America’s Top Financial Bloggers: Sometimes the Best Choice is a Difficult One
by Efin Advisor | July 31, 2009
by A Dawn
Award-winning author A Dawn is a City University of New York Economics graduate. The former Financial Advisor now works as a Data Integrity Analyst for a major Canadian wealth management corporation. He created Canada’s Personal Finance Website to make the world of personal finance easy and accessible for everyone. Invest Now is author’s first book. He makes his home in the world class city of Toronto.
There is no denying the fact that in times of economic hardship, people begin to look at their own situation and consider whether they can continue to live as they have been. Spending money is great fun when it is plentiful and you know there is more to come. But in times of recession, there is always a danger that the next company to announce major job cuts will be either yours, a family member’s, or one of your customers. It is then that you need to ask yourself if you should change the way you look at financial matters.
Keeping a positive attitude when it comes to spending money is important. It is not necessary or desirable to immediately put locks on your wallet and say “no” before kids, friends or anyone else suggests or asks something which may entail spending money. This will lead only to a situation where no fun is had, and before too long it becomes depressing and, often, unsustainable. This is no call to arms for big spenders – but a recognition that what is needed is not austerity, but responsibility.
To some people the two things may amount to the same. This is not really correct however, as it is possible to behave responsibly and still enjoy yourself whereas austerity strips away everything but the essentials. Making responsible choices need not mean making boring choices. Sure, you can still go out, but not every night to expensive places. You don’t need to give up a holiday, but maybe two weeks in Dubai would be excessive. Decisions like these are where people make the savings that can get them through tough times.
A lot of people will be shy of investing money that could be saved in a tricky financial climate, but again it is not a matter of locking down the cash you have in order to protect your position. Sitting down and working out a budget to which you can realistically stick, and assigning a portion of your monthly income for “fun” and another portion to save can make the recession a lot more manageable. For many people the worst aspect of the recession is not having to cut back on spending, but rather the uncertainty it brings.
If you are budgeting as a single person then you need only concern yourself with meeting essential payments and then spending responsibly enough to make it through the month with a minimum of fuss at the end. Budgeting as a family is different, and will sometimes mean difficult, controversial choices need to be made. Discuss these as a family and make sure that everyone understands how the decision has been arrived at and why it was necessary.
There is no doubt that a recession or even a short period of financial hardship is undesirable and can be frightening, but there are lessons to be learnt through dealing with it – lessons which can apply when the cash flow is back on track. Approach the situation with a level head and an honest attitude and you will see out any rough period.
I think a lot of these issues can actually be solved by planning out budgets and ccontrolling spending long before a recession starts or you lose your job. If you do things like that, you can live high on the hog during a recession, as prices decrease and people become more desperate for your patronage.
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I’m watchign all my friends close up their wallets so tight, that its hard for me to have fun with them anymore. My husband and I get hwat you are saying and realize that recession doesn’t mean there is a nationwide ban on fun. There are obviously some fun things we do that are cheap or free, and we prioritize them right now, but its nice to go to a good meal every once in a while. I’m watching my friends be miserable because they don’t realize that they can budget in some fun
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I’m actually going to Dubai on business next week, not a pleasure trip but i’m sure i’ll have some fun there. Yeah, I would never go right now if it wasn’t being expensed and covered in full. I took my kids to hershey park for a long weekend as a family vacation. We had a blast and it wasn’t expensive at all. Theme park vacations make a great trip, especially in a nice town like hershey pennsylvania
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Decimal Place Trading caused the recession of 2008
This recession was caused by the manipulation of stock prices on Wall Street through naked short-selling, flash trading, high-frequency trading, secret software, super-fast computers and what I feel was the main cause of this corruption: “Decimal Place Trading.” As I write this article today, much of this corruption is now slowly coming out through social media outlets such as Twitter and Facebook, along with bloggers on the internet, Yahoo bulletin boards, and the movie Stock Shock. The news media is also to blame for what has taken place in this country — including the near-collapse of Wall Street and the banking industry.
There are many things to point fingers at or place the blame on, and I can think of a few off-hand that I would like to cover — the first being Wall Street’s regulation changes. I am no expert — I am not even a writer — but decided to tell this story since the business news media was not telling it. These Wall Street regulation changes contributed to the aforementioned problems in many ways, with the first being the removal of fractions in stock pricing. On January 29, 2001, the New York Stock Exchange, or NYSE, went to four-decimal-place trading. On March 12, 2001, the National Association of Securities Dealers Automated Quotation, or NASDAQ, followed suit. This new rule had the best of intentions as we headed toward the computer and digital world, but over time it was manipulated and companies like Goldman Sachs figured out how to take advantage of the new system. I am not sure how it happened, whether it was lobbied for years or what — but along came the biggest mistake of all with the elimination of the uptick rule in July of 2007. This rule had been implemented after the great depression, and had been in place since 1938. How could the Securities and Exchange Commission, or SEC, abolish a rule that had been in place for close to 70 years, and had worked? Put these two changes together, and you get a simple equation: greed plus corruption equals recession.
Reports have been released on the web that Goldman Sachs made over 100 million dollars per day in 46 out of 64 trading days in Fiscal Year 2009, second quarter (April, May and June). Let me say that again. They made over 100 million dollars per day, and are still doing it as I write this letter today. But the question remains, how did they do it? There has been no report of this by any of the news media. How can this be? This corruption is 100 times the gravity of the Bernie Madoff story, and yet there has been no coverage by CNBC or Bloomberg News. Why? Goldman Sachs, upon Wall Street transitioning to fractions and the abolishment of the uptick rule, designed secret software and used this software to gain an advantage on every potential investor. Basically, Goldman Sachs became a Las Vegas poker dealer in New York City on Wall Street, turning profits on investors every trade with their super-fast computers and software.
Richard Keane August 26th, 2009 Revised version
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