In the midst of the recession, Americans are trying to determine how to know when to save, invest and pay off their debt.
Todd is kicking himself. He had forgotten how gut-wrenching it was when he got into some stocks shortly before the tech bubble burst in 2000, and rode what he didn’t realize was a downward slide until he couldn’t take anymore and cashed out. A lengthy bull run in the stock market and his soaring home value made him forget those past frustrations, and his 401(k) rollover built up some momentum in his IRA for a handful of years. That same IRA has dropped by 30%. At 41, he knows he needs to be putting at least something away for retirement, but he’s become so accustomed to stock market disappointments, he can’t even imagine reaching his retirement goal, and only reluctantly has he enrolled for a 3% deferral into his employer’s 401(k) plan.
Sanyika Calloway Boyce, credit expert at financialfitnesscoach.com, says you should think twice before doing something that has the potential to negatively affect your credit rating. She says a negative credit history could impact a lot of other things in your life such as insurance and potential employment opportunities.
After the last couple of years, many investors are wondering if there’s an investment strategy that could have avoided all that volatility while still earning the returns they’ll need to retire on time. This Marketplace article discusses the “permanent portfolio” strategy developed by the late investment adviser Harry Browne. The portfolio arguably has the best long-term track record of producing returns that have been higher than the stock market with minimal volatility. The strategy’s secret? Old-fashioned diversification taken to a whole new level. To paraphrase: The Office‘s Michael Scott: it’s like diversification on acid.
The National Foundation for Credit Counseling recently published the results of their annual Consumer Financial Literacy survey.
As reported by finance.yahoo.com, the highlights include:
Since 2007, more than two in five adults now keep track of their spending, an increase of 39 percent. However, more than half don’t have a budget and more than 11 million adults don’t know how much they spend on food, housing and entertainment.
Adults with non-retirement savings have gone up from 63 percent in 2007 to 67 percent in 2010, but three in ten report they have no savings and only 24 percent are saving more now than they were a year ago. Nearly two in five (39 percent) Gen Y adults–the most of any group–report having no savings.
Nearly two-thirds of adults (65 percent) have not ordered a copy of their credit report in the past year. You can get a free credit report once a year from each credit reporting bureau at: annualcreditreport.com.
The full results from this survey are available at the NFCC web site.
