In light of the recent economic volatility, a lot of people are wondering what's going to happen next. No one can see the future, but I want to paint a broad picture of what could likely happen, and how it will affect you in 2009.
It's great to have a 401(k), but not everyone knows that you don't have to wait until you're old before they become useful. There are a number of reasons you can take cash from your retirement account. It's basically taking out a loan from yourself. Funds from 401(k)s can be used to pay for a myriad of things, from medical expenses to financing a business to buying a home--although there should be a smart reason to take a loan. No vacations or big-screen TVs.
Nowadays, the pursuit of the American dream has dwindled to nothing more than a vain ambition. Luckily, members of Generation Y are blessed (or maybe cursed) with levels of ambition previously unheard of: we are three times as likely to want to save money, compared to our parents and grandparents. Simply caching money in an everyday savings account won’t elicit wealth, though.
New cars are a huge financial commitment, and not a very smart investment on paper. Edmunds.com says a new car loses 11% of its value on average when it leaves the dealer lot. And after the first couples years of ownership you can expect your new wheels to depreciate 20% to 40%.
Individual retirement arrangements (IRAs) are a great way to stash money for retirement. They can also be a lifesaver when unexpected expenses arise.
The choice between going with a professional or doing a job yourself isn't always cut and dry.
Bloomberg.com reported last week that the Federal Reserve had doled out $7.77 trillion as of March 2009 to banks with the goal of stabilizing the financial system. That number makes the Treasury Department's $700 billion bailout through the Troubled Asset Relief Program (TARP) look like an ant standing next to an elephant.