New Link - Try it out!

Here's a link to a handy wage calculator, and you can use it for US currency or UK. On the left side you can click on whether you want to enter an hourly wage to base your calculations on or calculate your take home pay based on an annual salary. Enter your filing status and deductions and you can quickly see a good estimate of what taxes you will have withheld and what your daily, weekly, monthly take home will be. I have added this link to the "favorite links" at the bottom of the blog so you can come back and use it any time. Let me know if you have other links we might all find useful.

http://us.thesalarycalculator.co.uk/hourly.php

Not in a recession yet, but this may be worse than you think

Interesting information. At present, with the decline in housing values at around 8.4% nationally, 13.5% of homeowners now owe more than their homes are worth. But this is happening with only with an 8.4% fall in the housing market. What happens with a 15% or 30% fall? Goldman-Sachs, now praised for avoiding the pitfalls of sub-prime lending, projects that this won't bottom out until we reach 15% or even 30%. First American Finance (NYSE:FAF) calculated the effect on homeowners if housing prices started falling, using data from December 2006 (and they certainly have started falling, haven't they?) Brace yourself! These numbers can be shocking. Already at 8.4%, what would happen if the prices drop to 15%? At that po8int about 21% of homeowners would be "upside down" in their mortgages. And to satisfy those who believe it could continue to a 30% decline in home prices - that would leave 39% of homeowners owing more than their homes are worth. Now, you may think that this will not affect you because you have built a lot of equity in your home. Or perhaps your mortgage is paid off. Good for you! Maybe you don't have a Adjustable Rate Mortgage. Good for you again!! But, you will still be hit with the effects of this crunch in one way or another. You see, what frankly scares a lot of lenders at this point is that it might become more attractive, and even financially less damaging, for some of these folks caught up in the squeeze to simply walk away from their mortgages. When and if this happens is large numbers, credit of any kind for anyone will become far more difficult to obtain, and prices of everything could go thru the roof. In addition, the impact on your home value, when so many homes are being seized in foreclosures, may shock you and alter your own financial planning significantly. It has already become far less attractive for many people to own a home. In fact, the new reality maybe that home ownership is not going to be the American dream that it once was. So watch the news, keep your powder dry, and stay flexible. None of us will escape the effects of this trend, recession or not. That's my opinion. What's yours?

Treatment without diagnosis is malpractice

This is not a political blog and it will not turn into one. But perhaps you would like to know a bit more about this recession we keep hearing about and reading about in the media. We have not been in a recession ...yet. Technically, Bush was correct, though many people don't want to believe that for one reason or another. A recession can only be properly identified after two consecutive quarters when there has been a decline in the GDP. Jul-Sept the economy grew at a 4.6% pace. That slowed to a .4% increase in the Oct-Dec quarter, but still it was an increase, not a decrease. Based on other economic indicators, there are difficult economic times upon us, but not a recession. If we find in mid to late April that the first quarter was a negative, then we still can't declare a recession until a second consecutive quarter of decline. That's the accurate answer to the question that the media seems to have already answered, perhaps driving the nail deeper before the fact rather than being content to simply report what has occurred. Typical. I did a little research in the wee hours of the morning. Warren Buffet says we are in a recession. He's wrong. Sometime in July we might find that the first two quarters of 2008 were the beginning of a recession, but before then it's just hype and hysteria. It's like telling someone they have terminal cancer before any lab results have come back. You will certainly get their attention, just as all this media talk about recession has. But let's not create the news. Do you agree?

Recession - What's Happening?

What is the trigger?

There can be no doubt that we are in the midst of some very troublesome economic times. The meltdown of the housing industry in the wake of all the greedy sub-prime lending coupled with $100 a barrel oil have put the U.S. economy in a real tizzy. Worldwide, markets are being affected by the weakening of the U.S. dollar, and there is no shortage of headlines to stir up public emotions in every major city. The problem is serious enough without the chicken little “sky is falling” headlines. But when I read the leading article headers on three online news sources before 6am this morning and they all were trumpeting the drop of every major foreign market over the three-day weekend, they seemed to me to be a sort of guarantee of panic among investors here as well, as soon as the markets opened today. Investing is so sensitive to emotion that national economies are vulnerable to such media hype. Today was a disaster for the markets in China, and that will have a serious effect on our markets on Wednesday, no doubt. People have their narrow little comfort zone and it doesn’t take much to discomfort them. But it seems clear to me that too much of what drives us is fear, not facts. Headlines, not hard evidence. You see, when the headlines around the world hammer on the topic of the housing crunch, foreign investors get jittery. When they get jittery they steer investments away from the U.S. markets, the balance of trade becomes further unbalanced, and the dollar weakens. The weakened dollar causes a whole cascade of other problems including the impact on American tourists abroad paying more than they imagined for their vacations, and that results in less foreign travel. We really do now have a global economy and just like a mobile, if you touch one part of it, the whole thing moves. What is a little scarey is that in recent times it seems that you only have to look like you might touch it, and the whole thing starts to move.

We know that it is the institutional investor that drives the markets, right? Not the individual trying to eke out another point or two from his IRA or his 401K. But I’m beginning to believe that panic stirred up by “worst case scenario” reporting can galvanize a large body of private investors and they can become a force in the financial markets too. I don’t believe that a single pension fund manager or other institutional investor with a portfolio of $500 million to manipulate is going to have much more influence on market trends than 50,000 individuals all moving around their $10,000, or 20,000 trying to decide where to put their $25,000 401K funds. The point is that if enough momentum develops based on panic created by headlines, $500 million dollars can create a pretty good shift, and I think that is what we are beginning to see repeated over and over, day after day. Abroad, the media is telling foreign investors that the U.S. is headed for a serious recession and they better protect themselves. Not too unlike my whole generation sitting in the hallways of our elementary schools with our heads covered by our arms because we were all sure that at any moment a nuclear bomb was going to land on our heads. Now, I’m not the brightest bulb in the chandelier, but I do know that sitting on the floor with my hands over my ears is not going to offer much protection from a nuclear blast. But since we seem to now have a very large herd of panicky investors pushing us to the brink of recession, we do need to have a plan for protecting our retirement finances. Tomorrow we’ll talk about how to protect your 401K, or at least how to reduce your losses in these turbulent times.

Best Airfares?

When you plan your next air travel, don't settle for the best fare offered on Orbitz or Travelocity, or any of the other search sites. Use them for research. Find the flights and the fares that best suit your needs, write down all the information, and then go directly to the airlines web site and look up the specific flights there. Often you will save another $10 to $15 or more there. The reason is that these popular search sites derive their income from the airlines. The airline pays them for each ticket they sell. That means the airline must get that additional money from ...YOU!. So if XXXXXXX says your best fare to Minneapolis on Feb 12 at 9am will be $273 on WonderJet, go to the WonderJet website and look up that same flight, date and time. You might be surprised. Sure, it may only be a small savings, but you'll have enough to spring for pizza with the grandkids. One word of caution - DO NOT call the airlines to book your flight. Speaking with a real live ticket agent costs money. This extra savings only works online!