Bond laddering; 5 common extreme money scripts

Flashing back to 2009: I have images of articles from a February, 2009 BusinessWeek issue.  Last week I mentioned that, in early 2009, 10,000 people a day were losing their jobs.  What was also reported was the downsizing of industry.  A variety of industries were expected to feel the burn of the economic meltdown. Because inventories were high and consumerism slowed to a stop, industries that produced goods were likely to continue reducing their employee headcount.  Some of the sectors that were expected to continue dropping employees were apparel production, car, train and plane productions and construction.

The attached article  reports on the surge of foreclosures and the big banks’ response in helping homeowners.  The loan modifications offered didn’t help and the think tank of bank executives offered hollow promises.  Sadly, most borrowers went into foreclosure or were forced to declare bankruptcy.

Based on information that I read last month at the 10-year anniversary, some people reported suffering equity losses that they’ve never recovered from.

This article has so much information about what not to do and is a learning tool for not repeating others’ mistakes.  I’ve included it here.

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Protecting Your Retirement Assets | Invest by Risk Category

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It was reported back in early 2009 that 10,000 a people a day were losing their jobs.  Job losses meant that people stopped spending money, furthering the damage to the economy.  It almost seemed that there was no way out of the disaster.  As you can see from the second image that I presented that consumer spending was down, way down.  Consumer spending supports the economy at the rate of about 70%, so you can see how job losses and reduced spending were going to delay economic recovery.  In addition, average people not only stopped spending but were struggling with accumulated debt.

Job losses were the news of the day.  I remember being at my follow-up job only two months, when I had two cell phone calls in one week from friends that both lost their jobs.  Many employers handled it poorly, witnessed by the remaining employees.

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Asset Diversification and Extreme Money Scripts

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stock market

2008 Flashback

In late October, 2008, the fear had set in.  A writer from Newsweek chose to report on the edge of positivity but, really, there was none to be found.  Everywhere you turned, there was more bad news.

Even the run on foreclosed properties had a downside.  The article reports that foreclosed owners often left feces on doorknobs and banisters.  That’s a reflection of the anger level of homeowners that had to abandon their homes. Many were on the verge of bankruptcy.

Financial meltdown

The “Ownership Society” rallied by President Bush was meant to include every American into the homeownership club.  That went down in flames, taking the rest of the country with it.

Today’s first topic is asset diversification

I promised to talk about asset diversification and I know you’ve heard of this.  You may feel a yawn coming on.  I know, it’s not very exciting.  What is exciting is knowing that your hard-earned investments won’t be wiped away in an instant if “Wall Street” makes a bad decision.

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Our Next Financial Crisis

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 stock market crash

October, 2008:  Stock Market Avalanche

Ten years ago, back in October, 2008, the stock market tanked.  The uncertainty from the big bank bailouts and near-collapse of the economy was reflected in the wild volatility of the stock market.

The Dow Jones Average, at over 11,000 in the third quarter of 2008 was now below 8,500, resulting in year-to-date stock losses of over $8.3 trillion.  The news of government bailouts rocked the markets and no one wanted to be in equities. It was a scary and dismal time and the instability was not to be contained.

Imagine losing your job or worrying about your job security at the same time knowing that your investment portfolio was evaporating.  Not a fun time.

More reasons on the financial collapse:

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Don’t Repeat Old Financial Mistakes

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Today’s flashback to 2008 follows the buyout of Bear Stearns, how their executives knew the financial reality and how the subsequent fallout of the failure of the large financial institutions was forming.  CNBC aired a special, Crisis on Wall Street, on the frenzy of reactions during mid-September 2008 to deal with the quick domino-effect of the bankruptcies of the country’s largest banks.  If you didn’t watch it, you can probably catch a rerun.

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Today’s Vlog: Being the CEO of Your Finances & Visualizing Your Future Financial Self

money management

On today’s vlog session, I’ll be discussing the following topics:
Being the CEO of your personal finances and visualizing your financial future.

A business functions under the following formula: Revenue – expenses = profits
A good CEO works with each component to generate profits for the business.
Let’s take the first component. Revenue – this is the income of the business. It involves monitoring revenue streams of the business and projecting income growth.
You should be doing the same, because without income, there wouldn’t be a formula to work with. Project out your earnings, decide how to manage your current income more effectively or how to increase your current income.

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2008 Flashback: Bear Stearns & Personal Debt

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On today’s vlog session, I’ve gathered the following topics – all related to debt:
Flashback to 2008 – Bear Stearns: the precursor of the Great Recession

Assessing stocks – the most important company metric is debt and risk level

Book review: Squeezed. What the author describes as new for our economy is actually not new at all. And by maintaining low levels of debt, you can maintain a high level of resiliency when responding to changes in the financial environment.

 

How are you managing your debt or is your debt managing you?

 

Related post:
Investing and Behavioral Risk

Protection From Financial Chaos

 

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

I stay in tune with the health of our country’s financial progress by taking in information from several sources.  I read Investor’s Business Daily on a regular basis.  They provide a gauge of the market and print it right on the front page: Market in Confirmed Uptrend, Uptrend Under Pressure, or Market In Correction.   I take cues from reports on CNBC and daily newspapers and combine the findings to make good decisions.  Ever since I’ve taken my financial position into my own hands, my level of attention is critical to its success.

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