Planning For Your Life

Wow! We keep asking ourselves, “Can it get any worse?”, and it appears that the answer to that is YES.

As I write this today at 10:00 am the Dow Jones is down over 200 points again and there doesn’t seem to be anything the government or business can do about it. The one consolation is that we will have a three day weekend for the markets with a banking holiday on Monday. It seems that progress can be made over days when the markets can’t react immediately.

I know that we will get through this as we have gotten through every other challenge our economy has faced over its history but when you are in it, it can really hurt. I know that we have all lost money and that it will take time to recover what is gone but there are a few things you can do right now to protect yourself.

First, you should already be in cash in your 401k plans. The market may fall still further and there will continue to be a lot of volatility until this credit crisis gets resolved. If you are concerned that you will miss some good days ahead know that you will also be missing some of the bad ones as well.

Next, you should look at some of the new investment vehicles out there that offer what are called “living benefits”. These plans, offered by insurance companies, guarantee a future income stream with a minimum return of 6 or 7% on your investment that you cannot outlive, even if your account value drops to zero. There are a number of good companies that offer these products and I would be happy to discuss them with you if you like.

If you are participating in plans where you are contributing on a monthly basis, do not stop. Even if you have moved the bulk of your 401k to cash your future investments should be invested in the market since you are buying shares at better and better prices. This will help when the market recovers as these shares that you bought on sale will recover faster.

Don’t pull your money out of the bank. No one has lost a dime yet and with the insured amounts lifted to $250,000 (there is even a proposal on the table to make this unlimited) your money is safe. The worst thing we could do to insure a depression would be for us to make it even harder for banks to make loans because there is less capital on deposit.

Talk to a professional about your money. I hear too many people say they don’t want to do anything for fear of doing the wrong thing. Doing nothing, however, may be the wrong thing. There are ways to protect your investments and provide future growth, so open those statements and then find out what you can do.

I know this is a scary time, but be assured that we will get through this and life will get better.

Let me know if I can help you.

Marc

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Do you sometimes feel like you are connected to something bigger than yourself?

We often go through our days oblivious to anything outside of ourselves and content to ignore the life that is all around us but sometimes life forces us to notice what is always there.

Last weekend Sandy and I took a short trip to the beach (one of the great joys of living in Central North Carolina is the ability to be at the beach or in the mountains within 2 ½ to 3 hours) and I was once again confronted with the majesty, beauty and power that is our living planet.

As we climbed over the bridge on the dunes to the beach I was awe struck at what lay before me. This gigantic body of living ocean lapping up on the shore with the power of untold gallons of water, salt and sand. With every wave crashing on the shore I could feel the very planet inhaling and exhaling life and vitality.

It has been some time since we have been to the ocean so I am sure that the impact of being in the presence of this massive body of water would not have struck me so profoundly had it been a more mundane experience.

What I was left with was a profound feeling of connectedness both with the planet but also to every living person, animal and plant that was present around me. The feeling was so profound that you might even call it a religious experience, a deep gratitude for the senses to experience such beauty, power and grace and the profound sense of my connection to it all.

If you have never had the opportunity to feel a connection like this, I encourage you to take the time to get out in nature, put your mind on hold and just get present to the planet that is alive all around you.

Regardless of what we create as humans there is nothing to compare to what God has created for us. It is free and available at each and every moment of each and every day.

I hope you can take a minute today to experience a little and give thanks for life you have been given.

I am thankful for mine.

Marc

Here is the video of our trip. I hope you enjoy it.

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Last Sunday it happened. The Treasury Department took over Fannie Mae and Freddie Mac, the two largest mortgage holders in the world. The combined mortgage holdings of these two giants is just north of $5.4 Trillion. That is a lot of money no matter what country you live in.

The good news is that the takeover will help to stabilize the markets that have been shaky for months, wondering if these two companies would survive the mortgage meltdown that is occurring here and around the world. The bad news is that it may make it more difficult to get a loan for a home or a business in the months ahead because the plan requires both entities to sharply reduce their mortgage holdings in the future.

The moves by Treasury and Congress a few months ago was designed to allow these companies to increase their lending in both dollars and the size of loans in order to provide some liquidity to the distressed mortgage markets. With the takeover and reduction in portfolios, money will now be exiting the markets instead.

There is also danger in the banking sector as most banks still have not disclosed the extent of the losses from bad mortgage loans on their books. I did notice in the paper this morning that mortgage rates dropped yesterday on the news of the takeover and may go still lower in the future but that is hollow news if the banks and lenders are still unwilling to make loans on any terms.

You see, banks can leverage every dollar deposited by ten times. If they have $1 million in assets they can lend out $10 million. For every dollar that a bank or lender writes off the books he must reduce his leverage or increase his deposits. Right now banks are in a squeeze and you and I are caught in the middle of it.

How did we get into this mess? The blame lies in two areas, from my perspective. First, Wall Street allowed the formation and sale of all of these loans as if they were all AAA credit worthy. Second, Congress took money, lots of it, from Fannie Mae and Freddie Mac to look the other way and make excuses for their risky actions and they are still making excuses today. It is probably high time that we start holding someone responsible for this mess since we, the taxpayers, will end up paying for all of it.

So what can you do? Stay liquid, keep your credit on solid ground and educate yourself about what your public representatives are actually doing.

We will come through this because we always do. We are the United States of America and we will survive and prosper but the time for taking undue risks is over and we should stand together in making the future more stable for future generations.

To your Prosperity

Marc

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The children in our neighborhood will be heading back to school next week so I guess that signals the end of summer.

For me the signal for the end of summer is the waning produce from my garden. It has been a good summer and the garden produced some good crops of peas, beans, spinach, squash, peppers and tomatoes. I managed to freeze or can a lot of it and look forward to using it into the winter ahead.

Here is a picture of some of the squash.

Today I tilled the squash under and prepared the soil for a second crop of green beans. I hope to get one last good crop before it freezes so I can have some beans this winter.

I know that we will have many more days of warm weather ahead but it is always sad to see the end of the garden. It is a signal that things are changing, evolving and slowing down.

Life, however, never slows down. In fact, as we grow older it seems to move ever faster and we have to work at slowing it down. A garden, though, is a great way to slow time down because there is nothing you can do to make plants grow and produce any faster.

And when you are working in the garden you need to stop and take notice of every little aspect of it. What is new that you missed yesterday, what needs special attention, what needs to be harvested today? And if you have a particularly small crop (mine was a pepper called Tai Hot) that you need to get right down on to pick and that has hundreds of fruit, time can really slow down.

I’m lucky that my kids are grown and gone so that I can have the time to contemplate and work in my garden. If you have kids, especially young ones, your life is probably in a constant whirl of activity. I remember those days of after school activities and constant juggling of schedules to make it to the events.

But even if your life looks like this it might be a good idea to find something in your life to slow you down. To slow you down long enough to appreciate LIFE. Maybe it is yoga, or meditation, or a walk around the block or your garden.

With school back in session it might seem like things just got more hectic, that time just sped up a little more, but if you take some time to just consciously slow it down you might find that small piece of time where you can take notice of that most important thing just in front of you right now. A moment just to be present to life, your life and a chance to say “thank you”.

Here’s hoping that as your summer comes to a close you find a moment just for You.

Marc

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Have you ever wanted to make a difference? Have you heard of the concept of Pay it Forward?

There are a group of people with just such a mission and you can join them.

http:/www.payitforward.name

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