Monday, October 13, 2008

How To Survive an Election Year Financial Meltdown

I am republishing this post about dealing with the recent highs and lows (mostly lows, sadly) of our economy. Last week's losses on Wall Street were the most for one week in the history of the New York Stock Exchange. Lots of people, fearful of losing more, may have joined in the panic and sold, sold, sold. I hope this was not the case. Today (Monday, 10/13/08) the Dow gained back almost half of those loses from last week, the highest one-day gain since 1933. As this post states, do no panic. Stocks historically go back up. I am not saying that the bad financial times are behind us, they are not. But what I am saying, again, is not to panic, practice patience, and enjoy the things in your life that you can control.

Please also enjoy:

How To Survive an Election Year Financial Meltdown


I know what some of you are saying, "Why should I listen to what you have to say about the economy? You're a self-help guy, who specializes in healthy lifestyle and personal development, as well as makes funny (goofy) videos and goofy (funny) parody songs."


Why? Because in dire times like these (seen the Business headlines recently?), during the most important presidential election of our lifetime, it takes a commonsense and practical approach to combat all the craziness going on out there.

Q: But, Mike, you write and make videos about diet and nutrition, motivation and how-to, what do you know about finances?

A: As much as the next guy, and more than enough to help you.

TEN THINGS YOU CAN DO TO SURVIVE THE ELECTION YEAR FINANCIAL MELTDOWN

1. DON'T PANIC

Wall Street seems to feed on panic--panic buying and panic selling. While others overreact and sell off their stocks and put their cash in safer investments, you don't need to follow suit. Unless you need the money from those investments right now, standing pat is still the best option. Why? Because stocks eventually ALWAYS come back up--this is a historical fact. And if they don't, then we're all in trouble. This too shall pass.

2. SIT ON IT

Rarely, as a self-help, fitness guru, do I suggest sitting back and doing nothing. But, in this case, go right ahead! Pass the popcorn and park it on the couch. Okay, you still need your daily exercise, but with regards to your money--LEAVE IT ALONE. Sit on it. In fact, the best advice that I hear the most from those that get paid to know this sort of thing is: DO NOT stop contributing to your 401k or IRA. Why? Right now stocks are cheap. When the market goes down, prices go down. The more stock you purchase NOW, at lower prices, the more you will have LATER, when the market stabilizes and goes back up. Think about it.

3. KISS (KEEP IT SIMPLE, SHERLOCK!)

Simplify your life. Cut back, spend less. Analyze what you NEED versus what you WANT. If you dine out 3-4 times a week, cut that in half. Do you really need satellite TV and radio? The recent trend now is stay-at-home vacations--you spend less on gas and airfare, while discovering local attractions you may have been missing, or avoiding, for years.

Bottom line: Simplify your life and save money.

4. TAKE A WALK

How much do you spend a year on that health club membership? Figure out a way to stay in shape at home, and cancel that costly membership. Walking is one of the least expensive, but most effective, ways to stay in shape. Plus, it gets you outside, and is good for the mind and spirit. In times like these, that's a good thing.

If you desire a more strenuous workout, look into purchasing dumbbells, a stationary bike or other equipment; whatever fits your specific needs. The initial investment may smart a little at first, but will more than pay for itself for years and years.

5. INVEST IN YOURSELF

While exercise and keeping fit are vital aspects of personal growth, don't stop there. Continue working on self-improvement and personal development all the time. livelife365.com offers hundreds of self-help videos that can change your life for the better, all free of charge and just a mouse-click away.

6. LISTEN TO YOUR BOSS


There is no place continued growth is more important right now than in the job market. Now is not the time to take your job for granted. Nor is it the time to mess up the job you have. Yes, keep that resume handy and continue networking and sharpening your skills so that you are more marketable. But you also need to keep your boss happy with your work. Work harder. Do the best job you can to make yourself indispensable. Most companies will have cutbacks and layoffs--YOU cannot control this. But you CAN control your effort, productivity, and attitude.

ALWAYS be in the TOP ranked twenty percent of good performers, not the bottom twenty.

Why? GOOD companies seldom layoff GOOD employees.

Be good, listen to your boss!

7. STOP AND SMELL THE FLOWERS

Enjoy yourself. Enjoy each day. Live life 365. This simply means to live your life every day in every way. Yes, times are tough, the economy is a mess, the world is a bigger mess, but you can still find a way to enjoy the little things in life that have nothing to do with the bigger things that are out of your control.

Every Day Every Way

8. GET YOUR HANDS DIRTY

Now is the time to roll up those sleeves and get to work. But you're already working on self and your job; what next? Go outside, dig up the garden. If you don't have a garden, start one. Landscape. Mow the lawn. Do house repairs, spring or fall cleaning. Learn a new (inexpensive) hobby. Do it yourself. Besides saving you a ton of money, DIY is good for the mind, body, and spirit. A sense of self-accomplishment goes a long way. And if you're picking ripe tomatoes off the vine, you're not worrying about Wall Street. Besides, growing your own will save you more money in the long run (and they taste so much better, too!). Can, bottle, preserve, or freeze whatever you can't consume now, and have a winter of homegrown, inexpensive veggies.

9. BALANCE YOURSELF

And your portfolio. The only movement you should be doing with your portfolio is rebalancing it. This simply means you need to take a look at your asset allocations. When there are sharp fluctuations in the stock market, your assets will also shift. But do me a favor, check with your financial consultant before you do anything.

As for you and YOUR balance: you should always be working on managing your Triad of Balance, the harmonic balance between Mind, Body, and Spirit.

10. VOTE FOR CHANGE


Now, more than ever, we need some major changes in Washington. If YOU do not like what is happening in YOUR life due to decisions made by our political leaders, YOU have the power to CHANGE it.

The current financial meltdown we are witnessing needs to be fixed. Fixed fast! We have the choice to keep on making the same mistakes that have led us here.

Or opt for CHANGE.

For the better.

I hope these tips help make dealing with these turbulent times a bit easier. And always remember that YOU have more power than you think to CHANGE your LIFE.

peace,

Mike

23 comments:

Sandee (Comedy +) said...

Great advice except for the last part. We really don't have any good choices. It is as always, the lesser of two evils. Have a great day. :)

Mike Golch said...

since I on a retirement income from the state of Ohio I hope that things will not go south for me. our retirement fund took a big hit when enron collasped.
and we donot have much savings left.

Martin Miller-Yianni said...

Good angle on life, but how many people will take this advice? More fool on them.

twinks said...

Hi,
Great views about life.
The world is in crisis and people are experiencing it. However, instead of complaining, I reckon everyone of us should pause and reflect about the decisions we make in life and do something useful for a change.

Have a nice day :]

Gandalf and Grayson said...

All sound advice, Mike. We do need satellite TV though. =)

PaulsHealthBlog.com said...

You take the time to write a good informative post, and then Wall Street has its biggest day ever, and gas prices record the largest drop ever.

What in the world?

Daisy said...

I think I will stop asking for so many toys. That will save lots of green papers!

Preston said...

Solid advice. The more I read your blog, the more I like you. My 401k has been decimated but since I'm not retiring for another 20 years, I'll sit tight and wade the troubles out.

Eric S. said...

Now this is a very good post, with helpful tips. The best part is it was not full of doom and gloom.

Dan Brantley said...

Great stuff Mike, I would also recommend Dave Ramsey's Financial Peace University - incredibly practical advice on finances.

The Presidential race gets all the press but I believe Congress is where we need some real change. And in these more local races our votes can make a real difference. In some congressional races there are only hundreds voting, winners are decided by tens of votes.

Da Old Man said...

I agree with the "sit tight" philosophy. The market is pure supply and demand. As everyone rushes to dump stock, the price drops. If one needs the money soon, then sell it off slowly as it rebounds and invest in something safer.

Mike Foster said...

sandee: politicians get a bad rap...because they've earned it

mike: hang in there, it's bound to get better (I hope)

martin: it's all stuff that I do when times are tough, like now...gotta live life...365

twinks: so true, personal accountability works...you, too, have a nice day

gandalf and grayson: ya know, I kind of need mine too (to watch the Sox!)

paul: what in the world, indeed...

daisy: green papers are important...but so are toys

preston: thanks, appreciate it...and time is the great healer of all things, even financial markets

eric: doom and gloom is the antithesis of livelife365

dan: get out the vote...and I will check out Ramsey's stuff


peace,

mike

HEALTH NUT WANNABEE MOM said...

Great tips to remember since things are getting a little trickier and stress is more abundant. Loved your pinch comment on my blog. I laughed and laughed!

The Healthy Mom said...

Great post, Mike. I agree with you on all respects. I'm sick and tired of hearing about the election on TV, and all the crap about the economy, bla, bla, bla. Your point about just sit back and watch is a great idea. I think that's what I need to do. I need to just relax and sit back with my popcorn. Great points! Thank you for sharing.

john b said...

Great advice Mike. I wrote a post yesterday urging everyone to stay the course with their investments and most importantly, DON'T PANIC! Ironically, the stock market roared back with a vengeance. But, it dropped today. I think we need to be prepared for market volatility for the foreseeable future. You have offered some great ways to help get through these trying times. Take care. :)

Mike Foster said...

da old man: so true, unless you really need it now, best to sit tight

heidi: pinching pennies works too

healthy mom: seems like they've been running for president for years...oh, they have

john: looks like there will be big up and down swings, but hopefully never again like last week...whew!


peace,

mike

carol at A Second Cup said...

A great post. Your suggestions are both insightful and doable. I do some of them already and I will start doing some others. I think I will start with #1.

geovani said...

Pick up any book on the international system written somewhat recently and you are guaranteed to see one overriding paradigm: globalization. This concept has been researched, questioned, and analyzed by practitioners and academics from all realms- some argue its problems others its benefits and still some questioning if it even is a new shift in the world order. Well this week we saw a pretty extreme and concrete example of the actual effects of globalization and what this means for our policy makers- and our election
-------------------------
geovani

Viral Marketing

Bella said...

What a great post... I honestly felt better after reading it!

"Takes commonsense and practical approach to combat all the craziness going on out there."


Well said!!!

Faisal Admar said...

i thought the next post should be about garlic? lol. just pulling your leg =p

btw, i'm hardly invest my money in any kind of investment yet except amanah saham bumiputera (asb) which is managed by the government and i can enjoy the 7-12% dividend a year. as soon as this asb full with 250k then i will try some other while enjoying my 17k-30k a year dividend hehe. travel somewhere maybe?

are you good in fd instead of bond and stock?

Stacey / Create a Balance said...

I'm in it for the long term...but today felt painful.

toastyaroma said...

I WILL be voting for change. Chuck Baldwin of the Constitution Party!!

Free Music said...

This is really good advice