Financial - I'm worried

[MaryMary]

I was just try to point out that what billythekid stated:[/FONT]
” Pleople are loosing thier homes because they foolishly took ARM loans and the mortgage companies foolishly loaned them the money! Anyone who is loosing everything because of the housing and gas situations were living payday to payday in the first place.”

Is not the only reason people are losing there homes.

I'm sure billyboy didn't insert "many" at the very beginning of the phrase and it sounded like all people having problems only due to exuberant refinancing. However I agree it was a root of "ripples" our economy experiences now, too many people did do it.

I like what you said
" I know I won’t take as much for granted as I did in the past."
That the most valuable lesson which should be derived from tough times.

[hotcouponmama]

The US Government stands behind the FDIC. The FDIC will NOT run out of money.
Your funds (up to $100,000) are guaranteed. Don't panic!

Yeah, it's all media hype!

Remember the US govt. is the people. The FDIC has a reserve of about $50-56 billion of which the Indymac bank is estimated to consume about 4-8 billion of that resource. That said there are estimates out there that there are another 150 banks out there that could fail, and if the FDIC runs short of funds, they will tap the banks for additional resources and that means higher bank fees for us all.

A quick word of wisdom though - if you have assets over $100K in any single bank, I would think about spreading it between multiple accounts at different banks to have your funds be covered.

Wells Fargo just reported that they are in a strong financial position in a report to the feds last week.

If you're banking with a local small bank, you might consider going to the bank management and asking for a report of the health of the company. Some are positioned really well and can weather storms because they were conservative all the way along, and others that have tried to grow too quickly might be spread too thin. You're within your rights as a customer to ask. They don't want to provide you the data, I'd consider that a sign to change banks!

[hotcouponmama]

Since you make a deal over the word foolish can I assume you think an ARM loan is ever "wise" when purchasing a home to live in?

There are times actually when it can be a good thing but it's really based on the personal situation and I wouldn't advise it for everyone. In our situation, it just happened to work out for the good. But we're in a really unique situation financially where as weird as it sounds, having a debt load has helped us accomplish other things we've been trying to get done. We also have the resources to wipe it all out if we needed to, but again, it's important to recognize that each person's situation is different.

[BillyBoy]

BillyTheKid, To answer your original post. Don't be scared. It is difficult to make good decisions when you are scared. My advise to you is:

1. Think in terms of "need" and "want". Many of us confuse the two terms. A car is a good example. I "need" safe transportation that will transport 4 adults. This vehicle does not "need" to be new. I "want" a pretty new Cadillac SUV that would make my neighbors go oooo and ahhhh, but I will wait and pay cash for one when it is 4 or 5 years used. When we think about it, we actually "need" very little. A budget in some form is necessary so you know where your money is going.

2. Look for ways to increase your monthly cashflow by decreasing the outflow. I assume you are doing this now since you are on this site. Untility bills, eating out and entertainment are 3 budget categories that usually can be reduced with little pain. An example is when we realized that we were paying for premium movie channels that we rarely watched. For what we were paying we can rent 5 movies a month.

3. Don't buy on credit. Live within your means. If you can not live without purchasing on credit, then something needs to change. Either you must find a way to make more money or you must get rid of something.

4. Put something away for a rainy day, because it is bound to rain. Some people recommend saving until you have a minimum of $1000 reserved for the storm.

5. Get out of debt. Even if it is only $20 a month, begin killing your debt one credit card or loan at a time. Without debt you will be much less likely to become scared when we hit rough economic times again. And we will again probably 10-12 years after we get through this one.

6. Invest. I am not a broker, but this is my position. Do not invest in individual stocks. If you will not retire in the next 5 - 10 years then press on. Mutual funds with at least a 20 year track record. I look at this market as a "sale" and have increased my monthly retirement investments. If I had any outstanding debt I would only invest what my company matched until I paid off my debt.

7. Be willing and open to do any type of work to achieve your goals. I have a son in law who is out of work, but refuses to work anywhere unless it utilizes his degree in Biology. So my daughter works to feed them and thier duaghter.

8. Stop listening to the negatives. Even if others here are correct and doomsday is on the horizon, there is NOTHING you can do to change it. All you can do is do what you can to improve your familes situation now. Whether this is a bubble and correction as I believe it is, or the next Great Depression, cutting your debt and investing for retirement will pay off for you and your family.

Good luck to you!

[derketchup]

8. Stop listening to the negatives. Even if others here are correct and doomsday is on the horizon, there is NOTHING you can do to change it. All you can do is do what you can to improve your familes situation now. Whether this is a bubble and correction as I believe it is, or the next Great Depression, cutting your debt and investing for retirement will pay off for you and your family.

I agree with everything except this. I think it is necessary to listen to the negatives. I don't think we should let fear run our lives, but listening to the negatives may give us insight into minor changes we can make.

For example, imported rice is more expensive. I could ignore the negative news about this, or I could evaluate how much imported rice I use. I then could determine if I want to take the risk and stock up on imported rice now, find some domestic rice, or ignore the hype and hope the market goes back to normal.

[BillyBoy]

I think I would open my eyes if I were you, it’s obvious you are very naive to think the only reason people are losing there houses are through bad choices. If I could have looked 15 years in the future I wouldn’t be where I am. You really don’t know where you’ll be in 15 years either.

My eyes are wide open. I did not say the only reason people are loosing thier homes is because of bad choices. People have always lost thier homes here and there for a variety of reasons. The reason for the HUGE increase in foreclosures IS the sub prime craze.

I don't know where I will be in 15 years, but I will be just as willing to work as many hours a week as necessary, at any job I can find, to keep our family afloat. If my field could only provide sporadic work I would either suppliment or change careers all together as I have done before. Naive I am not.

[MaryMary]

BillyTheKid, To answer your original post. Don't be scared. It is difficult to make good decisions when you are scared. My advise to you is:

1. Think in terms of "need" and "want". Many of us confuse the two terms. A car is a good example. I "need" safe transportation that will transport 4 adults. This vehicle does not "need" to be new. I "want" a pretty new Cadillac SUV that would make my neighbors go oooo and ahhhh, but I will wait and pay cash for one when it is 4 or 5 years used. When we think about it, we actually "need" very little. A budget in some form is necessary so you know where your money is going.

What's happened if I was offered a good job but I cannot take it without having a car? Should I wait until I saved enough for a car then start looking for a job? :shrug7: Or should I buy $300 clunker and pour in another $1000 in repairs while still not sure if it will start tomorrow morning?

3. Don't buy on credit. Live within your means. If you can not live without purchasing on credit, then something needs to change. Either you must find a way to make more money or you must get rid of something.

Not again..
do pay with your CC but make sure you have enough to cover your next month bill.

4. Put something away for a rainy day, because it is bound to rain. Some people recommend saving until you have a minimum of $1000 reserved for the storm.

Just $1000 might not do much for many of us. How much to save is up to every individual, considering your monthly spending and stability of your income source.

6. Invest. I am not a broker, but this is my position. Do not invest in individual stocks. If you will not retire in the next 5 - 10 years then press on. Mutual funds with at least a 20 year track record. I look at this market as a "sale" and have increased my monthly retirement investments. If I had any outstanding debt I would only invest what my company matched until I paid off my debt.

One need to invest per own comfort level and knowledge. Do include individual stocks in your portfolio if you know how to pick it right.

7. Be willing and open to do any type of work to achieve your goals. I have a son in law who is out of work, but refuses to work anywhere unless it utilizes his degree in Biology. So my daughter works to feed them and thier duaghter.

As long as this decision suits both, your DD and her DH, they will stay with it. It may be better for them to have your son in law home to take care of house and their child then having him work for min wages and give all of it plus to daycare. I knew an immigrant family where a husband was a high level musician, had a tough time to find job. He was invited to festivals and occasional performances 1-2 times per mo. and overall paid better for these occasions then he'd have $7/hr regular job.
I personally would support stay at home husband if I see any honest efforts to get on track and I'd make enough to make ends meet.

8. Stop listening to the negatives. Even if others here are correct and doomsday is on the horizon, there is NOTHING you can do to change it. All you can do is do what you can to improve your familes situation now. Whether this is a bubble and correction as I believe it is, or the next Great Depression, cutting your debt and investing for retirement will pay off for you and your family.

Listen or not to anything and anybody is everyone's personal choice. You have to have personal opinion based on facts, so either negativity or "pink bubbles" would enhance your course without leaving you confused.
Yes, cutting your debt while increasing savings and retirement contributions will do good for you in any case.

Conclusion:

Before making any important move, financial or personal, take care to educate yourself on the subject as much as you can, whether accepting an attractive job offer or picking your investment portfolio.

[BillyBoy]

What's happened if I was offered a good job but I cannot take it without having a car? Should I wait until I saved enough for a car then start looking for a job? :shrug7: Or should I buy $300 clunker and pour in another $1000 in repairs while still not sure if it will start tomorrow morning?

Like I said you only buy what you NEED. It is one thing to have no choice but to finance 3 or 4 thousand to buy reliable transportation a quite another to buy a new $25,000 car.

But, you knew that didn't you MaryMary???

[MaryMary]

Like I said you only buy what you NEED. It is one thing to have no choice but to finance 3 or 4 thousand to buy reliable transportation a quite another to buy a new $25,000 car.

But, you knew that didn't you MaryMary???

Yes a person would have a choice: to accept the job and finance the suitable car, or decline the offer because he/she afraid to be in debt.
The latter is foolish and fobic, but a choice.

A job may require a bit more then what you personally need. Real Estate agents needs to have a clean, comfortable, roomy car to drive prospective clients around. Construction worker may neeed to tug along their tools.

My point is never be afraid to step above your current box, but do so after careful study and preparation for consequences.

[billythekid]

Hi Everyone,

Thanks to everyone that has been replying. First, I am still very worried, I think hard times are coming. However, from my bank, and store accountant have told me we still have time to prepare for it.

They have confirmed my initial thought though, the FDIC cannot support hundreds of banks failing- at least not without it affecting someone. Oil Markets have peaked, prices should NOT raise sharply for a few months, ironically because of the banks failing. Wachovia is on the verge of collapse (That's just a heads up).

Stocks need to be left where they are. They are going to stink for the next 3 to 5 years, then it sounds like they will go up? They have already fallen to much to pull out now. I have Rite-aid and some money markets, they are staying in the sharebuilder.

Um, I spoke with the head of our local branch. He told me that EVERYONE had been asking them about it. I'll be right forward, I use First Citizens Bank, they "so they say" do not take any risk accounts- which I believe because they did not win the bid to build our new church building.

What am I forgetting
OH - I do pay for EVERYTHING on my cards, BUT they are paid off each month automatically. I use
Barnes and Noble for school - 5% Back Automatically
Chase Premiere - 6% Back on Gas Right Now, Automatically Credited. Soon 3% (it will be thrown away)
BP Gas- 5% Back on Gas
Amex - Don't like it really )-=
Paypal - Paypal Discounts