In the Eye of a Financial Storm
We are hearing news daily of financial turmoil. Congress is voting on a $700 billion bailout of our financial system. Banks, such as Washington Mutual, are failing. U.S. Treasury agrees to insure money market funds against losses. What should we do?
No questions things are bad but right now it is time to step back and assess our financial situation. Here are some suggestions on how to weather this financial storm:
- Do not panic and make hastily made decisions. Do not immediately liquidate accounts without knowing the facts.
- Review plans. If you have a financial plan get it out and review it. Evaluate your portfolios or investments and assess your time horizons (i.e. when will you need your investments). If you have a long time horizon meaning 10 years or more it maybe best to do nothing and ride out the storm. If your time horizons are shorter meaning 5 years or less you are in a much tougher position. Shorter time horizons mean portfolios/investments should be reviewed in terms of riskiness and preservation of capital or cash. If you are not sure seek professional advice from a certified financial planner – preferable one who doesn’t sell financial instruments.
- Budget. If you don’t have a financial plan (don’t worry) at the very least start a monthly household budget. It is essential that we understand where our money is going and where can we save money.
- Do not use credit cards unless you can payoff the balance each month. Increasing debt loads with higher credit card balances now is extremely dangerous.
- Stay healthy. Our jobs/careers right now are absolutely important to staying afloat.
I am trying to stay positive. It is tough. I will say that after the dust settles Wall Street must be held accountability for this crisis. The days of unfettered money making opportunities must end.
Stay tuned to RebelCapitalist for more information.
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