posted on Feb, 11 2009 @ 10:58 AM
Originally posted by sty
an interesting article on Tiscali`s website:
1)Build up a savings buffer
2)Cash is king
Depends on the situation. Cash is fine for the short term, but over 2-3 years inflation is going to start to kick in due to the the quantitative
easing measures (ie printing money).
3)Concentrate on repaying debts, not spending more
Again, unsavvy advice. If interest rates are close to zero percent, then don't bother paying loans at the moment... there's no financial incentive
to. It would be better to stick the money in a higher rate savings account or invest it, then pay off the debt when the interest rate goes above the
rate of return on the investment.
4)Concentrate on repaying secured debts first
Same as above. I would actually say pay off unsecured debts first, since they most often have a higher interest rate. Your mortgage probably racks
5%-6%; an unsecured loan could be anywhere up to 30%
5)Overpay on your mortgage
Again, there is NO sense in doing this, if your mortgage interest rate is below the rate of return on an investment. If you can get a high interest
account paying 5% and your mortgage only has a rate of 4%, then it makes sense to put it in the savings account. Also if hyperinflation occurs, your
debt will be a minimal concern!
6)Check your credit rating
7)Consider fixing your energy tariff
8)What about protection?
9)Reduce your outgoings
10)Where else could you make savings?
The government is doing the opposite because they government is not a single entity. The government is spending more in order to put more money into