How Regular Folks Are Affected By Market Collapses

For the average person, the daily moves and giant sell-offs on Wall Street don’t mean a thing. Why would they? Most feel that if they don’t have any money in the stock market, they won’t be affected by major changes. Truth is, we are all affected by the changes in the market, and we need to start paying attention. Unfortunately, as we have seen recently, those who have no direct interest in the market are sometimes hit the hardest.

The good folks over at 247wallst.com have release a report detailing the 8 places where major market changes affect the personal finances of the average American. I have listed them below.

Where It Affects Us

Employee benefits cut
Retirement deferred
Home sale
Home purchase
Education deferred
Unemployment
Car purchase
Small business start-up

Unemployment and Benefits

I was personally most interested in the Employee benefits and the Unemployment numbers. Most don’t really realize that the companies they work for begin cutting back on employee benefits even before a market collapse. Generally, when the market starts to shift toward the softer side, businesses begin to cut back on pensions and matching of 401k’s. So when you have a complete meltdown like we experienced not too long ago, the reaction is even sharper, and many see their benefits dwindle to minimal levels.

If you know business, you know that the only thing that truly matters, is the numbers on the balance sheet. These are what the big boys in charge will look at, and place the most importance on. So when a company begins to feel the pinch, and starts to see their assets dwindle, and the overall value of the company with it, they begin to make some changes. The easiest place to recoup some losses is in the payroll department. Pretty much any company out there can find a place to cut back on staff, so this is usually the first change made.

The next time you are watching MSNBC, and want to gouge your eyes out due to boredom, settle in and pay attention. The glitz and glamor of Wall St. may seem like another world to you, but the changes and movements in that market affect every household in America.

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