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What you need to know to cope during downturn
The old-fashioned common sense of our grandparents still stands as a reliable guide to money. Whether you are digging out of debt or managing substantial assets, the principles are similar.
Don’t compete with Joneses
Comparing and competing with others can lead to financial overextension in which all our income disappears every month to support too much house, multiple vehicles and premium coffee. Many things that you see others enjoying are not paid for—they may be up to their ears in debt.
The advertising-driven consumerism of American society has lured millions of us into confusing our needs with our wants. Consider that most new purchases trade potentially income-producing assets (money you can invest) for income-draining liabilities (new car, vacation home).
Resist the temptation of false necessities and cultivate the freedom of contentment. Enough really is enough. Possessions do not bring peace or financial independence. Pare down and clarify what you really value. If your spending expands as your income expands, you can miss a great opportunity to build wealth.
Get out, stay out of debt
Ben Franklin said that “he who has four but spends five has no need of a purse." No matter how much money you make, if you are spending more, you are living in debt rather than building wealth.
Imagine pouring water into a bucket with so many holes that it runs our faster than you can put it in. Plug the holes. Analyze your spending—are the culprits new clothes or dinners out? Do whatever it takes to control them—stay out of stores, eat at home, etc. Shred the credit card offers, choose one card to use carefully, cut up the others, and pay them off, the one with smallest balance first, until you are debt-free. Then pay your credit card bill in full every month—no excuses.
Live below your means
Spend less than you make: Live not just within the edge of your means, but well below your means. Otherwise you will not have surplus to save and invest wisely.
Everyone has enough to save. If your income were cut by 10 percent you would find a way to adjust. So pay yourself 10-to-20 percent every month, preferably by direct deposit into an investment account, so that it is automatic and doesn’t require making a choice or remembering. The investment vehicle could be your company’s 401(k) or an account with a brokerage firm, for example; you could split your automatic investments between two accounts.
Diversify
Diversification is the key to preserving your invested assets. A table with four legs will stand, but a table with fewer may not. Picking one or two stocks or funds is risky.
Diversification does not mean parking money in multiple accounts at multiple firms. That leads to an uncoordinated strategy and a lack of oversight. If your investments are the players on a team and you are the owner, you still need a coach. Find a good financial advisor—most do not charge to consult with you.
Take care of yourself
Your goal is your own eventual financial independence. This means not being dependent on a job, a spouse, an inheritance, a company retirement plan or your children for financial sustenance. Financial independence occurs when your investment income meets or exceeds your monthly expenses. Achieving this takes time, but leads to psychological freedom. It's a slow, gradual process built on the cumulative effects of your determined long-term choices. Forget shortcuts and trying to get rich quickly—be content to become wealthy over time. Disciplined patience and a fine-tuned will are the tools of wealth-building
Be a good steward
With wealth, comes great responsibility. It must be managed well and that requires education, attention, time and effort. Even a fortune can be lost with poor management and foolish lack of attention. And with wealth, comes great opportunity. It is a delightful experience to have sufficient surplus to give charitably, to provide for others—whether family members or the poor. We have all learned from Mr. Scrooge the misery of hoarding and the joy of giving.
Money is a powerful tool than can be frittered away, wasted on temporary satisfactions, or used wisely for a long-lasting legacy. Cultivate uncommon common sense in matters of finance to set your course on the ultimately more satisfying path.
Editor’s note: This column is provided by Morgan Stanley. Systematic investing and diversification do not assure a profit or protect against loss in declining financial markets.
This article is published for general information purposes and is not an offer or a solicitation to sell or buy any securities or commodities. Investments and services are offered through Morgan Stanley & Co. Incorporated, member SIPC.
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Transformations
What comes to mind when you think of the word, “Transformation”?Do you have fantastic thoughts of people or things changing into something amazing for example, Clark Kent turning into Superman or Bruce Banner becoming the Incredible Hulk or possibly something a little more down to earth like a caterpillar miraculously changing into the beautiful butterfly?
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GRADY COUNTY FAIR RESULTS
Plants
Potted Plants
(Several varieties combined)
First: (Adult) Ann O'Bar
Second: (Adult) Joyce Riker
Third: (Adult) Jallane Link -
AROUND THE AREA
SEPTEMBER 2
Poetry Reading
• When: Sept. 2, 7 p.m.
• Where: Eduardo’s Mexican Restaurant, Private Room, 3127 S. 4th St., Chickasha
• Details: Featured Poet is Carol Hamilton, writer, storyteller and Poet Laureate of Oklahoma 1995-97Hamilton’s website is www.carolhamilton.org. There is no admission fee to attend the Poetry Reading, and refreshments are available for purchase. For more information, contact Rockford Johnson, 224-0160 or 317-7506. -
Duncan nips Chicks for straight-game win
Duncan got their eighth match win of the season Tuesday, beating Nancy Waters’ Lady Chicks in straight games at the Activity Center.
The Chicks looked like they had a little hangover from Monday night’s tough road loss at Tecumseh, coming out flat again and dropping their first two games by identical 25-17 scores.
They came out firing on all eight cylinders for game three, running out to a 15-9 lead on the strength of a 7-0 run with Shelby Crosley serving, but the Demons battled back to tie it late and the Chicks let it slip away, 25-21. -
STATE SPORTS BRIEFS
NORMAN (AP) — Oklahoma coach Bob Stoops has named walk-on Patrick O'Hara as the starting place-kicker for the seventh-ranked Sooners.
Stoops said on his radio show Tuesday night that O'Hara won the competition with Jimmy Stevens, freshman Michael Hunnicutt and redshirt freshman Bryce Easley. -
OSU's Gundy still learning on job
STILLWATER (AP) — Mike Gundy hasn't lost his love for dialing up the right play to keep Oklahoma State's offense purring along.
That passion, which he has called the most enjoyable part of his job as head coach, was bred into him as an offensive coordinator. And he is a former starting quarterback for the Cowboys. -
Whimsical metal work, jewelry part of big art show at USAO
A showing of whimsical metal work and jewelry is scheduled to be on display at the University of Science and Arts of Oklahoma during Helen’s Show Sept. 10-Oct 1.
The show will feature the work of USAO graduate Helen Shafer. The exhibition will be open daily during normal business hours in the Davis Hall Third Floor Art Gallery on the USAO campus. The show is free and open to the public. An opening reception is scheduled Sept. 10 at 6 p.m. in the gallery. -
High-speed chase lands 1 in jail
A high-speed motorcycle chase down Highway 81 last Wednesday landed a Ninnekah man in jail and a felony charge of eluding a police officer.
Court records show that James William Hutchins, 21, blew by Oklahoma Highway Patrol Trooper Timothy Parrish at U.S. Highway 81 and County Road 1460 and was clocked going 144 miles per hour in a posted 70 miles per hour zone.
Parrish reported that he was sitting stationary at that location at about 3:45 p.m. on Aug. 25 when he observed a red motorcycle traveling southbound. He engaged his emergency lights and siren and pulled onto the roadway behind the Triumph motorcycle. -
5 inmates denied parole
Parole was recently denied for five Grady County inmates serving sentences with the Oklahoma Department of Corrections.
The following individuals were denied at the August Pardon and Parole Board meeting:
• Jeremiah Daniel Cline, who is serving a five-year sentence for distribution of a controlled dangerous substance and a five-year sentence for possession of a controlled dangerous substance, began his sentence in August 2008.
• Warren P. Diego, who is serving a 15-year sentence (10 years PTS) for lewd molestation, began his sentence in February 2009. -
Judge recuses herself from pharmacy case
OKLAHOMA CITY (AP) — A state district judge has stepped aside from the first-degree murder trial of a pharmacist accused in the fatal shooting of an unconscious would-be robber.
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Transformations
