We are halfway through 2018 and if you are not already thinking about how to grow and protect your business, now is the time! Many things remained unchanged from 2017, however there are trends for 2018 that you should have top of mind.
- The bubble will burst- There’s a bubble out there, but no one is really sure exactly what this means or where it is. Stocks have risen to unbelievable heights, with price-to-earnings ratios well above their “normal” ranges. The housing market has rebounded in such a way that talking heads are calling home ownership “an escalator to wealth.”
2018 seems to be pushing hard for a burst bubble. According to The Economist, “The hunger for assets that is driving up prices is also leading investors to take more risks—risks which may not be fully priced into their investments and which they may not fully understand.”
When prices for houses and investments are at a reasonable level, people make purchases without overextending themselves. When earning a higher return requires paying a higher premium, people have to dip into their financial buffer to receive an adequate return.
But, what does all this mean? People have less in the bucket to draw from if things go south and could be forced into selling at a loss to cover their daily expenses.
The good news is that we’re already hesitant about our current bubble. People aren’t celebrating their newfound wealth like they did in 2007 and 2002 just before past bubbles popped.
What you can do?
Diversification is key! If you have investments, make sure they’re properly balanced to match your tolerance for risk. It’s easy to forget about your growing nest eggs and end up with a ton of money in stocks at the exact time you need more in something stable, like CDs or Money Markets.
Consider diversifying your business’s revenue streams, too. Having all of your customers come from one social demographic, profession, or geographic area increases your risk of catastrophic failure. Try branching out to smooth any potential bumps before any bubbles burst.
- You will get hacked – Like it or not, in 2018, you’re going to get hacked. Maybe it’ll be personal, maybe it’ll be your business. One way or another, you’re going to have to put up with someone getting their hands on your personal information.
The Equifax hack was just the most recent and galling version of what’s in store for us. As more and more of our data is put online, it increases the incentive for hackers to find ways to gain access to it. The U.S.’ relatively lax punishments for businesses that lose information to hackers compound the problem.
With nothing to lose for inactivity, large corporations will continue letting standards slide, which means you and your customers are going to have to deal with the repercussions.
What you can do?
The short story—it’s the kind of thing everyone should be worried about, and also the kind of thing no one thinks seriously about until it happens to them.
Get yourself a security plan, a password system or manager, and think about freezing your credit. And buckle up, because 2018 is bringing more hacking and theft with it.