Financial Friday: Stock Market

With the stock market falling nearly 7% yesterday, many of you may be wondering what the financial world is coming to and many of you might be scared. Well, I'm here to tell you that there are things we can do about it and we don't have to be frightened.

First things first, my family lives a debt free life (with the exception of our mortgage) and things couldn't be better. In fact, because we live within our means and save what we can each month, the so called "mortgage and stock market crisis" don't have too big of an affect on us. Yeah sure gas prices have gone up some, but they've gone down some too. Sure, the stock market has been rising and falling like a roller coaster, but that's what the stock market does. The truth of the matter is that because we have chosen to live our lives debt free, lived within our means, become frugal, saved money, and taken steps to educate ourselves things are actually the best for us that they have ever been.

Now my family does invest a little, and I mean a little, in mutual funds for retirement. So I have seen some of our money shrink in size, but it's still there. When I purchased a mutual fund, I did so with an understanding of how the market works and an awareness that sometimes my shares would decrease in value, but they will also increase in value at other times. I followed Dave Ramsey's plan by diversifying my funds (which include several mutual funds and good old fashion bank savings accounts too) and by keeping an emergency fund should an extreme situation arise. By doing this, I took steps to ensure that I would be protected during times when the stock market was down.

As of lately, I've actually excited about falling stock prices because that means that I am now able to buy stocks (through our mutual funds) at a discount. What does that mean? It basically means that I am able to buy more shares, at a cheaper rate, than I could previously. The reason why I'm excited is because when the stock market goes back up (and it will, it may take a while but it will), my shares that I bought at a discount will be worth much more than I paid for them. It's important to remember that over the long run, the majority of mutual funds will make money; it's just hard to keep that in mind if you are checking your account balance everyday. Also remember, that any money you invest in the stock market or in mutual funds should be money that you do not intend on using for at least 5-10 years, which is yet another means of protecting yourself from the volatility of the market.

Now you may be thinking, "what can I do about the current financial situation?" Well, let me tell you there is lots that you & I, the every day American, can do and here is what I suggest:

1. Promote self responsibility within your own home and community. We as a society need to stop blaming the government for everything that goes wrong financially in our lives. The government didn't make you buy a house you couldn't afford, the government didn't make you live outside your means, the government didn't make you buy a larger TV when you should have been paying your bills... Is this really how we want our kids to be raised, thinking everything should be a hand out and nothing should be earned through hard work and sacrifice?
2. Why should the government help us, when we are not even willing to help ourselves? Believe it or not, not everything in this country is a right. Things that were once thought of as items earned after hard work and time are now simply expected to be given to us because we live in this county. Well, I for one am for the traditional way of working and earning my living, saving my pennies, and counting on no one else but my family and the Lord Jesus Christ.
3. Look to your family and church for answers and help before looking towards the government. Money and the government are not the answer to all life's problems. Some things are deeper than what is in this physical world. I know for a fact that if I needed a cup of sugar my neighbor would gladly lend it to me. Why, because I would in turn lend it to them. This is what friends, fellowship, and close netted communities are all about.
4. Write your congressman, your senator, your representative. These are suppose to politicians representing us, the people, and with the recent $700+ billion bailout plan passed, I don't think they are getting our message.
5. Finally, make sure to vote in this upcoming election. Many of you may think you are struggling now, but just you wait. If we let far left liberals take control of the executive and legislative branch where have all the checks and balances gone? I don't know about you, but I am not up for the idea of a socialist society being run by a government stealing from the rich to give to the poor. I'm sorry, but if I work hard for my living and work hard for my family to prosper then I believe it should be my choice to continue to donate too charities, rather than have a politician tell me I have to.

Some of my thoughts ideas may be upsetting to some of you, so I apologize; however, this is how I feel. I think our country is headed for doom and gloom if we do not do something about while we still have the ability to do so.