Posted: September 23rd, 2008 | Author: Joe | Filed under: Economy | Tags: Economy, Opinion, Rant, Recession | No Comments »
I am SO confused.
According to the AP (and others) the U. S. economy has been in a recession since about Q4 of 2007. But just today they report:
“Bernanke: Recession more likely without bailout.”
Q: How can we enter a recession without a the government bailout of wall street if we’ve been in a recession for a year?
A: We haven’t been in a recession.
A quick search of this site turns up the following posts:
Well, I guess you get the idea… I’m not one to buy into the AP’s desire for a U. S. recession. Still, all snarkyness aside, this bailout business is more than a bit unsettling…
Related Posts:
Posted: September 23rd, 2008 | Author: Joe | Filed under: Debt | No Comments »
Unless you’ve been living in a cave lately, you know that the financial markets are in pretty rough shape. The current situation is commonly referred to as the “credit crunch” because banks made so many bad loans, the ones not being nationalized taken over by the U. S. Government are being much more cautious about who they lend money to.
If you carry a lot of debt, and commonly use credit to make ends meet you’re probably in pretty rough shape yourself lately. When times turn bad like this, it really drives home the importance of being debt free.
But not everybody can avoid debt completely in today’s society, and sometimes there are factors beyond our control that can cause us to become almost entirely consumed by debt. Maybe it’s the death of a primary provider, or a long term health crisis that leaves you unable to work. Whatever the situation may be, sometimes attacking the individual debt with excess cash just isn’t an option.
Well, the chances of the government (taxpayers) bailing the little guy (you) out aren’t very likely, but there are other things you can do to consolidate debt. There are many programs out there.
Debt Consolidation is the act of combining several loans into one larger loan. This extends the term, or life, of the loan, but usually results in a lower interest rate and monthly payment.
I thought about perusing this option with my own debt load when I decided to finally do something with my finances. Ultimately I decided that I just didn’t have enough debt to warrant debt consolidation – I didn’t want to roll my credit card and auto loans up into a new loan that I would still be paying after the car was dead, and the stuff I bought on the credit card was no longer of any use. But I was lucky in that I didn’t have a situation which caused a loss of income. If I had lost my income, I would most likely have turned down the road to consolidation.
If you’re interested in learning more, you may want to check out debt consolidation center at Bills.com. They have some useful information and provide an application process where you can apply to a host of debt consolidation companies in one shot.
Related Posts:
Posted: September 23rd, 2008 | Author: Joe | Filed under: Investing, Retirement, Tips | Tags: 401(k), Retirement, Taxes, Tips | No Comments »
BankRate has an interesting topic over at its Tax Talk column. A reader asks their expert, Expert: George Saenz, CPA:
“I am curious about my tax-deferred 401(k) plans when I move. If I move from New York to North Carolina or South Carolina, will New York come after the taxes that were deferred while I am working here now? I can’t seem to find the answer to this question anywhere.”
This was something I never thought about. I think most people probably think that their retirement account is their own. At least until they start making withdrawals and the income may be taxed, as it is in a 401(k) account. But Mr. Saenz’s answer does make a kind of sense:
“If you’ve lived and worked in New York or any other state that imposes an income tax for that matter, your retirement accounts have been in part subsidized by the state.
The subsidy is the state tax savings you realized when you excluded the retirement contributions from taxable income. If you move prior to collecting your retirement pay, you’ve eroded that state’s tax base. If you move to another state that imposes an income tax on retirement accounts, you’re enriching that state’s coffers at the expense of the other state in which you worked.”
Looks like this is yet another caveat to the tax deferred retirement accounts that we need to be aware of.
Related Posts:
Posted: September 18th, 2008 | Author: Joe | Filed under: Debt, Retirement | Tags: dave ramsey, Debt, Retirement | 3 Comments »
“You’re saying that you’re all washed up
Got nothing else to give
Seems like you never figured out
How long you have to live”
- The Traveling Wilburys
I’ve shied away from Dave Ramsey. I’ve seen some blogs talking about him, and seen his multitude of books in passing in book stores, but I’ve so far avoided him. I think it must be because he is everywhere I turn.
It’s my contrarian personality I suppose.
But I can ignore him no longer. I saw him on T.V. the other day, talking about the mortgage/credit crisis and what you should do about it. He made a lot of sense. I’m not saying I’m going to become a convert, but I am listening.
I stumbled onto an article at Yahoo! Finance the other day by Dave Ramsey, titled: Dave Ramsey on Debt in Retirement.
This article caught my eye because I hear quite a few of my parent’s friends talk about how they’ve never been more in debt than they are now. These are people who have just retired, or nearing retirement. It certainly makes me want to do everything in my power to avoid being in that situation when I reach that point in my life.
If you’re a couple of generations removed from the boomer generation, you might be wondering what the big deal is. I’ve even heard some boomer’s say, “who cares about debt? They can’t make me pay when I’m dead.”
This line of reasoning always makes me think of the quote at the top of this post. People often have so much anxiety about dying young, that they never plan for the far more likely scenario: a long life.
But here’s what Ramsey has to say about why debt in retirement is a big deal:
“It’s imperative that debt be eliminated as soon as possible, for that then gives you control of your most powerful wealth-building tool: your income. It is very difficult to service debt when you’re in retirement, and most people who have debt going into retirement are not people who have big savings going into retirement. So it creates a really catastrophic situation.”
He goes on to say:
“I recently talked with a 72-year-old lady who owes $80,000 on her house and she’s trying to live on a monthly Social Security check of 1,100 bucks … and what that says is that she’s not going to be able to keep that house, not if she wants to live and eat.
This idea that a mortgage is forever is a bad plan; this idea that debt is forever is a really bad plan. Debt will only steal your golden years away from you.”
Hey, this guy makes a lot of sense! 
When he talks about boomers and debt, it really drove home the “Debt as Megatrend” concept detailed in Stock Investing For Dummies, by Paul Mladjenovic.
“The fastest growing area of bankruptcy filers are senior citizens — and college-agers are right behind them. So, as the boomers, who were notorious for overspending and under-saving, start hitting retirement, I wish I could be happier as to what I’m going to see. But the statistics aren’t good, and past financial sins have a nasty way of catching up with you.”
I would encourage everyone to read this article. If you’re a boomer – it’s never too late to get moving in the right direction, and if you’re just out of college or highschool – take heed and avoid the debt trap!
Related Posts:
What others are saying