Monday, April 14, 2008

A Money Moment

Very interesting argument in this month's Money magazine against panic-selling of stocks...some numbers: the average decline in a bear market is 30%. But the average rise in a recovery is 120%. So hang in there boys and girls. I'm hurting too, but I'm not selling.

More interesting stuff from Money:

A one year cd pays 1.97% on average. At 4% inflation, you are losing by saving, and that's before taxes! So what am I doing to keep my little stash growing? I've got my nest egg in Countrywide, which pay 4.05% on $10,000 plus balances. They've got a one year-cd for 4.20% but I want to keep the cash liquid right now. I'm paying my credit cards off immediately, as variable rate debt is probably your worst enemy in this kind of economy. I'm still looking for those one time bonuses that yield $100 here, $75 there, and seriously add up at the end of the year. Figure out the rate of return on the money vs the energy you expend taking advantage of the offer, and you will be surprised at how worthwhile they are.

Money did a profile of economist Teresa Ghilarducci, who thinks that the Federal government should do away with the 401K and IRA tax break, and instead FORCE everyone across the board to save 5% of their incomes for retirement. That's right folks, a mandatory government savings plan on top of Social Security (because Social Security is such a success story?). Oh good grief. This 5% and ONLY this 5% will be considered pre-tax and to this 5%, no matter how much it might be, the government will contribute $600. This is Ms. Ghilarducci's brilliant idea.

See this is why I am such a fiscal conservative. It's my damn money. I will not have the government dictating how I save for retirement. Give me the freedom to save and invest my money the way I want. If the government would make a deal with me right now to stop taking Social Security out of my paycheck from this day forward, I would happily forego all the Social Security benefits that I've paid for until now. And I'm sure I'd make out ahead, because I am a better money manager than Uncle Sam. And even if I wasn't, it's still my damn money. Last time I checked, we were still a capitalist society of free markets. This idea is almost socialist. Teresa Ghilarducci is probably voting for Hillary.

And that's the WebGirl Money Moment. I do love this magazine.

No comments: