Tuesday, September 30, 2008

Taking action after the bubble has burst

Yesterday it got bad.
  • The $700 billion bailout did NOT get agreed.
  • The Dow dropped by nearly 800 points.
  • Major banks in seven different countries either went broke, got bought up or bailed out by their respective governments.
  • Today the Asian and London markets have been in freefall.
Let's agree - the bubble has very definitely burst. The economy isn't working in the USA and the global financial system is now in jeopardy.
When the US president goes on live TV to say that the country's economy - and therefore the rest of the world - is in grave peril, you know that the stakes are about as high as they get.
The Guardian - Q&A: The US banking bail-out
Some financial analysts are comparing the current situation to the Wall Street Crash of 1929 and saying that this is worse. Why? Well, financial instruments today are a whole lot more complex and the overall situation is still very far from transparent. Lots of people are still very worried about what has still to be unearthed in terms of toxic waste. Current predictions are that things will get a lot worse before they get any better.

The bottom line is that we will all be affected in varying degrees during the long haul back to a sound economy. It's now time to take stock and regroup.

Where I'm coming from

The queue that got nowhere
(Northern Rock, Bromley 15.09.07 1.00pm)

11" x 16", pen and ink and coloured pencil in sketchbook
copyright Katherine Tyrrell
- all rights reserved (see note at end of original post)

A year ago I was in a very frightening place as a bank in which I had money looked like it was going bust (it was nationalised).

Since then I know other people have had to face their own personal financial armageddons.

It's an extremely unpleasant experience when life trips you up but we all have to get on and deal with such situations as best we can.

As many of you know I'm a professionally qualified accountant and I've been a senior finance manager and business adviser in the past (although not for the financial services sector I hasten to add), hence why my knee jerk reaction is to move into 'let's get down to business' mode when the going gets tough as opposed to hiding under the covers until it all goes away. I wouldn't recommend that latter action right now - you could be under there for a very long time.

Due to my own experience last year, I knew the economy would get a lot worse before it got better.

That's why, since January, I've been writing posts about how artists can meet the challenges presented by the current state of the economy.
I'm proposing to
  • offer a bit of coaching for anybody who might be feeling a bit panicked right now. I'm not somebody who ever advises about personal finances - but I can advise in a generic and business-oriented way via this blog.
  • run through the standard recipe for how to manage risk and/or recover from a truly dire situation. Essentially it's a list of prompts which, in the current state of turbulence, will help you to get a fix on whether you're actually sinking or swimming and then decide what to do next.
I'm going to tackle this by creating a brief post for each of the recommended actions and then post links to each on this one when I've finished.

I'm also going to create an information site specifically for artists thinking about how to deal with a recession and an exceptionally difficult economy. I'll be including any helpful posts or articles by other people (eg by Alan Bamberger of artbusiness.com) - so if you've read any articles or blog posts anywhere else which you've found helpful do let me know - and please post links in the comments section below.

[UPDATE: Now created see Art and the Economy - Resources for Artists]

Then - if life gets difficult for you - you'll know somewhere to go which might have some relevant tips and outlines some approaches for tackling the challenges faced and taking appropriate action.

Time to get cooking - as in recipes not books! ;)

5 comments:

Jennifer Young said...

I don't think I knew you were an accountant as well as an artist. Yes, it's pretty frightening stuff and I will be interested to read your posts on the topic as they unfold. Thanks in advance.

MaryAnn Cleary said...

The entire situation is a bit frightening. I opted to retire early from my previous employer after working in China for two years and with them changing the medical portion of the pension plan. I am now wondering if that was a wise move and watch apprehensively as my nestegg continues to dwindle due to the economy. I do have medical insurance though which is a big deal in the U.S.

My passion is and always has been art. It is what I love doing. (I was an engineer previously with my job.) Any marketing advise by you is welcomed as artists as a group tend to be rather poor at doing it. As my drawing skills return and I search for my niche & style, I know that it will take some time to develop a market for it ...especially in these rocky, economic times. I would love to know how others are marketing their art, especially those who are just starting out or have decided to pursue it full time. What is successful and what is not.

Thank you, Katherine, for your blog and marketing advice.

E. Floyd said...

Hi,

This is a very good post and I like it that you are offering your services to fellow artists in this time of crisis.

It is during times like these that reinforce my sense of always living within one's means and to also always squirrel some savings away to cushion these not so happy times.

I hope everyone finds a way to balance life and art making during this time of financial crisis. And thank you for providing a steady and thoughtful means for sharing advice.

tracywall said...

I didn't know you had that background!

Being self-employed in two businesses that may be considered "indulgences" when you're scrambling to pay for food, gas and mortgage, I am pretty uneasy during these tumultuous times. I'm looking forward to any suggestions and prompts you may offer.

Thank you for being a rock. We can all use a place to lean on a bit.

mongoose1 said...

Wonderful post Katherine!

I've watched my retirement accounts loose a little over 20% of their value in the last year.

I have just tried to remember that the losses are on paper and to not panic and sell (which is when the lose becomes a reality). I'm grateful that I have a great job which is quite secure, but there are times I feel like I am watching my retirement income tank.

I will probably slow down on my larger art purchases, which is a very sad thing to type. I do have a couple of commissioned pieces which should be delivered soon but that's it on new art.



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