Market Watch: June 2, 2009

I’ve worked with thousands of people over a thirty year career in helping them with their personal financial planning. And I’ve learned that if you’ll take these five basic steps it is far less likely you’ll have a serious financial problem during your life.

One of the biggest factors fighting against financial planning is debt, especially credit card debt. If something starts off as a small debt it turns into a big one simply because you were not paying off the debt. financial planning means you have a plan and paying off debt should be the first goal of your plan.

A great alternative to payday loans is to ask your employer for a cash advance. If your employer will let you have an advance on your pay, you could save a bundle compared to the interest lenders charge. Know your alternatives before considering this type of loan.Ask whether or not your lender will report this to the major credit agencies.

Market impact costs of .40% (these costs arise from the impact on the market price of a stock when it is bought or sold). The implicit costs associated with a variable annuity on the low side are therefore 1.25% but can all the way up to more than 10.00%. Let’s not forget that many of the mutual funds used in annuities are actively-managed and, therefore, have much higher costs than passively managed mutual funds (i.e., index funds and asset class funds).

It is important that if you want to start out in Forex trading that you find a broker or investment management company that you can trust. Find out what your rights and liabilities are and how long the company has been trading. Read the small print!

Lehman’s stock lost around half its value and the Dow Jones lost nearly 300 points. The American government did not say it was going to help the bank or the financial planning services crisis in any way.

How you pay matters to your overall cost of debt service. If overall debt reduction is your goal, pay the high-rate stuff first. It will save you thousands. Even better, consolidate all of your debt to the card or bank with the best rate. Tell them all what you intend to do and watch them fight over your business.

Little things such as making coffee at home and taking a run in the morning help, but you could even downsize on your house or purchase an earth friendly car if you have a gas guzzler. This could also make your car insurance payments decrease by switching to a car with better gas mileage. These things may seem drastic, but can be a great help.

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