Yea Peppi, we do. As depressing as it is to think about, it is one of the core values that my parents taught me and my husband has (grudglingly) adopted.

We could last a year or more......

In talking to one of my friends who has 2 kids also - 11 and 8 - she is going through exactly what you are talking about. Her DH lost a very high paying job last April (he is a research chemist) and has not been able to find work since. They have made it a year living off their savings, but they are now facing having to sell their house and move into a townhouse/condo. She is a very resiliant woman and dealing with the difficult situation, and she and I have talked about the very subject of this thread.... how man of our friends could have lasted a year on their savings?

Anyway, it is grim but very important!

Alexa

Both of you make very valid points, but, please remember that there are those of us who do not make enough to put some part of our salary into savings each month. I feel for the many families who are struggling and may have to sell their homes and downsize. But for single people living on only one income, the struggle may be to keep body and soul together each month so that they don't lose any place to live altogether.

Teresa, I agree with you, don't get me wrong. I am a single also, so I can easily relate to you and others on the CF.

One of the first things my parents did was to force me to save 3 months salary right after college and hitting a "real" job. That money was not to be touched under any circumstances other that no income available. I have only had to touch it once, 13 years ago, thank the higher powers.

When did we become so "needy" that we have forgotten the safety and security of our families over the big screen TV or the high priced dinners at home or out?

Hopping of my soapbox and heading for work now.

Peppi

We are one of the couples that could not last a year (unless we pulled out our 401K money). We recognized this fault recently and are diligently working on our budget and sticking to it. We just set up a college fund for my son so hopefully he won't be carrying college debt until retirement like I will. I thank the tanking economy for helping me to see what's really important.

Peppi, I'm up there on the soapbox with you. I think with our "I deserve it" mentality a lot of us have become irresponsible spenders. I see television advertisements that say "you deserve it" and I find myself talking back to the TV "why do we deserve a (fill in the blank)? What's getting really bad is the financial bad behavior of some is going to affect those like Peppi, Teresa, and Alexa who are acting financially responsible.

My heart breaks when I here about families who have worked hard to earn and keep what the have only to fall on hard times due to things that are REALLY out of their control.

We all have stories of responsible friends or families who have made good decisions but have lost everything to things out of their control. My DH gave a scholarship to a student. She called last week and said "coach, I won't be able to play because my car has been repossessed and I don't have transportation to practice". I talked to her mother, they had a successful trucking business and had just begun to build a house on their acreage for his ailing mother. Well the gas prices of last year wiped them out. After spending all of their savings trying to keep employees and trucks on the road, one by one they lost the trucks. Then their house and had to move in with the mother in her small older home.

We have know these people for 8 years. They did not dress fancy, drive fancy, vacation fancy. What the wanted most was for their daughter to have a good education.

Watching the news, which I do way too much, I am thinking that the hard workers who try to be responsible and constantly consider the consequences of bad decisions are going to be paying for the free passes and bailouts for those who haven't give have figuratively leaped off the mountain with the expectation that there would be a safety net.

Yes, there are people that over extend and live beyond their means but I think the majority of people are just trying to get by, provide for their family, and have a dignified retirement.

With Walmart the world's largest employer, it is no surprise that people are going into debt just to have a semblance of a middle class existence. The majority of bankruptcies in this country (although it has been made harder to file) are because of medical expenses.

...and kids do make a difference. They are expensive little suckers.

Dh is in the construction industry so we have always had a cushion for the lean times. We have done all the right things but I can tell you that it is getting harder and harder.

I hate to say this, but this is one of the reasons why DH and I decided not to have kids. Plain and simple...they are terribly expensive and I'm not sure what kind of legacy our generation is leaving behind for other generations to clean up. I truly feel for parents of younger children these days. I know they often think, "What's in store for them when they grow up?"

DH and I have good jobs and live very simply. We live in a small starter home, drive older cars, clip coupons, and don't eat out often. Our biggest vice is travel, which we love to do (another reason for no kids), but we're no different than many. God forbid if some major accident came along, we'd be hurt financially.

As far as savings, we've realized we need to build that up in case of an emergency. I'm much more financially frugal than DH, so if it were up to me, we'd be living on beans and rice. Fortunately, both of us have strong job skills in the government and education that would allow either one of us to support the other if we had to.

elery and I could live a year if he cashed out his 401K and I cashed out my life insurance and deferred compensation.

I had savings, oh, just before I got divorced. I lived on them for a while and paid Amanda's and Ashley's college expenses. They helped too, both worked part time and contributed, lived at home instead of on campus, Amanda got her "core classes" at the local community college because it was much cheaper. I was making less than $40,000 per year, supporting two daughters in college and paying off the debts that the ex left me in the divorce from where he started the health food business.

Between college and divorce, I was pretty much down to my last nickel in savings and was just paying current bills, without cashing in that deferred compensation. Given the way the value has fallen, maybe I should have cashed it in....

Annie

"One of the first things my parents did was to force me to save 3 months salary right after college and hitting a "real" job. That money was not to be touched under any circumstances other that no income available. I have only had to touch it once, 13 years ago, thank the higher powers."

Hey Peppi - I think our dads took the same parenting class! LOL! I was given the exact same advice and when my dad found out he only had a few weeks to live (15 years ago), he told me to increase that cushion to 6 months or more since I wouldn't have him to rely on in case of emergency.

Alexa

This doesn't seem all that surprising, when you think about the foreclosure/bankruptcy issues our economy has been sucked dry from. I spent a lot of years wondering how people I knew managed to afford so many of the ''things'' they had. Now I know they didn't actually own them!

I'm appalled by people (yes I know some), who ''can't afford'' to buy diapers or formula for their baby, but they have a nice flat screen in their living room and wouldn't think of not paying their cable bill. The grandparents are providing for them all, which I also wonder about...what that's teaching anyone, besides how to be co-dependent? Apparently being the providers didn't give anyone lessons in teaching their kids survival skills, except how to show up crying about how hard it is to make ends meet. Frankly, I'm throughly disgusted with people who make certain choices and refuse to learn anything them.

I remember years when people didn't think we had a pot to **** in, yet we were saving to buy our first house. We chose to live ''below'' our means, in order to have a different future and learned some valuable lessons in sweat equity. Ask me if I care what they thought! We still managed to have the place everyone wanted to come when they wanted a break from their lives. I still believe one can live well on less; it just depends on what choices they make. It's amusing to me that people are now ''finding out'' about thrift shops and shopping at the dollar store, or are just learning that they can make food at home and eat better for less.

Yes, I could live for far more than a year, and have disability insurance in addition. There's no one else to take of us, but us!

Depending on how long I live, I could go along time on what I've saved. I am so lucky that my house is paid off and is a manageable size. I just figured that I could live for 28 years if I am extremely frugal and that would include using the equity in my home. Social Security would help, as would a very small pension. My lifestyle would be sitting in the house, reading library books, not buying clothes and only as much groceries as I need. Not sure I could afford healthcare until Medicare kicks in. Yuck.

My biggest expense is local taxes. Our school board is very irresponsible and just built TWO new Taj Mahal high schools. They treat tax payers like an ATM machine. Want a fancy new computer lab? A playing field with lights and astro-turf? A swimming pool and diving pool? Just raise taxes!! Mine are going up 7.8%. AT every election, I vote against the incumbent school board members.

My mom was a depression child and her dad never made much at all. She was born ultra-frugal, even though my dad was quite succesful. I used to resent that she wouldn't spend money on nicer clothes, etc for us, but I learned a lot about how to save. Of course, we had all the things we really needed like good food and a good education -- she never stinted on education! We all had music lessons, dance lessons, skating lessons,and college paid for.

Anyway, I know I am fortunate and my heart breaks for those who are struggling, especially those who did not act in an irresponsible manner. If my kids need help, I could offer a bit of financial assistance and a place to live. Oy, what a thought -- my adult sons home again.

Well, provided the stock market didn't crash, we weould be ok. If it crashed, well, we would move in with Peppi!

The good news: I have ALWAYS put the max into my matching funds savings and always upped savings when I got a raise.

The bad news: It's been in stocks.

Like a lot of you, I quickly went from being smug with my retirement outlook to being scared carpless.

Cathy, me too. Now I wish I'd just spent the damn money on trips and fancy cars. I have rebalanced my portfolio as I got older. My employer uses Vanguard and they have a great program that automatically rebalances depending on when you plan to retire. So now I am 40% stocks and 60% bonds.

I am still maxing out my contribution but wonder if that is the best move. However, if I am the next to get canned, I won't have to worry about that, will I?

Yes, this whole situation is scaring the carp out of me.

If you are contributing ANY percentage to the stock market right now it is a VERY good move! Investing 101 says "dollar cost averaging" is where it is at and the single dollar you invest today wil be worth a LOT more in the years to come because despite the current conditions, the market will rebound. Good move those who have not lost faith (or been forced to).

I am right in line with those who have "done without" to keep the coffers as full as possible. My 20 year old builders special kitchen will attest to that as will my 10 year old truck, consignment shop clothes, original carpeting, modest 3 BR 1.5 BA house, etc.

And Clare hit the nail on the head... I am tired of hearing the "poor me" stories from those who have the flat screen TVs, take the big vacations, have cable and high speed internet, drive the new car every few years, etc and can't pay their mortgage, feed their family and on and on ad nauseum.

Okay - I am now going for a walk to lower my blood pressure LOL! It is a LOT cheaper than the $400 per month gym some of those same people belong to! (and why are they the ones that park illegally in the fire lane so they don't have to "walk" from a parking space a little further away in the parking lot?)

Well, I'm one of those who feel this IS different. I put us mostly in cash a long time ago but we still lost 6% from our 401(k) in the past six months. We're still contributing fully but no equities for us right now. It's all going into fixed income. We're less than 4 years out from retirement...can't afford to lose 40%! Not enough time to recover. We could live on our cash (outside tax-deferred accounts) for 3+ years assuming social security & pensions failed even after writing a check to payoff our mortgage. If SS & the pensions materialize like they're supposed to then we shouldn't need to touch any savings to retire comfortably.

I'm spooked enough that I'd rather miss the first 10-15% upswing on the S&P than put money at risk now. Rumblings throughout the entire banking system...feels like those first couple seconds of a major earthquake (I'm from CA!). Scares me.

I think it's human nature to look for somebody/something to blame. Truth is even those who lived within their means probably contributed to the problem. For example, anybody here have 401(k) funds invested in Fannie or Freddie? If you had a balanced large-cap fund you probably enjoyed the benefits of their growth over a 5 year period. Same thing with other equities...the entire financial group, for instance. I can't imagine any large-cap fund that didn't own BAC or one of brokerages. That makes us part of the problem...we were willing to accept the gains during the boom so we shouldn't now complain when the bubble bursts. Many of us also probably benefited from escalating home prices...not everybody got caught without a chair when the music stopped. Many banked tidy profits.

Anyway, I don't like casting stones. This new Stanford fraud has me really concerned. It seems to have potential to cause pretty catastrophic failures. I've just seen on CNBC that the guy has been located, in Virginia, by the FBI &, amazingly, he's NOT under arrest.

I think we've got a long ways to go before we're seeing this from the rearview mirrow.

/tricia

The economy is scary. I don't have a family I can depend on, so my survivial really is my responsibility.

When I got my first apartment three years ago (that I'm still in), I looked for the cheapest place I could find in a "safe" neighborhood. I drive a car that is 10 years old, and it's STILL the newest car I've ever had! I do not have cable (I use Netflix, much cheaper and I'm in control), or a home phone (cell phone is fine for me). I don't go to restaurants much at all and spend a lot of time at home alone (and enjoy every second of it!). Very cheap to do that! I cook, though I've been relying on convenience products a little more than I'd like to lately. I don't have health insurance, but I don't get sick often. If I do, I'll just die. It's much cheaper!

The thing is, my job recently changed. I'm still doing the same thing I was, but my pay changed. Now, instead of making a little bit of hourly and a little bit of commission, I make no hourly and a lot of commission. My income has tripled (doubled on a slow week) within the last two months. So, I've been saving a lot of money. Everyone at work is encouraging me to move to a nicer place and get a newer car (no thanks, I don't do car payments, and I haven't even had the accord a year yet). Everyone at work has a brand new car, eats fast food for almost every meal... but I'm not sure they have any savings. I'm saving over half of my check every week. It feels good... I remember a time when I needed new tires and had to buy one each week for a month because that was all I could afford.

I have definitely postponed finishing college because of the economy. I'd actually like to be able to save enough to not work for a few years and just concentrate on school. That will take a while though. I just calculated, and I could go 6 months if I had to.

Bobby, Not to take a motherly role, as you are a friend, but I am proud of your responsibility and sensibility. How did that happen? LOL

I'm 42 DH is 54 [in the NE] we do well and we have been living frugally to assure our children have an education and we won't eat cat food but we lost a hefty 6/7 figure investment this year.

I just signed on for my little guy to do Tae Kwan Do for a year and it cost me $1700 thats a *lot* in my book and it no where near what I spend for 13 yr olds baseball commitments. To me that's insane but it's the norm for NJ.

Explains why I don't get $300 hair services.

Cathy, and Bobby, it happened for two reasons. Bobby is not stupid and he lives on his own. He is a realist. He knows that even at his young age, life is not easy.

Bobby, you made me feel better and hopeful.

Sherry, I don't think the market has hit bottom yet, so I better get the guest room ready. Bring Drexter with you please. He is small, so he won't eat much. If Dilly lets him live, that is.

Alexa, you gotta love the Dads, always even to the end they look out for thier girls.

Tricia, you are right, for those close to retirement, the losses hurt the most. I should send you my portfolio and let yuo have fun with it. It gives me migraines.

And to those reading and not posting, I hope this may have made you think and hopefully plan better if needed. When things started to change last fall, I went into "layoff" mode. some thought I was nuts, until they got hit.

And just out of curiousity, do wives or husbands still have the mad money stash? You know, a little off the budget just in case he/she ticks you off and you need it for whatever? Both Mom and GM told me if I ever married, to always have some all to myself. As Oma, said, "better to have and not need than to need and not have". Wise women she was I think.

I'm sure none of the 20 and 30-somethings I know could live very long without a paycheck. Living in extremely expensive areas like Southern California is very difficult for young people.

I'm probably good for 2 years.

Two years might seem like a good cash cushion but I don't think the economy will recover in two years. An educated guess that this is a permanent lowering of living standards for much of the world. I'm not laid-off yet but being in the auto industry I have to expect it.

I saw this economic wreck coming years ago. Locked my house into a low rate 30 fixed mortgage in '03. Rather then take out the equity I opened a revolving credit account. If I have to I can put my mortgage in reverse for awhile and burn equity.

When I was younger I never had enough money to attract a spouse or have children so none of those to worry about. Feel like I'm drinking more then I should as of late. Not so much the volume or being drunk but spending money at the bar does not seem wise. Seems so strange looking at a beer and wondering if I can really afford it.

: )
lyra

Aw Peppi! I am lol-ing here! I think your Mom and "Oma" and my mom and grandmother probably hung out together too! Of course I have a "mad money" stash. Yea, I spend it on non-essentials (garden stuff, a special bottle of wine, an occassional piece of jewelry) but it is always there for emergencies.

And yes, kids are expensive! My kids don't wear designer labels (Target jeans and sneakers are just fine thank you), don't have the latest and greatest game systems, are not going to the super expensive camps and activities and are learning to live frugally too. Yes, they want to know why we don't keep up with the Jonses, but they are learning that a happy life is not dependant on the material purchases.

And sands - that $300 haircut was a once in a lifetime experience for me... I had mentioned that I had never been there before to get my hair cut and it was a Valentine's gift from my DH, not a typical experience at all.

Alexa

I hear ya Alexa, I've done the whole 9 yds once too, just wish I could do it all the time ;-) it's hard to fly first class just once!

And to those reading and not posting, I hope this may have made you think and hopefully plan better if needed.

Guilty as charged. As with many CFers who have posted, I was raised by depression era parents who did go hungry, although we did not. My mom saved slivers of soap and airline plastic dishes long after she could afford not to. My dad would be on the phone for a hour calling all over town to save $5 on a set of tires. I learned.

We are set, but my mind constantly plays 'what if' and I read to learn creative avenues for friends who might find themselves in a bind. If I were a single mom, I'd find roomates, preferably with similarly aged kids, and swap household responsibilities. If I had an empty nest house, I'd take in roomates or even consider, from days gone by, boarders. I'd ditch SoCal and my car and move to a city with public transportation, better economics, but NO SNOW please, LOL.

These are major lifestyle changes that I think we'll all be facing. Any other ideas?

I was one of 5 kids. I often tell the story about my mom who worked so hard not to let us know we were poor. Particularity poor when my dad was in a near fatal accident racing NASCAR cars. He had no insurance and he couldn't work for a very long time. Mom worked THREE jobs (with five kids) during this time in order to pay all the bills. How did she do that??

We had a frequent visitor whom we thought was a family friend, we called her Aunt Betty. Turns out she was from the welfare department or some agency; she would bring clothes, food stamps, and other services.

Aunt Betty arranged for us to go to a Christmas party sponsored by the Elks Club. Mom made us promise not to tell the other kids at the party that we weren't suppose to be there because the party was for "poor children". I remember how we kept giggling like we were party crashers. We also were party crashers at the Easter Egg Hunt.

We didn't know how poor we were until we were adults. The point is, mom and dad were very hard working proud people who instilled in us hard work not hand outs.

Our financial person told us several years ago not to have a lot of handy cash that you could be making money on...that was long before this horrble crunch. Now we wish we had our money in cash, at least enough to pay everything off. hence, my working and trying to save everything I make, minus what I use to help out my son and his wife. (He is finally back to work, whew, but they are very far behind now).
So, if the market crashes, I am SOL. And Peppi, you will have to make room for me, LOL.
Since DH IS retired, and I am past my prime, this stock market thing is killing us. Thank GOD we started with quite a bit, but it has taken a healthy hit. I am very nervous.

TWENTY DOLLARS

On their wedding night, the young bride approached her new husband and asked for $20.00 for their first lovemaking encounter. In his highly aroused state, her husband readily agreed.

This scenario was repeated each time they made love, for more than 30 years, with him thinking that it was a cute way for her to afford new clothes and other incidentals that she needed.

Arriving home around noon one day, she was surprised to find her husband in a very drunken state. During the next few minutes, he explained that his employer was going through a process of corporate downsizing, and he had been let go. It wa s unlikely that, at the age of 59, he'd be able to find another position that paid anywhere near what he'd been earning, and therefore, they were financially ruined.

Calmly, his wife handed him a bank book which showed more than thirty years of steady deposits and interest totaling nearly $1 million. Then she showed him certificates of deposits issued by the bank which were worth over $2 million, and informed him that they were one of the largest depositors in the bank.

She explained that for the more than three decades she had 'charged' him for sex, these holdings had multiplied and these were the results of her savings and investments.

Faced with evidence of cash and investments worth over $3 million, her husband was so astounded he could barely speak, but finally he found his voice and blurted out, "If I'd had any idea what you were doing, I would have given you all my business!"

That's when she shot him.

You know, sometimes, men just don't know when to keep their mouths shut.

Toooo funny. I wish I could do backwards math to figure out how many times it took to get to $3M. Too bad he is dead and she is serving a life term. I wonder who gets the money?

DH and I live very frugally, but only in the last few years have been saving more aggressively. Yes, raising 4 kids took it's toll. We're still paying college loans (partial, they covered the rest).
We began serious planning for the worst last fall and began making the 'easy' cuts. No cable, which means NO TV reception for us. No long distance service, phone card at 1.4 cents/min. works for us.
No unnecessary purchases. We carpool to work and another person rides with us 3 days a week.
My freezer is full, my canning shelf is full, we have some cash saved, and between that and unemployment we could go a year, just barely.
We sat down and made a plan to replace some income if one of us loses our job.
We have enough land to grow food and sell it.
We have extra rooms we can rent.
We can raise animals or rent pasture.

Just the planning eases a little of the stress. I agree that this may be a 're-set' of the lifestyle to which we've become accustomed. Developing countries cannot increase their standard of living without another being lowered. When we've been on/near the top for so many years, there's really only one direction to go.

I hope people take a hard look at what is really important.
Food, water, shelter, family, faith, etc.
In my book.......everything else is gravy.

Stepping down............................next?

Deanna

Deanna, this statement: "Developing countries cannot increase their standard of living without another being lowered." is a common myth - and it is just not true.

When America, Canada and the developed western european nations boomed, that boom lifted the whole world.

Just prior to the boom, many Chinese people considered cats and rats to be delicacies - they were meat after all. The boom allowed the Chinese to climb waaay up that economic ladder - they actually have a middle class now - many people can now afford cars and eat meat on a regular basis. They even have Walmart in China.

India was similarly lifted - with millions able to climb out of abject poverty. Our government and private charities gave more money to Africa in the past 10 years than ever before.

The economic world is not a finite-sized pie that everyone is sharing - with some hogging and some not getting a share.

On the contrary - pies are constantly being baked all over the world -- with much to share when times are good, and dwindling pieces or nothing to share when there is a downturn. America did not "hog the pie" - we baked a tremendous number of new pies for ourselves and the world.

Some have mentioned that China is getting all our jobs during this downturn, but that is not the case. The places we have outsourced to and manufactured in are hurting BECAUSE developed countries are hurting. China is hurting right now, just like we are.

We are now all in the same boat, for better or worse. I see it as better. It is not them-against-us. (Except for terrorists!)

You can see consumerism as a bad, evil thing. But our striving for better and bigger and newer and cheaper things made it possible for our own countries and much of the world to grow. And as the poorer countries' economies grew, they became consumers as well.

Buying, manufacturing and selling. If we stop buying cars, there goes the car companies. If we stop "upgrading" to newer homes, there goes the construction business. If we stop dining out, well, on and on... It's the circle of economic life.

I feel bad for anyone hurting right now, whether it is here in California, over in New York, or in China, Hungary, Iceland, wherever humans are striving for a better life.

Okay, I'm off for now - who's next to step on the soap box? LOL...

I am one that is nervous about the economic situation. My husband is talking about a redution in force but I am hoping that with his needed athetic director and Computer coodinator position it will help him out . I stay at home with our 4 kids under 5, we live in an extremely rural area, with a population of around 600 people and the closest bigger city is an hour a way. By the time i figure in gas, clothes, food, day care and other things it wouldn't be worth it to make ends meet. We don't eat out, all my kids clothes are hand me downs,good will finds and garage sales. I grow a big gardener and I put up food for the winter, shop the sales and also buy the store brand. I do worry about my IRA but I have 30 years to go and hope that we can stay where we are at For instance we have a 3,000 sq foot house with a 100x150 foot lot with double car garage, that we bought for 30,ooo. So if you are looking for a cheap place to live, we have a few houses for sale here in Ansley NE.

My in-laws have a paid for house in rural Florida. It is only a doublewide trailer really, but it sits on an acre of land in a nice small subdivision. My father-in-law who is 79 said that if we wanted the house when they were gone, it was ours. Nobody else in the family wanted it and we were welcome to it, along with the John Deere in the garage. Heck ya! I could easily live there. Not that I want anything to happen to the in-laws. Heck, they could outlive us. My mother-in-law's dad lived to be 96 and was healthy up to the last couple of years of his life.

We could go about a year, but that would wipe out savings. My wife had 250k in 401k, but afraid to look now. Still enough to raid for a few years if we had to, but hopefully it won't come to that. I think/hope we are near the bottom of the recession and can slowly start crawling out of it. If GM and or Chrysler fail my area will be a ghost-town. There are some bright notes however. Michigan has given some huge tax breaks to the movie industry and we are having some major productions in the area. My sister just got a part in George Clooney's new movie. She is going to be a business traveler on an airplane!

Duane

Gina, I don't think you are on a soap box! I think you a great optimist and I enjoy reading your posts always! To counterbalance I will do my best Debbie Downer:D - but with hope!

On my soapbox...The idea that China has a middle class may be overly optimistic but it is really a myth. I agree with you that we are world citizens and we are in this together. We don't make too much anymore in the US, but boy we have been extremely successful exporting this crisis. This is not our father's recession. What makes me even more fearful is that other countries do not have the safety nets we have in place (like unemployment benies, food stamps, etc) and many governments are vulnerable to radical movements as the global recession worsens.

We should not define our citizenship of the world as being good consumers. There is too high a price in the quest for cheaper and cheaper goods - and not just financially - environmentally and morally as well. I do not believe that Americans should be forced to compete for jobs with third world countries. In particular countries that have the poorest human rights records in the world.

I am all for capitalism but there is a high road and a low road and globalization should not mean moving from country to country to find the cheapest labor and in many cases, exploit it. We see companies leaving China for Vietnam now. We need Fair Trade instead of Free Trade.

On a personal note, Dh was laid off since September - just went back to work 3 weeks ago and they laid everybody off yesterday. NYC construction has it cycles and he is doing what he can - increasing his education in solar, etc but in our 15 years of marriage I have to say I have never seen what I am seeing now and I don't think the other shoe has dropped or that most realize how much trouble we are in. Going back to my career is not an option now but we will see what the future holds.

Bobby, you have a lot to be proud of!

Okay, me done:)Next?

Not a soapbox comment, but I am curious to know where you get your financial savvy/advice? I kind of braindead in this area. I have a really hard time understanding how different financial vehicles work and figuring out what I should be doing. I rely somewhat on my broker at Merrill Lynch (hate the company, like the guy). However, he cannot look at my whole financial picture, only the ML investments. If I ask for advice, he always directs me to something he can do through ML. If I want to keep my money at Vanguard, he can't help.

So where do you go to learn about managing your money? Is there a website that is particularly good or a book? I certainly understand that the person who has my best interests at heart is me, but I need to feel more confident about what I do.

Find a certified financial planner who is fee-based or fee-only in your area. Fee-only will charge you an hourly fee for consultation.

Also, if you like to read instead of talking to someone - Investing for Dummies, which goes through fundamentals, stocks & bonds, real estate and resources.

Investopedia.com has some decent tutorials.

I started by opening a $5K trading account with Charles back in about 1990. I As a banker, I already knew how to analyze a corporate financial statement. So, in the beginning I stuck with companies that I knew & understood their business models (in my case that was financial institutions). After I got used to buying/selling, etc. (in those early days I used a broker to make the actual transactions), I branched out by choosing other industries & studied everything I could get my hands on about that particular industry. Home builders were a logical investment area, for me, since I'd been a construction loan officer for a couple decades. From there, I moved to insurance companies. About 2000, I started trading online.

Then, several years ago, I hit a home run trading WorldCom after the fraud was announced. It was trading between $.09 - $.15 for a couple weeks before the ultimate outcome was known. I day-traded 50,000-75,000 shares sometimes buying & then selling 4-5 times/day. Stocks are an area where size does matter...by trading those quantities of stock I made a very nice profit over a two week period. Now, my trading account was large enough to start seriously buying 100 share blocks.

My TV is tuned to CNBC all day long starting at 6:00 a.m. through the closing bell. I've learned a lot by listening over the years. But really there's no experience like just getting in there & giving it a try. I don't hold stock for long in my Charles account - two years is the longest hold, to date, & normally I'm in/out within 3-6 months. I've chosen to sell whenever I can clear 20%. Often, I buy/sell the same stock over & over...sell when they've posted a good quarter & rebuy when the bloom is off the rose a bit.

I am NOT a buy & hold investor. IMO, that's a sure fire way to get burned...possibly, badly. I'm an active, hands-on manager of all of our investments (including DH's 401(k). I came of age watching my family take huge hits because they'd bought companies like Kodak, IBM, GE...little 'ole lady stocks. But, because they'd been told to "buy & hold" forever...they lost huge. So, when I entered the equities markets it was with a different attitude. I don't buy mutual funds (except in the 401(k) where I don't have a choice). Rather, I have built over time my own little baskets of stocks that I rotate in/out of depending on where we are in an economic cycle. I've studied these companies, understand their business models, know management, & often even attend annual shareholder meetings. Then, I trade those stocks, sometimes daily, over & over & over.

It's worked well, for me. I've got a pretty high tolerance for risk & also a pretty darn good nose for spotting problems. I spend, on average, one hour each week studying EVERY stock currently in our portfolio. Then, I also spend several more hours each week studying stocks that I rotate in/out of but do not currently own & also looking for new companies to add to my baskets.

Here is a link that might be useful: investopedia.com

I hit "Submit" before I was done!

In today's market, I've got us basically all in cash so I can take some time to study the markets & learn about some new companies while still sleeping well at night. I'm working on learning all I can about health care, big-pharma, & energy. I don't know enough yet to make a buy but that's OK 'cause I believe the market is too volitile for a couple just 4 years from retirement. My goal, is by mid-summer to have studied the financials of the major players in those fields.

Gina's right about the financial planner. If you go that route...find somebody not being paid any commissions. Even then, be sure your attitudes are in agreement with his/hers. Most are going to tell you to buy & hold...and hold...and hold...and hold...& then they'll tell you, "Oh, it's OK, just keep holding. They'll eventually come BACK!" Yeah, right.

/tricia

Whoa -- now I don't need to buy a book. I have Tricia's post! I think part of my problem is that I just find this stuff overwhelming and not particularly interesting. I feel like I'm back in math class again.

Tricia, it is interesting to read your strategy. Part of my problem is that I don't have a lot of time to devote to this, along with a full time job, a long commute and family responsibilities. That's why I wish I could find someone I trust to lead me in the right direction.

Gina, I did look into fee-only advisors. What I found is that unless you have a whole lot of money to invest, they aren't interested in smaller accounts. I used the NAPFA web site and one other I can't remember now.

So I will try to learn what I can. I have taken some courses but I sometimes come out more confused about when I went in.

That Dummies book may be what I need. I do have Dummies for Personal Finanace and that was helpful.

Thanks.

By the way, what software do you use to keep track of your finances? Quicken?

Dedtired, while not one for finance/investment, I did create one for a household budget in excel. Basically it is money in and payments out with a pos/neg for the end of the month. The KISS principle, nothing fancy but I tried to detail where my money is going. I would be happy to send you a copy if this s what you are looking for.

Peppi

Thanks, Peppi. I may give Quicken a try. I can download my bank statement right into Quicken or Excel.

I don't know which is worse being on a diet or keeping track of my expenses.

LOL Dedtired!

You said you looked into fee-only advisors who wanted customers with more to invest. That probably means you didn't find truly fee-ONLY advisors, but those who do hourly-fee AND commissionable services. Fee-only means advisors who do not serve as a broker at all.

I highly recommend seeing one if you want to set up a plan for the future and need some hands-on help. I used an advisor who did both, and when I told her we just wanted an hourly-fee consultation and was not looking for a broker, she had no problem with that. She was quite good. An advisor can tailor their consultation to you and your needs and you won't have to read all the mountains of info out there that IS totally dizzying, LOL.

In the end, we did not follow the advisor's advice, but used her resources and the report she made for us as a sounding board/exercise for discussing what we wanted to do between the two of us, and to make sure we were not overlooking any options.

I also use a spreadsheet (excel). Big number for me is the month to month balance. I like to see it going up. When my checkbook builds an excessive balance I make extra payments on my mortgage. With revolving credit I can always borrow that money back if I need it.

I use the free Microsoft spreadsheet that came with my computer rather then excel. Excel does nothing for my home budget that can't be done with the Works spreadsheet. I love my spreadsheets and if I could only have one computer program that would be it.

My bank statement downloads as comma separated variables!... meaning it opens with a spreadsheet program.

: )
lyra