Create your own bailout – QNS.com

Create your own bailout

By Joseph Palumbo III

Where is our bailout? Your credit cards are near being maxed out. You are holding off on a new car. You vomit at the thought of reviewing your 401(k) and where your retirement stands.

In speaking with Queens financial consultants, 2009 is the year of a brave new financial world. But how will we get through it when no one is going to hand us money?

The old rule says to invest in stocks. Our new attitude is to do so if you have an iron stomach. The market is far from stabilized and you can still get stung short− to mid−term. Stocks are a good way to show a return over time, but invest in more fixed−income investments and buy real estate.

Buy real estate because you can purchase property at garage sale prices. Invest out of state if the deal is right. Property may not be as liquid as stocks, but it shows a better overall return and appreciates. If your house is down now, it will come back; if you lost money in the market, it is lost. The odds of real estate coming back are greater than the stock market.

Max out your 401(k). One of the most important ways to gain wealth is to pay yourself first through an automatic deduction. Now is the time to contribute more because stock prices are low and your investments are purchased at cheaper buy−in prices.

Some people think canceling their credit cards will increase their credit score. Not true. Have unused credit cards to use, but keep them unused. Thirty percent of your credit score is determined by how much of your accessible credit you are using.

So How’s Business regarding your bailout? The common−sense approach is to buy something on sale. Both stocks for your 401(k) and real estate as an investment or place to live can be worthwhile and profitable over time. None of this is a perfect science, but possibly a solid game plan to follow.

Reach Joe Palumbo at 516−248−0256 or jp@camelotlimo.com.

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