Most people assume they’ll see a financial crisis coming. They think they’ll have time to react, adjust, and protect their money before things get bad.
But history—and human psychology—suggests otherwise.
The biggest financial crashes and wealth transfers don’t happen overnight. They build up gradually, while most people convince themselves that “everything will be fine.”
By the time reality hits, it’s too late.
Why People Ignore the ObviousThere’s a reason financial crises take so many people by surprise, even when the warning signs are clear. It comes down to three major psychological biases.
1. Normalcy BiasThis is the belief that things will always continue as they have before.
People assume that because banks didn’t collapse last year, they won’t collapse this year.
They believe that because pensions worked for their parents, they’ll work for them too.
Even when prices are rising rapidly, they assume things will “go back to normal.”
The truth? Economic shifts don’t play by old rules. What worked in the past doesn’t guarantee financial security in the future.
2. Recency BiasWe tend to give more weight to recent experiences than historical trends.
If the stock market has been rising for years, people assume it will keep rising.
If house prices have only gone up in their lifetime, they don’t consider what happens when the cycle reverses.
If there hasn’t been a bank run in the UK for decades, they assume it’s impossible.
Yet history shows that every financial bubble bursts—and those who expect the past to repeat itself are often caught off guard.
3. The Comfort of DistractionIt’s easier to focus on day-to-day concerns than to deal with uncomfortable truths.
People worry about energy bills but don’t realise the currency itself is losing value.
They watch house prices rise but ignore the real cost of borrowing due to interest rates.
They see food prices going up but assume it’s just temporary inflation—rather than part of a much bigger financial shift.
Governments and media help fuel this distraction. The focus is always on short-term news cycles, keeping people occupied with symptoms rather than the cause.
What Happens When a Crisis Hits Overnight?I know firsthand how fast things can change.
In 2009, my business had its best year yet. Scratch that - I had my best year ever in terms of personal earnings. Business was booming, I lived in a great house, drove a nice (not new but nice) car, and I had several short breaks and two short holidays. Previously to 2009 I'd been lucky if I'd had one short break a year.
Fast forward to January 2010.
Suddenly and without warning, my business was gone. I was left hosting a garage sale, clearing out the house I could no longer afford. My two beloved teens had to go and stay with their Dad. That wasn’t too much of a hardship for them—he lived locally—but for me, it was devastating.
I was homeless for a few months, in my late 40’s, sleeping in spare beds and on sofas. You can read more about it in my book A Better Entrepreneur, but it was a terrible, terrible time.
One colleague had warned me in November 2009 that something weird might be happening under the financial waters globally, as he had 18 mortgages, previously approved, withdrawn in one day.
But I was in a different industry and I thought it wouldn't affect our business. I never saw it coming.
I wasn’t reckless, I didn’t live beyond my means, and I thought I was financially secure. But when the economy turned, I wasn’t positioned for what came next.
And I wasn’t alone. The 2008 financial crisis had a profound impact on the UK, leading to the deepest recession since World War II, with significant increases in unemployment, debt, and home repossessions, and long-lasting effects on the economy and mental health.
It took me years to get back to full confidence, assuming I'd just been a naive business person. I blamed myself for not seeing it coming, I blamed myself for not building more of a safety net, I blamed myself for not recovering more quickly, both mentally and financially.
But one good thing came out of it. I determined to become EVEN MORE financially literate and never, never be caught out like that again.
The Consequences of InactionEvery major financial crisis follows the same pattern:
A small percentage of people recognise the warning signs early and position themselves accordingly.
The majority dismiss the risks, assuming things will work out.
By the time the crisis is undeniable, it's impossible to avoid the train coming down the tracks and the best opportunities are gone - and most people are scrambling to salvage what’s left.
Think about the Global Financial Crisis of 2008/2010.
Some people saw it coming - and moved their money out of vulnerable banks, repositioned their investments, or even profited from the crash.
Most people ignored the warnings - and lost homes, jobs, and savings when the system crumbled.
Now, in 2025, with inflation soaring, government policies threatening pensions and benefits for the least well equipped among us, and banking systems shifting towards saving themselves via bail-ins, history is repeating itself.
What You Can Do NowQuestion your assumptions. Just because something has always worked doesn’t mean it always will. Look at financial history, not just recent trends.
Stop waiting for the media to confirm the crisis. By the time they report it, the damage is already done.
Take action before everyone else. Those who move early protect their wealth. Those who wait too long find themselves trapped in a collapsing system.
This is why I have been studying macro-economics, boning up on financial crashes from the past - did you know that France got through over 19 fiat currencies after the French Revolution? It was only when Napoleon came along and insisted on a currency based at least minimally on gold, did the country start to recover.
And there's your clue. If you watch Mike Maloney's 'Wealth Cycles' you'll find out exactly what is happening right now and how to protect yourself and squirrel enough away to look after you, your family and your extended family and friends if you want to.
I recently attended a Mastermind in Mexico focused on these exact challenges—understanding how financial cycles work and how to prepare myself and my family before the inevitable train crash of the massive weight of debt collapsing around the world and the majority wake up to the problem way too late.
Now, for those who couldn’t travel, there’s a rare chance to attend a UK-based Mastermind in June covering the same critical insights.
If you want to learn more, DM me or email me now via my Contact Page and I'll make sure you get all of the details of that Mastermind as soon as available.
Photo by Benjamin Wagner on Unsplash
