Is Your Financial Tree a Strong Oak or a Fragile Widow Maker? Looking Underneath the Visible Canopy

After the Storm

Many people are picking up the pieces of their personal and business finances after the wild economic winds of the last few years.  In this post we’ll take a look at some actions that can strengthen your financial “tree” and help it stand tall against strong economic winds.

A tremendous storm blew through my Phoenix neighborhood last week.  Violent storms are common during the monsoon season in the desert but we’ve never seen a storm this ferocious.  Our neighbor’s fifty-foot Eucalyptus tree was uprooted by the strong wind and crashed through our wall.  Fortunately no one was injured and no houses were damaged.

I’ve had a deep dislike for this tree that was planted in a flower garden and constantly surface watered causing the roots to remain shallow.  It perpetually shed bark, seeds, pollen, leaves and branches into my pool.  Each weekend I silently cursed this tree as I scooped the garbage from my pool.  The Eucalyptus tree is called the “Widow Maker” in Australia because of its tendency for large branches or whole trees to fall and kill people and animals.  Now I understand how it got its nickname.

Our financial lives can be like this tree.  The violent winds of life blow from a direction and at a speed we don’t anticipate and are unprepared to resist.  For years the predictable economic winds blew and many financial trees withstood the gusts.  The winds of the current financial crisis began blowing in 2007 and left many financial lives uprooted.

Maybe your financial tree’s roots stayed near the surface and were never driven deep by the watering of shrewd saving, conservative borrowing and wise investment.  The visible canopy of your financial tree grew too large by acquiring things you didn’t need and couldn’t afford.  Your tree became increasingly unstable as it grew taller and the roots remained shallow.

You may be sawing your fallen financial tree into pieces today.  Maybe you’ve contracted with lawyers and accountants to clean up the financial debris after the storm.  Or possibly you were one of the few who shrewdly watered and pruned your financial tree to withstand the unexpected wind.  In any case today is a day to begin again if your tree has fallen or to prepare your tree that survived to withstand the next financial storm.

Here are some suggestions to prepare for the next big blow:

  1. Keep your financial tree pruned.  If you must buy something new, donate the old item that it replaces.  Stay light and free from too much stuff.
  2. Live within what you earn.  Don’t try to compete with your neighbor’s finances and allow your money branches to hang over their fence.
  3. Force your financial roots deep into the ground through disciplined saving, careful spending and shrewd investing.
  4. Borrow only what you can comfortably repay.  Don’t fertilize and water your financial tree with unnecessary debt.
  5. If your financial tree gets blown down, be accountable for the decisions you made.  Don’t look for a bailout.  Clean up your own mess.

Join the discussion:  What are you doing to prepare your financial tree for the next violent economic wind?

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About Michael Shelton

Your Business Coach Facilitating Delegation and Work Group Engagement Michael Shelton has over twenty-five years of business and military accomplishments, including extensive experience with one of the largest, publicly traded real estate investment trusts (REIT). He is a qualified business coach with assignments in cross-functional work group management, strategic planning, unit leadership, joint venture acquisitions, executive education, mentoring, training and merger integration. Michael has accumulated best practices for building committed work groups from more than $4 billion of capital markets transactions and commercial property development. He served as a commissioned officer and helicopter pilot in the U.S. Army, and earned his MBA from The University of Arizona. Michael has served as a major conference panelist and is the author of Cash Flow Rich, Winning Ways to Evaluate and Finance Real Estate. Today, he helps business owners get more work group engagement as President and CEO of Shelton Business Services, LLC in Scottsdale, Arizona. Disclaimer: I don't offer investment, legal or tax advice. Talk to your broker, accountant or lawyer for investment, tax and legal help. I might own stock in the companies I mention on-line. My posts, tweets and other on-line activity are my personal thoughts and don't represent my employer or company.
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