Financial Advice for the times , anyone???

F

FhvnLT4A

Joined
May 25, 2008
Messages
1,737
Likes
226
Location
SE Mass
Feedback: 9 / 0 / 0
OK, I get alot of opinions on the what we should do and what we shouldnt do, so I thought I would post it here. I would like to hear REAL, intelegent thoughts on what this economic issue means to the lower middle class homeowner who has no clue what to do.... Do I spend it like I had it??? Do I save it and put it in cans in the backyard??? Buy?? Sell??? I already know my IRA is getting the snot kicked out of it, but theres not much I can do about that. I would like some financiallly savvy people to help me out here.....

and one more thing.... carrying a balance ( a fairly large one) on a credit card right now... bigger problem or should i be charging to the MAX ( The Para LDA 9mm and Ak-47 are just waiting to be purchased)....

Thanks ahead of time !
 
My take- I am not a financial advisor, nor do I play one on TV

Stick out the IRA/401K. First reaction (as mine was) is to pull out and go for high ground. This thinking will kill the market entirely if everyone does it. Things are at fire sale prices right now, so you stand to win big when the market recovers. For anyone, it is a matter of how long you have. I am 39-I still have a while to go yet. If you're 65, you're strategy should be more capital preservation.

Bag the credit card. Pay off the debt. Get a second job. Renegotiate the interest rate to 0% (it can be done-just tell them you can't pay) Have the CC company freeze the card. They may anyway. Unsecured debt is always bad.

What about the 700B bailout? It means shit to you and me. It will not raise the value of your house. It will not get the Dow back to 13,000. It simply means that those who should go belly up will not. Will your kids be paying it? No. When the market recovers, the government will probably make money on the deal, much as they did with the Chrysler bailout from years ago. My problem with the bailout is that it merely staves off the inevitable for a time. It encourages a continuation of the "just borrow the money" attitude. We have, as a society, become too used to easy credit. Some debt is not a bad thing. A CC maxxed out and a home mortgaged to the hilt is.
 
Well, the only advice I would offer is to spend wisely and save carefully.

I have been listening to a few different people on the radio and the key items I picked out were to first spend on things of value that you will need. Be frugal but don't take it to an extreme where you can't have fun now and then. Look for items that are well-made, will last, and which you need.

As far as the credit cards, use them with care. I would not carry a large balance if you can help it. That money would be better used earning you at least 1-2% rather than costing you 7-12%. But if you can find a very low rate credit offer, that might be worth pursuing. I consolidated a few high interest cards cards into one account that offered 1.9% interest for the life of the balance (just don't add anything that will cost a higher interest rate! - usually payments are put towards the lowest rate balance.).

As far as savings, save as much as you can. And watch your savings. Can you move your IRA funds around into more secure investments? Do you have some savings in a nearby, safe bank? What about some emergency cash (probably not more than you afford to lose).

Do you really need the Para and the AK? If you do, try to pay cash.

You appear to be in a pretty secure line of work, but do you have any plans for what you could do after you retire/leave?

Some advice, some questions. Take them for what they are worth - free. And good luck.
 
chickenlittle.jpg


The sky is falling, the sky is falling.

For gosh sakes, you don't buy when the stock market is up, you buy when it is down. It's the game of the market.

What goes up, comes down - what goes down, comes back up.

If you are going to invest for any reason at all, then let it ride.

I don't look around me and observe what is happening to others and assume that somehow all that will "attack" me somehow. My life is the same, if not better. There are many who are doing very well - and it is not just the rich...

My motto - I never face reality unless the reality is what I want it to be.
 
"We're doomed." C3PO

Sit tight. If you don't sell any stocks, you haven't lost any money (except on paper).
 
I like electric companies that pay dividends. They never fail to pay a dividend every 3 momths. I just have them take the dividend and reinvest it in to more stocks.

No fees and when the stock go's down, the dividend stays the same and I get even more shares when the dividend is rolled over.
 
I appreciate all the advice.... I dont buy or sell stock. my stuff is through a company that does all that for me.... I was more looking at what me as a homeowner and lower middle class income could do on a day to day basis....
 
FhvnLT4A said:
I appreciate all the advice.... I dont buy or sell stock. my stuff is through a company that does all that for me.... I was more looking at what me as a homeowner and lower middle class income could do on a day to day basis....
Click to expand...

Keep your home, pay your mortgage....be happy.
 
packingungal said:
Keep your home, pay your mortgage....be happy.
Click to expand...

I really think that's about all most of us can do at this point, although if I had a lot of cash around I'd be buying stocks. It's always a good idea to not carry a credit card balance at the criminal interest rates they charge, so if you have one try to pay it off - better yet, don't carry credit card debt in the first place. Otherwise, keep your head down and wait for the shooting to stop.

The market came down something less than 10% yesterday. Back in 1987 the drop on Black Thursday was more like 30%, as I recall, and I was also 100% in equities at that time (I've since hired a financial guy who has long since corrected that), which meant that my [paper] loss was much more significant. The market eventually came back, and it will this time as well.
 
FhvnLT4A said:
I appreciate all the advice.... I dont buy or sell stock. my stuff is through a company that does all that for me.... I was more looking at what me as a homeowner and lower middle class income could do on a day to day basis....
Click to expand...

All we can really do as real Americans and not lowlifes who suck of the .gov and tax payers is to work more and try to make more. I myself just started looking for a part-time job to supplement my income. I plan to put the extra into a new account and only use it for paying off credit cards and a few other bills. Once those are paid off I should be all set...

Many of us are in the same situation but we know that .gov is NOT the answer and we can only help ourselves. As long as we are stuck paying for the people who refuse to help themselves it is going to be an uphill battle with sacrifices having to be made.

So long story short, work hard, spend wisely and payoff your debt.
 
LOL great advice both of you.. I too am looking for something part time. My FD salary just isnt cutting it anymore. Its a shame to say, but i actually make LESS with my promotion than I did as a firefighter. Overtime for officers is basicly nil. Then to find out that a paramedic in the next town over makes more than I do as an OFFICER.. that really rained on the parade.. gotta go find me something on the side...
 
Bugs100 said:
I like electric companies that pay dividends. They never fail to pay a dividend every 3 momths. I just have them take the dividend and reinvest it in to more stocks.

No fees and when the stock go's down, the dividend stays the same and I get even more shares when the dividend is rolled over.
Click to expand...

Except when they go bankrupt. E.g., PSNH.
 
Mikey said:
This is the best advice you will ever get if you are just turning 18.

If only I could go back in time and kick myself in the nuts.[thinking]
Click to expand...

SOME CC debt is ok, just don't Max out a $5,000 card (have many friends who did). Remember, when you turn 18 you have no real credit history and when you need it will hurt you.

Again, SOME CC debt is fine as long as it NOT maxed out. When you want to go get a house later on you can be denied or your interest rate can be higher, same goes with a car and other big ticket items. With better credit your the one who has more leverage when negotiating the mortgage.

And after this folly I will not be surprised if banks et al change their lending criteria for home mortgages after this.
 
Skald said:
SOME CC debt is ok, just don't Max out a $5,000 card (have many friends who did). Remember, when you turn 18 you have no real credit history and when you need it will hurt you.
Click to expand...

Nobody is saying don't use credit cards, just don't carry a balance. If you pay your bill in full each month your credit history will be the same as if you'd payed it off over time.
 
Skald said:
And after this folly I will not be surprised if banks et al change their lending criteria for home mortgages after this.
Click to expand...

Unfortunately, I think that just wouldn't be politically correct. It would all but kill home ownership for poor people who can't afford homeownership in the first place. It will also kill home prices for people who can currently pay for their home and make them wonder if it is worth paying for a home that is no longer worth what your mortgage is worth and may never be worth it again. I'm fairly certain if someone told me my house was now worth $150k, I'd probably stop paying it and putting the money into the bank instead and wait for them to come. Of course this is the thinking that got us into this mess in the first place.
 
FhvnLT4A said:
I appreciate all the advice.... I dont buy or sell stock. my stuff is through a company that does all that for me.... I was more looking at what me as a homeowner and lower middle class income could do on a day to day basis....
Click to expand...

Create a realistic monthly budget. Start with the necessities - food, mortgage, utilities, gas. Mortgage and utilities should be fairly constant and easy to budget for. Food can be pretty predictable too, just don't expect lobster at a high class restaurant every night. For gas, budget about 5% higher than you think you will need, and roll any surplus over to the next month's budget. This portion of the budget takes absolute priority over everything else as these are the essencials of your survival.

Next in priority is things that are eventually needed, but won't cause catastrophic consequences if you don't get to them immediately. New clothes, routine maintnance of the house, car and anything else that would fall into the "needed but not top priority" category.

Retirement and savings comes next. Set a realistic amount to save each month, even if it's only $100, you're still putting money away.

Finally, discretionary income. Anything that is not needed for survival but makes life more comfortable goes in here. New toys, guns, ammo etc. As tempting as it is, this category should not be 90% of the budget [sad2]

I'm not a financial planner by any means. You should contact a financial planner if you think you are running into any financial difficulties.
 
Skald said:
SOME CC debt is ok, just don't Max out a $5,000 card
Click to expand...

Any CC debt (read, carrying a balance beyond a month or so) is terrible unless you somehow got them to agree to a really low interest rate. What starts as maybe a grand or two quickly turns into a $%#$%$ albatross. Once it invades far enough it's like trying to swim to keep from drowning with a lead weight attached to your leg. I've been there twice and have no intention of ever going there a third time. That shit can eat you alive if you're not careful. Now I never put anything on a CC that I cannot pay for immediately, unless its some kind of dire emergency.


-Mike
 
Instead of putting money into my 401k, I'm going to try and redirect it to my savings accounts at FDIC insured places like ING Direct which currently pays 3% on savings accounts.

Unfortunately right now, no new gun purchases for me. Less range time. Less ammo purchases.

I'm concerned about job security for many people and that will ultimately affect my job.

I already keep track of every expeditures that I have. I posted my firearms spreadsheet before...Maybe I'll post what I use on daily basis so people can take a look.
 
It's not so much your credit card debt but how are you using them. If the financial systems do not get "bailed out" so to speak, the problem is that the banks will hold onto their cash and not want to lend, this could eventually affect your credit card. Let's say your credit limit is $10,000 and you're current balance is $5,000, in theory the credit card company will reduce your line of credit down to what you owe, so that card will be "maxed out"....... so if you use this card to get by each month (pay bills, grocery) you could be in trouble. If I was you I would pay down what I can in debt, while at the same time save as much cash as possible, and of course stop spending.


Of course banks are in the business of lending (i.e. making money on interest) so a total shut down of the flow of credit makes no sense.
 
FhvnLT4A said:
I appreciate all the advice.... I dont buy or sell stock. my stuff is through a company that does all that for me.... I was more looking at what me as a homeowner and lower middle class income could do on a day to day basis....
Click to expand...


Anything you can do to cut your expenses will help. The biggest expenses in most people's lives are food, car, and housing.

If you can bear to eat like you are in college you can save money by eating pasta, mac & cheese, lentils, and other assorted cheap foods. It doesn't give you a very good diet though. My SO does all the shopping and is religous with the coupons. Every couple of months she gets a shopping bag full of coupons from a friend of hers whose mother lives in a retirement community and gets the coupon flyers from the recycle bins (most people never even think to use coupons).

My S.O. saves LOTS of money by combining coupons and paying careful attention to sales - then using the coupons when the goods are on sale at the same time. She often gets her best scores on things like shampoo and similar goods. I have seen her come home with 15 bottles of shampoo and conditioner that she ended up paying something like $3.00 for after combining all the disounts. She also carries around little wallet thingy that is chock full of coupons.

If you go the coupon route see if you can hook up with other like minded people and share the coupons you don't use.

Check prices carefully - buying at places like Costco and BJ's is NOT always the cheapest price. You can often get better deals at supermarkets - especially with coupons.

I have seen numerous people waste huge amounts of money on automobiles over the years. By either buying cars that are way more expensive than they need - or buying cars that are just unreliable and eat up large wads of cash by needing constant repairs. I am an full on advocate of Hondas. I am on my third one (an Acura actually) and all three have been nothing but reliable. My last two were up at 185,000 miles when I stopped driving them. The first one I just wore it out by driving it hard (CRX). The second one was a 97 Honda Civic that was sold at 189,000 miles with NO rust on the body and was still in excellent operating condition. It probably had another 180,000 miles of life in it if the right person was behind the wheel. During the life of that Civic I replaced the battery once (at 160,000 miles) the brakes a couple of times in the front and once in the back, the exhaust system a couple of times, and a few other odds and ends. It was a VERY reliable car and was simple enough to fix yourself - which is by the way, another great way to save money - learn to do your own car repair. That car saved thousands of dollars in repairs over it's life over other comparable cars I have seen friends buy that have needed constant repairs of one sort or another.

Mow your own lawn (don't pay a service) - better yet look into doing "natural" landscaping that doesn't need as much maintainence.

Insulate the house better. Heating can run up huge bills depending on what type of house you have. Insulating a house that is poorly or completely uninsulated can pay huge dividends in heat savings.

If you are heating with oil you might find that by converting to gas you can save money - I think a lot of the gas companies give rebates if you convert.

Upgrade you heating system to a more efficient one - there are MA and Federal govt. rebates on some of this stuff.

Bring you lunch into work instead of buying it.

Get rid of cable TV or get basic if you have the expensive premium channels.

If you have kids make them do chores around the house, this will free up your time to spend on doing other things that save money (I see lots of people whose kids do nothing but suck up electricity playing video games)

Cruise yard sales - you would be surprised what people sell for cheap money or put out in the trash in the more expensive towns. The guy next door to me just put what looked like a perfectly good lawnmower out in front for the trash this morning - the trash guys didn't take it but some guy in a pickup stopped and picked it up. I remember the neighbor struggling with it because it ran like crap. I bet somebody who was good with small engines could get it running fine. Pick it for free - fix it up, then sell it for $100.00 on Craigslist. Easy money for the right person.

Frankly I think for the average person "investing" in goods that stand a good chance of gaining value is better than risking your money in the stock market. I have read a number of investment advisors that have pointed out that since the early 90's the average gain in the stock market has barely kept pace with the rise in the consumer price index. You could of course make a lot of money betting on the right stock - but that is a gamble.
 
Mikey said:
If only I could go back in time and kick myself in the nuts.[thinking]
Click to expand...

Well, I can't help you with the "going back in time part" but I may be able to assist the with the rest of your statement [smile][wink]

As far as the OP is concerned...DON'T PANIC. Things will eventually go back to normal.
 

Similar threads

Need Advice - Red Dot for P320
2
Replies
40
Views
624
jkelly1229
J
Does anyone have
2
Replies
30
Views
1K
appraiser
appraiser
Suppresor advice needed
Replies
14
Views
369
Road_Clam
R
A wee bit o gun porn for the 1911 guys
Replies
18
Views
560
citoriguy
citoriguy
Need Advice...
2 3
Replies
68
Views
2K
groundscrapers
G
Back
Top Bottom