Alex was a highschooler who had already developed an interest in investing. So, he opened an account with the trading app Robinhood.
He began trading options, an investment strategy with the potential for high rewards, but not without more risk than traditional investing.
A couple years later on June 11, Alex believed he was $730,000 in the hole and on the hook for $170,000 of it within the next few days.
Later that day, his parents got a knock on the door and received the worst news any parent could: their son, Alex, had taken his own life.
If you were Alex in this situation, what would you have done?
Alex’s story is a sad one. Heartbreaking, really.
It’s one that tells of someone who was facing a crisis and did not know what to do. “He thought he blew up his life. He thought he screwed up beyond repair,” said Alex’s dad…
I don’t share Alex’s story to suggest what he should have done. I share it because no matter what we may be going through, financially or emotionally, our life is never beyond repair.
Alex’s story reminds us that we must all ask ourselves what we would do during a crisis.
It’s a very important question everyone should have an answer to. However, there’s one question that’s even more important:
How do you prepare for a crisis?
Usually, a crisis isn’t something we can predict. That’s why preparing for it is our best line of defense. Because it’s easier to make the right decisions and navigate the storm when we are first prepared for it.
It’s not easy to do what’s in your best interest during a sudden change in your life, because you do not have the time nor do you have the mental or emotional peace to think clearly. So, we need to prepare for a crisis before it comes by taking the time now to create a plan…
The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock.
When you start by creating a plan, you’re building a framework for your mind. In other words, you’re giving yourself detailed, step-by-step instructions ahead of time,,, so that when the time comes, you don’t have to think; instead you just have to read and follow the instructions you’ve given yourself.
This plan you create will probably require you to think hard and think long. But don’t make it more complicated than it needs to be. None of us knows what crisis (or crises) we will face. Don’t try to prepare for everything.
Instead, think about what you may need if a crisis of any kind comes your way by asking yourself these three questions:
1. Is it going to cost me something?
Practically everything in this world costs money. Set aside some savings to fall back on in case of emergency, aka a crisis. Even if it’s just a little each day, work on building some savings, because every little bit counts.
2. Will I need help/advice from anyone?
It’s always good to ask for help in time of need. So, thinking ahead about someone or a few people you can turn to during a crisis is wise. Even if it’s just for prayer.
3. What can I do without if I had to make the choice?
Lastly, you want to get rid of anything that may make going through a crisis even more difficult for you. Would you lug a heavy backpack full of unimportant or useless stuff when you have to climb a mountain? No. You wouldn’t.
So, if the crisis is a job loss, for example, some of the “unimportant or useless” stuff you can get rid of would be money you spend on things like eating out or meal subscriptions, shopping for extra clothes, or leisurely travel. These are all things that will drag you down even further.
Now, those three questions are just to start. If you can think of anything else that will help you create your plan, by all means, do so. But don’t forget to write your plan down.