Learning From The Economic Downturn

To say we've been through some tough financial times recently as a nation would be an understatement. Almost any financial advisor will tell you we're in unprecedented times right now, a decade of economic instability not imagined since the Great Depression. Analysts issuing financial advice must now reevaluate the new landscape and that seems to be the case across the board. Clearly, it's necessary for us to be boldly confident as we move forward, otherwise we risk relegating future generations to even more economic uncertainty. But it's equally critical that we take a look at the reasons for the precipitous decline of America's financial engines so that we can learn from the mistakes made. Here are the reasons for the situation we're in:

The housing bubble popped and sent our financial institutions crashing and burning. For decades, a confluence of factors built like volcanic magma beneath the sea floor. Easy credit conditions, bad underwriting, and predatory lending (like sub-prime lending) created the biggest housing bubble in American history. When these bloated, toxic loans weren't paid back or purchased it led to both historic foreclosure rates and the massive instability of our financial institutions, causing the collapse of AIG, Merrill Lynch, Goldman Sachs, Fannie May, Freddy Mac, Stanley Morgan, Washington Mutual and the Lehman Brothers. The result of this has been the lowering of the US credit rating and the epic devaluation of what used to be the symbol of the American dream—the home.

Wall Street is faced with a new regime of regulations and lower returns. This time it may not be part of the cycle. Many stock market analysts say the proverbial train has gone off the track and may not ever return to its previous course. Because of new rules enforced after the bursting of the housing bubble, banks now have to producer higher levels of equity in order to balance risky assets. Most options for doing this will result in significantly lower returns, leading to many major corporations to embrace job cuts, outsourcing, deleveraged assets, and weaker markets. Even if Wall Street does make an epic return, the age of 'the market' being seen as the great economic stabilizer is over.

If we treat these as teachable events, it's possible to use the recent economic downturn as a way to redirect the future. The innovation and ingenuity of American entrepreneurship has bailed us out before and it can again if we take seriously the reality that markets require a constantly shifting balance between regulation and freedom. There's no silver bullet here, but that doesn't mean we shouldn't reload—our economy, that is.

Europe’s Debt Crisis Causes Fluctuations in U.S. Treasury Bonds

The twists and turns of the ongoing European debt crisis, coupled with the knowledge that its outcome will have considerable implications for economies worldwide, has had a direct impact on American financial markets. When hopes of a deal are high, and one appears close, the U.S. stock market rises in approval. Conversely, whenever the situation starts to looks especially bleak, the stock market responds with an accompanying fall.

The same has been true of U.S. Treasury bonds. Whenever Europe appears hopeless and the stock market is down, Treasury bonds serve as a haven for worried investors and rise accordingly. This process was on full display this past week: after a meeting of European finance ministers was cancelled, speculation swirled that the major leaders in the Euro zone were not on the same page. As a result, bond prices immediately responded and began to trade higher. The 10 year note went 1 2/32 higher to a yield of 2.111%, while the 30 year bond jumped 3 1/32 to yield 3.13%. The two year note had a more moderate 2/32 rise to 0.255%.

When the European crisis hasn’t been hitting the news, Treasury bonds have actually trended downward in recent weeks alongside reports of an improving U.S. economy. With rises in job and consumer confidence data, the stock market showed signs of health at the expense of Treasury bond yields. But these improvements are still being stymied by an overall lack of investor confidence, and analysts predict that Treasury bonds will continue fluctuating until the European crisis is resolved.

At the core of the European debt crisis is the dire financial straits of the Greek government. Europe has already given Greece one bailout, and now it looks that the country is going to need another. But there are other problems as well: the Portuguese and Italian economies are also greatly struggling, European banks are burdened by national debt, and some countries are questioning their membership in the Euro zone in the first place.

As is often the case, politics has played a role in the negotiations. Although Germany and France – the two most important economies in the talks – have put their weight behind a plan that sets up emergency funds, supports the Italian economy, and restructures the Greek debt, there are many small points of disagreement and countries that are unwilling to go along. In Italy, Prime Minister Silvio Berlusconi is mired in a political struggle and has refused to make the commitments that Germany and France seek.

The outcome of the European crisis, then, is still to be determined. All we can say at this point is that U.S. Treasury bonds will continue to fluctuate alongside the roller-coaster negotiations.

Junk Bonds are Back in Business (For Now)

For individuals just struggling to get an honest list of the best checking accounts offers in a bad economy, junk bonds probably sound like a bad idea. Generally speaking, they'd be correct; the potential yields of junk bonds, otherwise known as high-yield bonds, are far from the safe assurances of certificate of deposit rates. In fact, these particular bonds belong in their own class solely because they're rated below investment grade and are therefore too risky to pool with other bonds. In typical economic tough times, experts tend to advise investors to stay away from high-yield bonds – the risk for struggling entities failing to oblige to the returns is just too great.

But these are not typical economic tough times.

No doubt about it – it's tough right now. But it's a different kind of tough. It's so different that nobody really knows where the market is headed, and that's reflected in the wily way in which we've seen investor confidence fluctuate in recent months. Europe in particular is fighting to avoid economic calamity on a historical scale. Up until now this has resulted in major abandonment of junk bond dealings in favor of the much safer alternative – U.S. Treasuries. Both foreign and domestic investors have flocked to Treasuries, which has resulted in a lowered yield, creating an unprecedented gap between Treasury yields and those of high-yield corporate bonds.

Typically, such a gap was bad news for junk bond enthusiasts. But as it turns out, the European safeguards against high-yield default are much more bearish than what analysts say is necessary. Current buyers of junk bonds linked to the Euro are being compensated for a 7% default scenario, a much higher rate of default than experts believe is going to be the case in the European high-yield market. Even lower anticipated rates of default exist in the U.S., encouraging investors to give junk bonds a second glance, at least in the meantime.

That means that, for now, junk bonds are looking like a sure bet to many investors. The current trend is to descend on the best-rated of these bonds – those rated B or BB. But if the division between Treasuries and bonds stays true while European debt fears subside, you may even start to see investors brazen enough to buy up lower-rated bonds, although experts caution that these riskier junk bonds are bound to come with higher default rates.

Will small-time investors and those used to CDs suddenly become junk bond aficionados? Probably not. But at a time when uncertainty is the only sure thing, speculative bets on risks – and the benefits of enough bond buyers doing that – might just become the next big thing for amateur financiers.

The Real Cost of American Oil

The Real Cost of American Oil

Americans tend to act like a group of addicts when it comes to certain things. We are never going to give up our massive addiction to fatty foods, as seen by protests against trans-fat bans in major cities. We are always going to want lower taxes and more freedom, as seen in the Tea Party demonstrations, even though we don't really know the cost of it. We are also working more than most of the other countries on the planet, and often getting less accomplished while we are there.

But the biggest addiction we face as a nation has to be our reliance on automobiles and the internal combustion chamber. We have always had an unhealthy relationship with our personal transportation devices, but the obsession has grown to staggering new heights. The aftermarket car parts industry accounts for $257 billion of our economy, which comes after the initial vehicle purchases. While the automotive industry makes great money, the oil industry profits from continuous fuel-injections.

When we think of the skyrocketing prices of oil in America, it is easy to conjure up images of terrorists and unstable dictators in the Middle-East. While the media tells us that people like Muammar Gadaffi and Saddam Hussein needed to be killed in order to tap into their strategic oil reserves, about 36 percent of our oil is produced domestically. Texas, California, Oklahoma, the Gulf of Mexico, and even North Dakota are some of the largest producers of oil in the US.

While a good portion of our oil comes from domestic sources, you would think that there is still 64 percent that must come from the Middle-East. Think again. Most of our foreign oil comes from places like Mexico, Russia, and our neighbor to the north, Canada. Only about 11 percent of our foreign oil comes from OPEC countries.

The price of oil is so high in this country because of the simple law of supply and demand. We are craving the product so badly that the oil companies have more reason to exploit the need and collect profit from it. We rely on the black stuff for just about everything. Getting to and from work is just the tip of the iceberg that gasoline keeps frozen. All of the shipping, delivery systems, and lawn and construction equipment we use relies on it as well. If we took it out of our economy, America would fall straight on its face.

Another reason the prices of oil are so high in America is because of corrupt speculators on Wall Street. CNN reports that a group of five oil speculators were charged with manipulating the price of oil futures contracts and making a profit of $50 million. These investors place their money on oil in hopes that it will continue to raise in price, while they simultaneously manipulate the markets in their favor.

The next time you are complaining about President Obama not keeping the price of oil down because he wants to pull out of Iraq, you should reconsider your criticism. Instead, draw your attention to those protesting the bailouts of big banks who get us into this trouble to begin with.

Europe: Not Big Enough Not to Fail?

Last week was filled with news that European leaders were slowly but surely sorting their debt crisis out – inciting a massive sigh of relief among international investors. This was reflected by big rallies on Wall Street. But with news this week revealing that deep-seeded differences among European leadership remains in the way of a successful compromise, investors, financial experts, and economic analysts alike are once again holding their breath when trying to postulate the future state of the global market. This is reflected by big losses on the stock market that have reminded everyone that there's still no end in sight to the uneasy European economy.

There is virtually no European country currently invulnerable to the threats of a potential financial meltdown on a continental and ultimately global scale. Even Germany – which most people consider the strongest and most financially secured European nation – is at-risk for catastrophe if troubled Eurozone nations such as Italy go belly up. Indeed, as long as a country is tied to the unifying Euro, they surely play a major role in the current crisis, either as a detriment or as a potential source of a solution. It's a failure for these nations to responsibly dish out the proper punishment to each other and collect the correct amount of assistance from one another that's keeping a rescue plan from being carried out.

It sounds all too familiar – we're basically witnessing the aftermath of the 2008 crisis in the U.S., only instead European leaders have the luxury of acting before the catastrophe occurs. It might sound proactive, but there's one primary difference between the way the United States handled it's crisis and the way European leaders are wanting to handle theirs: we bailed our big boys out, and they're trying everything they can to avoid that.

Germany and France are determined to avoid bailing banks out, and just about any other institution at risk for default, countries included. This inability to commit to a last-ditched solution, even if it's under the condition of being “just in case”, is what has the world so shaken up by the European debt crisis. When the United States economy was at risk of collapse over three years ago, the world watched and waited as we doled out the cash necessary to prevent a second Great Depression. Seeing that the United States clearly avoided such a catastrophe through bailouts, investors and economists are eager for Europe to commit to the same thing. But so far, they are not.

Perhaps they have, on some level, negotiated a backdoor strategy for solving sovereign debt crises attached to the Euro, which most certainly would involve major bailouts. But since such news would be helpful in solving day-to-day market strife, the lack of a plan being spoken of is an indicator that one unfortunately does not exist. In the meantime, European leaders race to figure out a unique way to fix their economic crisis, something that avoids the alleged pitfalls created by the quick actions of the American government when it bailed out banks and beyond.

Europe has the luxury of being able to anticipate their oncoming disaster and therefore thwart it. While this makes the continent's leaders determined to take their time and come up with a refined solution, they must understand that when it comes to the global economy, a continent is definitely too big to fail.

Take a Hint from China: U.S. T-Bonds are Sure to be Safe for Decades

Doubts about the fidelity of United States Federal government debt is all the rage these days. At the center of debates that cover the future state of our collective collection and spending of capital is the way American lawmakers plan to solve our looming super-debt. Simply put, some people are seriously doubting the US' ability to solve its debt crisis in the long-run. If the US were to fail to balance its books, then the once-considered invincible and immortally secure value of the US Treasury Bond, which in essence is an investment in future American success, will disintegrate into just another piece of paper.

But those who should be the most worried about such an event occurring, are the ones who continue to commit actions that only make sense if they believe the US long-term situation is a good one. The Chinese government has not ceased their faithful purchasing of US T-Bonds even during the worst period of the Great Recession, and as we veer near a potential double-dip they still haven't stopped. In fact, China has bought over a trillion dollars worth of T-Bonds since they started doing so when our two countries expanded our relationship with one another in the late 20th century.

The only way China can ever expect to see a benefit to their 1.1 trillion dollar investment in the American government is if the United States continues to prosper for decades. Looking at the maturity rate for the bonds they've purchased there's simply no other way around it. Yet despite official criticism regarding the way American lawmakers have been playing with fiscal fire, China has not shown any indication that they've hit the panic button, or that such a button even exists.

China is no stranger to just about anything when it comes to managing the economy of an empire and international relations. The world's leading power does not invest more than a trillion dollars into a military and economic competitor without reinforced assurances that the transaction functions on the terms that were agreed upon.

What does China see, exactly, that makes them so confident? Maybe it's the two trillion dollars of top-level American corporate and private citizen revenue that gets horded inside banks every year instead of being spent like it should. Perhaps it's the countless tax loopholes for big businesses that have yet to be closed, but could be to net more government capital. Or it could just be the fact that as long as the United States continues to possess the world's most powerful and technologically advanced military China feels like they have a reliable business partner under no immediate threat of default.

And even if our government does default on its debt, for some reason China is certain that the US Treasury will always make good on its monthly coupon payments out for bonds. While this is a little scary to think about, it says enormous things about China's confidence in the American public sector to eventually get done what needs to get done.

So long as the private sector of the United States plays along, everything about our current debt crisis is sure to become a thing of the past. China certainly believes so, and with more than 2,000 years of continual existence, you can count on them to always see the bigger picture.

VP Biden Attempts To Ease Chinese Concerns Over American Debt

The markets took a beating recently when a deal to raise the debt ceiling was finally reached. The bipartisan compromise came down to the zero hour as government officials argued up to the last minute on how to effectively map out a repayment strategy. When the deal was finally reached, America's triple A credit rating was downgraded, for the first time in history, to a double A status. This has many concerned about American's economic viability, especially China. It's for these reasons that Vice President Biden traveled to China to placate fears that America could default on it's debt.

The American economy isn't new to economic troubles, but everything hit the fan when news of Standard and Poor's downgrade of the US Sovereign Credit Rating was released. The S&P 500 has long held the economic standard and credit rating for the world market, and issued a warning, not to the private sector, but to political officials.

A warning was issued to the U.S. Government that if America couldn't find an effective strategy at paying down its debt, there could be consequences. Standard & Poor has been worried about America's borrowing practices for some time now and after a contentions debate in Washington over a deal, the market has lost faith in the country’s ability to make effective and sound economic policies. After the announcement, the entire market went into a state of flux and China, the largest holder of American debt, is voicing serious concern over the way we're doing business.

The past two weeks have shown incredible volatility in the market as, after debt deal was reached, the Dow lost more than 200 points before recovering ground later on in the trading day. Ever since then, three digit swings in the market have become a daily occurrences, and almost expected. This, however, isn't as much of a concern for investors, like China. The biggest issue that's concerning the world market is the state of U.S. Bonds, long considered one of the safest investments in the world. Bonds and treasuries haven't been hit yet but, if this were to happen, the entire market could head towards something worse than any of us could imagine. This is why VP Biden is making the rounds and trying to reassure China over the viability of the American market system.

Chinese officials, who have long been surprisingly silent as the American economy has slumped ever further into recession, are now speaking up. They're now openly criticizing the political players in the government. You could consider China much like a shareholder in America as it holds over 1 trillion dollars of America's debt. This makes them the largest shareholder in the game and they've become increasingly concerned, like everyone else, about American's poor borrowing decision and partisan squabbling. It was Biden's aim to ease these tension with his most recent five day visit what some are calling America's “ Charm Offensive.”

Vice President Biden struck a much different tone on his most recent visit to the world's fastest growing economy. America, a long-time advocate of political rights and change in the region, was far more subtle than in the past. VP Biden tried to underscore the important ties that the two world powers have in shaping the future of our planet. It was a PR campaign to try and ease tensions and soften China's increasingly negative opinion of the American system.

It's not clear yet whether or not Vice President Biden's visit will prove positive, but it's not just China that the country has to worry about. There is serious and legitimate doubt regarding whether or not the country can make sound and effective decisions for the greater good of the entire country, and world for that matter. Americans, as well as the world, will be looking very closely at the country during the election coming in 2012. It's hoped that a new tone can be set, one of compromise and intelligence.

The President Promises No New American Recession...But Read Between the Lines

In interviews this week, United States President Barack Obama repeatedly reassured the American people that the country was not at risk for a double-dip recession. In spite of the President's statement, the recent downgrade of the American credit rating by Standard & Poor, doubts about government debt solutions, and growing concerns for the wily stock market activity and the economic panic underway in both Europe and Asia, Americans are still believing that a recession is imminent

I wouldn't say what the President says to the American public is scripted, but the head of the executive branch almost never speaks off-the-cuff about current affairs. This is especially the case when it comes to future events. When the President goes on television saying the likelihood of the United States experiencing another recession in the near future is remote, it isn't because it's what his gut tells him. It's a statement based on plenty of empirical evidence, and more importantly, politically it's something that absolutely has to be correct, or else there will be hell to pay for the President.

So while not even the President can completely guarantee that another recession won't happen, try and let his words help you relax a little bit. No politician, whether good or not, ever sees it in their best interest to offer false hope when facing a certain catastrophe. If there was uncertainty within the White House about another American recession, Obama's words wouldn't be so confident. He'd say the risk was “minimal” or something like that. But he and his team have decided that one year away from his reelection campaign Obama can confidently tell the country that we're not at immediate risk for a double-dip recession.

If you didn't pay close enough attention to the President's own words, have you been paying attention to mine? Not once did I ever say Obama said the planet isn't at risk for another recession. That's where the shiftiness exposes itself. What makes his confidence so peculiar is how close the world seems to be to falling into another economic crisis. America's hand in this new turmoil was strictly partisan nonsense: our lawmakers failed to create a responsible way to deal with our debt limit and that had untold affects on global economic confidence. But the real immediate risks for a new recession are elsewhere. Before we feel the pains we'll see them being felt across the pond and beyond.

That doesn't mean we aren't at risk for an eventual recession, and chances are Obama and his people know this.

Unfortunately, I don't know what Obama and his team are really thinking. Perhaps they see the window of time between a global economic meltdown and the fallout on the United States as an opportunity to finally initiate a job plan or enact other big government solutions. But being this close to the 2012 election, I highly doubt they'd pull such politically-charged tools out of the box. Maybe they're hoping the American private sector gets spooked by uncertainty abroad so much that they start injecting more money into the domestic economy instead of continuing to plant their profits into overseas accounts. Or maybe they've just decided that our current level of partisanship in congress makes any action impossible, and that this can only be used as fuel to feed the flame of the next election.

One thing's for sure, if a new recession hits soon, it won't be ours. For a little while anyway.

Online College Courses Coursed to Double by End of Decade Due to Dire Economy

If you're looking for a place to put some lingering investment money, then look into the potential growth produced by online college courses. When jobs are down, higher education enrollment goes up. With the advent of instant mobile transfer of all forms of data through 4G wireless and advanced cloud computing, its obvious that online education is on an evolutionary track upward. What does that mean for the rest of us? It means there's an industry on the verge of an overhaul in need of investors, and we could be the ones backing it up.

Right now when you perform a web search for online colleges, you get an innumerable amount of lists and rankings on where's the best place to go and they mostly amount to the same series of options. None of which are considerably viewed as high-end academic institutions. Not that they should be necessarily. All I'm saying is that there's enormous room to grow in an otherwise stagnant industry.

Traditional academic institutions continue to control the majority of education, as they should. And by no means am I advocating for profiteers to take over online education. But there's business value in putting money into non-profit engines of economy. Jump start a new venue for online education, one that is leaps and bounds above the rest, and you can start churning out learned individuals who turn around and give back to the economy and ultimately become appreciative alumni.

It all sounds a bit fanciful, but hear me out. So long as unemployment continues to remain at a national average of 9 percent, and the unemployment rate of those under the age of 25 continues to stay at traumatic levels, college enrollment is set to climb. Combine that with the increased connectivity of the modern web, and it's clear that the potential for online higher education has yet to be completely attained.

So for those of you out there with limited ideas on where your money can be put, seriously consider researching any and all institutions that are educating individuals online, for pay or not. You're going to be investing in an industry that while not exactly one that is sure to earn you the most private wealth, is one that is sure to only grow stronger as the years go by. By acting now you can possibly be taking part in the early years of an academic approach that will go on to dominate the rest of the 21st century.

There's a market out there that will arrive in five to ten years that's going to ache for online academic resources. They're the Facebook generation and the kids today who have the luxury of having the whole world beamed into their pocket-sized smartphone. They'll be incredibly used to the learning constructs of the web, and will be much more open to the idea of learning online than previous generations have.

I'll keep saying it: online education is an industry primed to explode. Don't allow the way in which online education has been implemented thus-far influence the way you view its long-term role. Today it continues to exist as a cumbersome alternative to traditional academic environments. But give it another decade to soak up the benefits of instant video chat, mobile file transfer and access, and lure countless individuals away from traditional universities and see how much it changes.

Are we headed into a new age of academia? That depends on whether or not investors, such as yourself, consider online education a viable place to put capital. The market will be there whether or not the money to fuel it will be.

Knowing Whether or Not You Are Prey for Loan Sharks is Your Job No One Elses

Payday loan lenders probably don't have very many friends, similar to their common maritime metaphor the shark. Calling them predators is a little presumptuous though. Think about it: is a shark hunting if the fish swim right into its jaws? While those who provide payday loans typically target low income wage earners through their marketing and rely on these folks to make a profit, it's not like they jump out of the water and snatch innocents to carry back down into the depths with them. In nature, if an animal is eaten, part of it is the animal's fault. Predators, after all, are only doing what they're programmed to do. And somebody has to do it.

If you're the kind of person these places like to see walk into their lobbies, then you need to understand a few things about payday loans. Number one, their entire existence, from formation of the contract to disbursement of the funds, is designed by the lender to make it hard to pay it back unless it's paid in full. They want that high interest. Why? Partly because interest is where money is made when lending, but also because the people they target tend to be those with bad credit and excessively high interest is the only way, allegedly, that lenders can borrow to people with such risky credit histories without losing money. Either way, it's fundamental that you understand that from the very beginning, the cards are stacked against you if you don't have a responsible well-thought way to pay back the loan within a week or less.

Finding the right payday loan lender is less about seeking out shreds of kindness in the varying terms and conditions of multiple lenders – because underneath nice language none of them are particular nice – and more about focusing on whether or not they provide enough information openly about their different loans and how they're repaid and what your options are. CashNetUSA Payday Loan for example has an FAQ page that's actually quite useful compared to similar online payday lender websites that seem to only want to "ask" questions that nobody particular wants answered. While I can't say their interest rates are any lower than the competition, at least they let you know what the process is like if you're unable to pay. The penalties might seem outrageous, but there's something to respect in a lender at least letting you know in advance.

It takes a dedicated sense of personal responsibility to avoid getting yourself into a payday payback mess in the first place. Never borrow such a loan without making sure there's a way to pay it back immediately. Understand when an emergency calls for such a loan and when you're just looking for an easy way out. Payday loans are not an easy way out. They're a way to acquire a large sum of money quickly if timing demands it and you're virtually unable to find another source of money in the time it takes to fix the emergency. In any other case, do everything you can to secure another source of emergency income. If you choose to swim with sharks, don't say nobody ever warned you about getting eaten alive.

Young Realtors: Be Free Tonight, Buyers Are on Your Side

It's counterintuitive but the current changes in the way the American housing market functions can actually mean increased advantages for those just starting out in the real estate business. There's no denying that home buying is way down and foreclosures are way up. Home ownership is once again an exceptional undertaking. But agents who have built their entire careers and livelihoods on a now obsolete model of real estate are the ones who are in the fight of their lives. Rookie real estate agents with a knack for adaptability have been observing the recent events of the last few years and stand a far better chance in today's real estate marketing arena than those who are in some ways forced to cling onto a dying strategy.

Conventional real estate agents used to be able to rely on the endless number of new buyers on the market. It's not often that a realtor gets a return customer and so reputable success was based on who could get homes sold, not find the right one for a potential buyer. In fact much of the pseudo-fraud committed inside the real state arena was based on the fact that nobody made money anymore from helping people buy homes and instead the money was in getting homes bought. This caused realtors to maximize moneymaking efficiency by caring less about whether their clients found a right home and more about how many homes could be sold in a the shortest amount of time possible. In the wake of the housing bubble this tactic is dead, and realtors are now more reliant on finding the right home for the right person in order to maintain their reputation but more importantly maintain their survival.

So, in a sense, the playing field has been leveled. Prove you're a savvy realtor by getting a reputation early on as someone who doesn't try to push a homestead lemon and who does the extra legwork to find the best fits for you. Another way to bank off the errors of your elders is to seek out expired leads. If you know what properties are about to be taken off the market, introduce yourself to the seller as a better agent who will get the mission accomplished. This is a great way to build the reputation of being a great seller as well as a great finder.

The real estate market is probably the hardest field to get into right now when you consider how just a few years ago it was one of the easiest. But that right there is the key to your success. If you can thrive as a start up realtor in as unforgiving a market as this one, what won't you be able to do once the market improves? You're young. Time is on your side.

The Ugly (Financial) Side of Retirement

Retirement. The very word conjures up images of lying around the house, dozing in the hammock, sipping iced tea. Or maybe you prefer a more active dream of daily golf or fishing. Whatever you imagine, it's unlikely you'll consider the ugly side of retirement that few people mention. This is the side that anyone who hasn't prepared financially for retirement can tell you about.

Instead of those lazy, relaxing, enjoyable days, or even the more active ones where you get to do what you choose, this side of retirement is a different picture altogether. It's one of limited income, financial stress, the worry over paying for your medicine or buying groceries. This side of retirement is not only ugly, it's frightening as well. The good news is, with some simple planning, you never have to encounter this unwelcome guest as you age.

Retirement is a part of life, but because age seems so far down the road, too few of us plan for it properly. We may start a 401K, but then we change jobs and cash it out. Or we may start a CD, but when it matures, we use the money for something else. We have good intentions to plan for this inevitable day, but too often we only aim and never shoot where our financial future is concerned.

One way to overcome this demoralizing time in life is to begin now, today, to plan. Even if you can only put away $50 a month, or $25 a month, put something away right now for your retirement. Don't count on the government to support you. They can't even support themselves. Instead, take action on your own behalf and start a separate account, then begin to stash a little money away every month, or ever week. This will become your small retirement fund when the day arrives.

Another way to plan for your retirement is to do your level best to get out of debt completely. If you must maintain a mortgage payment, try to get it as low as possible, but if there is anyway to pay off even the mortgage do so. It will be worth the sacrifice when the day of your retirement comes and you don't have to worry about a place to live.

Financial Expert, Dave Ramsey, says you have to live like no one else now, so that you can live like no one else later. In the world of retirement planning, that means cutting corners, saving money and living more frugally now so you can enjoy your retirement years later without a heavy financial burden hanging over your head.

Retirement is often called the "golden years." And that can be true. But only if you plan for it and do your utmost to ensure you are financially stable by the time that day arrives. Who knows... if you plan well enough, you might even be able to squeeze in a few golf games now and then if you've a mind to.

Supplementing The Cost of Education: How To Find Ways to Pay For Your Schooling

The biggest cost of education is the tuition, plain and simple. Some universities charge an average of 40 thousand dollars a year, and that's on the low end. Just because a person can take out tens of thousands of dollars doesn't necessarily mean that they should. There are a lot of ways to build up your income and save money for school without going into debt for decades to come. There are jobs and programs that are designed to help with this burden. So in order to invest in your future, consider one of the following options to build up your resources.

Many programs offer assistantships. These are usually designed for people looking to get their master's degree. A person usually applies for this. It's like a job where a person, while going to school, works as a professors' assistant and helps them with a wide variety of things anywhere from, making copies to managing email databases. It's usually not very taxing work but it depends on the department as well as the professor you're working for. The job is often located in the same department you're trying to get your master's degree in. In return for your services, you're tuition is paid for the duration of your degree.

For those who have yet to get their bachelor's degree, there's a government assistant program called a Federal Pell Grant. These are usually designed for students whose collective family income is below 20 thousand dollars. This means your mother and father's combined income. It's important to note that many families with incomes below 50 thousand are often eligible as well. The award varies but it usually ranges anywhere from 4 hundred to 4 thousand. This is all depending on your level of need. Though this won't pay for your entire tuition costs, it's free government money that can go a long way.

Some more industrious youths might consider investing in the stock market. The operation of the stock market is basic but the details aren't. It's usually best to consult investment web sites, like TimothySykes.com, to glean professional information on the different kinds of stocks that are out there. From short-term speculative stocks to more long-term investment opportunities, the stock market might be the perfect place for you to build up your resources and pay down or pay off burdensome tuition costs.

With the cost of tuition raising every year and incomes and job levels staying stagnant, it's up to every individual to make their way but it's important to realize that there is help out there. Some approaches are more proactive than others but one of these options might work for you. The Internet is always a wealth of information and there are many other possibilities and avenues out there for people willing to put in the effort and time to get the necessary funds.

Renewable Energy Always A Safe Bet, Especially with the Government Helping Out

In late 2009 the United States Treasury Department set aside $2.2 billion dollars for Clean Renewable Energy Bonds. These bonds were meant only for 805 different entities; none even remotely close to what you would consider your humble level of power brokering. But this kind of massive investment with government technology does show that the Feds are serious about clean energy. Since most any expert will tell you that climate change isn't going away anytime soon, keep your entrepreneurial ears perked for future federal action regarding clean and renewable energy investment.

If there is any industry that will be receiving massive boosts in their technological prowess at the hands of the U.S. government, it will be any industry that commits to alternative sources of fuel. This isn't just exclusive to already established energy powerhouses like Edison or super researchers like DuPont. While now in the midst of a global economic recovery we may see only the head honchos get the big bucks to invest in energy innovation, there will be plenty of demand for small business ventures to pick up the slack in the years ahead.

But why? New companies are more likely to hire people than institutions that already have an established staff and the means to lower personnel costs. With unemployment at a virtual standstill and that number likely to rise as much as it does fall over the next several years, the government is going to be very concerned with the amount of job creation entities promise to commit to in return for the ability to utilize government assets. The off-chance that your little company might figure out a way to drive a car on water faster than Ford is worth giving the funds to you as long as you're hiring.

If you're in no position to be starting your own energy research business, which is pretty understandable, then look into investing into these companies yourself, for the reasons just mentioned. A company in your hometown might just be a few years off from being in the position to receive these kinds of funds. If you can help them get there then figuring out the impossible task of carrying your investment yourself from start to finish is no longer an issue.

Good investments are made on things that can be foreseen for years to be necessary and also in fixing things that are clearly going to be problems. By this definition there is no investment more secure than one made into the pursuit for clean and renewable energy. Consider it the World War Two to our Great Depression...the War on Fossil Fuels will be what brings our nation out from the Great Recession. In fact, the investments made into renewable energy may be what brings the whole world out from the ongoing wars and depressions that have plagued humankind since, well, ever.

That sounds like one heck of a place to put my money. You bet?

Use Equity or Downsize Your Home?

Many retirees have felt the effects of the recent recession during their retirement. Cash seems to be harder to come by as many have their funds tied up in their home, which forces them to adhere to a strict, and often small monthly income.

With medical bills or the interest to restart old hobbies overhead, many New York retirees consider cashing in on their home’s equity to gain some extra cash. However, this may not be the most cost-effective choice for asset rich and cash poor retirees.

Cashing out, or taking out an equity loan, is often costly and can leave little in the form of an inheritance for family left behind. These types of loans must be repaid plus interest once the home is sold. The longer a retiree lives, the more interest they will have to pay once the home is sold, which can double the amount borrowed in as little as 15 years.

A more cost-effective option to obtaining more on hand cash may be for retirees to simply downsize. Retirees may sell their home, and then purchase a smaller home or condo for less to gain extra cash. If they are worried about not having enough room for all of their additional furniture, retirees can rent a storage unit. Storage units are safe and inexpensive ,and some are even climate-controlled, making them idehttp://www.blogger.com/img/blank.gifal storage facilities for family heirlooms or extra furniture.

There are plenty of less expensive real estate options for retirees in New York, and they should consider downsizing their home before entering into an equity loan program. Though these types of loan programs may be ideal for those without family members, for those with family they anticipate leaving behind, an equity loan may significantly decrease the inheritance amount needed to cover unpaid medical or funeral expenses.

Note: Some government pensions can help pay for accrued medical expenses such as in home care. Take for example, the Aid and Attendance pension for veterans.

Getting the Most Out of Your Emergency Fund

Having an emergency fund is important. You probably already know this. However, one of the most depressing things about an emergency fund is the slow rate at which your interest earnings build up. Emergency funds are often kept more traditional savings accounts, since they are easy to access. This is one of the reasons the yield is so low. Because of the safety of cash savings (if kept in a FDIC-insured bank or NCUA-insured credit union), and because of their liquidity, it is difficult to get a good yield on your emergency fund savings. You can, however, get a little more out of your emergency fund with a little rate shopping and some planning.

Looking for Better Interest Rates

Different cash products are offered by a variety of banks and credit unions, and the competition for your deposit might help you find some better savings account rates than what you would get on a more traditional savings account. Look online for rates in other states, as well as consider the offerings from online banks. You can find a number of options if you are looking for a better yield.

Be warned, though: You might have to maintain a minimum balance in order to qualify for the best savings account rate. Additionally, you have to be aware of the restrictions on the number of withdrawal transactions you can engage in when a savings account is involved. Another issue is that the remote (or online) nature of your bank or credit union might mean that you have to wait a few days to access your money.

You can ensure access to your money by linking your high yield savings account to a checking account at the same bank. Then, you can do an instant transfer to your checking account when you need the money and use the debit card to access the money. Another possibility is keeping a small amount in the local brick and mortar bank, and using that until you can get money from your main emergency fund sent in.

Creating a CD Ladder

In many cases, the idea of a CD ladder is confined to long-term savings schemes. However, it is possible to set up a CD ladder as an emergency fund, allowing you to take advantage of higher interest rates in your emergency savings, while still accessing your money regularly. You can set up a ladder that matures every three months – or even every month – based on a 12-month or 18-month maturity for your longest CD. You follow the basic rules of setting up a CD ladder by dividing up your emergency fund money. You can then roll CDs into longer maturity accounts as each term ends, adding money you have saved up, and taking advantage of better CD rates. You do need planning, though, since you will only be able to access your money penalty-free once a month or once every three months.

With some planning and shopping around, it is possible to earn more interest on your emergency fund, making it work a little hard for you.

Trade Schools For Investing in Your Future

After an economic downturn, it can be tough looking for employment. Right now the job market is starting to bounce back, but only after years of continuous job loss. The market is growing, and jobs are becoming available. However, in some areas the unemployed still outnumbers the job market needs. Trade school is a good options for those trying to increase there job qualifications, and also fill a need that may open on the market. Trades also offer an alternative to traditional universities where student have to invest years of work and thousands of dollars to attain a degree.

Massage therapy is one of the fastest growing niche fields with a continued outlook of expected job growth, According to the Bureau of Labor Statistics. Do research on the requirements to practice massage therapy in your state and research massage schools online.

Due to the aging population and increased interest in preventative care, the health care industry is another field that has seen growth. It can hardly get people into the field quick enough to fill all the available positions. With competitive pay rates and benefits, working as a health care professional could be the best move for you. Consider the average medical clinical assistant, according to the BLS, you can gain a degree in as little as 1 to 2 years with an annual average income of 25 - 30K.

According to Technical Schools Career Guide, traditional trades, such as plumbing, are still one of the best jobs for financial stability. With projected annual earnings above 40K and a projected 10 percent job growth, plumbing is still a lucrative trade. The same goes for electricians. With a 12 percent growth rate over the next decade, electricians make on an average of 24 dollars an hour according to bls.org.

Consider some of these in demand jobs, if you want to secure your future and create better opportunities for you and your loved ones.