Tuesday, October 7, 2008
Unless you've been hiding under a rock the past month, every media outlet you turn to is talking about what sad shape the American economy is in, and that's a good thing. It's a good thing because lots of people who don't normally have time to stomach American politics as usual are paying attention to what all the names on the ballots are actually up to. Before the vote on the $700 billion bailout, representatives were receiving record numbers of complaints and questions from constituents like never before.
If you're one of the many who don't talk about the mysterious "Fed", short-term securities, or toxic debt in daily conversation, this is a good opportunity to find some basic information to help you make sound financial decisions in the middle of all this doom and gloom. I recommend these three great resources:
www.federalreserveeducation.org/fed101 is a great resource to find out what the Fed is all about. This website covers in detail the history, organization, powers, and responsibilities of the Federal Reserve Bank, and even includes educational literature for children.
The Total Money Makeover, by Dave Ramsey, is the best book on personal finance I've ever read. Ramsey covers how to get out of debt, pay for an education, savings and investments, real estate, and retirement, strung together by a common theme, "debt is dumb and cash is king". Included in the book are plenty of forms to help you get your financial situation down on paper and how to organize and plan your way to living debt-free.
The First Book of Investing: An Absolute Beginner's Guide to Building Wealth Safely by Samuel Case is an excellent resource for those who don't know a mutual fund from a market share and have never unfolded a Wall St. Journal. Case begins by helping the reader discover his/her attitudes toward money, how those attitudes have developed, and how to overcome any bad emotional connections with money and see it for what it is, a tool. Case then explores the world of investments, always taking time to explain complicated terminology, and stressing to the reader the levels of risk they may encounter. Also, at the end of each chapter Case provides a list of resources for further reading on each kind of investment.