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Like most of us, I have been thinking about this current "economic crisis" and watching what people are doing and what they are worring about. I keep thinking that if you have been saving in a 401K or IRA or any sort of stock market based retirement savings plan you are still better off today than you would have been if you had been doing anything other than that. Only someone that has been in it for less than a year or two has actually lost anything!
I called my Financial Adviser (Bernice Langel, of Langel & Associates) and asked her if she would do a quick "what if" calculation for me. "What if" someone had been investing about $10.00 per week in some sort of retirement savings account for the last 5 years, what would be the value of that savings plan just prior to this melt down and what is it worth now?
First off, if that $10 per week had been stuffed into a mattress instead of a savings plan (401K/IRA/Stock/etc.) it would not be worth as much as what had been hidden in the mattress! The buying power of that cash would be less due to inflation. That $10.00 per week for 5 years adds up to $2,600.00, but inflation would have made that amount worth only about $2,300.00 today... i.e.: what could have purchased for $2,300.00 5 years ago would now cost $2,600.00. So basically, the bed bugs got $300.00 of what was hid in the mattress.
Yet, that same $2,600.00 put into a savings account of some sort over the last 5 years would have been worth about $3,200.00 at the end of August this year.
The stock market began the serious fall in September, and at the end of September (just before the really serious drop last week) it would be worth only $2,800.00.
While it may have been a loss $400.00 during the month of September, the savings account would still be $200.00 ahead of what it would have been if it had been stuffed in the mattress!
She was working only with monthly averages, so calculations for what it will be worth after this latest serious drop will have to wait until the end of October when the monthly numbers are compiled, and granted, at the end of last Monday it would have been horrible, but it is better today, so by the end of the month there is no telling what it will be.
If any toy train dealer were to suddenly offer trains at 1/2 price most of us would be all over ourselves spending money getting as much stuff as we could!
If the next day they were to lower their prices even more, would you sell what you just bought?
NO!
You'd BUY some MORE!
WELL!!!!
Right now, (in the last few weeks) the stock market has been running a "SALE" on stocks.
Remember the old adage... BUY LOW, SELL HIGH!
NOW is the time to BUY!
We all know that automobile sale advertisements are bald-faced lies, but to parrot the way they hawk their wares...
IT'S A YEAR END BLOWOUT!
LOWEST PRICE THIS YEAR!
NOW IS THE TIME TO BUY!
PRICES WILL NEVER BE LOWER!
HURRY, SALE ENDS SOON!
I called my Financial Adviser (Bernice Langel, of Langel & Associates) and asked her if she would do a quick "what if" calculation for me. "What if" someone had been investing about $10.00 per week in some sort of retirement savings account for the last 5 years, what would be the value of that savings plan just prior to this melt down and what is it worth now?
First off, if that $10 per week had been stuffed into a mattress instead of a savings plan (401K/IRA/Stock/etc.) it would not be worth as much as what had been hidden in the mattress! The buying power of that cash would be less due to inflation. That $10.00 per week for 5 years adds up to $2,600.00, but inflation would have made that amount worth only about $2,300.00 today... i.e.: what could have purchased for $2,300.00 5 years ago would now cost $2,600.00. So basically, the bed bugs got $300.00 of what was hid in the mattress.
Yet, that same $2,600.00 put into a savings account of some sort over the last 5 years would have been worth about $3,200.00 at the end of August this year.
The stock market began the serious fall in September, and at the end of September (just before the really serious drop last week) it would be worth only $2,800.00.
While it may have been a loss $400.00 during the month of September, the savings account would still be $200.00 ahead of what it would have been if it had been stuffed in the mattress!
She was working only with monthly averages, so calculations for what it will be worth after this latest serious drop will have to wait until the end of October when the monthly numbers are compiled, and granted, at the end of last Monday it would have been horrible, but it is better today, so by the end of the month there is no telling what it will be.
If any toy train dealer were to suddenly offer trains at 1/2 price most of us would be all over ourselves spending money getting as much stuff as we could!
If the next day they were to lower their prices even more, would you sell what you just bought?
NO!
You'd BUY some MORE!
WELL!!!!
Right now, (in the last few weeks) the stock market has been running a "SALE" on stocks.
Remember the old adage... BUY LOW, SELL HIGH!
NOW is the time to BUY!
We all know that automobile sale advertisements are bald-faced lies, but to parrot the way they hawk their wares...
IT'S A YEAR END BLOWOUT!
LOWEST PRICE THIS YEAR!
NOW IS THE TIME TO BUY!
PRICES WILL NEVER BE LOWER!
HURRY, SALE ENDS SOON!
