The New Saver’s Mentality

If this recession has done one good thing, and infused one nugget of irrefutable wisdom into people who formerly were big time spenders who never looked at price tags and foresaked a potential gorwing life savings in pursuit of material products, services and high faluting lifestyles, then that is good for those people who really didn’t think about saving for the future or the true value of money and the fleeting nature of the material goods it can buy. People like this have been changing their ways since the recession for one simple reason.

They really had to do it not only to survive, but as a wake up call that millions of retirees lost billions of dollars in the financial crash, and they they too could have that happen, and what if they had nothing to fall back on when they were older and retired? This idea literally scared sense into millions of people, and the reports are showing that more and more Americans are turning to saving their money.

Savings has been at a multi year high lately as more people turn to putting their money away in safe places and giving up expenditures they no longer find are a necessity. People old and young have really re-prioritized their money, and this has lead to an all time savings high, and investing high that cannot be matched except for in times of learning the real value of money and security.

Now, with the new year, financial planners and stategists have had even more people coming to them for their “New Year’s Resolution” to help them save more money and perhaps more strategically plan to build it more effectively over the crucial years before their impending retirement. Not only retirement, but many people are now interested in things like emergency savings accounts for when things are a little tight or when things go awry again in the financial markets as a sort of “just in case” measure.

Also, more and more citizens are trying to cut costs where they can. People are doing things like cutting out all the unnecessary cable channels on their cable subscription, taking a hiatus from the gym and gym fees and working out at home or finding other creative ways to get their exercise in for virtually free. They are also looking at ways to scale back on insurance premiums, any monthly bills by cutting down heating costs and water costs for example, or looking for competitive prices on services like that.

One of my savings things has been to make sure my paid off car stays in great shape, so I take it in for preventive maintenance, because after all, that’s much cheaper than a monthly care payment. Where have you cut back on your budget?

Merry Christmas This Eve…

Today’s post is really going to be short and sweet. I sit here on Christmas Eve, thinking about all the wonderful blessings in my life, and the fact that I have a comfortable home, am not sweating about making ends meet most of the time, and have wonderful friends and family, and all I can do is look at life with the utmost gratitude and thankfulness.

I think that’s what Christmas is all about, or at least what the entire holiday season is about, no matter what you happen to celebrate. I was struck by the openness of strangers today, and it always reminds me that we are all truly in this life together, no one is alone, and with eachother’s help, we will get ourselves and everyone we know through these difficult times. For now, let’s just reflect on what we have and what we are grateful for. Merry Christmas everyone, I hope your Christmas day is filled with warmth, family, friends and great food

Will Emotional Fulfillment Bring You Financial Stability?

I have often thought about the idea that emotional fulfillment and spiritual fulfillment will help to bring you the abundance you’ve been looking for in your financial life. We all have dreams and desires of being free of the burden of financial problems, the worries that go with working your fingers to the bone and living paycheck to paycheck, many times in jobs that leave you feeling bad about yourself or totally unfulfilled emotionally, and the havoc that can actually have on your mental health and actual physical well being.

But what if you put your mental and spiritual health first? What then? Could you just expect the floodgates of opportunity and wealth to open to you, and your worries about money and material items to vanish? Of course, it’s not that easy, as we all know, but I firmly do believe that emotional wellness and doing what you truly love and have a passion and zest for as your profession will definitely lead to financial success if you pursue it with a passion.

If you talk to any successful business person, they will ultimately tell you that they love what they do, and that this aspect alone is a huge piece of the puzzle to their success.

I am a follower of the teachings of Deepak Chopra, and he always talks about how people who tend to be positive and spiritually fulfilled will naturally be more financially stable, because it all goes together more than you think. When I think of some “rich” people who seem totally miserable, I always wonder if the money is even worth it, and how they got that way in the first place if they are so unfulfilled in many other ways.

Often the story goes deeper than that though, and some of the people who walk the walk and talk the talk of the rich are actually insolvent or having serious money issues because of overspending.

Take for example people like Bernard Madoff. Here is a man who by all appearance ran a successful investment company and managed money for some of the most rich and famous people out there. He lived the life, had the yachts, the vacation homes, all the material trappings of financial success. And yet, look where he is now because of his poor spiritual choices, his option taken to bilk people out of their hard earned money?

His family has been disgraced, he’s in prison, and is now totally poor himself. I’ve also heard rumors that he has incurable cancer, but I’m not sure if that is true. When you see things like this, it is a true reminder that it’s not just money that counts, but it is integrity, spirituality and doing what is right.

Michael Moore At It Again with Critiquing of Capitalism

Michael Moore, the controversial film maker who brought us such scandalous documentaries as Bowling for Columbine, Farenheit 911, and my least favorite, Sicko, is at it again, showing up with cameras at places like Wall Street taping it off with crime scene tape and generally making a spectacle of himself in the name of protestation against the greed of the US government. Mind you, this is the same place he lives and which has afforded him immense success, where free thinking is allowed and even encouraged.

I don’t want to sound anti Michael Moore, but after I saw Sicko, his latest documentary, I felt that he really skewed the view in that one. I liked his previous works, but this one just seemed to present a very one sided story about health care in America. I realize the health care system is very flawed here, but it is also flawed in places that offer free healthcare, just not as seriously. I thought that Sicko bordered on expoitative, although I give him much credit for having the guts to do these types of films and Farenheit was a great film although some claim that one was extremely one sided as well.

This time he is attacking the very foundations of American capitalism saying that it just doesn’t work. However, I disagree. It is going to have ups and downs, of course, but it is the best way for people to be masters of their destiny and also the best environment for people like me to pursue their dreams of owning a small business and becoming independently financially secure.

The capitalist environment is one that has afforded me personally many opportunities that I would not have had in any other political climate, or they would have been severely limited in other places, so I for one am grateful for capitalism although I acknowledge it is not perfect and needs constant improvement.

Bank Support Ending?

In a recent article I read, a top financial adviser to Barack Obama advised the President and his administration against pulling the rug out from under the federal support of the banks so as to keep the recovery momentum going, that is, the little bit of recovery we have experienced thus far. This has been a concern of economists actually for a while. The first concern was that you can’t “legsilate away” a recession, however you can definitely help the recovery through federally funded programs, and the second was that the banks may become reliant on the support, and what would they do once they stopped receiving this much needed cash infusion from these federal programs?

Well now, almost two years into the very beginnings of the recession, financial analysts are focusing on what now to do about the slow pull back of government money and programs that were designed to help banks and other financial institutions out of the financial quagmire they had found themselves in. If we pull back too suddenly, it could potentially have a huge negative impact on the recovery that is currently in process and visible through various signs of life in the economy. Unfortunately one of the most important signs of recovery is still missing, that is, the sign that jobs are making their way back.

One of these government funded programs was to back and insure people who were enlisted in money market mutual fund programs, and that is scheduled to end very soon. This was because of the concern that money markets, traditionally one of the safest investment instruments, albeit a low yield one, were even in potential danger of going belly up because of the massive turmoil in all areas of the market and the government wanted to ease people’s minds and back those programs so that there would not be a mass exodus on those as well, as there had been on numerous other financial instruments, such as stocks and bonds.

The key is to have the perfect timing here, and that may not be possible, which will put a wrinkle in the market recovery. However, with the right leadership, advisement, and timing by the putting together of some of the top intelligence in the financial industry, which is the government’s job to attain, we could find ourself sitting more pretty in a few months even if the timing is correct.

Lessons Learned from the Recession

While this long recession has many of us shaking in our shoes about the future of our jobs, our businesses, our retirement accounts, and the circulation of money in the US, it also may offer us some lessons that can help us both individually and collectively as a nation. First, the recession has taught us some lessons about risky lending practices, and opened congress’ eyes to the need for regulation of these loaning entities. It also has taught us that no one can ever time stock market, nor can they ever see a huge drop coming all the time, so it’s best to diversify your portfolio if you’re saving for retirement, into low and high risk, and medium risk investments.

It has definitely taught me and my significant others a thing or two about planning ahead and saving “for a rainy day” so to speak, in case anything ever does happen where one of us loses our job or finds that we have to start over. For example, I now try to put aside a certain amount of money every month that gets automatically deposited into another account where I don’t have access to withdraw the money. A lot of Americans have learned that you have to always have something to fall back on, in case of financial difficulties or one losing their job, and that lesson has spread amongst most of the families that I know.

Many economists think that the recession may be coming to an end, and that in the end, we as a nation may actually become a stronger economy down the road because we now know how to avoid these types of things from happening in the future, to this depth of severity. Ben Bernanke is one of those people, and he has shared his thoughts on why he felt that the bailout had to take place or else it would have meant imminent disaster for the American economy.

While there is a lot of criticism out there for the amount of money laid out to banks and other businesses to bail them out, there are also many who feel that it was utterly necessary, albeit a necessary evil, to keep the economy somewhat stabilized and not create a whole new domino effect of layoffs and job losses.

Even Daycare Centers Feeling Squeezed

Well, when I read this one, I thought it does make sense, although it’s not one of the first businesses you typically think would be threatened by a severe recession, but coupled with high unemployment numbers, you’d better bet you’ll start seeing daycare businesses suffering. And why not, since many of the work force are parents who have to pay daycare businesses to keep their children during the day while they go off to work and make the money for the household?

With many daycare agencies and businesses making up to a grand a month for watching people’s kids during the week when they are at work, some agencies have had to drop their prices to keep people coming, and some have had to even close their doors because their enrollment has gone down too much to make the business a profitable one. Daycare, once a booming business, in many states and towns, has become a virtual ghost town for customers and they are suffering, like most other businesses in this increasingly barren economy.

This domino effect has been happening to daycare centers just in the last few months, as the effects of unemployment and reduction in force, reduction in pay and expenses has taken it’s toll on the American family. Sure, people are saving on what can many times be expensive daycare, but they are also out of a job and having to cut back in many other ways since their income has dried up. Unemployment benefits pay for a percentage of your pay, and not even for more than a few months usually, so when that dries up, then there really are some problems.

It’s a shame too, because kids being at home in these increasingly stressful family environments is good neither for child or parent, and the effects will most likely be seen on the family unit as well. Heck, there are already stories of family dysfunction and divorce that are directly attributed to this economy now. Hopefully we can all just look at this as a thing of the past soon. There are some signs that a recovery may be on the way according to some, but we still have a ways to go for hanging in there.

Tax Time Brings Anxiety…Once Again

I just visited my tax accountant’s office a few days ago, and left it feeling a nagging sense of anxiety. But this is nothing new for me really. Every year, I agonize over gathering all of my year’s information together, making sure I get every possible deduction, since in addition to having a regular nine to five job, I also run a business on the side, and making sure I’m also not missing any of the streams of income I’ve generated, so I don’t inadvertently make Uncle Sam mad.

That’s the last thing any of us needs, and the tax man tends to strike fear in most American’s hearts, especially those that run businesses where the record keeping can be very confusing and the tax codes don’t exactly help. Even with a professional to help you, it can be confusing as to what you really need ot even take in to your tax preparer every year, and when you do finally gather everything together, you’re almost always left with a nagging feeling that you forgot something.

I mean, a whole year’s worth of information is a lot! Especially when I tend to forget things that happened a mere one day ago, let alone several months ago. It helps a lot if you keep an immaculate record of receipts and comings and goings of your personal money and also any business related money that happens to enter in to the picture.

Another thing that can help tremendously, which I myself have not implemented due to time constraints, are money management systems like Microsoft money and Money business edition, which simplify the book keeping process – especially if you are the secretary, treasurer, and CEO all in one, which a lot of small business owners have to be due to income and debt ratios.

Every year stress seems to peak about taxes in March, because that’s when that dreaded April deadline comes looming and people start to panic and know they have to start getting their information together quickly. However, if you do a little planning ahead, you can stave off this sort of mess and actually enjoy your March month!

Interesting Financial Tidbits in the News

In some very sad, angering, and actually one very optimistic story in the news as of late, it can be seen that we are going to keep hearing these unusual stories for quite some time as our country struggles to recover from one of the worst problems in history. The first one is very sad indeed. It’s about a ninety year old gentleman who lost his entire life savings of $700,000 in the Ponzi scheme that was built up over years by “financier” Bernie Madoff. The poor guy was unfortunate as many other were, in trusting this class A idiot who lost millions of dollars of hard earned money for people, and ended up losing every penny of his life savings- just down the drain, like that.

I can’t even imagine seeing my life’s worth flushed down the toilet like that, especially when I’m supposed to be enjoying my golden years in comfort and security. Shame on you Madoff, I don’t know how you can live with yourself, and the fact that you and your wife tried to shelter you assets from being seized to at least help pay back some of the people who’s lives you ruined just shows that you don’t have much of a conscience.

This ninety year old gentleman was forced to get a job paying ten dollars an hour at a local grocery store. I can’t even begin to describe the feelings of disgust this drums up, and I’m sure I’m not alone in that sentiment, and I’m a very forgiving person. In more positive news, apparently someone is benefitting from our current crisis. Used cars are flying off the lots, as people look for bargains on reduced used car prices and tend to not be going for the new cars any more instead opting to save thousands by buying used.

Used car salesman may be benefitting from this by selling more cars, and more easily, so at least someone is making better money. It’s good to hear even a glimmer of good news right now, it seems like Americans are hungry for it, lapping it up at first sight, giving us something to look forward to, and that ever so fading hope of a quick recovery. It will happen, it’s just a matter of time, please remember that!

Businesses : The Strong Will Survive and Thrive After Recession is Over

I hate to compare our current economic fiasco to Darwinism, but it really is somewhat of a perfect situation for business owners to really ratchet up their performance, goals and their strategies for being more profitable, more competitive and more goal oriented, while some of their competitors are taking it on the chin or even going out of business.

Not that all of us business owners aren’t taking it on the chin with the tight grip consumers have on their money right now, and the even tighter credit markets, but there are certainly the stronger amongst us who can weather the storm without freaking out and closing shop, for fear that we will lose everything if we don’t. It’s interesting times right now. It’s a time when a lot of people who have the guts to do things that most others are fearful to do will make lots of money when this whole fiasco is over with.

Take value stock buying for example. You are seeing common stock drift to levels not seen in years, and the opportunity is prime picking for buying excellent stocks are dirt cheap prices. Heck, some of them are practically being given away right now, and are still producing great returns and dividends while others have their money in money market funds and low yield savings accounts. Not that I’m downplaying how much so many of us lost in the stock market, I’m not, but if you can, you may want to research and buy some stocks now that are truly high value.

Business owners, this is your time to really fine tune your business. Try to keep your cool, even in the face of falling sales and plummeting profits. Use this time to tweak what doesn’t work, realign your advertising and marketing strategies to the new era (albeit it may be short, we don’t know) of thrifty spending, and work like hell on your business model to ensure that when times do get better, you will be primed to take over your niche when a lot of the other guys and girls that couldn’t stomach it took what they had left and ran.

In times like this, there comes incredible hardship and trying times, but there also comes incredible opportunity. You decide – are you going to make it into your biggest opportunity of your lifetime?