MAKING THE DECISION TO CONTROL YOUR MONEY (PART 1) REBECCA RICE
He followed the advice of financial advisors. He
Do You Worry About the Economy?
invested in conservative stocks, bought term life
insurance, and spent less than he made. He put
There is enough in today’s news to worry any
money into a taxdeferred retirement account.
investor.
As the years progressed, his business succeeded.
Quantitative Easing is a simple way to say printing
He got bigger and bigger clients. The stock market
more money without anything behind it. The
boomed. Life looked good. He bought a bigger
government debt is rising alarmingly. Soon the
house in a nice neighborhood.
government will be paying more in interest than it
does for roads, military, and other essential services.
Then, the recession hit and a major client defaulted
What will happen if interest rates rise? Can the US
and went bankrupt. It left Gary with unpaid workers
Government continue to pay the debt interest? Will
and the debt of enormous inventory he’d purchased
Uncle Sam pay down the debt?
for the project.
Boom and Bust.
The economy has been plagued
Gary had to file bankruptcy. He could no longer
by a series of booms and busts. The Federal Reserve
afford the nice house. And then the stock market
Bank was supposed to level out the market swings.
took a dive. Gary lost a dozen years of retirement
Instead, they have increased. We’ve had the dotcom
savings as he watched the market fall.
bubble and burst. The housing bubble, the financial
crisis, and so on. Have you seen your bottom line
Fearful of worse, he pulled his money out and
shudder as you’ve gone through these cycles?
distrusted the market as it started rising again. Even
if Gary had left his money in through several booms
Stock Market Jitters. No one seems to know what
and busts, he would have discovered his retirement
direction the stock market will go. Have you listened
goals were still unmet.
to different news outlets? Some say the market is
robust and recovering. Others say that disaster lurks
Gary believed in the system. The problem? It didn’t
around the corner and will pounce any minute. As you
work. Can you relate to this story? Has there been a
get closer to retirement, do you want to be invested
time when you saved and invested and thought you
someplace that can crush your account value and
were getting ahead…just to get slammed?
take years to recover?