Nothing. You are powerless in the hysteria of the so-called “Fiscal Cliff”, the media’s catchphrase du jour ever so reminiscent of Y2K, H1N1, Avian, SARS, etc, etc. So what will happen when we go off the cliff on January 1? Nothing, absolutely nothing is going to happen except Rose Parade, football and guacamole.
Conversely, we have already paid growth penalties in the form of uncertainty and frozen capital; the markets are discounted accordingly. In 2013 we will see economic hindrance passed downward to the end user, call these affects “trickle-down taxes” and they are on top of any other tax consequences being erroneously touted as economic stimulus by the current admin.
What you CAN do, however, is prevent your own fiscal cliff (ditch, ledge or curb). You do this by learning from an
inefficient and non-cooperative government. Heed the lessons of basic accounting: cash inflows must exceed cash outflows. Run your household and business like a going concern and manage it sensibly. Make spending cuts on things you can do without and fight like the dickens to capitalize on any and all tax strategies you can justify.
Getting caught up in the nuances of “Fiscal Cliff” or any other fear of the day is a waste of time. But recognizing that the “cliff” is just like Y2K and SARS (ie: nothing perilous is going to happen to you) is helpful for our collective piece of mind this Holiday season. You are the kings and
queens of your own kingdoms. Act accordingly.
-D. Scott Bloom, CFP
CERTIFIED FINANCIAL PLANNER™
The opinions voiced in this material are for general information purposes only and not intended to provide specific investment advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is
historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.