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Lessons from the Lost Decade: Protecting Yourself 9 July, 2009

Posted by David Anderson in Economic Policy.

What if the policy makers don’t make the right decisions? How can we protect ourselves?

The first lesson has to be avoid excessive debt. Outside of the home, I am not a big believer in debt. If you can’t pay your credit cards off in two months, you have a problem. It is better not to have a car payment. If you do, keep it 4 years or under.

The best way to keep from getting into debt unexpectedly is to save. Emergencies happen. You will either let Visa be your emergency fund or you will have a real one. Every family should make their first priority to have $1000 in an emergency fund then eventually build it to a minimum of 3 months of expenses.

The second lesson is that stocks can be a good investment, but don’t fall into a buy and hold mentality. Watch your investment’s fundamentals (not price fluctuations). Buying Worldcom or Enron and holding them would not have been smart. The best way to protect your IRA’s and other investments into individual stocks is to use protective puts. The best way to afford them is to combine them with covered calls.

Don’t be afraid to use dollar cost averaging. Buying good stocks when they are down is a great deal.

We have to take action locally to encourage business formation. In spite of tough budgets, we need to ensure that we have a the infrastructure to take advantage of the resources available to encourage economic development.

Advocate for sound policies. Educate your leaders. Our tax code is our number two enemy. The fact that we spread out depreciation and equipment as much as we do discourages expansion in this country. The fact that we tax our country’s companies and allow imports to go almost untaxed hurts us. The fact that we are geared to consumption and very little to savings makes long term growth unstable. All of these problems are solved with the Fair Tax. Our biggest enemy is the ignorance of the public and the policymakers about the nature and value of free markets.

We need to join together with like minded individuals. Whatever one’s view of Glenn Beck, he is scaring the establishment because he understands this fact. He went from talk to action with his support of the tea parties and the 9/12 project. That is the key for all of us. We need to organize to effect the political process not just in the parties but forming PAC’s, 527’s and (c) 4 organizations. There is a PAC citizens for prosperity getting off the ground. It needs to be supported. The only way that we will protect our future prosperity from government is to invest in a better government.



1. Lessons from the Lost Decade: Protecting Yourself | UK Web Designer - 9 July, 2009

[…] post: Lessons from the Lost Decade: Protecting Yourself Categories: Development Tags: Business, career, Development, infrastructure, leaders, […]

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