How To Stay In Debt

How To Stay in Debt Forever

Usually blog posts have the latest and greatest money tips for knowledge, fun, or suggestion.  There’s an element of persuasion to get to the ultimate FIRE, financially-independent, retire-early status.  Easy savings ideas are rolled out, coupled with side-hustle suggestions.  I’ve done a few of the jobs on the list but in the end, they didn’t pay very well and I’d rather have time to myself than work a second job.

My hobby is making my money work for me.  I’ve coached others on money management and I’ve conducted financial management workshops.

Through my observations and interactions with others, being a financial planner is not as rewarding as I thought it would be.  People want an easy answer, one that they don’t have to take responsibility for.  Like a financial windfall is going to fall out of the sky to rescue them from their foolishness.

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Value

 

Value

Have you seen The Price of Everything on HBO?

The maker of the documentary exposes the world of art collecting and the explosive valuations assigned to the art space.  I call it “space” as I couldn’t get past the vacancy attached to paying a ridiculous amount of money for something to look at nor could I be persuaded by the pretension.

To me, it’s a profound lesson in how we define value in our lives.  Because when you think about it, everything has value.  And nothing has value.

What do you value?

What’s the value of feeling good in your skin?

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The Best Gift To Give A Child

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With the holidays coming up, I thought I’d address gifting.  Unable to contain my practical side, my suggestion for gifting to children should be corporate stocks.  Forget the useless toys and crap that ends up in a junk pile.  Hopefully you donate those things when your child outgrows them, not add to our garbage landfills.

Give a gift that gives back.  This year, buy a dividend-paying corporate stock.  Your gift can extend past the holidays by educating them about stock investing.  Plan small, ongoing lessons throughout the year to generate enthusiasm for investing.  This could be the most valuable gift that you can give a child. You would be laying a foundation for their future wealth.

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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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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