Suze Orman is a very well respected financial advisor who happens to be a motivational speaker, host of her television show on CNBC, and author of 6 consecutive New York Times Best Sellers. She was also selected by Time magazine as one of the TIME 100, The World’s Most Influential People. So if anyone understand finances, it would be her. She has compiled a list of top 10 money tips for 2010, that I would like to share with you all. I certainly took away a thing or two from this helpful article. Enjoy!
1. With interest rates so low, where’s the best place to park my cash?
Orman: I’d look for the highest yielding money market, deposit account, savings account, something that has insurance behind it and just let my money float there just to see what happens in the future.
2. Do you have any tips on 401(k)s or IRAs?
Orman: In 2010, the greatest thing that is happening is that nobody is excluded anymore from converting to a Roth IRA. All income qualifications have been thrown out the window. Next year will be the time that you want to convert or start converting into a Roth IRA.
3. How should I prepare for new credit card regulations taking effect in February?
Orman: The best thing is to transfer to a credit card company with a credit union. These companies make it their goal to please union members rather than shareholders. But don’t wait until February when the regulations change. Currently, you have major credit card companies that are increasing the interest rates on many of their card holders to 30 percent, increasing the minimum payments from 2 to 5 percent. By the time the card act passes, a lot of people who’ve already had serious damage done to them, it’s going to be too late.
4. What is the best strategy for managing credit card debt?
Orman: Let’s go back to cash where we start to pay for things like in the good old days. Use credit cards as little possible, and use actual, physical cash for every day items such as groceries. Start becoming reliant on the money you have, what you see is what you get. Get back in touch with your money.
5. I have an extra $1,000 and no debt. What should I do with it?
Orman: Anything can happen at any time. The best thing you can do for yourself is to have an eight-month emergency fund. Assuming you have all your bases covered, you should look at opening a retirement fund. Your number one priority in your life is going to be to be able to pay your bills later on in life when you no longer have a paycheck coming in.
6. Will the stock market continue to be volatile in 2010?
Orman: When something has gone up 60 percent, which [the stock market] has since March, I would be very skeptical here, and I would watch things very closely. Don’t invest in this market unless you’re not going to need your money back for at least 10 years.
7. Will 2010 be a good time to buy a home?
Orman: If you can take advantage of the $8,000 tax credit the government is offering until next year, have 20 percent to put down, have an eight-month emergency fund, and can easily afford payments on a 30-year fixed rate mortgage, and can find a steal of a deal, I think now is a perfect time to be purchasing a home.
8. Will morgtgage rates rise in 2010? Should I refinance my mortgage again?
Orman: I think right now is a fabulous time to refinance your mortgage again. But the question is, will you be staying in that home long enough for you to recoup the closing cost of what it’s going to take you to refinance the savings you’re going to have from your new mortgage versus your old? It makes no sense to spend thousands of dollars in closing costs to refinance your house to save hundreds per month, and then move four months later.
9. What industries will be best for job-seekers to find careers in?
Orman: You should go into a field where you really want to spend the rest of your life. If you can just do what you want to do and you can be the best at what you want to do, better than anybody else out there, you will create a job for yourself. Just because there’s a job market out there this month or next year in an area, it doesn’t mean it will be there a few years from now – look at the car industry.
10. Layoffs are common in this downturn. How can I prepare myself financially in case I’m laid off?
Orman: You used to be able to rely on credit cards, but since the credit industry has crashed and in many cases companies close credit lines once debt is paid off, you may be on your own. The first place that you get money, obviously, would be your emergency fund. You can also take money out of your original contribution to your Roth IRA. I would not take money out of a 401(k) plan, as 401(k) plans have protections against bankruptcy in all circumstances.
*** Article courtesy of www.boston.com ***
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{ 6 comments… read them below or add one }
love Suze! she gives good advice but I sometimes wonder if she invests like this. for some reason, I question it especially when she said keep a car for 10 years and she has. I’m like I know you’re not driving around like that
Good points within your write-up, you have got an interesting blog here. Thanks for the ideas.
wow, great advice. thanks for posting.
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