I was listening this morning to an NPR Morning Edition article about a Spanish bank, Banco Santander and how they are not only weathering the financial crisis, but in fact, expanding. They are actually acquiring European Banks. Their most recent acquisition was a medium size bank in the UK, Bradford and Bingley at a "bargain basement" price.
The thing that struck me however was the President, Emilio Botin's explanation of why they are fairing well during the crisis and his advice was profound: He said, "If you don't fully understand an instrument, don't buy it," Botin said. "If you will not buy for yourself a specific product, don't try to sell it. If you don't know very well your customers, don't lend them any money. If you do all these three things, you will be a better banker, my son."
This is some of the best advice I have read in awhile and imagine if lenders, bankers, investors, even consumers had heeded this advice, how much of the current mess we are in might not have even happened? In fact, I would say that we all be much better off. My grandfather used to say, "live within your means, save money and pay all your bills on time' (he only had a mortgage and I can assure you it was less that 15% of his total income) 'and you will be much happier knowing that at the end of the day you have provided well for yourself and your family". Living by these standards is something that all of us should do.
In this weeks presidential debate, one of the audience members asked the following question of each candidates, "What sacrifices would you ask of the American taxpayers in this time of uncertainty?" Their answers were not as important as the question itself. I have no doubt that many of us are already making sacrifices and we may be making more as this crisis wears on. However, sacrifice does not mean we have to be pessimistic or depressed about our futures. It simply means that if we buckle down a little and take the advice of those that have come before us and live within our means, we will all be much better for it.
Perhaps we have lost sight of this in America. Folks, it is time to take our dignity back and do the right thing for ourselves, our families, our communities and our country. It won't be easy, but it is necessary.
Stay sharp and good luck
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