The following was written yesterday by financial guru Dave Ramsey. It's information well worth repeating.
By the way, did you know that I am Dave's Endorsed Local Provider (ELP) for real estate in Northern Kentucky?
In case you haven't noticed (which means you've been living under a rock on the moon), there have been a lot of bad reports about the economy when you turn on the evening news or read the paper. Multi-billion-dollar bailouts. Investment banks being bought. Subprime loans being paid for with taxpayer money. Insurance companies needing someone to cover them. It's bad news, all right ... but not the end of the world.
Sit down, get a glass of water, and take a chill pill. The economy isn't going to collapse; not even close. If things were to completely bottom out and everybody went bankrupt, that means there would be no Microsoft, Nike, Coca-Cola, Home Depot, Hewlett Packard, Procter & Gamble, Disney and Macy's. And that's just for starters. Do you honestly think that the entire American economy and every business within it will vanish?
Let's tackle a few things. First off, ratings drive the news. It's a sad thing, but not as many people tune it to watch a little girl rescue a homeless puppy as they will to watch news of a market "collapse". If it's bad news, they'll do a report it at 6 and 10 with reporters on the street, and splash it all over their websites. The news networks are competing to get you to watch, so they fill the broadcast with drama. Don't let them trick you into thinking it's Doomsday.
On that note, don't pull any money out of investments that you have. When you jump out of a roller coaster before it stops, you get hurt. If you put $10,000 into a mutual fund and it's now worth $8,000, the worst thing you can do is pull it out. Let the market recover over the next few months and years, and your $8,000 will be worth what you put into it and then some. That's the key to investing; it's long term!
If the Dow Jones Industrial Average starts the week at 10,000 and ends at 9,990, and rose and fell thousands of points in between, you ended up right where you started from. Why get worked up over that?
When things look bad, remember 2 things: The media will blow things out of proportion to get you to watch, and YOU determine how good or bad things are for you. Each time you pay off a debt in your debt snowball, that's more money that you have coming in to your household. When you work a little overtime to pay cash for your vacation or that new TV, it's not Washington that solves your problems ... it's you! Don't let anyone fool you into thinking differently.
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