Sushi Money

Let’s see, durable goods are way up?  Could that be significant for employment going forward?  Hmmm… maybe that means we’re not really headed deep into recession, but just bouncing off the bottom a bit.  What else does that mean? 

Could the market be forming a base here?  All this government bailout stuff and an election year too (although why is one of our candidates campaigning in Europe?!).  Housing’s still way off from a bottom though, and banks are still tightening credit it seems.  But oil’s come down quite a bit the past couple of weeks, about $22 per barrel less than before.  Was that the top? 

The Treasury Secretary and FDIC folks see the current events as a “challenging environment” for consumers and financial firms.  No kidding.   But with all that money flowing out of the government, it’s got to go somewhere.  Eventually it’s going to make it’s way to consumers, and maybe show up in the way of inflation?  Which means the Fed may be raising rates over the next year.  Could be why mortgage rates have headed up too.

I don’t have a clue where the markets are headed, but I’m staying in the game.  There are some hopeful signs for economic growth and a continued recovery.  So how do I see it?  I’m focusing on safe places to put money and not taking any big risks.  But I’m not parking the money in the mattress either.  But safe is a relative term that means different things to different people.

If you’re 77 years old and have $65,000 of life savings, you want to feel that the money is safe in the bank savings account or a CD to use when you might need it.  And if you’re a young family, working hard to pay your bills and feed your children, it’s important to make sure that the $3500 you have in the savings account is safe.   And with almost every bank across the nation, that money is safe. That’s why they’re FDIC insured for up to $100,000 for most accounts.

But what’s the word safe mean to a family making over $100,000 a year, with three kids and one heading to college, and a modest 401(k) and retirement savings of $200,000?   Maybe that family is doing just fine at home and handling the economic challenges without any hardship on a monthly basis.  But are their investments and retirement savings in a safe place, especially when considered against a spectrum of 20-30 years?  Maybe not.

And that’s where a professional financial planner or advisor can help to structure your diversification and asset allocation based on what you believe is safe and appropriate to your age, your family situation and your financial goals.   Eventually the tide is going to turn, and you want to be ready to take advantage of positive economic change, while minimizing economic challenge.

What are the core values from my perspective?  Staying invested for the long term, staying patient, paying down debt and building up that emergency fund in the bank.  Not necessarily in that order!

I does feel good to save for a cushion in case we need it, and yes, there’s still many good places out there to park your money.   Folks are jumping at the chance to open a 4.0% CD with Bank of America while the company extends their business hours this weekend.  That’s not bad at all.  And there are other FDIC insured places to save such as with ING Direct’s High Yield Savings account offering a 3.00% annual percentage yield.

But here’s a question: Is the American Dream dead?  Is it too hard anymore to get an education, a decent paying job, find a home and raise a family?   Are there really hoards of “Empty ATM’s and Desperate Boomers” out there?

Maybe for some folks, but for the nation as a whole?  No way.  I don’t buy that for a minute, and I refuse to believe that the dream so many of us have for a better future has fallen by the wayside just because we’re facing economic challenge in many ways.   We’ve been through this before, and we’ll face it again.  But we’ll get through it.

No matter what I read, and all the negative hype about financial markets and the credit crisis, what the economy really is about is what we do at home.  If you’re the one struggling right now my thoughts and best wishes are with you.  But no matter what, don’t give up, keep the faith and stay hopeful.  This country has been through some pretty hard times in the past, and we’ll move forward from here just as well. 

* On a sad but inspirational note, Randy Pausch who gave us The Last Lecture has passed away today, July 25th, 2008.  I posted a Wall Street Journal video about Randy in September 2007.  He truly showed us what living is all about.  Here’s the link to his full 76 minute Last Lecture on YouTube.  And Randy’s personal site is worth visiting.  God Bless Randy, and to your family.

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