Unemployment is on the rise, gross domestic product is still hovering in negative territory, our national debt is being protested in the streets across America and word is out that the US Treasury is printing more of the greenback to offset bailout initiatives coming out of Washington. In addition to this, United Nation officials are discussing the possibility of creating a world currency to replace the US dollar in the world economy. From the outside looking in, it would seem as though we were under an economic attack yet while the media focuses on the great political divide, a story is emerging from the other side of the globe that could change our economic landscape forever.

China has recently announced their plan to sell out of their U.S. dollar position, describing our economy as a “black whole”, with concerns of our treasury printing more dollars which would only hurt their position as they continue to carry $1.9 trillion of U.S. debt. This is not the first time Beijing has voiced concern over its massive exposure to the US dollar and it most likely will not be the last. In an effort to hedge their economy Beijing’s plan is to concentrate on building an inventory of copper and other industrial metals in order to grow their infrastructure over the next 50 years. Such little attention is being paid to this story that I’m starting to wonder whether or not American investors realize how significant this shift in Chinese policy is regarding the state of the U.S. economy.

As the world’s main reserve currency, the US dollar is used to set international market prices for oil, gold and other currencies. If Beijing abandons their support for the US dollar and the world embraces a “New World Currency” what will happen to the value of our money in the years to come? It doesn’t take much to figure out the answer to this question but in case you have not been on top of this story you should know that these events could have a devastating effect on our economy. The average citizen could see inflation like we have never seen before and investors will be left searching for answers of their own, wondering what to do with their money.

We are certainly navigating in uncharted waters but before you jump into your financial lifeboat let me say this, even during the great depression there were fortunes made by those who were able to follow the money flow. Understand that crisis will often produce opportunity but you have to be willing to seize the opportunities as they present themselves. Back in the early thirties investors didn’t have the news channels like we have today nor did they have the ability to move money as quickly as you can right now. On top of that, the average person didn’t have history as a guide because when the great depression hit, most people were caught off guard unable to hedge themselves with a plan. If you are willing to accept the fact that our world is rapidly changing then you are in great position to capture new profits as long as you are on top of the money flow. For example; if you knew that China was interested in accumulating a position in copper and other industrial metals, then why not invest in those commodities? Seizing opportunity doesn’t mean “buy and hold” till you die, it means looking ahead with an understanding that new trends are created every time an economic shift takes place. One idea for you is to look into commodity Exchange Traded Fund’s (ETF) these instruments take advantage of higher prices in the commodity markets through different portfolios that can include long positions held in Oil, Natural Gas, Zinc, Copper and Aluminum Futures. You don’t have to concentrate all of your money in such an investment but it may help put your mind at ease knowing you are at least moving with the money.

If you think the dollar is on the verge of a collapse, you might consider certain currency ETF’s that would appreciate when the value of the dollar falls. A falling dollar can lead to inflation so you might want to hedge your cash position. Historically, gold has been one of the best places to be when inflation hits the fan but these days you have a variety of ways to invest in this precious metal without having to worry about insurance or storage costs. There are certain ETF’s that allow you to benefit from higher gold prices without having to take delivery of any gold whatsoever.

Another investment that did very well in the 1970’s, while we were experiencing double digit inflation, was real estate. But let’s face it, the experts are still trying to figure out if this market has hit a bottom yet, so one way you can participate without having to worry about putting too much money in this market, is to look at the Real Estate and REIT ETF’s. No lawyers, real estate agents, or closing costs. It trades like a stock which makes it easier to manage risk. You can use stop loss orders on all these that I have mentioned and each can be easily tracked on a price chart.

The formula is simple. Identify the trend, invest your money in the direction of that trend, then, focus all of your attention on protecting your investments with stop loss orders. Above all, try not to fear this market, but instead seize the opportunities as they present themselves to you. We are no longer in a buy/hold environment, we have entered into the new age of buy and protect.

Written By: AJ Monte CMT
Chief Market Strategist
The Market Guys

If you are a do-it-yourself trader and you want to learn more about the strategies mentioned, feel free to visit: http://www.themarketguys.com

If you agree with the strategies mentioned, but you want a professional to manage your assets using some of the strategies above then contact Allgen Financial Services, Inc at (407) 210-3888 or advisors@allgenfinancial.com.

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Saving money is one of those tasks that’s so much easier said than done. There’s more to it than spending less money (although that part alone can be challenging). How much money will you save, where will you put it, and how can you make sure it stays there? Here’s how to set realistic goals, keep your spending in check, and pay yourself first.

Steps

1. Set savings goals. For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a house, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals.
   • Kill your debt first. Simply calculating how much you spend each month on your debts will illustrate that eliminating debt is the fastest way to free up money. Once the money is freed from debt payment, it can easily be re-purposed to savings.
2. Establish a timeframe. For example: “I want to be able to buy a house two years from today.” Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged.
3. Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period. For example, if you want to put a $20,000 down payment on a home in 36 months (three years), you’ll need to save about $550 per month every month. But if your paychecks amount to $1000, it might not be a realistic goal, so adjust your timeframe until you come up with an approachable amount.
4. Keep a record of your expenses. What you save falls between two activities and their difference: how much you make and how much you spend. Since you have more control over how much you spend, it’s wise to take a critical look at your expenses. Write down everything you spend your money on for a couple weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc.
   • Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts.
   • Sit down once a week with your small notebook and receipts. Record your expenses in a larger notebook or a spreadsheet program.
5. Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $300 on ice cream, $100 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you’ll be much more motivated to pinch pennies.
   • Can you move to a less expensive apartment or house? Can you refinance your mortgage?
   • Can you consolidate your debts so that you’re not paying as much interest?
   • Can you save money on gas, or give up a car altogether? If your family has multiple cars, can you bring it down to one?
   • Can you drop a land line and only use your cell phone?
   • Can you live without cable or satellite TV?
   • Can you cut down on your utility bills?
   • Can you restrict eating out? Buy food in bulk? Cook more at home? You might be able to save a lot of money on food.
6. Reassess your savings goals. Subtract your expenses (the ones you can’t live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let’s say you’ve decided you can definitely get by on $1500 per month, and your paychecks amount to $2300 per month. That leaves you with $800 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly.
7. Make a budget. Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you’re going to have a particularly hard time restricting. (E.g. “I will only spend $30 a month on movies/chocolate/coffee/etc.”)
8. Stop using credit cards. Pay for everything with cash or money orders. Don’t even use checks. It’s easier to overspend when you’re pulling from a bank or credit account because you don’t know exactly how much is in there. If you have cash, you can see your supply running low. You can even bundle up the predetermined amount of cash allocated for each expense with a label or keep separate jars for each expense (e.g. a bundle/jar for coffee, another for gas, another for miscellaneous). As you pull money from a jar for that particular expense, you’ll see how much remains and you’ll also be reminded of your limit.
   • If you need to have credit cards but you don’t want the temptation of having them available to use day-to-day, restrict that section of your wallet with a note or picture reminding you of your savings goals.
   • Credit cards are not inherently evil; it’s all about your self control. If you use them responsibly (i.e. completely pay them off every month), you can benefit from them. But the reason most credit card companies make money, however, is because people end up spending money that they don’t have. Unless you are one of the people who can religiously pay off the balance in full every month, you’re better off foregoing the promotions that credit card companies use to lure you in (cash back, introductory APR, airline miles, and so on).
9. Open an interest-bearing savings account. It’s a lot easier to keep track of your savings if you have them separate from your spending money. You can also usually get better interest on savings accounts than on checking accounts (if you get interest on your checking account at all). Consider higher-interest options such as CDs or money-market accounts for longer savings goals.
10. Know where your money is. And how much of it, too. If you accidentally overdraw your bank account, you will incur hefty bank fees; worse yet, the place you paid with that check may slap a bounced check fee on top of that, and send the check in again, resulting in a second overdraft fee from the bank! So just a few cents missing to cover that check could result in over $100 in fees. To avoid that, you should always know how much money you’ve got in your account(s), so you never cut a check for more than what you have.
11. Pay yourself first. Savings should be your priority, so don’t just say that you’ll save whatever’s left over at the end of the month. Deposit savings into an account (or your piggybank) as soon as you get paid. An easy, effective way to start saving is to simply deposit 10% of every check in a savings account. If you get a check or sum of cash, say 710.68, move the decimal point one place to the left and deposit that amount: 71.07. This works well and requires little thought; over several years, you’ve a tidy sum in savings. Over decades, you’ll be a millionaire.
    • You can set up an automatic transfer from your checking account to your savings account.
    • Many employers allow you to deduct savings from your paycheck. The money is directly deposited in your savings account so you never even see it on your paycheck.
    • You can also have investments for retirement taken directly out of your pay, and the taxes may be deferred with this option.

Tips

• Always OVER estimate your expenses and UNDER estimate your income.
• If you can afford to share things you have, from food to living space to appliances, try to do so. What goes around comes around when it’s between close friends, soon enough, you’ll find your friends doing the same, and everybody benefits.
• Have a professional shopper go through your closet before you hit the mall. They will help you assess what you already have and what timeless items you can invest in to create more looks from those you already have. There are services that do this (e.g. Visual Therapy in NYC and TimePros in Los Angeles). Remember that this service can cost a pretty penny. Don’t use this method unless you have a tendency to make $250 - $400 shopping trips!
• Have a hobby? Match your funds. One important habit for saving is if you have a hobby, such as model airplanes, scrapbooking, dirt biking, scuba diving, etc., set a hard and fast rule that whatever you allow yourself to spend on your hobby, you match those funds to your savings. For example, if you buy yourself a $45 pair of riding gloves, another $45 goes to your savings. Serious about saving? Try doubling your matched funds! These savings plans will do two things: Save money regularly and quickly, and really show you how much you are spending on your hobby, when it costs you twice as much.
• If you receive unexpected cash, put all or most of it into your savings, but continue to set aside your regularly scheduled amount as well. You’ll reach your savings goals sooner.
• If you vacation normally, use the web to search for affordable vacation deals instead of paying full retail price. Some sites offer very discounted vacations by partnering with resorts across the country. Essentially, you are required to go on a 90 minute sales-pitch to buy a timeshare at the resort, and in exchange you receive an extra cheap luxury vacation and often freebies like theme park tickets, gas, or dinner certificates.
• Make purchases with paper money, not exact change, and always save the change. Use a piggy bank or jar for your coins. Coins and change may look insignificant but when accumulated over time they can help you save. Some banks now offer free coin counting machines. When you redeem your coins, ask to be paid by check so you won’t be tempted to spend your newfound cash.

Warnings

• Do not go out “window shopping” with any money on you. You will only be tempted to spend money you cannot afford to lose. Only shop with a predetermined shopping list.
• After a long week of working, you may want to indulge in some luxury, telling yourself, “I deserve this”. Remember that the things you buy are not gifts to yourself; they are trades, products for money. Say, “Of course I deserve this, but can I afford it? If I can’t afford it, I’m still a worthy person, and I still deserve to meet my savings goals!”
• Unless you’re in truly desperate financial straits (like 10 seconds from eviction and your three children are starving) don’t try to cut corners connected to health. Basic preventative care for yourself, your family, and your pets might cost you a $60 office visit or a $30 heartworm pill today, but the skipping it will contribute to expensive problems and heartache down the road.

Article provided by wikiHow, a collaborative writing project to build the world’s largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Save Money. All content on wikiHow can be shared under a Creative Commons license.

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The link below will take you to an interesting technical video of the actual market conditions. Please allow a few seconds for the video to load in your screen.

http://www.screencast.com/users/irvweissel/folders/Jing/media/d7691fbb-5b5a-4656-9476-5f18fa74366d

For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com

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