DOW Down 778 Points – My Response

Nothing.  Ok, nothing is a exaggeration, but it drives home the point that nothing has changed from a personal perspective.  The principles remain the same after after a horrid financial day as they were on Sunday when things weren’t this bad.  If anything a day like today should make you more eager to dump your debt and get on solid financial ground so that you can be in as much control as possible.  Ultimately other than trying to influence your representative, you can only control what you do.  Wasting energy in fear and stress will only harm you unless it provides stronger motivation to change you financial future.

• Spend Much Less Than You Earn
• Get Out Of Debt
• Have a 3-6 month emergency fund.  If you feel uncomfortable in these time, 6-8 might be a better goal.
• Save For Retirement.

Since I have already accomplished 1-3, I will continue to save for a house down payment.  As far as retirement, I will continue my deposits(with company) match.  If you have faith that the US economy and stock market will figure things out in the long run, then keep buying like you have been.  Things like selling your stock and going to cash type assets might save you some money, but adds a lot of stress and opens the window for missing out on bargain buys.   I won’t be changing a thing with regard to my investments other than making a concerted effort to not check my balances to avoid stress, fear, and the motivation to do something stupid.

As far as the bailout is concerned, I was glad to see that there were representatives that were listening to constituents and doing their best to make sure that taxpayers didn’t get taken advantage of.  I loved to see government in action like it was last week with everyone working together, although I could do without the political name calling and posturing.

I would love to see a solution that allows those that caused the mess to bear the burden rather than the taxpayers.  Options like government loaning money rather than giving Paulson a blank check to give free money were he deems fit.  It seemed like there were many good changes to the bill over the weekend like removing earmarks, allowing for non free money help, and adding more protection for the taxpayers, but ultimately the bill stayed about the government going into much more debt so that they can hand out free money to keep the housing market artificially inflated and keep the credit markets flowing.    Should they have signed the bill today, possibly.  Although a collapse could end up being a self fulfilling prophecy fueled by fear.

I do know that government needs to get back to the principles above, but neither candidate has come close to committing to anything of the sort.