Protect your money tip #3: Secure your income

I realize that no one is completely immune from job cuts, but rather than throwing caution to the wind and hoping you don’t lose your job, you can take a few job protection precautions to help protect your money. Here are a few Do’s and Don’ts for today’s market:

• Do your homework on your current employer. You should be able to uncover enough information to learn whether they’re stable enough to keep funding your paycheck in the weeks and months to come.
• Don’t slack off. Honestly, now is the time to work harder than ever to prove your worth to the company. When the higher ups start looking for ways to cut expenses, you don’t want the spotlight to shine on you offering a less-than-stellar (read: easily expendable) job performance.
• Do avoid unnecessary job changes, which can lead to instability. Plus, you don’t want to be the low man (or woman) on the totem pole when the boss comes around with pink slips.

Of course, nothing can guarantee job protection in this day and age. If you’re looking to protect your money, you might want to consider joining the ranks of many savvy investors who’ve made the leap to business ownership. Sure, entrepreneurship is risky, but once you put in a strong initial effort and begin establishing yourself, you’ll find that your chances of surviving – and thriving – are much higher than those in high-paying positions working for others.

I’m not saying that you should quit your job to start a business; rather, now is the time to start a business on the side of your full-time job so it can be your cushion in case times get rough.

The bottom line is that you want to do everything in your power to protect your money and your family’s financial future.

Protect your money tip #4: Keep a roof over your head

How you do this will vary according to your specific needs. After a close look at your finances, you might decide to sell your home and rent a smaller home or apartment for less money, or you may choose to fight to stay in your current home. Either way, you’ll need to make sure that your family has a roof over their heads, no matter what happens.

Keep in mind that lenders are more willing than ever before to work with their customers on acceptable payment plans. So before you call it quits on your home, at least try to talk to the lender to see if they can help you stay in your home, perhaps with smaller monthly payments for a short period of time. They would much rather receive some sort of monthly payment than watch you walk away from your home, leaving them with yet another toxic debt. The point is that you never know until you ask!

Check back next week for more tips to protect your money.

Have a question or comment? Please feel free to contact me today!

I’m not trying to be a downer here. The moral of the story is that one can never be too careful these days, but there are job protection steps you can take to avoid the unemployment line yourself – and protect your money in the process. In the next three weeks, we’ll talk about everything you need to know to protect your money, so be sure to check back each week for more money-protecting techniques.

Protect your money tip #1: Pay off bad debt

To best protect your money, put as much extra cash as possible each month towards any unsecured debt you have. Try to pay them down as much as you can or – better yet – pay them off entirely if you can swing it. Trust me, you’ll be thankful to be rid of those high monthly payments if you lose your job.

Protect your money tip #2: Reduce your expenses

Take a look at your monthly expenses and cut back wherever you can stand the loss. One place to cut back is in bulk purchases. I mean, come on now…do you really need 500 rolls of toilet paper cluttering your home? In these uncertain times, you’d be better off buying only what you need right now and holding on to your cash.

Also take a look at any new purchases. Do you really need that new plasma TV or are you just keeping up with the Joneses? And here’s another thought: if you (heaven forbid) lose your job, how many groceries could you buy with the money you spent on a plasma TV last month? The best way to protect your money is to be content with what you have and only buy what you really need.

Stay tuned for more tips to protect your money and your job in the coming weeks.

Have a question or comment? Please feel free to contact me  today!

•4.       This recession has reached global levels. The current economy woes aren’t confined to the borders of the United States. In fact, the World Bank believes that global economic growth will slow enough to cause a drop of at least 1.7 percent in the global economy. We haven’t seen a decrease that high since World War II. The World Bank also predicts that developing nations are still growing despite the economy, but developed nations in Europe and the Americas are feeling the pinch. We’re likely in it for the long haul, too. The world economy dropped steadily for three years after the crash of 1929 before making a comeback, and world trade is falling even faster these days. It’s a harsh dose of reality, I know, but don’t worry…we’re getting to the good news!

•5.       The stock market (need I say more?). Now is the time to sell every stock you own. Seriously, get rid of them all and look into alternative investments that are much safer and still offer a nice return. If you have a 401k, though, don’t break it up; just move the funds to a self-directed IRA or money market fund. Steer clear of long-term bonds for now, at least until rates start to surge again. Another good option right now are inverse ETF’s. If you don’t take my advice and decide to keep your money in stocks, count on a decline of at least 37% from last year at this time. Some of you might still have faith in the stock market, and I applaud your tenacity. But know this: the stock market might still have a while before it reaches total collapse, but it is well on its way. You’d be much better off taking your losses now before they get worse.

And now for the silver lining: times may look bleak now, but there is hope for the future. There is still plenty of gold and other physical commodities to be mined , which would not only create jobs for workers but would also help create wealth for investors. We could all use a little more wealth these days, couldn’t we?

Stay tuned for my upcoming blog posts about the top five things you can do to protect yourself and your money in this troubled economy.

• 1. The banking crisis has not been magically fixed. Despite nearly $356 billion of taxpayers’ money that the government has thrown at our nation’s banks, the banking crisis is nowhere near a resolution. The International Monetary Fund (IMF) recently estimated that toxic debts (mortgages, car loans, etc. that consumers are just walking away from) could reach as high as $4 trillion. A shocking figure, yes, but even more disturbing is the fact that a mere three months ago, the IMF’s estimate was $2.2 trillion. Quite an indication that the banking crisis wasn’t magically fixed by the government’s handouts, isn’t it?
• 2. Job loss numbers haven’t been seen since the Great Depression. Again, I hate to be the bearer of bad news, but things aren’t looking good for the job market. As 663,000 Americans lost their jobs in March of this year, the national unemployment level leapt to 8.5 percent. That’s the highest it’s been throughout the past 6 recessions (see below). Stay tuned in the near future, because I’ll be talking about ways to safeguard your job – and, therefore, your finances.

Source: Time.com

• 3. Let’s not forget about the housing market, which isn’t looking good. The Home Price Index was down 18.6 percent from the prior year as of December 2008. A month later, the decline had reached 19 percent, which tells us that the market is getting worse, not better. It’s a snowball effect: the economy is causing hundreds of thousands of people to lose their jobs and the pickings for new jobs are slim, so that leaves countless Americans who can’t afford to pay their mortgages. The chart below shows how the numbers of Americans who had seriously delinquent loans rose steadily throughout 2008 and then made a jump in the fourth quarter. And if people can’t afford their existing homes, they certainly won’t be buying new homes, which means the construction industry is laying off workers, who are then losing their homes…it’s a vicious cycle that’s only getting worse.

Source: Calculated Risk

Check back for the final two reasons that the bear market is getting worse in my next blog post, “The bear market is getting worse, not better (Part 2 of 2).

One thing’s for sure: creating trillions of dollars out of thin air isn’t doing anybody any good. In fact, overloading our system with so many worthless paper dollars is just sowing the seeds for artificial inflation in record amounts.

Like every storm cloud, however, there is a silver lining for savvy investors. If and when the economy does pick up, intense inflation and resumed economic growth will send gold demand soaring. The reason is simply that people will wake up to the true value of gold versus paper money, which is essentially worthless without the backing of physical commodities.

Case in point: During the period of late-2004 to mid-2006, the Fed raised interest rates an astounding 17 times, from a low of 1 percent all the way up to 5.25 percent. In that short time, the value of gold investments skyrocketed 127 percent!

Even with the economy tanking, gold demand was surging. The demand for gold reached a record high of $79 billion in 2007 and then rose to $102 billion in 2008. All while the stock market was seeing record losses and the nation as a whole faced the possibility of a depression that rivals the Great Depression of 80 years past.

When the economy does finally make its comeback, gold demand will shoot through the roof, taking its value with it.

Now is definitely the time to jump headfirst into gold investments. You’ve got very little to lose and oh so much to gain.

For more information about gold investments or investing in general, please visit us online at www.weinvestonline.com.

It shouldn’t be going to greedy financial institutions that are only making our situation worse by charging exorbitant fees and executive bonuses while running their company  into the ground with no consequence.   So, is the greediness of the banks keeping many average American families down, or is it holding back overall economic growth? I dare say both!

To add insult to injury, the government has used taxpayers’ money to bail out financial institutions. Basically, the government gave banks our money so that they could turn around and lend us credit at outrageous rates so that we end up paying two, sometimes three times as much as our homes and cars are worth. Doesn’t seem fair, does it?

American taxpayers could have also used a portion of their bailout package to invest in their futures and start (or add to) a savings account that will help shield them from future financial disasters. Some might argue that they should have already had a comfortable nest egg in place, but the fact of the matter is that many Americans are barely scraping by from month to month; putting food on the table and a roof over their families heads is top priority, leaving little left to put aside for a rainy day.

This is the sad truth of where our economy lies currently. Many Americans have been irresponsible with their money; that is true. They’ve bought houses they couldn’t afford, and in those situations, they may need to lose their homes to learn a valuable lesson. But the banks aren’t innocent in this situation; in their greediness, they’ve eagerly loaned money to homebuyers that obviously couldn’t afford the home they were after, and then when mass foreclosures come about, the banks are the ones receiving the bailouts. (To be fair, some instances of foreclosure occur after homeowners have lost their jobs or come under another financial difficulty not of their own fault or the banks, but the banks are still the ones coming out on top with the bailout packages, not the taxpayers.) In what reality does that make sense?

To learn more about the 2008 Government Bailouts, please visit WE Invest Online Website and read my article titled “The Stimulus Package isn’t Enough: What Should Have Been Done With the 2008 Government Bailouts.”

The key is to diversify your finances so they’re not all wrapped up in the same opportunities. I’m not talking about putting your money in different stocks. My philosophy goes much deeper than that.

Savvy investors and investment experts have learned the concept of dividing your investment income equally between three piggy banks. Here they are:

• Savings: This money is off-limits and should never be touched. Even if you’ve been given an amazing deal that could potentially multiply your wealth a hundred times over, leave this piggy banks alone. The potential reward is not worth the risk! This money will be your safety net if your investments tank. At the end of the day, you still need to feed and clothe your family, and the savings piggy bank will help ensure that you can take care of yourself no matter what the market does.
• Investment: This is the piggy bank that you’ll dip into for the above-mentioned investment opportunities. Feel free to take risks with this money, because even if your investments fail, you will still have your savings and you can slowly build your investments back up again. Matthew 25:15 teaches us that we shouldn’t be afraid to take risks with the money that we’ve earned with our God-given talents, and having multiple piggy banks can help take the fear out.
• Giving: The Bible also tells us we should give to those less fortunate than we are. Your options of giving are limited only by your imagination and instincts. If you don’t already have a favorite charity that tugs at your heart strings and compels you to give, do a little research to find a cause you will feel good about supporting. You might also choose to give your time, which is just as valuable as money.

By utilizing the three piggy bank concept, you will be able to protect yourself from financial hardship, choose opportunities that might increase your wealth, and give to worthy causes. The bottom line is that you can sleep easy at night knowing that you’re doing right by yourself, your family, and your fellow man.

To learn more about the three piggy bank concept, please visit my website and read my article titled “Divide Your Wealth Into Three Piggy Banks for Optimal Returns.”

Which alternative investment is best? Well, in my opinion, investing in physical commodities is your safest bet, hands down. More specifically: put your money in gold.

Before we go any further, let’s talk briefly about the three piggy banks that I believe every investment portfolio should include (we’ll touch more on this subject later, so this is just a basic view):

• Savings: generational wealth. Never to be touched!
• Investing: the opportunity to increase your wealth. Here’s where you can take risks, knowing that if you lose this money, you can still put food on the table.
• Giving: helping people less fortunate than you and causes you believe in.

Gold has excellent liquidity for times in need.  Plus, gold is even better when used as collateral for loans or lines of credit.  Any bank on the planet will accept hallmarked gold as collateral if you need money.  The best part about this is that you don’t have to sell the gold to get the money. You can use other people’s money (OPM) in times of need.  I will expand on this topic in the near future.

I have been recommending gold for the Investing piggy bank for several months as this financial crisis has been worsening. I put it in print in my advertisement in Unique Homes back when gold was at $725 an ounce.  And again in the following publication when gold was at $850 an ounce.  Now gold has topped $1000 an ounce and it is still going.  Many financial advisors with broker-dealers have been scratching their heads and just don’t get it.

Don’t they understand that is a 27.5% return?  Ask yourself this: how much money did your advisor make last year when many portfolios lost 27.5% or more? Do you realize you will have to make a 55% return (double) to fix what they lost you last year?  You could be on your way to doing that with gold.

Gold is still an excellent investment for your investing piggy bank and, worst case scenario, you can transfer it over to your savings piggy bank down the road.  There are still many gains to be made in gold.  Are your hearts, mind and ears open to hear what I am saying?

For more information on this topic, head over to www.weinvestonline.com and take a look at my article, “More Valuable than Silver or Platinum: Choosing Gold as an Alternative Investment Option.”

The short answer: invest your wealth in gold.

You may be asking yourself why you haven’t heard more about gold investments if it’s such a smart choice, and my response is that those in the know have been trying to keep the secret of gold as an investment option to themselves. To prove my point, Central Banks were once upon a time happy to unload their gold reserves onto their customers. Lately, however, they’ve been pulling gold off the shelves, so to speak, and hiding it safely away in their vaults, away from public view.

While the value of the dollar is fading fast, gold has stood its ground for hundreds of thousands of years.  Let’s take a look at General Electric as an example of the staying power of gold versus the uncertainty of the dollar bill. Back in its prime a mere nine years ago, GE’s stock  was sitting pretty at $60.75, which amounted to about 1/5 of an ounce of gold. Within the past few months, the price per stock dropped to $12.58, or about 1/50 of an ounce of gold.

While the dollar value plunged 79.3%, the true value as it related to gold saw a 93% decrease. That’s quite a drop, my friends!

You can believe the stockholders are feeling that pinch. Had they invested their money in gold instead, their wealth would be secure right now. Just something to think about.

For more information about gold and other investment alternatives, please visit my website, www.weinvestonline.com, and check out my article, “Savvy Investment Options: Making the Leap to Gold.”