Accounting Degree

 It is a known fact that a few percent of the population controls over 90 percent of all the money in the USA.  Middle class has been hit the hardest from this down turn of the economy, the stock market was betting on the housing explosion in the late 90’s.  Housing prices went through the roof.  People thought that this was going to be a long lasting situation.  Mortgage companies were giving mortgages with almost nothing down.

Banks gave some people 2 mortgages one for their down payment and another long turn mortgage for 80 percent or better.  With rates coming down people were refinancing, some once, twice even three times to enjoy the drop in rates.  People were encouraged to take some of the equity out of their homes for remodeling additions, investments, buying a summer home for other properties.  People leveraged themselves to make more money. Nobody really thought the gravy train would end.

    Then out came the wolves in sheep’s clothing.  Offering even lower rates, BUT very few people read the fine print about the rate only being there for 2 to3 years, then jumping to prime rate, plus 5,6,7 percent or higher.  Some loans turned into out of control balloon rates.

 When people went to try to refinance, rates were higher, people couldn’t afford their homes any longer.  People started to panic, the stock market started to drop, consumer confidence fell, foreclosures started.  People panicking caused them to pull money out of the Stock market causing even more turmoil.  Banks started foreclosing. People started losing their jobs, homes dropped in value.  ALL the people who refinanced their home to 125% now had to give money back to the bank because their homes were not worth as much.

   Unscrupulous mortgage and loan companies jumped in, and acting as a friend to the consumers, signed them up in short mortgages, but unknowingly were trying to steal people’s property.  People who over extended themselves financially with other properties started a domino effect while losing property after property.  When the federal government finally saw what was happening it was too late.  People were losing their jobs and their homes and the economy was in deep trouble.  This economic down turn started a global recession.

   The major car manufactures General Motors, Chrysler, and Ford who were selling vehicles with 0% financing showed how much they are hurting even before this collapse.

People that have been dealing with the same bank for several years which they had their life savings and retirement money, where many were able to save $200,000 to $400,000 or more during their life, they ended up losing most of their money when the banks closed.  Their life savings was just about gone!

In December of 2008 over a half a million jobs were lost.  Major companies with massive layoffs, banks like Washington Mutual and Wachovia were taken over by Larger banks like Chase Manhattan Bank and Wells Fargo.

Citi Bank got financial help from the federal government in the tune of 62 Billion dollars!  They are still cutting jobs but they are trying to stay afloat.  I have to give credit to the upper management and CORPORATE OFFICERS that refused to take their yearly bonus in 2008.

  Unlike some financial institutions that received several billion dollars for help and what did they do with the government money? THEY TOOK THE MONEY FOR THEIR YEARLY BONUSES!

    When the big 3 car manufactures went to congress for help. They drove down to Washington. Who are they kidding? Their private jets are still their waiting to fly off into the wild blue yonder.

 Corporate America is part of a very big piece of this puzzle. The money they spend on their corporate images could save a lot of jobs. Even Mayor Bloomberg of New York City has not been paid (not that he needs the money) but he truly contributes a lot of money to charities.  I respect what he does. There should be more people like him. Corporate Offices should take a lesson.

 MIDDLE CLASS AMERICA NEEDS HELP.

 Here are 10 helpful tips.  

Mortgages now are extremely hard to get.  The Federal Government is finally stepping in to oversee what is happening.

1. Watch out for deals that are too good to be true, because they are usually a scam. There are still scam artists out there.  Make sure a competent attorney reads over ANY financial contract.  A woman in California that owned her home that was in her family for generations needed $30,000.  She found a lender but WITHOUT KNOWING the lender they sold the house right from under her.

2.Get legal representation with all your financial situations.  Make sure the attorney is someone that you know or a friend knows, or who has a good reputation that can be verified.  DO NOT USE AN ATTORNEY SUGGESTED BY ANY FINANCIAL INSTITUTION.  Watch your back

 3. If you are lucky enough to have several hundred thousand dollars saved, you can go to any bank that will have a FDIC program that will protect your money in a CD or some checking accounts and they will GUARANTEE your money up to $250,000.  If you have more a husband can open one account and a husband and wife can open another protecting $500,000.  IF there is more money to protect use, your kids and put it in trust but PROTECT YOUR SAVINGS!!  If it is a Brokerage account with Fidelity you are protected up to $500,000.  Call the FDIC and make sure on any of these programs.  You can get the telephone number or contact number through most banks.  BE CAREFULL THIS DEAL IS ONLY GOOD FOR THE YEAR 2009.  I am sure there will be other deals coming out this year.

4. On the Brightside, an economy EVEN SUCH AS THIS, MILLIONAIRES ARE MADE.  The market is low.  I still believe it will go lower.  Property is low but it will go lower.

 5. You can pick up tax lien properties as an investment.  Read about them DON’T investin them unless you know what you are doing and what you are looking for.

 6. The bond market is not the place to be at this point I would wait until interest rates go up.  If you can, try to keep your credit card bills down to nothing.  Some credit cards charge anywhere from 25% to 30%.  Find a bank that will offer you a balance transfer. Some of you can extend to 60 or 72 months with a rate of fewer than 5 percent rate.

 7.There are some good investments out there but make sure the company you are investing with is financially secure and make sure they are not in debt and have a CASH surplus.

8.  Property investment is good BUT you will have to pay taxes and support the property until you sell it.

9. The internet is a great research center.  You can make money on it.  BUT there are plenty of scams to. Be very careful. We have discovered a solid business with residual income to create retirement for many years to come..

Network Marketing as endorsed by Donald Trump-as a way out of all financial problems, starting a home based business and following a system of success–to ensure your family’s income is “recession proofed”.  

 10. If your car is in good shape keep it well maintained.  If you take care of it the car will take care of you.  If you do need a new car there are very good low or 0% finance deals out there, but remember, when buying a new car as soon as you drive it off of the lot you just devalued the car 20-25%.  It may pay to buy a Two Year old car still with a factory warranty.

Keep a positive outlook on things.  It is tough now but things run in cycles.  Look for the up swing, try to save some money and make wise investments.  

I hope the year 2009 is going to be a good year for everyone.  Remember this a cycle and there is a way down and then a way back up again.  Even when this economy becomes strong again, be careful not to over extend yourself.  Spread the wealth around. Put it in different banks and watch what the FDIC is doing. 

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