Is Your Money Safe?

A lot has changed since the Great Depression. One thing that hasn't changed is that we never learned from the mistakes that caused it. We are repeating them. What does that mean for you as an individual? How do you weather the storm? Here is my take on the answers to those questions. First, put your money in a credit union. Credit Unions generally didn't get in deep with mortgage lending and usually haven't used Fannie Mae and Freddie Mac to turn loans. They also don't have investment banks as part of their business. They are non-profits that have a primary mission to serve their members, not maximize profits for stockholders. Your money is least likely to be affected by the current banking situation. Second, start living without credit and establish a crisis fund of 6 months of expenses. Keep that money in a safe place like an insured money market account for access when you need it. Use it if you lose your job, or are affected by this banking crisis in some other way that causes a financial crisis for you. Third, consider getting my audio book "How To Live Debt Free" which details how to do this and other things to break our nation's addiction to debt one person at a time. (see details in previous post)If you are debt free, you should be less affected by a "freeze" in the credit markets, and more prepared to weather it.

Everyone is faced with reducing debt now

Let's face it. Now that our congressional leaders and the leaders of the treasury and federal reserve bank have come together to decide to borrow more money to solve a debt problem, we have put a bandaid on this serious economic problem. We are refinancing, so to speak. But the debt problem is still there. As credit tightens, we will all need to learn to live with less debt. I have already done this myself, and I can help you. That is why I am coming out with a new audio book to give you the specific steps to making this easier for you.

Buy an advance copy for a significant discount by sending me $25 (retail 39.95) to my paypal account at jim@jimandersononline.com and as soon as it comes off the presses, I'll mail it to you.

Debt is Really the Problem

As we move into this idea of the Government spending a trillion dollars or more to fix our credit crisis is more of the same mistake. Hear what Ron Paul has to say about it.

CEO Bonus for a Credit Crisis?

Food for thought...
When my business started going south in January 2001, I took a paycut and did everything I could to ease the cash crunch on the corporation. It was the right thing to do. Now, I am watching bank executives walk off with multi-million dollar severence packages while their banks are taken over by the FDIC. This is equivelent to me having fired myself as CEO instead, and have had the forethought to create a "golden parachute" for myself if I left my company as CEO. I could have walked away from my failing business and looted it with a severance package. Uncle Sam would have won because I would have paid income tax on that severance instead of writing off the corporate losses it would have been used to partially cover. I would have let it go into bankruptcy, and walked away with enough to fund my retirement. That is the game these guys are playing. It isn't their business, but they are basically looting a company they led to failure, in these cases, at the expense of our economy and taxpayers who ultimately have to pay for the bailout which means recovering the money for the severance pay as well. The IRS wins, because they get more tax revenue out of the situation.

Why does big business play by different rules than small business? Political corruption. Debt benefits our government officials in many different ways and costs us as individuals. Yet, if the next President allows the debt to keep growing, he will lead our country to a failed banking system and an economic crisis that could bring down our country's current form of government and likely leave us with a socialist or Marxist type system after the World Bank and International Monetary Fund bail us out.

The solution - get out of debt yourself NOW!

Fannie Mae and Freddie Mac Bailout

The warnings I have been posting on this blog for years starting to happen with this bailout. This is significant because these organizations are so large and are connected to the economy in such a profound way. Excessive debt destroys economies. People have been laughing at Ron Paul and his warnings. People laugh at me. They just don't listen, because our society does what everyone else does without thinking it through. Debt has become a norm, so much that people even believe it is foolish to pay off your mortgage because of the tax deduction. They don't do the math, they just listen to what people tell them.

Here are some comments about what this bailout is going to cost us from people who are paying attention:

“1.6 Trillion sounds about right, but they will stir things up, and mix more in, until it will be hard to tell, because it is an ongoing train wreck, and it never will be paid off, because it will destroy the dollar, so the real cost is a free America.”
— John H.

“Every bailout I’ve ever seen was at least a factor of 10 higher that the initial estimate. I’m betting on the 2 trillion number myself.”
— Steve O

“We’ll never know because by the time the numbers are in, we’ll be on to the next financially engineered crisis. But for a number — at least $1.3T.”
— John M.

The best way to protect yourself personally is to be completely debt free, including your mortgage, otherwise the future of your home ownership and financial well being may be in jeopardy. The cost of this will affect all of us no matter what we do, but if we are personally debt free we have a better chance of financial survival. Watch closely what happens. After this next election, we may be in for a big surprise, depending on who wins. It may not be immediate, it may take a few years. That comment above about losing our freedom - don't discount it too much. There may be some truth in that prophecy.