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Showing posts from January, 2009

Three Tax Tips

The time has come again where I am preparing to do taxes for 2008. This year, like most years in the past, I am actually looking forward to doing my taxes. Fortunately, my W2 form came a little earlier than the January 31 deadline , so I was able to start early. Many people recommend going to a professional to do taxes to avoid any mistakes. If you have a complicated return or are uneasy for some other reason, then I would definitely go that route. Personally, the first year I started my business, I made an appointment at H+R Block to get my taxes taken care of. As for the subsequent years though, I simply did the taxes online. Over the past several years of doing taxes though, I've definitely learned some key tips that have really helped. 1. Make sure you adjust your tax withholding. If you have a business, you may find that you tend to owe taxes. In this age of shrinking economy, you don't want to be in that position next year, so make sure to pay quarterly taxes and/or incre

Don't Discount Good Health

Everyone who has been paying attention is aware that the economy is in dire straits. From the serious tumble that the stock market took, to the completely tanking housing market, it is easy to see examples nearly everywhere that things are going badly. Fortunately though, the chances are, that if you're reading this, that you're in relatively good health. This is something that has the kind of value that doesn't have a price tag. There, I said it. Now think about it for a minute; you're good health is priceless. Recently I had someone close to me undergo a serious surgery. This has given me a new perspective on my health and also made me realize how important it is that everyone, no matter what their situation, do what they can to stay healthy. When you go to the doctor, you may be told to change your lifestyle, quit smoking, stop eating bad foods, etc. When you go to the dentist you may be told to brush better, or floss more. Regardless of what these professionals are

Suze Orman's Action Plan 2009

Recently I was in the position of being able to download the latest of Suze's books-Action Plan 2009.Although I was hopeful that it would be an amazing new take on money for the current economic enviornment, it was not the case. Personal finance stays the same over time and Suze's advice is fairly standard for those who are interested and are following personal finance. I suppose that the upside is that I am not in a position to worry. One nice feature of the book is that much of it is in question and answer format.

What Happened to Moral Hazard?

This week on Meet the Press, an contributor to Vanity Fair was one guest and she asked this very question. The concept is rather simple, it asks the question why America has become so content to spread the risk around? That is, if we fundamentally think that people who make bad decisions should bear the consequences of those decisions, then we must consider bailouts which significantly reduce and/or eliminate those risks to be a problem. Moral hazard is the term applied to such an event. Indeed, this is a fair question. Listening to broadcasts from the fall of 2008 would bring you to the same question when there was a workout for Bear Sterns. Some felt that any type of intervention, even in the form of a deal, was a bad idea. But others felt like this type of government assistance was a bad idea and was a moral hazard. This was a backlash which might have contributed to the U.S. government allowing Lehman to fail. Regardless of the whys and the hows, the question is now: why has the

Counting My Blessings -- And How it Happened

Recently, I got some very good news with regard to work-related compensation. In this economy, and in this troubled time of unemployment, any good news is really great news. So, for us right now, we're looking at a bonus, albeit smaller than expected. In addition, there will be a three percent raise. So many people are losing their jobs, that there are not situations where people who even have their jobs may not be getting raises or bonuses at all. So, I'm quite grateful. I think that it is important that people are grateful for what they have and realize that this is a time to be even more conservative. In this regard, I'm practicing what I preach here. And even in a good economy, this type of behavior is a good idea. It will make you more likely to keep your job when times are tough and more likely to get a raise and/or promotion when times are good. I'm convinced that these principals are what has helped me succeed in my current job. 1. Work hard. This is general, bu

The Next Financial Crisis

This week, Suze Orman did a show called "Face it to Erase it". This show was not anything incredibly new but one point that she made toward the end has really made me consider some of the macro economic implications. For example, there is a significant, nearly 800 Billion dollar outstanding credit card debt in the United States. An entire show was dedicated to people with large amounts of debts, but it became quite obvious to me that the vast majority of these people who were calling in were likely in a position to be unable to repay their debts. And these are not tiny debts. 10, 20, 40, even 80 thousand dollar debts. Suze made the observation which was quite pointed; this is the next major financial crisis for the United States. This is important because of the fact that credit card companies and banks are in the position of adding a significant burden to individuals here as they significantly raise interest rates and reduce lines of credit. The callers and other informati

Looking Forward to 2009

So it is a new year and with each new year there is a new opportunity for change and improvement. I'm actually guilty of being quite optimistic. This past year, the economy was the main story, hands down. But I'd like to say that I think that things will look better in 2009. And even more than many people, I think that we're going to be quite pleased by about 6 months through 2009, sometime in the summer. I need to be very clear that I have nothing other than a hope and a prediction, no real solid evidence. It's just my feeling. The amount of wealth destruction that has happened as the global economy has deleveraged is staggering. So, I think that as we begin to add leverage again, we're going to realize that it was not quite as bad as we thought it was. I'm very specific in why I feel this way. I think that most people want things to go well. That is, I think there's more optimists than pessimists overall. And I think that despite the increased unemployment