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How to Protect Your Nest Egg From Financial Downturns
Special to The Truth
From increased
unemployment to commonplace home foreclosures, it’s hard to
forget the devastating effects of the 2008 financial crisis
and the worst recession since the Great Depression.
While the hope is that
regulatory bodies and bureaus created in the crisis’ wake
will help prevent a recurrence, some experts say these
reforms were shaped by the same entities responsible for the
crisis -- but that citizens have the power to chart a
different course for their own economic futures.
“Whether policies were
formed with selfless or selfish intentions, you don’t need
to quietly agree to them, especially if they are misguided.
We have a system that can respond to the efforts of
individual citizens,” says Jay W. Richards, Distinguished
Fellow at the Institute for Faith, Work & Economics and
author of the new book, Infiltrated: How to Stop the
Insiders and Activists Who Are Exploiting the Financial
Crisis to Control Our Lives and Our Fortunes.
In his book, Richards
suggests that complacency on the part of ordinary citizens
will lead to more serious financial disasters. He encourages
readers to take steps to prevent future crises and protect
their own nest eggs:
• Get Informed: “Many
culpable entities used the crisis fallout to lay blame
elsewhere and increase their own power,” says Richards. “But
with knowledge, prudence and intelligent action, history
won’t have to repeat itself.”
“The only way to prevent
deception and cynicism during future crises is for ordinary
citizens to get informed and outraged enough to change our
fiscal and regulatory trajectory,” says Richards.
• Take Control: Online
educational resources can help you get informed. To brush up
on basic financial skills, visit MyMoney.gov, a site created
by the Financial Literacy and Education Commission with
information on how to save, what to consider when borrowing,
and how to make a budget.
• Diversify: Experts
recommend balancing different types of assets, such as cash,
stocks, bonds and commodities. Having different types of
investments means you might be better shielded from economic
crises, because some assets might fall while others might
rise.
• Don’t Rely on Your Home:
If the recession taught people anything, it’s not to rely
too much on home equity for retirement. Many think their
homes are more valuable than they really are or will be when
it’s time to retire.
• Be Philanthropic: “Those
concerned about the future should be the first to grow
effective local organizations providing real safety nets for
the destitute,” says Richards, who believes philanthropy is
a moral responsibility best left to communities.
• Think of the Future:
When a consumer borrows, she or he alone bears the debt.
However, when the government over-spends for short term
goals, future generations are expected to foot some, or all,
of the bill. “This is immoral and no fancy economic theory
can change that,” asserts Richards.
• Be Civic: Your vote
matters to politicians. Call, write and visit them to
express concerns over economic regulations you don’t
support.
More information about
Infiltrated can be found at www.InfiltratedTheBook.com.
Remember, you don’t need a
PhD in economics to stay informed.
Courtesy StatePoint
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