5 Tips To Help Protect Yourself In These Economic Times

Great!! The government has bailed out Wall Streets and the failing brokerages from further damage with a 700 billion bailout plan. But what about us little people who work everyday to support our families! What should we be doing?

It the past few months many Americans are more concerned that ever about their money and retirement.  But who can blame us, with all the scary news we here everyday about our economy.

The truth is you should be concerned with your financial investments because we are going through a rough patch with our financial system. The key is not to be afraid, because being afraid will usually cause you to make hasty un-educated decisions about your money. Now the reason I said uneducated is because honestly we really just don’t know…including myself.

For example, the other day I called up one of my investment colleagues, who has been working on Wall Street for 15 years to get the low down on what’s really going on with the economy.  Usually in the past when a financial crisis would occur, he would tell me right away what was hype and what was true. However, when I asked him this time, he honestly said no one knows what’s going to happen in months coming ahead.

I say all this to say, if the financial wizard and guru’s of Wall Street don’t know what’s going to happen, how in the world are we! However, you know I can’t leave my readers out to die, with giving them some solid advice.  So if you are concerned about the future of your money, here are 5 tips to protect yourself in these turbulent times.

• Stop watching these so called expert gurus on TV give you bad advice! All these Wall Street experts have no clue what’s going on, and at best their only trying to keep you invested, or worse recommend a buy because they see the company emerging, and you could buy at a bargain. Don’t fall for the game because unless you are prepared to ride out this bear market for three years or more, now is not the time to buy stocks just because you heard it’s bargain. Stay on course with your investing plan because regardless what happens, you will always come out on top.

• Do not pull your money out of the bank, and put in under your mattress. This is absolutely,  and positively a financial no-no.  We understand your thinking though. You see big banks failing every other day, rock solid institutions like Freddie Mac and Fannie Mae needing  bailout plans from the government to survive.  Your thinking if your money is in the wrong institution, you could lose everything you worked for. The ironic thing is if you continue to follow you investment plan and don’t panic, you can protect your money and keep growing even in bad times like these.

• Make sure your bank accounts don’t exceed the FDIC limits. This is what I call a good problem…If your accounts do exceed 100,000(qualified accounts with cash and cash equivalents) or over 250,000 in your IRA you’re at risk of losing some of your hard-earned moolah. If you do fall into this category, you should move the excess money(over 100k for cash, and 250k for IRA) to a different bank. The FDIC covers the each individual bank, and not the individual as a whole. So basically, you could have 100.000 in five banks, and the FDIC will insure all of them.

• No Need To Worry about Your Brokerage Account. If you’re a Morgan Stanley client, your account and your broker will still be there, as will the name Morgan Stanley. All you really have to do is make sure your brokerage firm is covered by the SIPC(this is equivalent to the FDIC for banks), and all the major brokerages are covered.  Also, don’t be alarmed in the next few months to see your broker move to another firm. Brokers with large accounts are being wooed heavly by other stable firms.

• Make sure insurance policy is active and protected. If you have an insurance policy with AIG, check with your state insurance regulator’s office that you open the policy in.  The current 700 million government’s  bailout will mean that your policy will continue uninterrupted, but you should just check to be sure. Life and health policies covered by your state’s guaranty fund are usually capped at $300,000 per policy. Plenty of people are now worried about the health of their insurance companies.  I recommend that your policy be rated either A or B by the Weiss Ratings.

These five simple steps should help you to sleep well tonight in the midst of these tough financial times. And don’t you worry, because I will continue to closely monitor the situation and guide you every step of the way. We will get through this together.

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