Friday, October 31, 2008
Financial-Crisis-Creates-Business-Opportunity
KANSAS CITY, Missouri (Reuters) - One woman wants to pay off medical bills. An Ohio couple wants $5,000 to start a home business. An Illinois college student needs help with tuition.
With bank loans drying up amid financial turmoil around the world, these would-be borrowers aren't looking to traditional channels for money. They have turned to the fast-growing online industry of peer-to-peer lending, in which online companies like Lending Club, Prosper and Loanio connect people who need money with those who have it.
Through this peer-to-peer arrangement, borrowers get the money they want, typically at lower rates than through a credit card or bank, while individuals lending the money collect higher interest rate returns than they might find in more traditional investments.
Twelve traditional banks turned down Tim Murphy's request for a $25,000 loan to start a gourmet popcorn shop in an Atlanta suburb, but he found 97 different individuals willing to share in lending him the full amount through Lending Club.
Murphy's 1,600-square-foot store now offers a dozen varieties of popcorn, including parmesean and garlic, ranch-flavored and nacho cheese.
"It's growing, slowly, but growing, said Murphy.
While demand for peer-to-peer loans is on the increase as traditional banks tighten their lending, the model is not without its problems.
Prosper earlier this month stopped signing up new lenders while the Securities and Exchange Commission evaluates its regulatory filings, a process that could take up to six months.
The amount of new lending on Prosper each month was already declining from a peak in May and average interest rates were increasing.
With the U.S. economy sliding toward recession, lenders are becoming leery of tying their money up in a peer-to-peer loan that typically runs three years and borrowers who could default.
Magnet2wealth Marketing Group
BETTER THAN STOCKS
Nevertheless, the model is still enticing for some investors and the peer-to-peer sites say they are here to stay.
Eric Di Benedetto of San Francisco said he and a partner have loaned nearly $1 million to hundreds of borrowers, and so far have found much better returns -- averaging above 12 percent -- than they could have garnered elsewhere.
"The stock market hasn't really done well over the last few years," said 43-year-old Di Benedetto. "We were looking for something that was relatively safe while returning double-digit returns. Banks have made a business of this for hundreds of years."
Sheryl Garrett a financial planner based in suburban Kansas City, Missouri, has advised some of her clients to invest their money in peer-to-peer lenders.
"All the stars are in alignment when credit is tight and investment opportunities have dried up," she said. "This is a way for borrowers to get the capital they need to keep our economy going, but also provide the investor, the lender, an opportunity to work in something they feel a lot more comfortable about than the stock market."
And a new company, Loanio, entered the market on October 1, aiming at borrowers who have been turned away from other lending sites because of poor credit.
More than 1,000 people signed up to participate within Loanio's first week, according to CEO Michael Solomon. The company encourages borrowers to use friends and family as co-signers and verifies a borrower's financial footing for a fee, Solomon said.
"A lot of traditional lending channels have been drying up," said Solomon, who is hoping the approaching Christmas shopping season will boost borrowing interest. "This is a nice complement."
Magnet2wealth Marketing Group
PERFECT STORM
Lending Club, based in Sunnyvale, California, limits itself to borrowers with good credit histories and brags of a default rate of less than 2 percent. It has started a secondary market where lenders can cash out of their loans early, after seeking regulatory approval from the Securities and Exchange Commission.
"The social lending industry is here to stay," said Lending Club CEO Renaud Laplanche, who cites the upheaval in financial markets as "the perfect storm" for his business, which has done about $20 million in loans in 18 months.
"Because of the credit crunch, borrowers have much less of an opportunity to get a good rate if they get a loan at all, and for lenders the average interest rate is 12 to 13 percent, a double-digit net return, which is a lot better than the stock market," Laplanche said.
Magnet2wealth Marketing Group
Prosper is similarly registering with the Securities and Exchange commission to set up a secondary market, halting activity on its site pending SEC review.
Prosper generates revenue by collecting a one-time 2 to 3 percent fee on funded loans from borrowers, and assessing a 1 percent annual loan servicing fee on lenders. Lenders bid to fulfill borrower loan requests by offering the lowest interest rate they are willing to accept.
Another company that sees a niche in the credit crunch is Virgin Money, a unit of Richard Branson's Virgin Group, which is expanding into the United States.
Virgin Money USA, which focused on handling transactions for borrowers and lenders who already know each other, now offers mortgages in the United States as traditional banks back away.
"What we've seen in the last few months is greater interest among both borrowers and lenders in looking for alternatives. Part of it is by necessity and part of it is by choice," said Asheesh Advani, chief executive of Virgin Money USA.
(Reporting by Carey Gillam; Editing by Eddie Evans)
Delivered by Sam Hawkins, Magnet2wealth Marketing Group
With bank loans drying up amid financial turmoil around the world, these would-be borrowers aren't looking to traditional channels for money. They have turned to the fast-growing online industry of peer-to-peer lending, in which online companies like Lending Club, Prosper and Loanio connect people who need money with those who have it.
Through this peer-to-peer arrangement, borrowers get the money they want, typically at lower rates than through a credit card or bank, while individuals lending the money collect higher interest rate returns than they might find in more traditional investments.
Twelve traditional banks turned down Tim Murphy's request for a $25,000 loan to start a gourmet popcorn shop in an Atlanta suburb, but he found 97 different individuals willing to share in lending him the full amount through Lending Club.
Murphy's 1,600-square-foot store now offers a dozen varieties of popcorn, including parmesean and garlic, ranch-flavored and nacho cheese.
"It's growing, slowly, but growing, said Murphy.
While demand for peer-to-peer loans is on the increase as traditional banks tighten their lending, the model is not without its problems.
Prosper earlier this month stopped signing up new lenders while the Securities and Exchange Commission evaluates its regulatory filings, a process that could take up to six months.
The amount of new lending on Prosper each month was already declining from a peak in May and average interest rates were increasing.
With the U.S. economy sliding toward recession, lenders are becoming leery of tying their money up in a peer-to-peer loan that typically runs three years and borrowers who could default.
Magnet2wealth Marketing Group
BETTER THAN STOCKS
Nevertheless, the model is still enticing for some investors and the peer-to-peer sites say they are here to stay.
Eric Di Benedetto of San Francisco said he and a partner have loaned nearly $1 million to hundreds of borrowers, and so far have found much better returns -- averaging above 12 percent -- than they could have garnered elsewhere.
"The stock market hasn't really done well over the last few years," said 43-year-old Di Benedetto. "We were looking for something that was relatively safe while returning double-digit returns. Banks have made a business of this for hundreds of years."
Sheryl Garrett a financial planner based in suburban Kansas City, Missouri, has advised some of her clients to invest their money in peer-to-peer lenders.
"All the stars are in alignment when credit is tight and investment opportunities have dried up," she said. "This is a way for borrowers to get the capital they need to keep our economy going, but also provide the investor, the lender, an opportunity to work in something they feel a lot more comfortable about than the stock market."
And a new company, Loanio, entered the market on October 1, aiming at borrowers who have been turned away from other lending sites because of poor credit.
More than 1,000 people signed up to participate within Loanio's first week, according to CEO Michael Solomon. The company encourages borrowers to use friends and family as co-signers and verifies a borrower's financial footing for a fee, Solomon said.
"A lot of traditional lending channels have been drying up," said Solomon, who is hoping the approaching Christmas shopping season will boost borrowing interest. "This is a nice complement."
Magnet2wealth Marketing Group
PERFECT STORM
Lending Club, based in Sunnyvale, California, limits itself to borrowers with good credit histories and brags of a default rate of less than 2 percent. It has started a secondary market where lenders can cash out of their loans early, after seeking regulatory approval from the Securities and Exchange Commission.
"The social lending industry is here to stay," said Lending Club CEO Renaud Laplanche, who cites the upheaval in financial markets as "the perfect storm" for his business, which has done about $20 million in loans in 18 months.
"Because of the credit crunch, borrowers have much less of an opportunity to get a good rate if they get a loan at all, and for lenders the average interest rate is 12 to 13 percent, a double-digit net return, which is a lot better than the stock market," Laplanche said.
Magnet2wealth Marketing Group
Prosper is similarly registering with the Securities and Exchange commission to set up a secondary market, halting activity on its site pending SEC review.
Prosper generates revenue by collecting a one-time 2 to 3 percent fee on funded loans from borrowers, and assessing a 1 percent annual loan servicing fee on lenders. Lenders bid to fulfill borrower loan requests by offering the lowest interest rate they are willing to accept.
Another company that sees a niche in the credit crunch is Virgin Money, a unit of Richard Branson's Virgin Group, which is expanding into the United States.
Virgin Money USA, which focused on handling transactions for borrowers and lenders who already know each other, now offers mortgages in the United States as traditional banks back away.
"What we've seen in the last few months is greater interest among both borrowers and lenders in looking for alternatives. Part of it is by necessity and part of it is by choice," said Asheesh Advani, chief executive of Virgin Money USA.
(Reporting by Carey Gillam; Editing by Eddie Evans)
Delivered by Sam Hawkins, Magnet2wealth Marketing Group
Tuesday, October 28, 2008
Reading Between the Headlines
Reading Between the Headlines
It's All in Your Interpretation
By Eric Daniels
EWI Instructor
Sam Hawkins
magnet2wealth.com
Have you ever read that ominous headline, “Home prices fall 15.8% in the past year: Case-Shiller”? How about, “Home sales, prices plunge in August”? You have read these headlines the same as I have, but the question remains… what does this mean to me as an investor?
Everyday, we are faced with negative news about our Real Estate markets, but even more so now in the financial markets in general. Remember this headline “Dow Drops 7.3%; Largest Loss Since ’87 Crash”? While the “average” person views this with dismay, investors should view this as a prime opportunity to SEIZE THE DAY! Simply put, the difference between opportunity and despair is all in how we interpret it.
Warren Buffett and Robert Allen are telling us that it is a great time to invest, both in Wall Street and Real Estate respectively. Guess what, they are exactly right! This may seem difficult, given the current perception of America’s economy, but you have to remember how our media reports to us.
As the above headline stated, home prices were falling in certain regions of the country, up to 15. 8%. What they chose not to write was that, at the same time, certain regions of the country were exploding in the real estate market.
Here is an excerpt from a less-publicized article in the same timeframe: “The suburban-Atlanta region… is experiencing resurgence in pending sales -- up 21 percent from July 2007 to July 2008. In August, pending sales have surged 43 percent over the same time as last year.”
Considering how to interpret these headlines will allow us to be successful investors. Think of it this way: Every action has a reaction. When someone loses their home to foreclosure, it reflects negatively on the economy. But, this opens the opportunity for investors to purchase properties at very low Loan-to-Value ratio, as well as creates a larger rental market and/or potential future buyers market.
Excluding foreclosures, lower property values and longer days on the market also benefits investors by allowing offers to be lower and normally puts sellers in a position to have to negotiate. The examples of potential opportunities in this market are too numerous to mention. The important take-away is to know how to read between the headlines.
I guarantee you that for every negative headline about property values declining, foreclosures rising or difficulties in obtaining financing, there is a positive headline for investors to read. It is merely a matter of looking for them.
Another facet to bear in mind is to “only worry about your own situation.” What I mean by that is, if you are investing in Illinois, does it have a direct effect on your business if property values in California are dropping? It does not. While you should never discount the overall health of our country’s financial and real estate markets, our main concern should be that of our personal investment areas. Read the headlines in your local papers; base your investment decisions off of those and adjust accordingly. If you base your decisions off of those headlines in the national media, you are definitely missing investment opportunities.
Here is another way to deduce what these headlines mean. Let us review the first headline in this article “Home prices fall 15.8% in the past year: Case-Shiller”. 15.8% is an average; it does not mean that every home price fell by 15.8%. The West coast could see falling home prices of 40% and the Midwest could be rising at 10% but that still leaves an average home price drop of about 15.8%. Remember, the headlines are not always as they seem.
Control your economic situation and write your own headlines! Don’t let others do it for you. The tools that you currently have, EWI and your education, your mentors and your own entrepreneurial intellect, are all the skills necessary to be a successful and enlightened Entrepreneur, no matter what direction the market goes or what the headlines read.
Join me on my Real Estate Strategies class every Monday at 6:00 p.m. Pacific Time while we explore the creative and profitable ways of real estate investing in today’s economy. Go to www.ewitraining.com to register for my course. If you are not an EWI Protégé, please call a Course Advisor at 800-761-6805 to find out if this is the right educational plan for you.
Join Magnet2Wealth.com for other ways to Multiply Your Income Sources
It's All in Your Interpretation
By Eric Daniels
EWI Instructor
Sam Hawkins
magnet2wealth.com
Have you ever read that ominous headline, “Home prices fall 15.8% in the past year: Case-Shiller”? How about, “Home sales, prices plunge in August”? You have read these headlines the same as I have, but the question remains… what does this mean to me as an investor?
Everyday, we are faced with negative news about our Real Estate markets, but even more so now in the financial markets in general. Remember this headline “Dow Drops 7.3%; Largest Loss Since ’87 Crash”? While the “average” person views this with dismay, investors should view this as a prime opportunity to SEIZE THE DAY! Simply put, the difference between opportunity and despair is all in how we interpret it.
Warren Buffett and Robert Allen are telling us that it is a great time to invest, both in Wall Street and Real Estate respectively. Guess what, they are exactly right! This may seem difficult, given the current perception of America’s economy, but you have to remember how our media reports to us.
As the above headline stated, home prices were falling in certain regions of the country, up to 15. 8%. What they chose not to write was that, at the same time, certain regions of the country were exploding in the real estate market.
Here is an excerpt from a less-publicized article in the same timeframe: “The suburban-Atlanta region… is experiencing resurgence in pending sales -- up 21 percent from July 2007 to July 2008. In August, pending sales have surged 43 percent over the same time as last year.”
Considering how to interpret these headlines will allow us to be successful investors. Think of it this way: Every action has a reaction. When someone loses their home to foreclosure, it reflects negatively on the economy. But, this opens the opportunity for investors to purchase properties at very low Loan-to-Value ratio, as well as creates a larger rental market and/or potential future buyers market.
Excluding foreclosures, lower property values and longer days on the market also benefits investors by allowing offers to be lower and normally puts sellers in a position to have to negotiate. The examples of potential opportunities in this market are too numerous to mention. The important take-away is to know how to read between the headlines.
I guarantee you that for every negative headline about property values declining, foreclosures rising or difficulties in obtaining financing, there is a positive headline for investors to read. It is merely a matter of looking for them.
Another facet to bear in mind is to “only worry about your own situation.” What I mean by that is, if you are investing in Illinois, does it have a direct effect on your business if property values in California are dropping? It does not. While you should never discount the overall health of our country’s financial and real estate markets, our main concern should be that of our personal investment areas. Read the headlines in your local papers; base your investment decisions off of those and adjust accordingly. If you base your decisions off of those headlines in the national media, you are definitely missing investment opportunities.
Here is another way to deduce what these headlines mean. Let us review the first headline in this article “Home prices fall 15.8% in the past year: Case-Shiller”. 15.8% is an average; it does not mean that every home price fell by 15.8%. The West coast could see falling home prices of 40% and the Midwest could be rising at 10% but that still leaves an average home price drop of about 15.8%. Remember, the headlines are not always as they seem.
Control your economic situation and write your own headlines! Don’t let others do it for you. The tools that you currently have, EWI and your education, your mentors and your own entrepreneurial intellect, are all the skills necessary to be a successful and enlightened Entrepreneur, no matter what direction the market goes or what the headlines read.
Join me on my Real Estate Strategies class every Monday at 6:00 p.m. Pacific Time while we explore the creative and profitable ways of real estate investing in today’s economy. Go to www.ewitraining.com to register for my course. If you are not an EWI Protégé, please call a Course Advisor at 800-761-6805 to find out if this is the right educational plan for you.
Join Magnet2Wealth.com for other ways to Multiply Your Income Sources
Friday, October 24, 2008
Bush McCain Endorsement - Sara Palin-SNL
Saturday Night Live Viral Video - Bush McCain Endorsement
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Sunday, October 19, 2008
SNL Sara Palin Rap
Sara Palin Rap - SNL
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Friday, October 17, 2008
The Real McCain
Multiply Your Income Sources....
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Wednesday, October 08, 2008
Economic Solutions
I have read at least 20 separate articles this week all with
a similar theme: in times of economic downturns you can
always find a silver lining.
If you work for a living, you may wonder if your job will be
there in the morning. If you count on your Stock Portfolio
or your 401K to pave the way to retirement, well you probably
already know that you won't be retiring.
During the Great Depression of the 1930s a large portion of
the world's population suffered as inflation ran wild and
unemployment reached epidemic proportions.
But, there was a group of people and companies that actually
flourished during the depression, thanks to smart and innovative
thinking.
You may be wondering how you can protect your family and
THRIVE during this time.
Well, the first thing you need to do is stop thinking of
this time as a crisis, and start seeing this as your chance
to succeed beyond your wildest dreams!
During such times many people are going to be looking for
another way to earn the income they need to prosper. Many
people are going to be looking to start their own business
- a great many will be looking to start a business online.
As a matter of fact, a network marketing newsletter I
subscribe to pointed to a 50% increase in signups this past
month due to the bad economy.
This is the perfect time to get off your butt and do
something to secure and protect your future and that of
your family.
If you see an opportunity, you need to jump on it
immediately because you can be certain there are others out
there who won't waste a second to cash in on your future.
www.magnet2wealth.net/s
a similar theme: in times of economic downturns you can
always find a silver lining.
If you work for a living, you may wonder if your job will be
there in the morning. If you count on your Stock Portfolio
or your 401K to pave the way to retirement, well you probably
already know that you won't be retiring.
During the Great Depression of the 1930s a large portion of
the world's population suffered as inflation ran wild and
unemployment reached epidemic proportions.
But, there was a group of people and companies that actually
flourished during the depression, thanks to smart and innovative
thinking.
You may be wondering how you can protect your family and
THRIVE during this time.
Well, the first thing you need to do is stop thinking of
this time as a crisis, and start seeing this as your chance
to succeed beyond your wildest dreams!
During such times many people are going to be looking for
another way to earn the income they need to prosper. Many
people are going to be looking to start their own business
- a great many will be looking to start a business online.
As a matter of fact, a network marketing newsletter I
subscribe to pointed to a 50% increase in signups this past
month due to the bad economy.
This is the perfect time to get off your butt and do
something to secure and protect your future and that of
your family.
If you see an opportunity, you need to jump on it
immediately because you can be certain there are others out
there who won't waste a second to cash in on your future.
www.magnet2wealth.net/s
Monday, October 06, 2008
SNL - Funny Debate - Sara Palin
Sunday, October 05, 2008
Funniest Debate
Friday, October 03, 2008
Bankruptcy on the Rise
The U.S. bankruptcy filing rate climbed again in August, reaching a new post-2005 high of 4,476 filings per day. The year 2005 is significant because it was the year that the bankruptcy law changed making it more expensive and more time-consuming to file bankruptcy as well as making bankruptcy less effective once debtors got to bankruptcy court. Despite these changes, the bankruptcy rate has become staggeringly high, and we appear to have returned to an era where we will have well more than 1 million annual bankruptcy filings.——>your solution herehere2008_filings_per_day_thru_august_2
By almost any estimate, bankruptcy filings will be over 1 million for this year. For the 2008 calendar year, bankruptcy filings will be:
* 1,049,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (4,160 per day) as they have averaged for the first eight months of 2008
* 1,075,000 filings if bankruptcy filings continue for the same daily rate (4,476 per day) as they have averaged for August 2008
* 1,080,000 filings if bankruptcy filings for the remaining four months of 2008 constitute the same proportion of total filings as the last five months of 2007 constituted for total filings that year (about 34.9%)
The August filing rate of 4,476 filings per day is 2.2% higher than July 2008 when the filing rate was 4,381 filings per day. Although the total number of filings in August (93,987) is actually less than it was in July (96,385), it is the daily filing rate that is most important. The total number of bankruptcy filings in a month is sensitive to the number of business days in the month, and July had an extra business day as compared to August.
Although August’s 2.2% increase may seem small, the figure is deceivingly low because it actually translates into a 29.2% annual growth rate. In other words, if bankruptcy filings increased 2.2% each month of a year, the total bankruptcy filings for that year would be 29.2% greater than it was the previous year. (Because of compounding, the calculation is not as simple as taking 2.2% times twelve months.) This is a tremendously high growth rate in bankruptcy filings. At this growth rate, bankruptcy filings in 2009 would be over 1,300,000. ——>your solution here
People often ask me why I think bankruptcy filings are rising. My answer is that it is both simple and complex. The simple answer is that hard economic times obviously contribute to rising filing rates. Tightening consumer credit markets also lead to short-term increases in bankruptcy filings as consumers find it difficult to borrow more to stave off the day of reckoning. That is the simple part. The more complex part of the answer is that we know people do not file bankruptcy immediately upon the onset of financial distress. Typically, consumers struggle for a long time–often two or more years–before filing bankruptcy. The job loss today or the harassing calls from creditors may precipitate a bankruptcy filing, but the seeds of that bankruptcy filing were sown long before it shows up as a statistic in the bankruptcy filings.
——>your solution here
By almost any estimate, bankruptcy filings will be over 1 million for this year. For the 2008 calendar year, bankruptcy filings will be:
* 1,049,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (4,160 per day) as they have averaged for the first eight months of 2008
* 1,075,000 filings if bankruptcy filings continue for the same daily rate (4,476 per day) as they have averaged for August 2008
* 1,080,000 filings if bankruptcy filings for the remaining four months of 2008 constitute the same proportion of total filings as the last five months of 2007 constituted for total filings that year (about 34.9%)
The August filing rate of 4,476 filings per day is 2.2% higher than July 2008 when the filing rate was 4,381 filings per day. Although the total number of filings in August (93,987) is actually less than it was in July (96,385), it is the daily filing rate that is most important. The total number of bankruptcy filings in a month is sensitive to the number of business days in the month, and July had an extra business day as compared to August.
Although August’s 2.2% increase may seem small, the figure is deceivingly low because it actually translates into a 29.2% annual growth rate. In other words, if bankruptcy filings increased 2.2% each month of a year, the total bankruptcy filings for that year would be 29.2% greater than it was the previous year. (Because of compounding, the calculation is not as simple as taking 2.2% times twelve months.) This is a tremendously high growth rate in bankruptcy filings. At this growth rate, bankruptcy filings in 2009 would be over 1,300,000. ——>your solution here
People often ask me why I think bankruptcy filings are rising. My answer is that it is both simple and complex. The simple answer is that hard economic times obviously contribute to rising filing rates. Tightening consumer credit markets also lead to short-term increases in bankruptcy filings as consumers find it difficult to borrow more to stave off the day of reckoning. That is the simple part. The more complex part of the answer is that we know people do not file bankruptcy immediately upon the onset of financial distress. Typically, consumers struggle for a long time–often two or more years–before filing bankruptcy. The job loss today or the harassing calls from creditors may precipitate a bankruptcy filing, but the seeds of that bankruptcy filing were sown long before it shows up as a statistic in the bankruptcy filings.
——>your solution here
Thursday, October 02, 2008
Economic Ciris - how to survive
Count your blessings stars if you have not been hit by any of the major problems of the current state of the economy
I am guessing that you still have a job...you can afford to drive the car that gets you there.
ConsumerReports.org had a helpful article
on the subject and here it is...
Dos and don'ts for dealing with economic instability
Economic crisis. Market meltdown. Government bailout. All these terms being bandied about these days probably have you wondering whether you should stuff your money into your mattress and, while you're at it, hide under the bed.
You shouldn't do that, nor should you panic. Regulators are taking swift action to bring stability to the market. The best thing you can do is ride out the short-term ups and downs with just a few prudent adjustments where necessary until it all shakes out.
Here are 10 recommendations from the money experts at Consumer Reports on what you should and shouldn't do as the financial events unfold. We'll be providing more specifics in the upcoming days.
What you should do
Check your safety nets . Government programs to protect investments, banks and credit union accounts, insurance and other assets are reassuring in times like these. But these safety nets have limits. So be sure you know what they are and how to maximize the protection they offer.
Follow the news. With swinging markets and new regulatory initiatives, things are changing quickly. For example, last week, with rising fears that money market mutual funds were at risk of "breaking the buck"--falling below $1 net asset value--the government established a temporary guaranty program to prevent that from happening. So don't act on the latest news or assume that what was true yesterday is still the case today.
Get your finances in order. There's never been a better time to make a budget and start paying down your debt, credit card and otherwise. (M2W-ad: "Multiply Income Sources" the best way to pay down your debt in the fastest way possible. http://www.magnet2wealth.com/e/z)
Rethink your plans to retire. If you're expecting to retire soon, consider holding off for a while, if possible, until things calm down. That will give you time to reassess and, if need be, modify your plans.
Call your financial adviser. With end-of-the-year tax planning an annual ritual, now is a good time to make an appointment with your tax adviser no matter what the economic outlook. He or she may have some advice on how to tweak your finances as you ride out the current storm.
What you shouldn't do
Bail out. Dumping your stocks or equity mutual funds now, when values are especially low, is simply guaranteeing that you'll turn paper losses into real ones. Even if there's more downside to come, staying on course often pays off during times of economic uncertainty.
Stop saving. Those regular contributions you've been making to your savings or retirement accounts are an important part of good financial discipline, and there's no reason to stop them now. We've long recommended a strategy of dollar-cost averaging your investments--making periodic contributions to your accounts, regardless of where the market is heading. That advice is as good as ever.
Speculate. While lower prices for investments create opportunities, betting on the markets can easily get you into trouble, especially with the wild swings we're seeing now. Small, measured investments are usually better than large, hasty ones intended to make a quick killing. Be especially wary if you get tips from e-mail, the Internet, or elsewhere for certain stocks, commodities, and other "once-in-a-lifetime" opportunities.
Take on new debt. Be careful about acquiring new debt. Economic downturns can affect job stability and investment income, making it difficult to determine how much debt you can handle.If you must borrow, say, to put a child through college or make an emergency repair to your home, be doubly sure that you've examined all the options and risks, especially if you're planning to use the equity in your home.
Stop living. Although these times demand extra caution, there's such a thing as over-reacting. Whether it's buying gifts for the holidays or taking your family on vacation, life has to go on. And some cutbacks can have negative consequences for your wallet, such as putting off maintenance for your house or car or canceling insurance policies. So don't overreact. Instead reflect carefully and, where necessary, adjust.
I am guessing that you still have a job...you can afford to drive the car that gets you there.
ConsumerReports.org had a helpful article
on the subject and here it is...
Dos and don'ts for dealing with economic instability
Economic crisis. Market meltdown. Government bailout. All these terms being bandied about these days probably have you wondering whether you should stuff your money into your mattress and, while you're at it, hide under the bed.
You shouldn't do that, nor should you panic. Regulators are taking swift action to bring stability to the market. The best thing you can do is ride out the short-term ups and downs with just a few prudent adjustments where necessary until it all shakes out.
Here are 10 recommendations from the money experts at Consumer Reports on what you should and shouldn't do as the financial events unfold. We'll be providing more specifics in the upcoming days.
What you should do
Check your safety nets . Government programs to protect investments, banks and credit union accounts, insurance and other assets are reassuring in times like these. But these safety nets have limits. So be sure you know what they are and how to maximize the protection they offer.
Follow the news. With swinging markets and new regulatory initiatives, things are changing quickly. For example, last week, with rising fears that money market mutual funds were at risk of "breaking the buck"--falling below $1 net asset value--the government established a temporary guaranty program to prevent that from happening. So don't act on the latest news or assume that what was true yesterday is still the case today.
Get your finances in order. There's never been a better time to make a budget and start paying down your debt, credit card and otherwise. (M2W-ad: "Multiply Income Sources" the best way to pay down your debt in the fastest way possible. http://www.magnet2wealth.com/e/z)
Rethink your plans to retire. If you're expecting to retire soon, consider holding off for a while, if possible, until things calm down. That will give you time to reassess and, if need be, modify your plans.
Call your financial adviser. With end-of-the-year tax planning an annual ritual, now is a good time to make an appointment with your tax adviser no matter what the economic outlook. He or she may have some advice on how to tweak your finances as you ride out the current storm.
What you shouldn't do
Bail out. Dumping your stocks or equity mutual funds now, when values are especially low, is simply guaranteeing that you'll turn paper losses into real ones. Even if there's more downside to come, staying on course often pays off during times of economic uncertainty.
Stop saving. Those regular contributions you've been making to your savings or retirement accounts are an important part of good financial discipline, and there's no reason to stop them now. We've long recommended a strategy of dollar-cost averaging your investments--making periodic contributions to your accounts, regardless of where the market is heading. That advice is as good as ever.
Speculate. While lower prices for investments create opportunities, betting on the markets can easily get you into trouble, especially with the wild swings we're seeing now. Small, measured investments are usually better than large, hasty ones intended to make a quick killing. Be especially wary if you get tips from e-mail, the Internet, or elsewhere for certain stocks, commodities, and other "once-in-a-lifetime" opportunities.
Take on new debt. Be careful about acquiring new debt. Economic downturns can affect job stability and investment income, making it difficult to determine how much debt you can handle.If you must borrow, say, to put a child through college or make an emergency repair to your home, be doubly sure that you've examined all the options and risks, especially if you're planning to use the equity in your home.
Stop living. Although these times demand extra caution, there's such a thing as over-reacting. Whether it's buying gifts for the holidays or taking your family on vacation, life has to go on. And some cutbacks can have negative consequences for your wallet, such as putting off maintenance for your house or car or canceling insurance policies. So don't overreact. Instead reflect carefully and, where necessary, adjust.
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