These days, writing down toxic assets is the grand dilemma that has consumed the entire banking industry and held the rest of the economy at bay. Banks are not the only entities weighed down with toxic assets. Everyone has their own share of these menacing particles within their own balance sheet.
What are personal toxic assets? Not unlike the toxic assets the banks are holding, personal toxic assets cause us to clamp up and be uncomfortable when we face adversity. Banks stop loaning to the public and likewise we begin withdrawing and go on hair trigger reactivity.
How, then, do we write down our toxic assets and begin relating to the outside world with more equanimity? Again, just like the banks, we have a difficult time recognizing what our toxic assets are. Even though we are aware what outside agent has triggered us, often, we feel helpless in choosing our reaction.
That is because it is what we tell ourselves that governs our reactions. However, very often, our reactions are not directly traceable to our self-dialog. Most of our self-dialog is deposited (no pun intended) into the unconscious and sits there constructing our reactions.
Say you have lost your job. You may have brief self-conversation about how worthless you are because you can't hold on to a job or nobody values your skills. At that very moment you have implanted a detonator in your mind which goes off in response to personal hardship. Indeed you hurt yourself by making that comment and unless you make an effort to replace that hurtful comment to yourself with a more encouraging and supportive one, you have foregone the freedom to choose your reactions.
I know most of us feel like we are grown ups but the truth is that we could still use a lot of self-parenting. At the moment of experiencing a loss, you need to give yourself a lot of encouragement. You need to tell yourself that things are going to be OK as they always have been; that you have always managed to be there for yourself regardless how tough it was on the outside.
This is really a tough proposition but it isn't dissimilar to dealing with children when they throw tantrums: lots of conversation and trying to calm things down while reassuring love and support within the family. Children are perfect mirrors and in their honest and unadulterated expression. They teach you how to deal with your own tantrums as well.
Unfortunately, similar to how increasing foreclosures are adding to bank toxic assets, the declining economy is a key contributor to the growth of our personal toxic assets. We are bombarded with disconcerting news about the state of the affairs which in turn leads to panic-driven self-talk and the balance sheet on our personal toxic assets continues to grow.
Recently, a friend of mine seeking my advice, told me that he was on the brink of financial collapse and he laid out a detailed plan as to how he can remain solvent in the face of tremendous adversity he was facing due to the declining economy. I patiently listened to him and then told him that his plan was sound but I was in no position to give him any advice on it.
When he asked why, I responded by saying to him that judging by what I what observed from his emotional state, his plan was panic-based and therefore could only be evaluated as a reaction not a rational choice. Then I proceeded to assist him to write down his personal toxic assets that were leading him to his panic-driven reaction.
He walked away from our conversation concluding that he needed to educate himself more on what was happening to the economy at large and his own financial options. This is what I would refer to as moving from reactivity to equanimity.
Then he said something interesting which led me to point out to him at another pitfall along this path. He said that, based on our conversation, he realized that he his original plan was like trying to cure an arm pain by amputating it.
Although I understood what he was trying to imply in terms of his response to the problem being too drastic, I pointed out to him that using exaggerated metaphors also elicits reactivity from the unconscious mind.
So, next time you walk into your TARP-funded bank, don't be surprised if you feel frightened and images of the movie 'Night of the Living Dead' run through your head! Which makes you wonder: does calling nonperforming bank assets 'toxic assets' also an exaggerated metaphor?