Where To Invest

The economy is slumping and no market is looking good, whether it be the stock market, housing market, or the prices you pay at the grocery store. But there are some things you can do to take advantage of the situation and prepare yourself for the future. Here are some tips:

Pay down debt with your refund and stimulus check

Average tax refunds are over $2000 and the tax stimulus plan will put hundreds of dollars into ordinary American's pockets. The government intended for you to spend this money to stimulate the economy. Don't be tempted... Pay off your high interest debt. A majority of Americans have CC debt, pay it off now. Don't even save some of your refund to buy a gift... lower your debt. The government won't always be this friendly and hand money back to you.

Take advantage of life insurance

Term life insurance has been declining in price over the last decade, 33% for some categories. For as little as $30/month you can get a 20 year $500,000 policy.

Don't take a loan out of your 401k

Let's not be stupid here during the recession. 18% of people currently have a loan out of their 401k. The problem with taking a loan out of your 401k is that you pull out pretax dollars, but pay it back with money you've already paid taxes on. When you withdraw the money at retirement, you're essentially double taxed.

Invest Long Term - Invest in the Stock Market

The best advice I could give here. Sure the market is volatile and gaining and dropping hundreds of points a day. But the market is correcting and at a low point right now. Haven't you ever heard "Buy low and sell high?" The best time to buy is when the market is at the low point. Is that low point right now, know one knows for sure, probably not. But it's definitely going to go back up given time. With that said, invest for 10-20-30 years down the road. Diversify in international stocks and various indexes.

Author: Joshua Saunders
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