I'm watching and reading even less news than usual. Why? Because everyday we are flooded with bad news and bad news doesn't make me money.
When I do happen to catch some news, financial or otherwise, I grimace. Mostly because the people that are watching it look so depressed.
Yes the market tanked. Yes Wall Street firms are (once again) too greedy for their own good. Once again Congress is really going to do something this time. It's a story that has played out before and will play out again.
My 401(k) is down. My Roth is down. My cash is still safe and my house is still standing. Now's the time to put things in perspective. Here are a few tips for the future (you're already screwed right now).
- Keep a large cash reserve. No matter what so called financial planners and advisors tell you, cash is king. If the advisor is real weasel, he'll tell you that you are at risk because you're money could be making a better rate of return (for him). Do us all a favor and punch him in the face and walk out of his snake den.
- Don't pull your money out of stocks in a down market. This is the only sure way to lose money right now. Just as you shouldn't rush in to buy in bull market, you shouldn't rush to sell in a bear market.
- Pay off debt. In the long run nothing is as risky as debt. Every mistake is amplified by debt. When you lose cash on a deal, you'll learn a lesson. When you lose other people's money, it get's more serious.
- Be cautious with your money. You worked out to earn your money (financial advisers and lawyers, excluded). Why let some snake oil salesman take it away. Keep a decent amount in FDIC insured accounts (savings account or CD's). Don't invest in anything you don't understand or feel comfortable with, NO MATTER WHO WANTS YOU TO. I don't care if it's your brother, brother in law, father, son or Jesus himself. If you don't feel comfortable with it, don't do it.
- Stop watching the news. Watching the news will make you unhappy. The only news reported is bad news. 99% of what's reported on TV just doesn't really matter. Gas prices going up? You'll find out when you go to the pump. What's the sense of getting upset watching the report on TV. People that watch the news are uneasy and unhappy. Those who don't watch the news are mellow and more stable. Which would you rather be? Oh and political news is the worst. If you think McCain or Obama are going to save you, please stop reading this blog because you're at the best naive and at the worst, just plain ignorant.
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