Some towns are taking note and learning how to survive a depression by using old tricks from history’s playbook. When people have no ready cash on hand, some towns are trying to stimulate commerce using some dollar alternatives that work in local areas. One of these alternatives is scrip, local currencies that can be used to trade within a select group of merchants. Another alternative that can work is a time bank. Instead of using dollars, people trade hours for different services. Each of these probably can’t uphold an economy all by themselves, however they do support additional ways to create commerce when cash is in short supply.

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Right now, inflation is not a worry. Interest rates are flat, and the Federal Reserve does not plan to raise them until later, once the economic engine steams up. However, once that happens, what can we expect? No one really knows, although one maxim in personal finance is almost always true: Today’s dollars are worth more than tomorrow’s dollars. Especially when inflation hits, the buying power of your dollar drops, and it takes more dollars to buy the same goods you bought earlier in the year for less. With current salaries decreasing, it’s important to put what’s left into assets that will appreciate over time. While it may seem a strange thing to do in a bad economy, the present economic distress presents an opportunity for consumers that won’t be available in the future by buying assets at discounted prices that will appreciate as inflation starts to rise. (more…)

With the need to get money into the hands of the average consumer, the minimum wage has been hike up to $7.25 from $6.55. Some states already had similar minimum wage laws, but the Federal law now makes the minimum wage hike across the board. The celebration for workers, particularly those using part time jobs or retail services jobs to survive this recession, may be short-lived. Businesses may eventually have the last word on what the market can support for a wage increase that allows them to continue doing business despite increased labor costs. If they see that the increase in the minimum wage is impacting their already meager returns, they may opt to layoff even more workers, or at least cut back hours for some. On the other hand, there is a real possibility that if the minimum wage hike increases the confidence in the consumer marketplace, it can help to increase business and have a positive effect too. (more…)

When it seems like everywhere you turn there is more bad news about the state of the economy, more people are becoming quite concerned about finding ways to keep their money safe. Even those who may have been big risk takers in the stock market have scaled back for fear that another dip in the stock market may cost them everything they have. With all the bank failures and bailouts that the economy has suffered in such a short period of time, it is no wonder why so many people have become so concerned. While you could always hide your money under your mattress, here are some simple tips that can help you keep your money safe no matter what the economy may throw at you. (more…)

Prices of goods and services fluctuate tremendously, but it is to be expected as more and more of us begin to prosper. Gas prices have been up and down often this year, with the current trend toward higher prices across the country. Many Americans who know how to create a budget have gotten used to lower prices as we have seen them for most of 2009, with the lowest point just before this year began. Gas prices start to increase as the price of crude oil goes up. Investors are looking to protect themselves from the weakening dollar as buying oil can help prop the value up of the dollar. As demand increases for oil, so does the price and since gas is made of over 55% oil, so do gas prices. It is an obvious indicator, as you see oil prices increase, you will definitely see increases in gas prices across the nation. (more…)

Business owners are having a tough time getting a conventional small business loan. Even credit cards, which have been used by business owners to help fund business expenses have cut their credit limits, making it hard to find funding. Many are turning to asset based lending companies as a form of alternative financing. These types of lenders include merchant cash advance lenders, banks making secured loans with direct assets, and factors. The costs to engage this lending may be higher, but in a time when some credit is better than no credit, the rate of financing in alternative asset-based loans has increased 8% in 2008, as explained by the Commercial Finance Association. (more…)

Every year, the government provides a cost of living raise to help with the growing cost of inflation. The amount of increase is based on a series of factors. People can look at the Consumer Price Index to get an idea of what each year’s increase would be but over the years, the average has been 3.2% to 3.9%. While it would be nice to see more especially with the tough economic crisis, many people are grateful for anything. Interestingly, some governmental officials have opted out of a raise but people on Social Security and those working for the Federal Government have been provided with a decent 2009 cost of living raise. (more…)

In an effort to take gas-guzzling vehicles off the road, the government has initiated a program that will give new car buyers a monetary incentive to trade in their older, less fuel efficient cars and trucks. Known affectionately in the media as the Cash for Clunkers program, the Car Allowance Rebate System, or CARS incentive program, will allow a $3500 to $4500 payday to be put into the pockets of those who wish to help the government make traveling greener. By reducing the number of less fuel efficient vehicles on the road, we can save money and help the environment in general by reducing the consumption of fossil fuels.  (more…)

When it comes to the term ‘depression’, there is still argument going on about whether the term applies to our current economic situation. While semantics are a fun way to debate away the time, the fact is that whatever you call it, the economy is in crisis and if this is not a depression, one is certainly a possibility. (more…)

According to a recent report on the legendary investor, Warren Buffet, it’s time to purchase stock in American companies. The method behind what might seem like a bout of madness for the aging investor is that when the total market value of US stocks drops to a level between 70%-80% of American Gross National Product, it’s time to buy. 

Buffet’s fantastic success as an investor is based, in part, on his practice of seeking out undervalued companies to invest in. He soon moved from turning over a profit through stocks in a company to purchasing undervalued companies and bringing the most-successful ones together into the Berkshire-Hathaway brand. But purchasing a struggling company is well out of the average investor’s financial reach. The only remaining option is to purchase a portion of that company as stock. 

It could well be said that nearly every company in the US that has the resources to continue operations is currently undervalued. With the total value of the stock market reaching the 76% mark at best, perhaps Buffet is right and its time to pull some money from under that mattress and invest it. 

Perhaps it comes down to a matter of faith. Once you decide whether or not you believe the economy will recover, the question of investing gains simplicity. If you cannot afford to lose a dime, then just like always, you should keep your money in a safe place and not worry about the stock market. However, if you have some cash on hand and want to research the possibility of creating genuine long-term wealth, it’s a great time to check out the stock market.  photo credit: ArtemFinland