Fear Or Greed top 4 Lessons From the Last Recession

Lessons From The Last Recession

By Raul Dinzey

  • The person who approves or signs your paycheck, controls your financial situation. The Top 4 lessons learned from the last recession are:
  • When buying a home, only get a fixed interest mortgage loan.
  • Stash as much cash as you can for your essential bills, housing, food and transportation.
  • Keep your resume updated and be ready for your next career move.
  • Network and leverage your circle of influence, be a resource for other people and also seek out new job or business opportunities.


When it comes to making money, what motivates you? Is it fear or greed? Warren Buffett was quoted that “ when it comes to investments, be greedy when others are fearful , and fearful when others are greedy.” We just went through a real estate buying frenzy driven by Fear of Missing Out (FOMO). It caused a hyper inflation of home prices which could only be stated as “ so crazy that you can’t make this up.” My perspective I think I’m motivated by both. Fear is tied to the need for financial security that comes from having a job and a steady income. If you are not signing your paycheck by having your own business or side hustle, you are not free. Someone is telling you what time to show up to work, what you will do and won’t do, and how much you will have because he, or she controls your check. And unfortunately your financial situation. This is a bitter pill to swallow isn’t it?

Fear of Uncertainty 

Do you remember your first job? Yo, yo, yo! I got a job! Congratulations, my brother, my sister and friend! How happy was that day for you? What a joy! How grateful you were and full of positive expectations! Yes! Wow! Wonderful! Isn’t it so much easier to get a job where you know how much you earn per hour, per week or per pay period? My hat is off to the people who use fear as a motivator and are able to learn how to function on a “ Commission Basis” it’s like, if someone doesn’t buy from you, you don’t eat. Fear can be the fuel to keep you pushing forward, to make one more phone call, to ask one more person for a meet up appointment in the hope of making a commission, because, if they don’t buy, you don’t eat.

(E) Employees – Work for other people

(S) Self Employed -Barber, Mechanic, Real Estate

(B) Large Business Owner 500 + People 

(I) Investor

90 Percent of the People – make 10 percent of the money, because they work for money.

Investors and Businesses Owners who have a business that runs without the owner. 10 percent of the people – Make 90 percent of the money. They don’t work for money. They have a business or investments that make money for them.

According to Robert Kyosaki in his book “The Cashflow Quadrant” ninety percent of people in the United States earn their living by either having a business that they work in “ Self Employment” or they work for someone else. This is called an active method of making money because it requires continuous work activity to continue to make money. While ten percent of the people either own a large business with 500 or more employees where they don’t have to work because the business makes money without the owner. And the least talked about group is group of people who are living off their investments. Their money makes money for them. The least place to be is where you have only one source of income. You can seize the opportunity of being an investor and being employed as well. Let’s find a way to create multiple streams of income.

The calendar has us on a monthly schedule. Payment on the bills are due on the day agreed, for some of us the rent is due on the first of the month and for others, the mortgage is due on the 14th. Since the rent or the mortgage is usually the largest bill or payment due. The days following the payment tend to be a little hard on the checking account. Technology has increased the methods to request payment from account holders. When people receive their bills, it’s  when reality hits us (stimulus)  oh wow, the light bill is due on the fifth of the month.  How am I, or how are we going to pay it? by all the means that are available to notify account holders. Dear Sir, or Mam, your monthly payment is due on… You know, the 5th, just like last month. Fear kicks in, and rears its ugly head. 

What Happened the Last Recession 

The last recession called by some people “ the Great Recession” is nothing short of a perfect storm that affected the economy of the United States. Is greed a good thing, or a bad thing? I suppose any emotion left unchecked can be harmful and perhaps detrimental to your inner peace and affect the balance of your motivation and daily life. 

Say “No” to Adjustable Mortgage (AR) loans also called Variable Interest Mortgage (VRM) in the past, because they are toxic and to be avoided at all costs. An AR loan means that you bought a property with a mortgage pay that with adjust, it will go up. Your monthly mortgage will go up and if you don’t refinance it to get a “ fixed” mortgage, you may not be able to pay your mortgage and after 3, or maybe 6 months, the Bank with the assistance wa Deputy Sheriff of the County where your property is located with evict you “ throw you and your family out of your home along with everything that you own. This happened to millions of people because so many Adjustable Mortgage loans were sold to so many people, If you buy a home with less than twenty percent down, you will be subject to Private Mortgage Insurance (PMI) which is a cost to you and an insurance for the Mortgage Company in case someone defaults, or fails to pay on their Mortgage. 

Mortgage Backed Securities 

Mortgage Backed Securities (MBS) (sounds like a harmless term)  are Bonds secured by homes and  other Real Estate loans, have been around since 1968,  and are used as financial instruments and investments. If you look it up today you’ll find that many large investment banks offer mortgage back securities. Thanks to some new laws that were put in place during the Obama administration, mortgages have to be more secure. All the upfront work and documentation is done to ensure that the bank is issuing a legal mortgage and that the buyer can afford to pay the mortgage. Which in turn would hedge or prevent the same results which occurred during the great recession.


Warren Buffett was quoted to have said’ “ be fearful when others are greedy, and greedy when others are fearful.” There is always more benefits to be found beyond the surface of a situation. Someone will always gain from every economic condition because people who took advantage of the low prices of property during the Great Recession were able to sell at a profit when others became greedy. Fear of Missing Out can’t apply to money decisions because the economy can turn and cause you much pain and regret. Emotional money decisions will hurt you twice and this is what May happen to the people who purchased properties at the peak of the prices we have just experienced. Let’s increase our sources of income and purchase sources which will pay you rent or dividends.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s