Financial Answers "IN SIMPLE LANGUAGE"

I’m back with another famous financial expert that you have probably watched on TV. If you haven’t seem him on CNBC’s “Mad Money” you need to check him out. His name is James J. “Jim” Cramer and he is a show all unto himself. Very entertaining and very knowledgeable. Mr. Cramer is a former hedge fund manager and best selling author. He has been a contributor to New York Magazine and Time Magazine.

Graduating from Harvard College magna cum laude, he thought he might become a journalist. After a short stint as a journalist, Mr. Cramer went back to Harvard and earned his Juris doctorate degree in 1984. That same year after not getting the legal job he wanted, Cramer became a stock broker in Goldman Sachs’ Sales & Trading Department. From that point forward he was to make his mark in the financial world. It seems like he has done it all including making a fortune. If you would like to know more about this rocket propelled financial genius check out some of his books including Jim Cramer’s Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer) and Jim Cramer’s Real Money: Sane Investing in an Insane World and Jim Cramer’s Mad Money: Watch TV, Get Rich and Confessions of a Street Addict and You Got Screwed! Why Wall Street Tanked and How You Can Prosper. These are just some of the books about genius Jim.

Please ask your questions and leave your comments and suggestions for In Simple Language. Thank you for taking the time to visit In Simple Language. Copyright 2008

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Before we get started, exactly what is a recession?  Well the official definition as stated by The National Bureau of Economic Research, which is the governmental agency empowered with dating and naming recessions, defines a recession as? Wait!

Before you go on, take a deep breath and remember this is a governmental agency and this blog is called In Simple Language.  I will give you their definition and then I will translate it In Simple Language.  Okay, if you are ready then here is their definition of a recession.  A recession is “a significant decline in economic activity spread across the economy as reflected in a range of factors, including gross domestic product growth, income, employment, industrial production, and sales.”  And you wonder why I started In Simple Language.

In Simple Language says a recession is any two back to back(three month periods of time) quarters the economy shrinks-then we have a recession.  I would say we have had that and then some.  What do you think?

The tough part about a recession is the government data that is usually available is almost always months behind in accuracy.  And even in some cases in the past, when the information was made available the recession was already over.  That is our tax dollars hard at work.

Recessions usually occur about every 5 to 6 years and last an average of about 10-12 months.  So depending on when you think we went into this “recession”  will depend on when it will be over for you.  With this in mind, many of us try to time the stock market or play it safe by not being in the market.  You have to do what you feel comfortable with and do what let’s you sleep at night.  That is what’s really important.

Be prepared, like a good scout, by doing your financial homework and you will weather this “recession” we are not in according to Washington. Ask In Simple Language your financial questions. Give us your comments and suggestions. Talk with your financial advisor.  

Thank you for taking the time to visit In Simple Language. Copyright 2008

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All of us have heard from our parents, teachers, co-workers, in books, on the television and many more places that knowledge is power.  Well I say that’s non-sense.  Do you know or have you known smart people?  People with masters degrees, doctorate degrees, years and years of experience and yet they can’t find employment or they are going broke or they find a job far beneath they experience and capabilities.  I have known lots of people like this.  Look around and you will find them also.

So if knowledge is power, why do these educated and experienced and knowledgeable people struggle to make a living?  The answer is simple.  The saying “knowledge is power” does not go far enough.  Having all of this knowledge from a formal education or from years of experience is worthless if you are going to sit at home and do nothing with it.  If you are unemployed and sit at home gaining more knowledge but you never plan to do anything with that knowledge what have you gained? 

Sure you have expanded your gray matter and if that is all you want to do so be it.  But if you want that knowledge to truly be power than you need to think ”Knowledge is Power When Put Into Action“.  You have to use this knowledge in some way to benefit yourself or those around you before the knowledge becomes power.

In Simple Language is here to help you take that knowledge and turn it into power.  The financial terms that you don’t understand will be clarified using In Simple Language.  Then you can take that new found understanding and apply it when you work with your financial advisor.  Not only will your financial advisor thank you for being a more educated client but you will feel more confident in all your dealings in the financial world.  Your knowledge is now being used and it is making you more powerful.

Please ask your questions and make your comments and  suggestions to In Simple Language.  Thank you for taking the time to visit In Simple Language. Copyright 2008

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Here we go again with more surveys.  Surveys can be a good thing if we remember to compare the results with our own situation.  This latest and greatest survey I read about was conducted this past April 2008 and was directed at people born in 1948 (age 60) who had investable assets of $1 million or more.

It seems our well to do friends, at least I think they would be with $1 million to play with, are becoming a bit squimish about staying in the stock market. Of the individuals surveyed, 69%, said they were going to be much more conservative in their investing. More bonds and money market funds and less stocks.  About 40% said they were going to downsize their lifestyles and a stunning 11% said they were postponing retirement all together.

It seems our “less than properous” econony has everyone a little worried.   Everyone except the “pundits”, and I use the term loosely, in Washington, D. C.  Pundits equals the politicians we have reluctantly elected not because we wanted them but because there were no other choices.  But that’s another post for another time.

Anyway the survey showed that 22% of those surveyed said they were giving less to charity, 21% were either canceling, postponing, or shortening their vacations and 18% said they were reducing their retirement savings.

The concern with all of this is that people may be panicking and becoming too conservative and protective in their thinking.  This could cause people to run out of money before they run out of life.  Not a very pleasant thought to be 80 years old and all you have to live on is social security in what ever form it will be in.

This is  why In Simple Language is here to help you understand your investments and investment strategies so you are not one of “those” people who runs out of money.  Educating yourself by understanding investments and financial terms is critical to your future financial well being. 

Post your comments and questions on In Simple Language and get the information you need.  I look forward to your comments and questions and will respond In Simple Language.  Thank you for taking the time to visit In Simple Language. Copyright 2008

Looking for a financial speaker or writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media now at (502) 569-1714.

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This must be a hot topic in the forefront of a lot of people’s minds.  I keep reading more and more articles talking about the problems that “younger” baby boomers-those around age 45-are having and going to have in the future.  These are usually the boomers that are currently sending or already have children in college.

My guess is we are in a recession regardless of how the government wants to play with the numbers.  Since the early 1980’s, Americans haven’t seen such a combination of increasing food prices, gas price increases, job losses, unstable and erratic stock market, home price declines, and sky high health care prices with no end in site. Plus add the damaging affect of a 5+ year war taking money away from my favorite gripe, our crumbling infrastructure.  Let’s hope and pray we don’t have any more “bridge” problems.  Where I live there are a lot of bridges and not alot of federal money to keep them up to speed.  Maybe I should move to Iraq and use their new bridges.

 The real problem with all of this is we are being forced to make less then good decisions on how we spend our money.  These decisions today will come back to haunt us in the near future as we continue to approach retirement.

These decisions today will have a direct affect on our financial ability to maintain our style of living in retirement in a manner we have been accustomed to.  Many of us will not be able to maintain today’s living style 10 or 20 years from now.  Many of us are living off of our retirement accounts right now because of job loss and the inability of finding another job that  pays a “living wage”.  This is a serious situation that is not going to go away anytime soon.

Not only are we raiding our 401k, IRA, investments, and savings, we are building up additional debt through our continuous use of credit cards.  And don’t forget the mounting mountain of debt with medical related problems.  Lose your job and your medical insurance premium just tripled or quadrupled.  COBRA is a joke.

This is not a totally negative picture however. Americans have always been resilient and we will get through this also.  We will survive by tackling one problem at a time and helping each other.  In Simple Language is a small part of helping those of you who are confused about financial issues and terminology. 

If you are going to draw down on your investments, get your questions together before you start to take money out and let In Simple Language help you understand what these investments are about. You want to be informed and ready to talk with your financial advisor on what the best course of action is for you.  Please submit your comments and questions to In Simple Language. 

Thank you for taking the time to visit In Simple Language. Copyright 2008

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