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11 Ways To Survive And Thrive In A Down Economy




11 Ways To Survive And Thrive In A Down Economy

Yes, when it comes to the economy, it has been hard in the past decade, and it continues to be hard. 

Only now is the Fed seriously beginning to talk about raising interest rates again, many people are without jobs, and others face crippling debt.  

So, ideally, what do you do not just to survive, but thrive during such times?

One:  Even if the Market is Behaving Strangely, Don’t Freak Out

It is in the nature of the stock market to move up and down, sometimes quite unpredictably. 

However, that doesn’t mean that you want to sell out the second it drops. 

Here’s a small illustration:

You know how awful everyone says the stock market has been, lately? 

Well, observe the following chart of the S&P 500 for the past decade:


See that awful canyon of a dip in 2008? 

See all the smaller, but not insignificant peaks and valleys? 

Those probably made all sorts of people very nervous at the time that they were happening.

Yet, do you observe something else? 

The right-hand side, representing the most recent months, is way higher than the left-hand side, which represents the farthest time back. 

In spite of all those peaks and valleys and truly terrible dips, the market has ultimately gone up.

It is, in fact, the tendency of the market to go up over time. 

If you sell off everything the second that times get tough, you miss out on that growth.

Joe Baker of Alcus Financial Group concurs.

He says that people get scared, ask themselves if the market is crashing and if they should shift their 401(k) over to a money market. 

The answer is no; they shouldn’t. Not unless they need the cash very, very soon—say, within a couple of years.

Most recessions last a maximum of six months before the S&P 500 begins to turn itself around. 

Only really big meltdowns last longer, and those take something more like 19 months. 

It’s still less than two years before investors have all their money back, and sometimes more.

So, don’t panic. 

Hang in there for the long haul, and you’re quite likely to turn a profit.

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Two:  When You Can’t Afford Something, Don’t Buy It

This one is a tall order for everybody. 

There’s always something we want that we really can’t afford to buy right now, credit cards notwithstanding. 

It might be a Jaguar, or an expensive designer dress, or that miniatures army of Chaos Space Marines.

Whatever it is—and it can be different things for different people—there is only really one answer to handling the situation. 

Don’t buy it.  It’s the hardest thing to do, especially when you’ve got more than enough credit available to do it, but still say no and don’t buy it.

Your future self will thank you for your self-control.

Three: Ask Yourself if You Can Pay Cash, and if You Can’t, Don’t Buy It.

Our society penalizes people for having no credit—your credit score goes into whether you can rent a house, how much you’re charged for a cellular phone account, and sometimes even whether you can get a particular job. 

So it sounds like odd advice in this culture, but if you can’t afford to pay cash for something, you really can’t afford to pay credit for it either.

You see, there are these magical things called interest rates, and whenever you carry a debt, they kick in and eat up even more of your money than you were already spending. 

For small amounts of money this isn’t so bad, but for big debts like mortgages or auto loans, the differences can be huge. 

And don’t forget that those huge purchases devalue over time, sometimes to the point where you end up paying more than the item is worth.

Long story short; don’t buy a house or a car at a bad time just because the bank will loan you the money. 

You may well live to regret it.

Four:  Make your portfolio as idiot-proof as possible

Don’t put all your investments in the same stock.  Just don’t do it.  This is very good advice, but not that many people follow it.

Hewitt Associates found that for every five workers enrolled in a 401(k) plan, three didn’t re-balance their portfolios once between 2000 and 2004.  This is a common oversight that can lead to a skewed portfolio.

A skewed portfolio leads to greater risk for you, the investor.

Remember to take certain factors into account when diversifying.  Two of the biggies are risk tolerance and age. 

People in the 20-40 range should be investing most of their assets in equities while people in the 60-70 range can put up to half of their assets in stocks.

Also, don’t forget that when you’re playing the long game, you can take market downturns as opportunities to buy in. 

Brett Horowitz of Evensky and Katz praises those who buy low, saying that it’s looking to the future, which in fact it is, given the market’s tendency to climb over time.

Five:  Don’t Let Your Home Imprison You

It is generally agreed upon by experts that when market times get tough, it’s time for homeowners to reevaluate their mortgages. 

If you have an adjustable-rate mortgage, it is a sad fact of life that the bank is probably about to pass its financial hurt on to you by resetting your rates considerably higher. 

Refinancing to a lower, fixed-rate mortgage is the only option under those circumstances.

The problem is, like with most other credit-related endeavors—you’d better have really good credit, or it’s simply not happening.

If you do have a FICO score of at least 680, start shopping around. 

Mortgage rates have been moving up and down like an elevator, so try to locate and latch onto the best rate you can find.

It may even be better to take a slightly higher fixed rate mortgage now rather than going with an ARM that could reset to even higher. 

Unfortunately, there aren’t as many options for people whose credit is not good, and if you fit in that category, good rates may be hard to find.

Of course, mortgages are more expensive with worse credit anyway:


As illustrated by the chart, people with lower credit scores are already paying more. 

Once ARMs get thrown in the mix, it gets really ugly. 

Dee Lee, the author of “Let’s Talk Money,” compares ARMs to horror movie monsters, and says they’re just about as safe to be around.

There are consumer groups who can help when your credit is a problem. 

The Homeownership Preservation Foundation has a 24/7 hotline, (888) 995-4673. 

The Homeowner Crisis Resource Center also has professional counselors available at (866) 557-2227.

Six:  Get That Resume Ready

Recessions don’t just threaten the economy generally. 

They can have a huge effect on your employment—or lack thereof—as well.

If you lose your job, it will be hard to get another. 

John Challenger, CEO of Challenger, Gray & Christmas, says that during recessions, corporations are playing the waiting game when it comes to hiring, and won’t want to open new locations or add employees.

And when it comes to keeping the job you have, it isn’t good enough to just work as hard as possible. 

Your job may also depend on where in the company you are employed. 

If your department is overstaffed, or you are considered support staff, you are in prime layoff territory.

The best position to be in is one that actively adds to a company’s cash flow. 

It’s also good if you know how to do a job no one else can, or take up crucial, long-term projects for your employer.

Also, pay attention to whether your boss is on the nice or naughty list with their bosses and connect with those higher up if the latter is the case.

And of course—network, network, network. 

If you do lose your job, you need somewhere to go. 

Depending on your position, it can take anywhere from two months to five months to find a new situation.

It’s a good idea to keep your resume full of successes and fully updated.

Seven:  Focus on Building Savings and Shrinking Debt

This probably seems ridiculously obvious, but it’s a good idea to reduce your bills and build up extra money. 

Not only is there the specter of unemployment in an economy like this one, but a lot of the assets that used to be able to help you out have lost value.

An emergency fund is no longer optional. 

The recommendation for how much to have in savings runs from three to six months’ worth of expenses.

Not everyone has that savings tucked away, however, especially lower-income families.


As the chart indicates, personal savings have seriously dipped since the seventies.

So if you don’t have money set aside, start saving. 

And while you’re at it, start paying down those credit cards

According to Demos, for every ten households, six don’t pay off their entire balance every month.

The received wisdom is to pay off the most expensive of the cards first. 

And count on having higher interest rates if you become delinquent. 

Robert Hammer of R.K. Hammer, a consulting firm for bank cards, says that you generally have to pay on time for more than a year before you can ask for lower rates and reasonably hope to get them.

The exception to this rule is if losing a job is what put you behind. 

If you find new employment, ask for lower rates and see what happens. 

Hammer advises that you may get relief under those circumstances.

Eight: When You’re Already in Debt, Don’t Add to It.

There are some debts that can’t be avoided unless one is independently wealthy. 

Houses, for one thing, are very expensive items. 

But if you have to take out a mortgage on a home, don’t turn around and add a lot of credit card debt to the mix.

Keep your payments simple—and your stress down—by sticking to just the one debtor.

Budgeting is probably the best thing you can do for yourself here.  Figure out what you need and figure out what you don’t need. 

Work out how much that daily Starbucks costs you and whether you can easily cut it to save money.

If you can, and the choice is between that and starting to run up credit card debt, ditch the Starbucks and put that money into savings instead.  Speaking of which….

Nine:  Exercise a Downsizing of Your Own

Don’t buy too expensive a house, or too flashy a car, or too much jewelry. 

If anything, live slightly under your means.

Buy a house that’s less expensive than you can afford. 

Drive a car that gets you around safely but doesn’t break your budget. 

Don’t eat out all the time.

You will be astounded by how much money you can save by doing this, and how much you can put into savings, retirement, and other investments.  All it takes is the capacity to tell yourself no when it crosses your mind that you want some luxury item on impulse. 

Just the simple—yet unspeakably difficult—action of repeatedly delaying gratification.

Ten: Broaden Your Skill Set

Whether it’s learning new job skills that will earn you more at the company you already work for, or preparing for a job at a new one, gain more skills and increase your competencies. 

The more marketable skills you have, the more income you can bring in, and increased income is never a bad thing in a rotten economy. 

Some people even choose to work second jobs, however temporarily, just to pad the bank account a little.

This tip is particularly effective when combined with those regarding budgeting and debt control. 

If you already have debt, increased income can help you get rid of it. 

If you don’t, the increased income can go into savings, so that if a disaster ever happens you don’t have to go into debt to deal with it. 

The situation is win-win.

Eleven:  In the Same Vein, Look Out for Opportunities to be Entrepreneurial

Start a business that solves a problem for someone. 

Clean, fix things, landscape—do any job that requires a skill others don’t have or takes care of something no one really wants to do for themselves.  Businesses along those lines can be incredibly lucrative.

All that it takes is a little creativity, and you can come up with things people will pay you to do in no time.


The economy may not change anytime soon, and there isn’t much you can do to change that unfortunate fact of life. 

What you can change is what you do about living in this economy. 

By following even just some of the steps outlined above, you can give yourself a major advantage over the average person. 

Control your debt, start building your savings, and be proactive about your employment. 

Be more selective about your indulgences, delay gratification, and keep an eye out for chances to bring in extra income. 

It may not be easy, but you can still thrive, even in these tough times.

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How To Teach Your Kids About Credit Cards




If you have kids in college, this article is for you. Teaching kids about credit cards is one of the most important tools you can give them The world of credit cards can be confusing and giving your kids a little education might save them a lot of headache and debt.

Students need to learn credit card lessons


Do you have children in college? Have you talked with them about how to handle credit?
When I wrote about this topic in 2008, students were inundated with credit card offers. According to Benjamin Lawsky, who, as a special assistant to the New York state attorney general, testified before the U.S. House of Representatives’ Subcommittee of Financial Institutions and Consumer Credit, “marketers set up tables in high-traffic spots on campus, such as cafeterias, student unions, bookstores, and other campus buildings … [and at] campus events including freshman orientation, activity fairs, athletic events and graduation fairs.”

Then came the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act).

Now, companies cannot sign up individuals under the age of 21 without a co-signer or proof of personal financial resources. Marketers offering incentives like pizza can no longer do so while at “an institution of higher education” or even within 1,000 feet of the school. They also may not make such offers “at an event sponsored by or related to” the school. Pre-approved offers of credit to individuals under the age of 21 also are prohibited.

Still, card offers are being made, and students need to know whether to act on them. You can expect that student credit cards will have less favorable terms than those offered to people who have a credit history; students are higher-risk borrowers.
Further, students, even those over age 21, may not understand that missing a payment or making a late payment not only increases the cost of credit, but also creates a negative credit history, something everyone should work to avoid.

“A bad credit history can make it harder for you to get mortgages, car loans and credit cards in the future,” explained Matt Schulz, a senior industry analyst at, a credit card comparison website.

“If you do get them, crummy credit can also cost you a fortune over the years in the form of higher interest rates and fees. It can also stand in the way of getting a job,” explained Schulz.

What can a parent do?
Since going away to college is the first step toward independence, you want to be sure that you respect your child’s need for self-sufficiency. But that doesn’t mean he or she has to go it alone. There are simply too many serious, long-lasting repercussions.

Communication and planning are key.

First, before your child leaves for school, talk to him or her about the benefits and the detriments of getting a student card. Establishing a credit history is a benefit. So is learning the discipline of paying bills on time to avoid a negative history.

Second, research options together with your child. Look online at (search for “student cards”), (click on “Credit Cards,” then “College Student”) or (go to “Credit Cards,” then “Student”). Consider the fees, rates and penalties of different cards, and make a joint decision on the type of card that might make sense. For example, you might consider prepaid cards or secured cards. Prepaid cards work like debit cards. No credit is extended. You prepay the card, and when the balance is low, you fund it. Secured cards require a cash deposit that acts as the credit line for the account. This allows a credit limit to be established, without risk to the bank.

Third, decide on an acceptable monthly budget and what to do if it isn’t followed.  Talk about how you would like your child to communicate with you if that happens.

Fourth, determine whether you and your child agree that he or she should not accept credit card offers before reviewing them with you.

Fifth, agree on how the two of you should check in with each other. Will you talk each month about finances, perhaps setting a date in advance? Will you encourage your child to let you know about challenges before they become problems?

In the beginning, your child will benefit from some gentle guidance. You don’t want him or her to be adrift in a financial morass that could have been avoided with a little planning and care. Financial literacy calls for learning a new skill, and it is not reasonable to expect a child to go on this financial journey alone.

For information on the impact of the CARD Act, read the Consumer Financial Protection Bureau’s report (the Card Act Report), which you can find at

* * *
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford, Conn.) and award-winning author, welcomes your questions/comments ([email protected]). To hear Julie speak, visit

(c) 2018 Julie Jason.
Distributed by King Features Syndicate Inc.

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JPMorgan Chase’s China License a Huge Win




The financial sector seems to be alive and well under Donald Trump’s new administration. For all his talk of demonizing Wall Street, Trump seems to have taken a shine to banks and their executives. And even though President Trump has a rocky relationship with China, one of his closest banks just did something no bank has ever done before – receive a license to underwrite corporate bonds in China’s interbank bond market. Will other banks be far behind?

Is the JPMorgan Chase’s Relationship With the President the Reason for the Historic License?

JPMorgan Chase is living large. The bank’s CEO, Jamie Dimon, has a particularly close relationship with our new president, and was in fact Trump’s first pick for Treasury Secretary. The bank is up about 24% since the election. Last week, President Trump signed an executive order to loosen regulatory restrictions on banks and lenders by targeting the Dodd-Frank act, essentially giving JPMorgan the opportunity to double its lending, which is already near an all time high. Now, the largest U.S. lender just got entry into China’s $6.4 trillion bond market – the third largest in the world. Is it all connected? Is Dimon’s relationship with Trump to credit for its good fortune?

Yes and no.

Dimon is a close advisor and friend to Trump, meaning that for all his promises to clean up Wall Street, Trump’s actions are all currently focused to help the financial sector. But though Dimon can advise Trump, it’s ultimately up to the bank itself to chart its own course. And JPMorgan has done a stellar job of that.

The bank was granted a business license in September of 2016 to operate a fully owned fund management business in China thanks to the Chinese Central Bank’s decision to loosen entry restrictions. That license led to its approval to underwrite corporate debt in the China market, which is JPMorgan’s bread and butter. The bank earned about half of its investment banking fees from debt-underwriting last year, meaning that it now has the ability to double its revenue with one new market.

Watch this news clip from CNBC where JPMorgan Chase’s CEO, Jamie Dimon talks about President Trump’s reforms:

Thanks to China loosening entry restrictions, JPMorgan won’t be the only U.S. headquartered bank in town for long. But between that time and today, the lender should see ample profits and develop some competitive barriers to entry for other banks. Between the China license and the repeal of Dodd-Frank, expect shares of JPMorgan Chase & Co. (JPM) to rise UP.


The executive order for the repeal of Dodd-Frank Act has been signed, see the whole story here!


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This publication provides general information about certain subjects, and should not be construed or taken as advice (legal, financial, investment, tax, or otherwise). Do not construe or take any information in this publication as a solicitation, offer, opinion, or recommendation to buy or sell any securities, bonds, or other financial instruments or to provide any legal, financial, investment, tax, or other advice or service about the suitability or profitability of any financial instruments or investments.

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More Bad News From Wellsfargo CEO Resigns




SAN FRANCISCO–(BUSINESS WIRE)– Wells Fargo & Company (NYSE:WFC) announced today that Chairman and Chief Executive Officer John has informed the Company’s Board of Directors that he is retiring from the Company and the Board, effective immediately. The Board has elected Tim Sloan, the Company’s President and Chief Operating Officer, to succeed him as CEO, and Stephen Sanger, its Lead Director, to serve as the Board’s non-executive Chairman, and independent director Elizabeth Duke to serve as Vice Chair. Sloan also was elected to the Board.

Wells Fargor CEO John Stumpf Resigns

Sloan’s appointment to CEO and election to the Board are effective immediately. He will retain the title of President.

Sanger said, “John Stumpf has dedicated his professional life to banking, successfully leading Wells Fargo through the financial crisis and the largest merger in banking history, and helping to create one of the strongest and most well-known financial services companies in the world. However, he believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward. The Board of Directors has great confidence in Tim Sloan. He is a proven leader who knows Wells Fargo’s operations deeply, holds the respect of its stakeholders, and is ready to lead the Company into the future.”

, a 34-year veteran of the Company, joined Wells Fargo in 1982 as part of the former Norwest Bank, becoming Wells Fargo’s CEO in June 2007 and its chairman inJanuary 2010.

“I am grateful for the opportunity to have led Wells Fargo,” said. “I am also very optimistic about its future, because of our talented and caring team members and the goodwill the stagecoach continues to enjoy with tens of millions of customers. While I have been deeply committed and focused on managing the Company through this period, I have decided it is best for the Company that I step aside. I know no better individual to lead this company forward than Tim Sloan.”

Sloan said, “It’s a great privilege to have the opportunity to lead one of America’s most storied companies at a critical juncture in its history. My immediate and highest priority is to restore trust in Wells Fargo. It’s a tremendous responsibility, one which I look forward to taking on, because of the incredible caliber of our people, and the opportunity we have to impact the lives of our millions of customers around the world. We will work tirelessly to build a stronger and better Wells Fargo for generations to come.”

Sloan joined Wells Fargo 29 years ago, launching a career that would include numerous leadership roles across the Company’s wholesale and commercial banking operations, including as head of Commercial Banking, Real Estate and Specialized Financial Services. He became president and COO in November 2015, when he assumed leadership over the Company’s four main business groups: Community Banking, Consumer Lending, Wealth and Investment Management and Wholesale Banking. Previously, he headed the Wholesale Banking group after serving as the Company’s Chief Financial Officer and, prior to that, as the Company’s Chief Administrative Officer.

Sanger has been a member of the Wells Fargo Board since 2003, serving as its Lead Director since 2012. Sanger also chairs the Governance and Nominating Committeeand is a member of Human Resources Committee and Risk Committee. He was CEO of General Mills, Inc., a leading packaged food producer and distributor, from 1995 until 2007. He served as chairman of General Mills from 1995 to 2008. He also serves on the board of Pfizer Inc.

Duke has been a member of the Wells Fargo Board since 2015. She served as a member of the Board of Governors of the Federal Reserve System from 2008 to 2013, where she served as Chair of the Federal Reserve’s Committee on Consumer and Community Affairs and as a member of its Committee on Bank Supervision and Regulation, the Committee on Bank Affairs, and the Committee on Board Affairs. She also previously held senior management positions at banks including Wachovia and SouthTrust.
Watch this video from CNN Money and find out what Elizabeth Warren says about Wells Fargo CEO to resign.

Amazon Expands Grocery Biz With Convenience And Drive Up Stores. Check this news here!

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The statements, views, and opinions of any article, contribution, editorial, or advertisement in this publication are not necessarily those of The Capitalist or its editorial staff, and are not considered an endorsement, sponsorship, or recommendation of any referenced product, service, issuer, or groups of issuers.

This publication provides general information about certain subjects, and should not be construed or taken as advice (legal, financial, investment, tax, or otherwise). Do not construe or take any information in this publication as a solicitation, offer, opinion, or recommendation to buy or sell any securities, bonds, or other financial instruments or to provide any legal, financial, investment, tax, or other advice or service about the suitability or profitability of any financial instruments or investments.

The Capitalist disclaims any liability for the accuracy of or your reliance on any statements, views, opinions, or information in this publication.

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