JOSE CASTRO

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The Hundred Dollar Bill is the new Fifty Dollar Bill: Where is our economy at?

April 3, 2008

  

 

     You may be asking, why did I choose the $50 bill over the $100 bill?  The answer is simple, a hundred dollars feels like a fifty dollar bill today.  This speaks for how $100 dollars just does’nt buy you what it could 6-8 months ago.  For example, I it used to cost $28( 7 months ago) to fill my tank and now takes $54.  This is an astounding number if you consider how the price of most things have gone up.  You can further confirm this by noticing the price elevations on simple household items at your local grocery store. 

 

     Is the U.S. economy going to the sewer?  I would beg to differ.  Though times are tough for many of us these times present us with golden opportunities to invest in.  The housing market has suffered the most and I would still be weary of purchasing real estate.  But, you can bargain so much better now than before.  In some scenarios I have seen home owners be able to get bargains on renovating their homes.  This is caused by the fierce competition our economy is experiencing.  Furthermore,  outsourcing has become more popular than ever before.  Elance offers exceptional services at prices that would be near impossible to match here in the states.  

 

My Notes:

  • Invest in your company(s) 
  • Make a weekly budget and stick with it(much like a diet, if you don’t stick with it you won’t get results)
  • Price Shop: with so many competitors worldwide explore your options and spend wisely.
  • Write where you need to go before going.  This is simple but is commonly ignored.  I have tested this and saved about 25%-40% in fuel not to mention time, I value the latter more.  More to come on how writing saves you so many many headaches.  
     In what I have experienced,  yes a hundred bucks buys you about what fifty bucks used to.  Resolve to take some proactive approaches to keep more hundreds in your pocket.  The economy is much like a current, it is fierce and ruthless on some days, but is also forgiving and calm on others.  The key is to keep paddling through and making adjustments as needed.  Challenge yourself to to cut back on excess spending.  Do you really need that pair of shoes?….after all, you may not need pair # 45…..   

Jose Castro


Comments

Alex says:

Jose,

GREAT POST! Very insightful and thought provocative.

Coming from the financial industry, it is NOW a buyers market. Think of it as a big fire sale to get things on the cheap for a long term investment. I also suggest taking out a mutual fund during a bear market economy. I just suggest MFS which is the oldest mutual fund company in the world and open up a dollar cost averaging account. Invest $50 to $100 a month and watch your fund grow over time. It’s like having one car each on a five lane highway. One car may overperform while another may underperform. Bottom line, is that your portfolio is not put into one basket but rather several to get an average yeild. You can get as aggressive or safe as you see fit. I have never taken a loss on my portfolio since 98!

Another time saver is your 401k. Open up an IRA fund and invest the max of 2k for each year. Aslo max your 401k at your company. Whatever is left over, invest in your dollar cost averaging fun and traditional IRA. When you retire, you don’t have to pay taxes on your Roth IRA since you already pre-paid your taxes on that. Live off your traditonal and 401k and use your dollar cost averaging fund to pay for incremental expenses. Don’t be fooled into thinking that social security will be around when we retire!

I also suggest that EVERYONE take out a long term care insurance policy as well as a living will, medical power of attorey and an DNR statement. This will make it easier on your loved ones to carry on your wishes in case something happens. Without them, you are setting yourself up for a whole world of hurt. Make sure to talk to your grandparents, parents and siblings about this so that everyone is on the same page and knows where to access your files.

But for now, take advantage of the fire sale as much as you can responsibly handle. If you are not sure, I suggest investing time to to with a vist with a financial advisor to help outline your goals and how to achieve them. Not sure where to find a such a person, I suggest HD Vest to find the nearest financial advisor. It’s been the best thing I have done. http://www.hdvest.com and use the Rep locator near your city. Do you need help to getting out of debt, save for retirement, open that new business, buy that house, invest in your kids college funds or have a disaster catastrophe fund, they can help! I worked there over ten years ago, I have never seen a company that supported its reps to help their clients achieve their goals like them. No shameless plug here. Just a truth!

Jose, what are your thoughts?

Alx

Jessica says:

Very interesting and thought provoking….maybe me think about prices going up in a different way

Comments closed


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