Entries Tagged 'Economic crisis' ↓
April 17th, 2009 — Cash, Earn Money, Economic crisis, Get Rich, Make Money, Savings, Sell Stuff
Worried about the economy and your job? Looking to save a little extra cash? Need a way to make fast cash easily? There are plenty of ways to make some quick cash when you need it, you need a little creativity and that’s about all!
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.
April 13th, 2009 — Economic crisis, Investing, stocks
With the market crash from 2008-2009, one could ask, are hedge funds finished? The quick answer to the question is “hardly”. There is no general definition of what is a hedge fund. In the beginning, hedge funds would help “hedge” investments by selling short the stock market, and so providing protection against volatility in the stock market. But now, the term is used more broadly to describe any kind of private investment partnership.
Globally, there are thousands of different hedge funds operating. Their main goal is of course to make lots of money, and to do so by investing in a variety of different investments and investments strategies. Often the strategies used are more aggressive than than the investment strategies of standard mutual funds.
Generally, a hedge fund operates as a private investment fund. The fund’s general partner selects different investments and also manages the trading activity and everyday operations of the fund. The investors or limited partners will invest much of the money and share in the gains of the fund. The general manager often charges a small management fee and earns a large incentive-based bonus if the investments earn a high rate of return.
While this might sound like a mutual fund, there are some important differences between mutual funds and hedge funds:
1. Mutual funds are managed by mutual fund or investment companies and are quite heavily regulated by federal law. Hedge funds, since they are private funds, have (so far) fewer restrictions and regulations.
2. Mutual fund companies invest only their client’s money, but hedge funds can invest their client’s money as well as their own money in the underlying investments.
3. Hedge funds charge their clients a performance bonus, usually equal to 20% percent of the gains above a certain floor amount. This is in line with equity market returns. Some hedge funds have successfully generated annual rates returns of 50% or more, even during volatile or difficult market environments. A mutual fund return is usually not as high.
4. Mutual funds have disclosure requirements, as well as other prohibitions against investing in derivative products, such as using leverage, short selling, taking too large a position in one investment, or investing in commodities. Hedge funds however may invest client funds however they wish.
5. Hedge funds are restricted from soliciting investments, and this is why you hear very little about these funds. During the five years prior to September 2008, some of these funds have doubled, tripled, or even quadrupled in value or higher. However, it’s important to remmeber that hedge funds do incur large risks and in this difficult economy, many funds will likely disappear after losing big.
Hedge funds are just another way to protect wealth, but in a tough economic environment, it’s likely that some restrictions will be imposed in the future.
March 19th, 2009 — Budgeting, Credit Cards, Debt, Economic crisis, Pay For College, Retirement, Save Gas, Savings
Part II
Continued from yesterday…
In yesterday’s post, I started with some basic ideas for how to survive a depression. The signs aren’t looking good yet (despite what some tee vee shows want you to believe.) Think we’re headed for a depression? Having trouble keeping your head above financial water? To survive a depression, you’ll need as many resources as you can muster – money saved, skills learned, low expenses. We’re just starting here with some options for you to start putting even a little bit of cash away, and build a financial base on which to stand…Here are some ideas to deal with basic financial issues facing many people today.
Tough Decisions For Many Families
As a result of the financial turmoil, there are plenty of families which will be torn between putting aside money for retirement, and saving for college for their children’s college education. Many parents now paying for private school in grades K-12 are now rethinking that decision. As for college costs, they keep rising, and enrollment in local community colleges is skyrocketing. Yet do parents always have to pay for college? If high school age children are encouraged to do everything they can to apply for all available grants, treating it almost like a part time job, they may find that there is cash available. In addition, holding down a part time job or two in the summer can give teens a way to afford school. When parents give up financial security in their old age in favor of paying tuition today, that is probably a far bigger danger than the impact on their children of having to attend a community college instead of a major private university.
There are plenty of state colleges that are priced under $20,000 per year for state residents, including tuition, fees, books, and room and board. A part time job that pays $10-15 an hour can cover a large portion of that amount. Community colleges are far less, especially if the student lives at home for a year or two.
The biggest takeaway however is that students should treat any kind of college loan as an absolute last resort. The last thing a student needs, or a parent, is another pile of debt in an economy like this, which could be sluggish for a decade or more. Getting real about your finances is the only way to protect yourself in a depression – and that means that the American “but I want it NOW” attitude has got to change in favor of a prudent, smart, long-term wealth-protection strategy.
Saving as much as possible, getting a job, and spending time researching grant money, as well as attending an affordable school, is a good, Depression-defense strategy. Parents should just keep socking away as much as possible for retirement.
How About Vacations?
As of this writing, airlines are lowering costs as gas prices have come down and people are staying home in droves to save money. Vacations while of course wonderful, are a casualty of reductions in credit spending. How many vacations have you taken that were paid for in full with cash? Avoiding credit card debt can mean avoiding expensive vacations.
Yet there are plenty of options. Home swaps are one; there are agencies online that help you find a family interested in a trade. There are campgrounds with modern cabins, and hotel discount websites. Cheap travel websites about, including last minute travel deals, discount airfares, discount cruises and cheap hotels. Cutting the length of your stay is an option too. Visiting relatives or renting a vacation home together with friends is another way to keep costs down.
Why not explore locations closer to home too? Big cities like New York and San Francisco can be expensive, but history and sightseeing abound in out of the way locations like
Easton, Pennsylvania (a couple hours from New York City), or off the beaten track locations like St. Augustine, Florida, or Bethlehem, Pennsylvania, or medium-sized cities like Memphis, Austin, or Minneapolis-St. Paul. Get out into nature by exploring one of our greatest national treasures: the
National Park Service system.
If you’re taking a driving holiday, you might consider going a shorter distance. Anyone with an RV is still taking a hit on fuel costs, but consider staying longer at one location instead of more mileage.
Spend Less for Entertainment
Do you really have to cut back on entertainment jut because your budget is cut back? Not really. There are really hundreds of things you can do, for less. One website, GoCityKids, offers lists of things to do, free and paid, for dozens of locations around the country. Public libraries are now swamped with requests for movie rentals, music rentals, and the old-fashioned book. Many municipal and college libraries show films to the public. Schools, colleges and local orchestras offer free concerts. Some communities sell discount tickets to events like theater and concerts, along with movie and museum tickets.
Start a game night, movie night, potluck night with friends, or a neighborhood wine tasting. There are more ways to connect with your community than you probably knew – and it can enrich your experience of where you live.
Are We Addicted to Debt?
There’s a lot of finger-pointing out there about who caused the current economic crisis. It’s likely that we all had a part. Clearly, the warning flags have been up for some time, as Americans’ saving rate went negative (we borrow more than we earn in income) and we just kept spending money we didn’t have.
With life spans increasing, you’ll need more money to retire in any type of comfort level. If you start getting on track now, you can protect your retirement, rebuild what you might have lost, and avoid getting sucked in to the casino we call Wall Street. One important way is to break your debt addiction by getting rid of credit cards. Pay them off; cut them up. Will it hurt your FICO score? Who cares? You want to move away from a debt-oriented way of thinking, which FICO encourages. And if you bank cuts your credit line, that will hurt your FICO too, without your agreement! Having money in the bank and learning to live within your means is a better strategy than building up a credit-borrowing score to borrow more in the future. It’s time to break your addiction now!
Do you want to be 75 years old and having to work to pay off your credit card debt and rent? I didn’t think so.
When Will It Get Better?
Everything in our world is cyclical. It might take ten years to start to see improvements, or a return to personal wealth that we saw a mere one or two years ago. but in the mean time, you will be able to build a much stronger foundation than you had before, and learn more about being a good neighbor, and how to build real wealth and not just borrow money to have the image of wealth.
To survive a depression, you’ll need to seriously cut costs, and increase the money you do have, as well as skills that make you marketable or which you can barter or use to maintain your home, vehicle, lifestyle. But belt tightening doesn’t have to be painful, if you find creative ways to enjoy life instead of just buying more and bigger stuff. You can instead save money, build real wealth and pay down debt. That way, when “good times” return, you’ll already be there.
March 18th, 2009 — Economic crisis, Investing, Mutual Funds
For the first time since the 1930′s, people everywhere around the world are experiencing a severe economic contraction, a recession which some believe will go into a depression. Everyone’s quality of life is being affected, and will probably continue to be affected, for some time. The big question is, how to survive a depression: what do you need to do to protect your savings, your retirement, your job, and make sure you have some solid footing somewhere.
The first step is to get a view of what’s happening out there. We’re busy, we’re scared – but you have to stay informed. If you haven’t already, start reading, watch informative tee vee (if you can find it: we recommend Bloomberg or in a pinch, CNN, but skip CNBC altogether). Read the web, follow the money.
Of all the experts being trotted out to talk on television about when to start investing again, I haven’t seen any who have said, Now’s the time. In fact, they say the opposite: Things are too shaky, too sketchy, the profits just aren’t there. So let’s forget the stock market for now. Hopefully, your money, or what’s left of it, is in a money market, a cash vehicle, under your mattress, or a high interest online savings account where you can at least earn a couple percent while yo figure out what else to do.
Will The Economy Will Improve?
Well of course the economy is always in transition – but get ready for an economy where things could plateau for a very long time. Prices could fall in a deflationary environment, but for the short run, it won’t matter, if we don’t have available cash to buy with. So, one step you can take is to hope for the best but prepare for the worst.
Start finding ways to cut back, and live on less, and if you are working, then stash the difference in a high interest savings account. Most of these are online savings accounts, with HSBC or ING Direct. You’re not alone, as many families are cutting back, or doing without, just to make ends meet.
Nearly every family has two working parents. Now adults are taking on more than one job apiece. Find a way to make extra money online, or start a side business, to bring in some extra cash, even if it’s only a little, like selling things on
eBay, or
Craigslist. Given that companies lay off employees as their profits go south, it’s a good idea to get ready with emergency funds in case you lose your job, and if you’ve already lost your job, more ideas appear below.
How To Save on Gas As Prices Climb
While not so high right now, many economists say gas prices will keep rising partly due to less availability, production cuts, and weather storms causing gas to climb. Or, speculators could easily drive the price up again as they did in 2008 which led to $4 a gallon gas.
Even though as of this post, gas prices aren’t that bad, the likelihood is that forces will work to keep prices from falling very far either. Oil producing countries won’t lose much money before cutting production. To save money on gas is pretty easy: Drive less! Or, drive a more efficient car. Combine trips, walk, bike, or just don’t drive around just for fun. Carpool to work, skip the mall, and you’ll save money almost automatically.
The Looming Food Crisis
Food prices are relatively low right now, but a big problem is that weather patterns are more unstable. In addition, ethanol production has caused corn prices to rise. In 2008, there were food riots when this caused high prices around the world, including Mexico and Pakistan.
Oil prices, weather, and futures speculation can all cause prices to rise suddenly. Two good ways to combat food price hikes, as well as save money are (1) grow your own, and (2) buy less processed food and (3) eat less meat. Guess what? Coupons are not the way to go! Coupons offer very bad return on investment. For hours of time, ou may save $3, $4 or maybe even $10, but if you spend 3 hours “couponing“, that means you got paid $3.30 an hour! Not worth it. Not to mention, most coupons are for salty, fatty, processed foods with less nutritional value than what you can make yourself.
So, start a garden, even if it’s a small container garden. Look for local farmer’s markets. And at your grocery store, buy “around the edges” where the produce, dairy and fresh food is. Reduce your purchases of processed food. And make one or two meals a week meatless, like pizza, rice dishes, beans or tofu. It’s really not that time consuming to whip up a wonderful quick dinner, that’s healthy and affordable.
Particular to groceries, try comparing price per pound for items across the board. For example, eggs are about $1.50 per pound, and tofu is about $2 a pound. The nutritional value is greater than frozen meals that cost $3-4 for a 9 oz. serving. Compare, shop smart and save.
Where To Find Fun Money
So if you’re broke, or just trying to save, does that mean you can’t have fun? No! As far as I’m concerned, eating “beans and rice, rice and beans” like Dave Ramsey says, is bull-bleep. There are plenty of
easy ways to save money. If you’re budgeting, just include one or two fun things in your budget. For example, we spent a weekend away by getting amazing airfares and hotel prices using sites like Priceline, and “raised” extra money by selling stuff on eBay to cover our purchase. We shopped hard, budgeted and saved up, and had a great time! You can do the same. Go out to dinner using coupons from Resturants.com, where you can buy $25 gift certificates for $10. Have a fancy potluck supper with friends. There are many ways to have a good time on a budget.
Discretionay income was always a joke anyway – since we all just used credit cards to buy our fun stuff! Real “discretionary” income is cash you really have that’s extra that you set aside not for paying bills, but to enjoy life. So what Dave Ramsey, if it takes me an extra six months to pay off my credit card!
Still, Try To Get Rid Of Credit Card Debt
Americans are said to have between $4,000 and $8,000 avergae credit card balances. We’ve had a
spending addiction for decades, and its coming home to roost. Plus, now that the credit card banks are hurting, they’re jacking up fees and interest rates, cutting credit lines – who needs it!? Personally, I’ve lived without credit cards for more than a year. It sometimes is hard to want to buy something, and not have the cash – but it sure feels good at the end of the month to NOT have that bill! Anything thaty’s not on my monthly budget, I don’t really need anyway.
Paying off debt should come after putting aside emergency money. You don’t want to be paying more than the minimum on your credit cards if you then lose your job an have no cashs aved up! So, better to put aside 3-6 months of income into savings, and then pay more than the minium on your cards.
Of course it practically goes without saying, don’t apply for more credit cards. Store cards, gas cards, al are relaly tempting when yo uhave no ready cash. But it’s part of the lerning process we’re going through – how to live within our means. When you live within your means, that’s great, but then you can start spendign less on your epxenses than you earn – and that money goes toward your welath! Better that it go to your own family’s wealth than the wealth of Bank of America’s credit card arm.
Remember that credit card offers like rebates, air miles or cash back all increase prices for everyone, and 80% of those “benefits” are never used. No matter what, you should use plastic only when necessary and not to support a lifestyle. don’t fal lfor the trap that the more you spend the more you’ll get back.
Help From Government Stimulus?
We are, most of us anyway, now the recipients of reduced taxes thanks to the stimulus plan. This will account for a few bucks each paycheck, but hey, every little but helps. Just dont’ use this s a reasonnot to stick to you r budget - you might consier putting it instead into your 401(K) or an IRA to make it work for your future.
Remember, saving even $10 a week is $520 a year, and that’s real money!
Tomorrow we’ll post the rest of this list of ideas about how to survive a depression, so stay tuned.
March 8th, 2009 — Bonds, Cash, Economic crisis, Investing, Money market, Mutual Funds, Retirement, stocks
You probably know where the term “con” comes from – as in, to “con” someone, or a “con game”. It is short for “confidence”. By gaining your confidence, someone rips you off.
That’s what we’re seeing right now. People are afraid. They do not feel confident – confident that they will keep their jobs, confident that they will keep their homes, confident that their retirement investments will be there when they are old.
Television, web sites, financial advisers, the analysts on Wall Street, the Wall Street bankers – all are playing a huge confidence game, and we, the investing public, are their victims. These vultures have really benefited, ever since the 401(K) really took off, and it was clear that regular Americans, now deprived of pensions and other ways to retire comfortably, would just shovel money in without really knowing anything at all about wise investing, on the promise that “over time, the market returns 8%-10%-14%” you name a figure. The whole thing has been a con.
But really, what I wanted to talk about is confidence, and how to regain it. Think: What would it be like to feel confident that your money was safe, right now? Think of the stress that would be off your shoulders. Think of how you would breathe easier, knowing that whatever the market was doing, up or down, you are in a secure position, not losing, not having to learn more than you have time to learn, or more than you can understand. Not know what the heck to do as you watch the market numbers go down.
What would it take to feel confident that your money was safe? A friend of mine was completely freaked out, and kept asking me, What should I do with my retirement accounts? (This was last November, she was down 15%.) I told her I thought the markets would keep going down, for some time, but that was just my opinion, and she needed to do what she felt was safe.
Her adviser (who was completely ripping her off in fees by the way, but she didn’t know that) kept saying “Oh no, you are in for the long term, don’t worry about blips in the market.”
Yet when I looked at my friend, all I saw was worry! She kept saying she hated the markets, hated having to think about being in stocks. She did not like the stock market, did not like that she couldn’t understand it. Her confidence was shattered, and so was her emotional well-being.
I asked her: Given how you feel right now, are you willing to bet what money you have left that not only will the markets stop going down, but that they will go up enough in one year to recoup what you’ve already lost? Her answer was no.
I said to her: If you are this uncomfortable in the stock market, take your money out! Get this monkey off your back! You can earn small but secure returns in money markets, CDs, and even learn later about government bonds or other less risky investments. Will you earn 8%, 10%, 12%? No, but that is never a sure thing anyway.
She moved all of her accounts to money market funds. Her relief was palpable. She could breathe again! She did not have to spend day in and day out worrying and watching tee vee, watching her hard word slip away from her. Today, she feels a whole lot better for sure that she’s missed the downturn in the last 4-5 months as well.
If you feel insecure being invested in stocks, if you do not have confidence that your money is in a secure place – then move it. Now. Today. If your advisor tried to talk you out of that, remember that they have a vested interest in getting fees from you. Move your money out of their claws. Your gut is at least as accurate as any investor – including me! No one has any answers in a market – possibly a depression – like this.
In case you care, and I’m not saying you should do any of this, here’s what I would do, and actually is what I am doing right now:
Move your money to a high-interest savings account. ING Direct is a good one, and if you also open chekcing, you can access your money wit a debit card. High Interest these days is just under 2%, but would you rather make 2% or lose 25%?
One your money is safe, then learn about what is out there that is cash or cash-like, and then move some money into those accounts. For example, there are government bond mutual funds like GNMA, or inflation-adjusted bond funds or ETFs where you can invest, and earn a few more points, and your money is relatively safe. Note: Funds and ETFs are not insured accounts. For FDIC insurance, you shoudl be in a money market, or CD, and verify it is insured with the institution.
You can then take some money out of savings, and open accounts with a low-cost broker like TradeKing. Buy into some of those cash-type vehicles through these low fee brokers.
Once you are securely set there, you can explore other ideas, like buying some gold or silver, or some commodities, or buying stocks in foreign countries like China, which are available as ETFs or within a fund. (I prefer ETFs but more on that another time.)
I also only put the company match into my 401(K). I put extra money into a ROTH and Individual IRA outside my company, into a self-directed brokerage account, where I can decide for myself where to invest my money – I’m not stuck with the investments and rules my employer decides is right for me. They’ve already proven they have no idea how to protect my retirement interests.
The bottom line is, you need to restore your own confidence. The so-called advisors are not going to help you. Television is not going to help you. If you are scared, fearful, anxious, take steps NOW to remove that stress from your life.
Your money can in fact be safe, and there are in fact places to invest where you can make money right now. Just not in the ways that the con men will tell you about.
