Companies are showing “profit” because:

(1) They fired a few million people, reducing expenses.
(2) They CUT INVENTORY, and so spent less.
(3) Their income is coming from sales overseas, but not here.
(4) They froze or reduced salaries, benefits, etc. for the workers they have left.
(5) And plenty of other bookkeeping tricks to show “profit”, “growth” and “productivity”.

Goldman, JP Morgan, etc. etc., they are hugely profitable because why? Because unlike us average Americans, they have been getting interest free loans from the government. We are not talking about TARP here, but the loans available through FDIC, the Federal Reserve and other agencies, in the trillions of dollars. And our money has been used by Treasury to buy the bad assets off their books at inflated prices, prices no other Wall Street firm would ever pay. So, of course the S&P is up, since it is weighted with financial stocks.

If a firm has billions of free money to invest, and you invest it in the market for your own account, and you don’t lend any to anyone else, and you drive the market with your volume – what do you think happens? The firm makes money of course. It’s a pyramid scheme to rival Bernie Madoff.

And how many people still working are still putting money into their 401K accounts? And how many pension funds are still putting money in? The price of stocks will go up as long as someone buys these instruments, regardless of their value. That the index is higher, does not mean there is value there, the “value” is illusory.

Don’t be fooled. Nothing has changed. There is little or no money being lent, because the TARP money has been used to shore up the capital requirements of the companies that got the money. They were virtually bankrupt. They used taxpayer funded loans to make it look like they were profitable. As one talking head said this week, if today we were to try to strengthen our banking system by increasing capital requirements we would bankrupt these “too big to fail” banks.

Basically, the Government is doing nothing for the average American but borrowing our children’s meager finances. We are going into more and more debt. China and Japan are going to resist our habit eventually. There is no reason a crash like last fall can’t happen again tomorrow – there are zero safety nets in place other than the Fed’s willingness to print as much money as they can as fast as they can.

And how can any company be profitable if they aren’t selling anything? If we don’t have jobs, and are under a ton or debt, and aren’t buying as much crap as we did when we re-fi’d our houses to buy bigger plasma tee vees, where are all these amazing profits supposed to come from next year and the year after that? Our “growth” was based on credit. Well there ain’t no more credit now, so now what? No one who is telling you things are getting better can explain that one.

What can you do? Where do you invest in 2010, or for your long term future? You can’t just put money into an account today, and leave it for teh “long term”. You need to stay on top of what you are invested in, where that market is headed, and be ready to switch as the markets do. Learn to invest money and build your plan accordingly. Don’t count on stable markets, because for now, there is no such animal. There really never was, that was a story made up for the non-investor middle class…

Based on what I hear from economists who are HONEST about what’s going on, investments that might look good right now are some foreign currencies, some muni bonds, Asian stocks, and shorting the dollar. Keeping an eye on oil prices too. You can’t “buy and hold” or you will get burned. (Six months up does not mean you’re in the clear.) Instead, PAY ATTENTION. Learn for yourself about investing and what works for YOU, don’t spend time listening to bullshit con artists on cable tee vee. Read books, listen to alternative opinions. Make your own informed decisions. If you don’t want to do the work, you shouldn’t be in the market.

Not only that – but the idea is, these investments will spur the kind of re-growth that builds our economy back up, but without the war and bloodshed. What exactly are our options here?

First – the green economy – green tech, green jobs – anything and everything green. Like it or not, industry new and old will have to be green. Believe in global warming or not, there is nothing wrong with making the world a cleaner place. In fact, it will make many, many people rich. And hopefully provide a planet on which to enjoy this new wealth. Will you be in on it, is the question?

Many people argue that green investment and things like cap and trade is in reality a tax on consumers of electricity. But that misses some major points. For example, we do not account for the “externals”, that is, we are not paying for the destruction we commit when we burn coal and create other greenhouse gases. We must begin to pay, because we can’t ignore the cost any longer. But also, with new green technology, the need to use dirty fuel will begin to lessen, so your costs as a consumer can go down thorugh conservation and adopting green alternatives. You won’t pay a consumption tax on something you don’t consume!

And keep in mind – the horse and buggy industry collapsed when cars came along. The mass transit revolution was trashed by government pushing cars and roads. So, here we are in another phase, where newer, better technologies are going to push out old dirty ones, and some companies will take a hit. But not for long, as alternatives come in like gangbusters into the marketplace.

Next there’s health care. Through technology there are major cost reductions to be had. The money is already flowing as part of the stimulus package.

A third investment the government is making is the auto industry. While it’s pretty volatile now, there’s a big committment to making sure we don’t lose all three automakers. which one or ones are left standing will grow into the future. (Could the Feds be unwiling to let GM go due to the release of the Volt next year? That works both for a green play and an auto play..)

Fourth, infrastructure and “shovel ready” future investments. A lot of increase has probably been built into companies short term already, but considering that there are a lot of bridges to be recuilt and schools and roads and so on, related industries re worth a look.

Ask yourself: What companies are on that bandwagon? What ETFs? What mutual funds? Look to invest in these in your 401(K), or start a self-directed IRA if you can’t invest in them through your workplace. Keep your eyes and ears open. Learn about the varity of investemtns out there. Don’t just save, but also conserve, put themoney aside into investments that make sense ina depression scenario. Don’t be a victim of it, ride the wave instead.

1. Reduce your heating or cooling needs. In summer, raise your thermostat setting above 80 degrees, and use fans, both the ceiling and floor fans. They help stir the air and add to comfort. Be sure the ceiling fan is circulating air down, not up. In winter, up is fine when you want to move warm air from the ceiling down to the floor level. Using a fan can save more than $600 per year.

2. When you’re not home, turn off the air conditioning. The constant running means it’s working harder. You can raise the temp so it doesn’t run all day, and turn it back on when you get home.

3. Be sure to keep your air conditioner’s filter clean by cleaning it at least once a month. A dirty filter will make your AC work less efficiently and that requires more power. Be sure to also Clean registers in all rooms as well as the intake register. Close the registers in all rooms not in regular use. And speaking of clean, you can take a cool shower just before bed to help you feel cooler.

4. Cover your outside condenser with shade, and you can save up to 10% on electric. Just make sure shrubs or grass don’t block the unit’s air flow.

5. Examine your ducts for leaks. Older ductwork can leak more. In the attic, check how hot it is there. Use insulation to save up to 40% of colling power. You might also consider installing an attic fan, since by reducing your attic temperature by just 10 degrees, you can save as much as 10% on your electric bill.

5. Put compact fluorescent light bulbs everywhere you can. An old-fashioned incandescent light is just a mini heater that emits light. Fluorescent bulbs are cooler, and more popular than ever as money savers, so prices are coming down. They give off only 10% heat for 90% light compared to incandescent.

6. Paint your home a light color on the exterior, to reflect heat. Dark paint absorbs up to 20% more heat thereby increasing cooling needs.

7. Watch your appliance use. Use full loads in the dishwasher and laundry, or air dry clothing on a clothesline in good weather. You can also air-dry dishes the old fashioned way, and skip the high-power heated drying cycle. Also, replace old appliances with Energy Star, which use much less electricity.

8. Consider a tankless water heater. Traditional water heaters keep water heated all day long regardless of use, but a tankless heater heats water only as you need it. This can save as much as 25% to 50% of your utility bills!

9. An obvious one is to turn off electric appliances, electronics and other power hogs when not in use. Even when plugged in, “ghost load” power that keeps LED clocks and fast-on switch powered costs as much as 10-15% extra.

By saving just a few watts of electricity here and there it can really add up, plus you can see your success immediately right in your monthly bill! Make it a goal to cut your bills by 20%, and see if you can’t do that with simple changes. Saving energy helps you save money, and that’s something you can really bank on.

First, using a coupon to buy a more expensive item than you usually would is going to cost you more. Of course. But that’s part of the reason manufacturers put coupons in the paper – so you will buy their more expensive, less desireable items. If you normally buy a store brand, you can figure that the store brand is probably just as good, and will cost you less, than the coupon brand even after you apply the coupon savings.

Second, notice how many coupons now require you to buy two of something? That’s cause if you’re going ot get double cuopons from your grocery store, the manufacturer wants to be sure they’re move twice as much inventory. So, even if you only need one item, you’re now being coaxed into buying two, at higher total cost. Yes, your saving on each item, a little, but you are out of pocket the price on a seconed item. That’s cash you don’t have in your pocket!

Third, if you are trying to save money on groceries, you are going to spend a heck of a lot of time managing and going through coupons to save just a couple bucks. some of these coupons websites say they help you cut time – but they don’t really, because you still have to go through the sunday paper, keep the coupons somwhere, rad through the lists on the weekend, plan your trip, and all of that takes up time. Ever had the experience that you spend three or four hours managing coupons, for a savings off three bucks at the market? Not worth it. Spend the hours buildinga web-based business like the coupon lady does, that’s where the real money is!

Fourth, not to mention, you are also paying for the Sunday paper to get the coupons in the first place. if you deduct the $3 a week or more for the paper from your coupon savings, are you ahead or not? Not to mention the tonnage of paper that is just getting recycled – hopefully.

Fifth, many coupons are for processed foods, foods the companies want to push, which are not as good for you, with additives, packaging, chemicals and more. If you want your family to be healtier, and your environment cleaner, you might focus iunstead on fresh fruits and veggies, fresh meats (not processed), household cleaners that are natural, and products that don’t come packaged in as much plastic as the food they contain.

No – instead of coupons, you can save money groceries shopping just by finding the least expensive store, stocking up on good sales, and not driving around to a lot of different locations or wasting time with coupons. Your real savings is your time which is worth far more than a couple dollars an hour. Save money, time and the planet, adn skip the coupons!

First, cut costs. That includes not just using coupons, but buying less of expensive items, and cutting out unnecessary items. For example, you might be using coupons but using them to buy things you don’t really need in the first place. So, start with what you need, and buy generic if it’s cheaper.

Next, manage your discretionary spending better. Try using the 30 day rule: wait 30 days before making a big purchase, and see if you still want or need the item after that time.

Third, try banking your savings. Saving 20% for example is not worth much if you spend it somewhere else. Whenever you save money, put the difference into a savings or investment account. This way you’ll see the direct impact – wealth – from your efforts.

Finally, put your money to work. While you might be gun shy of stock mutual funds, remember that there are many other options for investing – bond funds, Exchange Traded Funds (ETFs), government backed inflation indexed bonds, and other options. You need to spend some time to learn more about investing types beyond the basic “growth stock mutual fund” since those funds have not only taken a nose dive, but will probably be poor performers in the short run in a depression.

Spend the time to save money and put it in a savings or investment account can not only be safe but help you to build wealth in the event of job loss or other emergency.

To get a handle on your money, and build wealth, you do need some kind of budget. You don’t have to keep track of every single penny – that’s the kind of behavior that leads you to abandon a budget like the latest diet fad.

But by keeping track, you can see exactly where much of your money goes, and how much is wasted on everyday expenditures that aren’t necessary at all. You might find yourself shocked to learn how much the little things add up to. For example, if you spend $4 a day on coffee, stopping on your way to work, that adds up to $1,000 in a year! Seriously, there is no reason not to take a hard look at where your money is going, especially if you want to have wealth for you and your family.

With a budget, you can take control of those little expenses. They are the little ways your money drains away and leaves you broke, or living paycheck to paycheck.

The easiest way to make a budget work, even for people who don’t like budgets, is to set up an envelope system. For all your monthly cash needs, write up envelopes for each one, like groceries, gas, entertainment, medical expenses. Then, each paycheck, put the amount you are budgeting into the envelope. Now, you can’t spend more than what’s in the envelope on each of those items.

For items like rent and car payments, take those off the top first, and send off your check. The cash you have left over is what gets split into the different envelopes.

At the end of the month, if you run short, you just have to wait – or take from another envelope. You can’t use a credit card to make up the difference.

If you have money left over in the envelopes, then put that into a savings account. Use that to start your emergency fund for times when you might have income loss or emergency expenses like auto repair.

The idea is to live within your means. One envelope, or “cost” you might want to add to your budget, is an automatic amount right into savings or an investment account. If you put just $10 or $50 or $100 into your savings each paycheck, that can really add up, and it prevents you from spending that money on wasteful little items. Make sure that’s part of your budget as well.

To keep you focused, try setting specific long and short term goals. for example, a short term goal might be a weekend vacation. A long term goal might be a new car or purchasing a home.

Once you get started with a budget, you’ll find that it really an work, without too much effort, you just have to decide that it’s something good you’ll do for yourself and your future.

You don’t have to fall for fast cash scams either. Lots of scams pop up when the economy is bad and people get despreate. The good news ia, there actually are plenty of ways to make money, legit business ideas, for you to bring in money to pur aside for emergencies or help pay the bills today.

Along with saving money and cutting costs in your budget, it’s easier to get ahead when you make more money too. Here are five quick cash ideas, we’ll post more in the future, but these will get you started.

Each one is designed to (1) cost little or no money, (2) be something you can do right away, that (3) puts cash in your pocket almost immediately.

1. Sell your stuff on eBay, or sell books and videos on Half.com. You can sell stuff easily using eBay and turn whatever ou have sitting around into money in the bank. You are required to have a PayPal business account, but that’s easy to set up, click the link and follow the details.

2. Offer to sell for others on eBay. You can take a cut of between 15% and 30% depending on the item, but you can help people who aren’t computer literate or don’t have time to sell their stuff for cash too.

3. Put up a blog online and sell ads. Think it can’t be done? Read this post about how you can make money online with blogging, easily. There are free blog services like Blogger and WordPress, and many sites that now tell you for free how to start writing about what you kow and love, and make money at it. It might take a few weeks to see some money come in, but if you put in the time, it’s doable.

4. Sell services. Can you babysit, fix cars or computers, bake or clean? Look for community swaps, local classified ads, and find folks who need your service right away. You can get business cards for free (small shipping charge) at many online printing sites. Stop at a local chamber of commerce networking event and pass them out. Try asking friends and family for referrals.

5. Make extra cash by being an affiliate. An affiliate sends leads to a company and is then paid a percent of the sale for their help. A great site is Big Crumbs. Big Crumbs allows you to invite friends and family to buy online at a discount. Each time they do, you get a referral fee. You can even get fees from people you bring into the service! It’s a great deal because you can buy discount groceries, restaurant coupons and more, and legit too.

But these percentages go out the window in a recession or depression, because you want safety no matter when you are retiring. For the past year, stock prices have plunged. The allocations are probably wrong for your particular risk appetite. And if you call your 401(K) provider or employer, as I have, they will probably tell you, “Stay invested!” or “We feel the allocations are appropriate.”
Well, they really just don’t want you to move your money!

No, you have to learn how to reallocate your stocks on your own – based on a new market, and wait until things change or get better. There is no reason to stay in losing funds when you can reallocate to wait until a change for the better.

Now if you’re thinking of putting your 401(K) into cash, you should understand that that doesn’t not mean taking your money out of your retirement account. this could incur penalties that total a large percentage of your money – so don’t add penalties to your losses.

When you invest in your 401(K) instead put it into cash vehicles. Your broker will offer at least one or two of these accounts, since their plan allows for older workers nearing retirement to move into safer investments. These are the investments you want to take advantage of for now.

For example, if your broker offers a sample portfolio balance for someone within 3-4 years of retiring, use that for the their safest vehicles. some of these might be bond funds (usually government bonds), and some will be savings or money market options.

If you don’t want to take their advice, then see what funds or accounts they do offer, and move the portion of your money you want to protect into these vehicles. this is the way to move your 401(K) into cash, not by withdrawing all of your money. Then as the market slowly gets better, start moving small percentages back to stocks, based on the performance of the stock market. This is the beast way to use cash n your 401(K).

You’d never see a carpenter who didn’t use house plans to build a house. Without plans, the second bathroom might be completely forgotten when building.

There’s no way an engineer would begin construction on a new technological development without a thoroughly detailed set of design specifications. but for us, when it comes to money, so many of us run our daily lives without any idea about how to manage finances and use a financial plan.

How smart is that, especially when the economy is in bad shape?

The “blueprints” for your money plan is the budget. Using one is critical to reach your financial goals, but also for day to day improvement of your money situation. Without a budget, your financial life will continue to drift all over the map, without reaching goals, without making your and your family more wealthy.

Start your budget by figuring out what your financial goals are. If you’re married, do this with your partner. Look at the long term financial goals as well as short term.

Your budget is then a plan to achieve those goals. Start with a single step, by making a realistic budget that you can live with and stick to, to start building wealth.

It isn’t hard to do a budget – it’s not like a diet. You have to allocate your money each money, to the expenses you have as well as some for savings. Start by listing your income for each month, then underneath list of all of your monthly expenses. Be sure to leave some room for fun items, otherwise you’ll never stick to it. But remember that discretionary spending – items other than necessities – are the reason many people do not reach their wealth goals.

If you are unable to cover all of your expenses each month, start deciding where to cut to fit your expenses into your paycheck. The idea is to live within your means.

and don’t use credit to make up the difference. right now, we’re all seeing the results of that! You want to pay off credit cards, not keep growing the balances. We’ll talk about how to pay off your debt in a future post.

With a basic budget, you can get started putting money aside. Just put some money into a savings account, where you can keep it safe, and set it aside for emergency funds in case you lose your job or have another financial emergency like car trouble or illness. This is the fund that will keep you afloat in really bad times, and help you avoid losing everything.

Living within your means is hard – we’ve been taught the opposite in America – to spend above your means. But we now see the bad outcomes of that – bankruptcy, losing homes, losing jobs. So to make sure you survive a depression or recession economy, start today to spend less than you make, and create a budgets.

These tips can help cut yoru food costs.

1. Compare prices. Find the lowest prices stores – it can be an ongoing battle though. Many stores are reducing the number and quality of sales. I usually don’t go to a store just for a sale unless it’s a big one on expnsive items like meats, then I stock up. I also don’t pay an annual fee to shop at warehouses, there is a local warehouse store with no fee needed. Bottom line, look for the best overall price.

2. Don’t use coupons for items you would not normally buy. Coupons can lead us to buy things we normally wouldn’t – like buying two items to get the discount, when it takes forever to use up one! That’s cash out of your pocket today. Instead stick to coupons for items you need and use regularly. And of course always get double coupons! Find out more about using coupons here.

3. Buy less prepared and packaged food. The more cooking, plastic, cardboard and wrapping that goes into a product, the higher the price and the less nutrtition for the buck. Buy bulk meats, veggies and fruits, make your own and freeze the leftovers or package into bags. Just start to compare the price per pound or ounce for packaged foods with non-packaged, and you’ll get it fast enough.

4. Phase out using some things. Instead of paper towels, napkins, plastic ware, paper plates, replace with cloth. Instead of junk food with poor nutritional qualties and ever rising prices ($5.50 for a bag of tortiall chips???) start making your own or buying more healthy treats like baby carrots, basic crackers, and so on. Try cutting 2or replacing -3 items each shopping trip, it will add up!

5. Eat less meat. Make a few vegetarian meals. You can make a tofu lasagna that includes the protein of tofu and tastes no different. Or just a quick stir fry of veggies and tofu. You can also get compelte proteins from beans. Learn how to prepare lentil stews, black beans and rice, and other bean and grain dishes to save big.

Try these tips for saving on groceries, and cutting your food costs, and don’t forget to bank the savings each month !