Youâ€™re traveling through another dimension, a dimension not only of sight and sound, but of mind. A journey into a wondrous land whose boundaries are that of imagination. Thatâ€™s the sign post up ahead, your next stopâ€¦The Personal Finance Twilight Zone.
So I was reading this story yesterday about a man who quit his laboratory job for a French oil company in 2006 so he could begin preparing for what he believes will be the upcoming end of the world. In fact, he basically sold everything he had and invested his money and time in trying to prepare for the coming apocalypse.
This guy is absolutely convinced the world will end on December 21, 2012.
His evidence? An ancient Maya cyclical calendar that runs out on that date, supposedly with catastrophic consequences. He also refers to the ancient Egyptians, who, he claims, saw 2012 as a year of great change. And he points to a NASA prediction of a sharp increase in the number of sunspots and sun flares for 2012; he believes the spots will lead to widespread electrical failures and satellite disruptions.
Is this guy up a tree? Probably. Okay â€“ yes, yes. Heâ€™s a total nut job.
What is really sad is if the end of the world fails to come in 2012 as he expects, the only Armageddon this guy is going to be dealing with is the one that relates to his personal finances.
And thatâ€™s too bad for him.
Yeah. Heh. What a kook. Sheesh. Some people.
Yep, yep, yep. (sigh)
What if he is right? What if the world was going to end?
Such a scenario got me thinking about how I would look at my finances if I knew the exact day the world was going to end. Would I handle them any differently than I do today?
For me, the answer is, â€śit depends on the time horizon.â€ť
Letâ€™s first assume we did know with total certainty that the world was doomed to end, but instead of the final day coming on December 21, 2012, it was set to arrive twenty years later in 2032.
Exactly how would the world end? Your guess is as good as mine, but for the sake of argument, letâ€™s assume astronomers identified a very large killer asteroid that was virtually guaranteed to collide with Earth on December 21, 2032. And unlike what we saw in the movie Armageddon, Bruce Willis and Billy Bob Thornton wouldnâ€™t be available to save the Earth from total annihilation.
On December 21, 2032, itâ€™s all over â€“ except for the cockroaches.
Boom boomâ€¦out go the lights.
Such a scenario begs a lot of questions with respect to how we would handle our personal finances.
For example, would you quit or change your current job? Would you change how you handle your 401(k) contributions? What would you invest in? Would there be anything worth investing in?
What about your obligations to your creditors? Would you continue paying your mortgage and credit card bills?
And would you sell your house and become a renter because owning real estate would look a lot less attractive? (And you thought you had it bad when you found out your house sits on land subject to an emphyteutic lease.)
After thinking about this particular scenario for a long time I came to the conclusion that, for me, very little would change.
I would keep my job, and I would also continue to contribute to my 401(k) just as I currently do. Assuming I knew the exact date that the world would end, I would try to go about my life as usual, saving enough money such that I would have enough to comfortably retire a dozen years in advance of that fateful day.
In terms of how I would spend my money, it would really be no different than if I didnâ€™t know a killer asteroid was going to obliterate the planet.
I may be naive here but I also suspect, for the most part, the world would continue functioning in a business-as-usual mode too if for no other reason than it would have no other choice.
Now letâ€™s take the other extreme on our time horizon. Letâ€™s assume that our ex-lab workerâ€™s intuition is absolutely spot-on and our end-of-the-world time line is significantly shorter. Instead of twenty years out, the date of our killer asteroid impact coincides exactly with the end of the Mayan calendar on December 21, 2012.
This time my retirement would obviously be much shorter â€“ but the good news is it would also be much more extravagant! With such a short time line I, like that lab worker, would immediately quit my job and cash in all my chits with the aim of living an extremely comfortable lifestyle between now and the end of 2012.
Of course, I am once again assuming society would maintain some semblance of civility during this time.
As long as that assumption holds true, the goal would be to spend my money like there was (almost) no tomorrow, until my last dollar was spent on December 21, 2012.
I find it just a bit ironic that, as far as my personal finances are concerned, knowing the end of the world was relatively close in time might just allow me to live the opulent lifestyle I would never dream of living otherwise.
So How About You?
How would you handle your finances if you knew the exact date that the world was going to end?
I think the set of potential answers are as wide as the ocean is deep.
And so you there have it. The poles of fear. The extremes of how Earth might conceivably be doomed. Just a minor exercise in the care and feeding of a hypothetical nightmare. Respectfully submitted by all the asteroid watchersâ€¦ in The Personal Finance Twilight Zone.
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