So what else have we learned (or what else should we have learned) from the last year?

1.  You can’t spend money you haven’t yet earned. It’s a pretty simple rule, but one that everyone threw out the window because the economy was on an ever-upward track to… where exactly? Using borrowed money is expensive. Using borrowed money to build assets makes sense, but only if you’re actually building assets. Using borrowed money to satisfy your every whim is irresponsible and will eventually bite you in the bum.

2. Debt is NOT going to “just go away.” This “the debt will take care of itself” attitude seems to have been prevalent among businesses and individuals alike. It was as if everyone believed that the debt they were taking on was somehow going to vanish magically. That would be the only explanation for taking on debt you knew you could never pay off.

3. Wishful thinking does not work. There WON’T always be more money. When we were living through the good times, we let ourselves be convinced that the work would always be there, raises were guaranteed, and every year we’d be making more money. Business thought so too. Wrong. For every up-turn there’s a down-turn. For every boom, there’s a bust. And if we’re not putting away a little sumthin’ sumthin’ for a rainy day, when it starts to pour we’re all gonna get soaked. Which we did.

4. It’s dumb to invest in something you don’t understand. Warren Buffett never invested money in credit default swaps or other derivative investment products he didn’t understand. While the investment world lives to create highly complex investment products that no one can explain, you’re a dope if you buy one.  Whenever you hear of someone offering a too-good rate of return, walk away. It’s easy to let ourselves be convinced that the promised homerun will fix all our previous mistakes. But promises of a higher-than-normal yield come with unstated risks – huge risks – and unless you’re prepared to watch your hard earned money go up in smoke, don’t be tempted.

5. The fundamentals don’t change. Hate to break it to you, but every time I’ve heard The Spurts pulls this one out of their hats it’s been followed by a correction of some kind. The fundamentals can’t change. That’s why they’re called “fundamentals.” What can change is our perspectives and our expectations. But if we hold tight to the fundamentals, we can keep things balanced. It’s when we start disbelieving the fundamentals that we run into deep doo doo. While “fundamentals” are usually applied to “investing”, we saw lenders lose sight of their fundaments – the 5 C’s of good lending – and start handing out money willy-nilly, with devastating consequences.

6. You can’t get blood from a stone. This saying has been around for a long time. You’d think we’d get it. But we don’t. We keep believing there’s a way to make more and more money, grow our economy at a record pace for EVER, and negotiate bigger paycheques with more benefits each year. Well, here’s another one for you: “Every day bucket go to well, one day bottom drop out.” Yup, there’s no such thing as forever.

7. Flexibility is your strongest skill. Companies that can’t respond to changing economic climates fail. People who can’t adjust on the fly as the world around them transitions from one stage to the next won’t fare much better. Having money in the bank helps maintain some flexibility. With money comes choices. The more choice you want to have, the more money you need to save. That, by the way, is the purpose of building wealth: to create more choices. It isn’t to have the biggest house, the fastest car, or the most pairs of shoes. Wealth is all about having enough money to tell whomever to Peeezze Offffff.

Your turn. What lessons have you learned over the past year.  And if you had on message you’d like to pass on, what would that be?