Thursday, January 8, 2009


So what will 2009 hold for us? In these early days we have
  1. Fed interest rates at close to zero.
  2. Fighting in Gaza/Israel.
  3. Somalian pirates still holding a tanker and a few ships.
  4. The DJIA around 8600, the S&P around 900 and the Nasdaq around 1600.
  5. Scandals that are still brewing from Madoff to the Illinois senate seat controversy.
  6. Gas at around $1.60.
  7. Anticipation on Obama's inauguration.
  8. Money, job and home value worries.
  9. Uncertainty about the economy - will it get worse or will it get better?
  10. Ongoing conflicts in Iraq and Afghanistan.

A lot depends on whether a person is an optimist or a pessimist.
And a person's optimism or pessimism really depends on whether he has an income coming in and if he/she can make ends meet.

This feeble mind this that, that is the key to success in 2009. It includes
  • Live within your means.
  • Pay off all your debts including mortgage.
  • Save a year's worth of living expenses. This should include estimated Cobra payments, home, car, flood, umbrella insurance, car and mortgage payments, school/activity fees for children, any estimated co-payments, food and clothing allowances and up to $10K as an emergency reserve on top of the other estimates. This is a tough goal and may not be achieved in one year but we need to get realistic on what a year's living expense really means.
  • Hold on to you job in any way possible.
  • Don't cave in to impulses small ( a new cellphone) or large ( a car or a pool).
  • Stop looking at ads. You are not helping the economy by spending, you are only hurting yourself. The economy will find ways to adapt.

I guess the above proves that I have a pessimistic view, and to be honest I suppose I do. I am not overly so but just like companies tighten their fiscal policies and curtail spending in tough times, so should you.

I am however hoping that the year turns for the better

  • That the economy stabilizes after the job losses and contraction.
  • The middle class get some safety net that prevents them from going destitute after a illness or job loss.
  • The government goes after hedge funds and regulates them better rather than imposing more burden on a regular business a-la Sarbanes-Oxley.
  • The big 3 automakers produce vehicles that people buy for their mechanical merits rather than for patriotic reasons.
  • We get some closure of a successful nature in our overseas military undertakings.
  • We end the year with cautious optimism.

So...happy new year!

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