Are you worried about how a recession might affect you? You can put your fears to rest because there are many everyday habits the average person can implement to ease the sting of a recession, or even make it so its effects aren't felt at all. In this article, we'll discuss seven ways to do just that.
No. 1: Have an Emergency Fund.
If you have plenty of cash lying around in a high-interest, Federal Deposit Insurance Corporation (FDIC)-insured account, not only will your money retain its full value in times of market turmoil, it will also be extremely liquid, giving you easy access to funds if you lose your job or are forced to take a pay cut. Also, if you have your own cash, it won't be an issue if other sources of backup funds dry up, such as a home equity line of credit. (For related reading, see Are Your Bank Deposits Insured? and Bank Failure: Will Your Assets Be Protected?)
No. 2: Always Live Within Your Means
If you make it a habit to live within your means each and every day, you are less likely to go into consumer debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate. Debt begets more debt when you can't pay it off right away - if you think gas prices are high, wait until you're paying 29.99% annual percentage rate (APR) on them. (Learn how to stick to your budget every day in Squeeze A Greenback Out Of Your Latte and Nine Reasons To Say "No" To Credit.)
To take this principle to the next level, if you have a spouse and are a two-income family, see how close you can get to living off of only one spouse's income. In good times, this tactic will allow you to save incredible amounts of money - how quickly could you pay off your mortgage or how much earlier could you retire if you had an extra $40,000 a year to save? In bad times, if one spouse gets laid off, you'll be OK because you'll already be used to living on one income. Your savings habits will stop temporarily, but your day-to-day spending can continue as normal.
No. 3: Have More Than One Source of Income
Even if you have a great full-time job, it's not a bad idea to have a source of extra income on the side, whether it's some consulting work or selling collectibles on eBay. With job security so nonexistent these days, more jobs mean more job security. If you lose one, at least you still have the other one. You may not be making as much money as you were before, but every little bit helps.
No. 4: Have a Long-Term Mindset With Investments
So what if a drop in the market brings your investments down 15%? If you don't sell, you won't lose anything. The market is cyclical, and in the long run, you'll have plenty of opportunities to sell high. In fact, if you buy when the market's down, you might thank yourself later. (To learn more, read The 3 Most Timeless Investment Principles, Four Tips For Picking Stocks In A Recession and Market Bottom: Are We There Yet?)
That being said, as you near retirement age, you should make sure you have enough money in liquid, low-risk investments to retire on time and give the stock portion of your portfolio time to recover. Remember, you don't need all of your retirement money at 65 - just a portion of it. The market might be tanking when you're 65, but it might be headed to Pamplona by the time you're 70.
No. 5: Be Honest About Your Risk Tolerance
Yes, investing gurus say that people in certain age brackets should have their portfolios allocated a certain way, but if you can't sleep at night when your investments are down 15% for the year and the year isn't even over, you may need to change your asset allocation. Investments are supposed to provide you with a sense of financial security, not a sense of panic.
But wait - don't sell anything while the market is down, or you'll set those paper losses in stone. When market conditions improve is the time to trade in some of your stocks for bonds, or trade in some of your risky small-cap stocks for less volatile blue-chip stocks. If you have extra cash available and want to adjust your asset allocation while the market is down, however, you may be able to profit from infusing money into temporarily low-priced stocks with long-term value.
The biggest risk is that overestimating your risk tolerance will cause you to make poor investment decisions. Even if you're at an age where you're "supposed to" have 80% in stocks and 20% in bonds, you'll never see the returns that investment advisors intend if you sell when the market is down. These asset allocation suggestions are meant for people who can hang on for the ride.
No. 6: Diversify Your Investments
If you don't have all of your money in one place, your paper losses should be mitigated, making it less difficult emotionally to ride out the dips in the market. If you own a home and have a savings account, you've already got a start: you have some money in real estate and some money in cash. In particular, try to build a portfolio of investment pairs that aren't strongly correlated, meaning that when one is up, the other is down, and vice versa (like stocks and bonds). (Read more about this important investing strategy in Introduction To Diversification, The Importance Of Diversification and Diversification Beyond Equities.)
No. 7: Keep Your Credit Score High
When credit markets tighten, if anyone is going to get approved for a mortgage, credit card or other type of loan, it will be those with excellent credit. Things like paying your bills on time, keeping your oldest credit cards open, and keeping your ratio of debt to available credit low will help keep your credit score high. (To learn more about your credit score, see Five Keys To Unlocking A Better Credit Score and The Importance Of Your Credit Rating.)
Conclusion
The best part about these habits is that they won't only serve you well during times of recession - they'll serve you well no matter what's going on in the market. But if you implement these financial strategies, a recession is less likely to have a significant effect on your financial situation.
Tuesday, July 14, 2009
Monday, April 20, 2009
GREEN JOBS
I have come to the conclusion that the most pragmatic opportunity for creating green jobs is not in manufacturing, but in the services sector.We do not go out and buy a ton of modules and put them in our warehouse because they are being sold at a good price. Other companies have done that, and now component costs have dropped. They now have to sell those components at a loss. We bring it in and try to get it out of our warehouse right away.
Adoption of solar in residential and commercial buildings would go up dramatically as a result of the newly affordable cost structure.There will be hundreds and thousands of such businesses all over, catering to a large base of consumers and businesses. Sungevity, based in Calif. wants to be an online portal to help customers determine the right solutions for their specific situations, perform an analysis of cost-benefit and return on investment data, and then select a reliable system integrator that can install their solar system.for the integrators, Sungevity's value proposition is lead generation and customer relationship management.
The idea here is to sell customers on the viability and advantages of solar power is quite different from the expertise of people who install and integrate the systems. I can foresee a world over the next decade in which players do the customer relationship management, while others do the actual installation.These companies need to become successful, gain size and momentum and proliferate like dot-coms during the bubble. In fact, these are the same two classes of companies that would be able to scale Europe's and Asia's move up the solar proliferation ladder and continue to create onshore green jobs, wherever that shore may be: It is a model that lets a relatively small number of high-powered technology innovators spawn thousands of small companies. In turn, these companies create jobs that don’t require highly skilled workers.
Adoption of solar in residential and commercial buildings would go up dramatically as a result of the newly affordable cost structure.There will be hundreds and thousands of such businesses all over, catering to a large base of consumers and businesses. Sungevity, based in Calif. wants to be an online portal to help customers determine the right solutions for their specific situations, perform an analysis of cost-benefit and return on investment data, and then select a reliable system integrator that can install their solar system.for the integrators, Sungevity's value proposition is lead generation and customer relationship management.
The idea here is to sell customers on the viability and advantages of solar power is quite different from the expertise of people who install and integrate the systems. I can foresee a world over the next decade in which players do the customer relationship management, while others do the actual installation.These companies need to become successful, gain size and momentum and proliferate like dot-coms during the bubble. In fact, these are the same two classes of companies that would be able to scale Europe's and Asia's move up the solar proliferation ladder and continue to create onshore green jobs, wherever that shore may be: It is a model that lets a relatively small number of high-powered technology innovators spawn thousands of small companies. In turn, these companies create jobs that don’t require highly skilled workers.
Thursday, March 19, 2009
Impact On Biotech Stocks
It is important to note that the price for any given stock is the culmination of all market participants weighing in on all the data that is currently known, and what they believe will occur in the future. The markets are constantly in flux as they "price in" any changes to this data as quickly as possible. Usually, the larger the move, the more surprised market participants are by the data.
Each stocks experience a move that is correlated to a news event, and while the catalyst is not always apparent, the reaction is usually quite clear. Regardless of the event, it is always important to pay attention to the reaction, as this is what moves price.Check opinions at the door and follow the price action. The charts always show the reaction and allow traders to see what is occurring objectively.
Each stocks experience a move that is correlated to a news event, and while the catalyst is not always apparent, the reaction is usually quite clear. Regardless of the event, it is always important to pay attention to the reaction, as this is what moves price.Check opinions at the door and follow the price action. The charts always show the reaction and allow traders to see what is occurring objectively.
Friday, February 6, 2009
How to create a perfectly organised office
Here are 12 things you can do to make your office work harder for you.
1. Provide yourself with a range of lighting, from subtle to very bright.
You will need three or four separate light sources. I recommend fluorescents (overhead or indirect) to light up the room brightly when you’re feeling tired and need to wake yourself up. A second light source should focus on your desk. You can do that best with an overhead spot. A lamp, either on the desk or standing on the floor, will give your office a warm and friendly feeling when you entertain visitors. And natural light, shuttered with blinds, is great if you can get it.
2.Make the space workable.
Your desk and credenza should be tailor-made to fit your working style. Don’t shortchange yourself here. Give yourself sufficient room, but not so much that you will accumulate more stuff than you need. Make sure the files and equipment you use regularly are within easy reach. And position the furniture so that you can easily move from desk to credenza and back.
Put your computer on the credenza, not on your desk. That way, when people come in to meet with you they won’t feel like your attention is half on them and half on the computer.
3. Keep all regular reference and inspirational books handy - preferably within a step and a grab from your chair.
This can be done inexpensively by furnishing your office with store-bought bookshelves.
4. Invest the time and money to find and purchase a great chair.
From a personal productivity standpoint, your office chair is the most important thing you own. It is more important than your house - even more important than your car. Just think… on a typical day, you may spend eight to 10 hours in that chair. Your chair is also one of the first things people notice when they step into the room. So make sure it looks good.
Adjust your chair so that your trunk meets your hips at 90 degrees, and tilt your computer so that the top line of the text is five degrees below your eye level. (That way, you don’t have to move your head up and down to read.) Your keyboard should be positioned so that your hands lie flat. Set down a hard plastic mat on the floor beneath your chair so you can roll freely.
5. Keep an egg timer on your desk.
Use the egg timer to make sure you are never seated for more than an hour at a time. I stretch or do squats and push-ups. Sometimes I walk around the office and chat up my colleagues.
6. Get rid of the mess.
You may think it works to your advantage to have everything you could possibly need piled up around you, but it doesn’t. It just shows the rest of the world how unwilling you are to take control of your life.
“A place for everything, and everything in its place.” That includes holders for pencils, pens, and reading glasses - separate and easily within reach.
7. Use two inboxes and two folders.
The first inbox is the one that other people put stuff in. The second inbox is for you. Go through the first inbox every morning and select from it any important work you intend to do that day. Transfer that work to the second inbox. Take the rest of the stuff in the first inbox and file it in one of two folders.
You need one folder that has 31 pockets, one for each day of the current month. And you need one with 12 pockets, one for each month of the year.
Make sure the second inbox (your inbox) is cleaned out by the end of the day.
8. Have one or two drawers for everything you might need in case of an “emergency.”
In one of my drawers, I keep all the tools I might need at the office. Small screwdrivers (even a jeweler’s screwdriver that fits the tiny screw that holds the arms to my reading glasses), WD-40, duct tape, etc.
In another drawer, I stash some back-up clothing (two laundered shirts and two ties) so I can look good for an unanticipated but important meeting.
As it happens, I have my own bathroom at the office where I can stock a toothbrush and toothpaste, bandages, ibuprofen, hand sanitiser, cuticle cutters, etc. But these items can easily go in one of your “emergency” drawers.
9. Hang a clock on the wall that your visitors can see.
Nod at the clock at the beginning of each meeting as you announce exactly how many minutes you have to solve the problem at hand. (Do NOT use the egg timer for this!)
10. Set up an old-fashioned bar.
Stock it with Scotch, vodka, and rum for those moments when kind words aren’t enough. A humidor for cigars is optional for some, but not for me. If drinking is not your thing, try a Chinese tea service. I have a bar on one side of my office, a tea service on the other. They both come in handy.
11. Bring some life into your office.
A live plant breathes back oxygen into the environment. It softens the hard surfaces too. Select a big green plant, if you have room for it. Care for it on a few of your five-minute “egg timer” breaks.
12. Decorate your office with signs of who you are as a complete person.
Put up your family photos and your business awards. The walls and spaces of your office are gazing grounds for your visitors. Make sure the message they are getting is the one you want them to get.
And make sure there’s at least one thing in your line of sight that makes you smile - maybe an inspirational quotation. Keep it there to work its magic until it loses power, and then find something new to replace it.
Invest in a sound system, too. You don’t need anything fancy - just something that puts out soft background music.
One final thing that I won’t put on the list because it may be too much to ask for until you are the boss: a daybed for a power nap when you really need one.
1. Provide yourself with a range of lighting, from subtle to very bright.
You will need three or four separate light sources. I recommend fluorescents (overhead or indirect) to light up the room brightly when you’re feeling tired and need to wake yourself up. A second light source should focus on your desk. You can do that best with an overhead spot. A lamp, either on the desk or standing on the floor, will give your office a warm and friendly feeling when you entertain visitors. And natural light, shuttered with blinds, is great if you can get it.
2.Make the space workable.
Your desk and credenza should be tailor-made to fit your working style. Don’t shortchange yourself here. Give yourself sufficient room, but not so much that you will accumulate more stuff than you need. Make sure the files and equipment you use regularly are within easy reach. And position the furniture so that you can easily move from desk to credenza and back.
Put your computer on the credenza, not on your desk. That way, when people come in to meet with you they won’t feel like your attention is half on them and half on the computer.
3. Keep all regular reference and inspirational books handy - preferably within a step and a grab from your chair.
This can be done inexpensively by furnishing your office with store-bought bookshelves.
4. Invest the time and money to find and purchase a great chair.
From a personal productivity standpoint, your office chair is the most important thing you own. It is more important than your house - even more important than your car. Just think… on a typical day, you may spend eight to 10 hours in that chair. Your chair is also one of the first things people notice when they step into the room. So make sure it looks good.
Adjust your chair so that your trunk meets your hips at 90 degrees, and tilt your computer so that the top line of the text is five degrees below your eye level. (That way, you don’t have to move your head up and down to read.) Your keyboard should be positioned so that your hands lie flat. Set down a hard plastic mat on the floor beneath your chair so you can roll freely.
5. Keep an egg timer on your desk.
Use the egg timer to make sure you are never seated for more than an hour at a time. I stretch or do squats and push-ups. Sometimes I walk around the office and chat up my colleagues.
6. Get rid of the mess.
You may think it works to your advantage to have everything you could possibly need piled up around you, but it doesn’t. It just shows the rest of the world how unwilling you are to take control of your life.
“A place for everything, and everything in its place.” That includes holders for pencils, pens, and reading glasses - separate and easily within reach.
7. Use two inboxes and two folders.
The first inbox is the one that other people put stuff in. The second inbox is for you. Go through the first inbox every morning and select from it any important work you intend to do that day. Transfer that work to the second inbox. Take the rest of the stuff in the first inbox and file it in one of two folders.
You need one folder that has 31 pockets, one for each day of the current month. And you need one with 12 pockets, one for each month of the year.
Make sure the second inbox (your inbox) is cleaned out by the end of the day.
8. Have one or two drawers for everything you might need in case of an “emergency.”
In one of my drawers, I keep all the tools I might need at the office. Small screwdrivers (even a jeweler’s screwdriver that fits the tiny screw that holds the arms to my reading glasses), WD-40, duct tape, etc.
In another drawer, I stash some back-up clothing (two laundered shirts and two ties) so I can look good for an unanticipated but important meeting.
As it happens, I have my own bathroom at the office where I can stock a toothbrush and toothpaste, bandages, ibuprofen, hand sanitiser, cuticle cutters, etc. But these items can easily go in one of your “emergency” drawers.
9. Hang a clock on the wall that your visitors can see.
Nod at the clock at the beginning of each meeting as you announce exactly how many minutes you have to solve the problem at hand. (Do NOT use the egg timer for this!)
10. Set up an old-fashioned bar.
Stock it with Scotch, vodka, and rum for those moments when kind words aren’t enough. A humidor for cigars is optional for some, but not for me. If drinking is not your thing, try a Chinese tea service. I have a bar on one side of my office, a tea service on the other. They both come in handy.
11. Bring some life into your office.
A live plant breathes back oxygen into the environment. It softens the hard surfaces too. Select a big green plant, if you have room for it. Care for it on a few of your five-minute “egg timer” breaks.
12. Decorate your office with signs of who you are as a complete person.
Put up your family photos and your business awards. The walls and spaces of your office are gazing grounds for your visitors. Make sure the message they are getting is the one you want them to get.
And make sure there’s at least one thing in your line of sight that makes you smile - maybe an inspirational quotation. Keep it there to work its magic until it loses power, and then find something new to replace it.
Invest in a sound system, too. You don’t need anything fancy - just something that puts out soft background music.
One final thing that I won’t put on the list because it may be too much to ask for until you are the boss: a daybed for a power nap when you really need one.
Thursday, January 22, 2009
The only commodity worth buying in 2009
In May 2008 the JSE All Share rushed to an all-time high of 33233 points. Investors couldn’t get their hands on enough mining shares, ploughing into the likes of BHP Billiton, Anglo American, Sasol and the platinum majors. It’s the type of feeding frenzy that usually signals the top of a market – but greed clouded judgement – and few could resist the promise of further upside. Today these investors are licking their wounds as the All Share Index (down 39%) and Resources Index (down 54%) wallow miles below those highs. What happened?
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