September 2008

10 Ways to Protect Your Finances From the Crisis

by Brett Arends
Here are ten things that this financial panic means for you.

1. Check that your bank accounts are federally insured. The Federal Deposit Insurance Corporation (FDIC) guarantees deposits up to $100,000 per person. If you have to hold more than that, spread it across multiple banks. As a taxpayer you are paying for this insurance. Use it.

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2. Make sure your brokerage accounts are federally insured, too. The Securities Investor Protection Corporation (SIPC) guarantees you at places like Lehman Brothers, Merrill Lynch, E-Trade and the like up to $500,000, including $100,000 worth of cash. The same rules apply: If you have more to invest, spread it across multiple firms. Note: The SIPC is only there to make sure you get your shares and bonds back if a brokerage fails. It does not, obviously, guarantee those investments’ value.

3. Put money in thy purse. If this market and this economy get any tougher, cash isn’t just going to be king any more. It’s going to be king, queen, emperor, lord high chamberlain, and the whole court – including the royal cat and crazy prince Ruprecht locked in the attic. The easiest way to make or find a buck is to save it. So take an axe to those family budgets. The restaurant meals. The Super Duper Everything Cable package. The rip-off checking account with the high fees and low interest. It’s all costing you.

4. Set up a home equity line of credit while you still can. I usually don’t like advising people to take on more debt, but if access to ready cash might be a life saver it’s best to line it up. That’s especially true if you are worried about your job. Credit is already tight, and it may get a lot tighter still.

5. Refinance your mortgage. The panic on Wall Street just caused a collapse in the interest rate on long-term US Treasury bonds, as lots of investors rushed there for safety. And that usually leads to a fall in long-term mortgage rates.

6. Stop pulling a Monty Python when it comes to your worst investments. If you ever saw John Cleese and Michael Palin perform their famous skit about the dead parrot, you know exactly what I mean. No, your Fannie Mae shares aren’t “resting.” They’re lying at the bottom of the cage with their feet in the air. What more do you need to know? So stop waiting for them to “recover” before sorting out your portfolio.

7. Don’t panic. Journalists, like markets, tend to move in herds. And by the nature of their jobs they write about the plane that crashes instead of the thousands that land safely. Remember, too, that pundits want to seem really wise by putting on serious expressions and saying things like “we don’t know how this thing is going to play out,” and “the situation could get a lot worse”. Bah. Guess what? We never know how things are going to play out. And the situation could get a lot better too. That’s the future for you.

8. When it comes to your short-term money needs, nothing has changed. Any money you might need within the next year or two should be held in cash or equivalents. That was true two years ago and it is true now. The stock market is no home for money you may need urgently. It could fall 30% or jump 30%. Nobody knows. You can get a one year CD paying 5% right now, and it’s federally guaranteed.

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9. If you are investing for five years or more, buy some stock. The investment outlook is much, much better today than it has been for several years, because shares are much cheaper. World markets overall have fallen 27% from last year’s peak. They’re not a steal at current levels but they are not particularly expensive either. Invest globally. Vanguard Total World Stock gives you the whole world and low fees. If you are looking for a value focus, Morningstar analyst Bridget Hughes likes Oakmark Global. Another good one is Tweedy, Browne’s new Worldwide High Dividend Yield Value. The list is not comprehensive. Remember: I am not trying to call the bottom of the market. Things could fall quite a bit further ahead. No one knows. So only invest little, often, and broadly.

10. If you want to worry about anything, worry about your taxes. The worse this crisis gets, the more they will end up putting the taxpayer on the hook to prevent a meltdown. Taxes are going up sooner or later anyway, no matter who wins the election, because of our gigantic federal deficits. (If you think Lehman Brothers was bad, you should look at Uncle Sam). And you can forget about any talk of tax breaks. Oh, and if you want a break from worrying about taxes, worry about Treasury bonds. Deficits won’t do anything good for them.

Write to Brett Arends at

Copyrighted, Dow Jones & Company, Inc. All rights reserved.

I was bored to death so I took this nonsense quiz. >.>

What’s Your Name’s Hidden Meaning?


You are balanced, orderly, and organized. You like your ducks in a row.
You are powerful and competent, especially in the workplace.
People can see you as stubborn and headstrong. You definitely have a dominant personality.

This is true. I am stubborn. But I’m not sure if my personality is really that dominant though.

You are well rounded, with a complete perspective on life.
You are solid and dependable. You are loyal, and people can count on you.
At times, you can be a bit too serious. You tend to put too much pressure on yourself.

Complete perspective in life?! The heck, I’m still lost. I don’t even know what to do after college. hehe. loyal… maybe not. I’m not serious with relationships which I find shallow. let’s just say, I’m with them for the sake of work or something else, but not personal feelings of attachment.

You are wild, crazy, and a huge rebel. You’re always up to something.
You have a ton of energy, and most people can’t handle you. You’re very intense.
You definitely are a handful, and you’re likely to get in trouble. But your kind of trouble is a lot of fun.

Definitely, I’m a rebel and I’m crazy (they say). I don’t have a ton of energy; I’m a professional bum. :3 I always get into trouble, but I don’t find any of those fun. but on the second thought, maybe some can be considered fun. >:] like what I did to two of my high school teachers — you can call it warranted bullying. >:]

You are the total package – suave, sexy, smart, and strong.
You have the whole world under your spell, and you can influence almost everyone you know.
You don’t always resist your urges to crush the weak. Just remember, they don’t have as much going for them as you do.

I am?! O.O

I was expecting a normal career talk earlier in the Industry Orientation Seminar, only to be surprised by the presence of Proctor and Gamble’s president, in casual clothing. X) That was really really really unexpected, since most of the companies only sent someone from the HR department or a middle manager. Yet there was P&G Philippines with their President Jim Lafferty. And so he began his short talk about what in P&G for us after we graduate sharing 2 stories (of his life with P&G).

Story No. 1:

James Lafferty is not a graduate of any business course. He’s not even an MBA. He’s a graduate of a BA degree meant to make him a PE coach or teacher of junior high students. Funny but see how great he is to have achieved such. He started his own company and handles fitness training of his corporate clients — basically making old fat men work out. P&G was one of his clients that time and someone offered him to try marketing in their company. And he said yes. WIth no educational background in business, he learned everything from “Life U.” After 24 years, working in 40 countries, he is now the President of P&G Philippines. He said education provides no assurance that one will get a really good job. What’s important is the hunger or determination of one to achieve things. He can teach anyone how to make financial projections and analysis. He can teach anyone how to market. But he cannot teach someone to be determined enough, hungry enough for achievement.

Story No. 2

It was December and he received a call from P&G Thailand asking him to conduct a training. So December 23, he and his family went on a vacation in Thailand. December 26, the tsunami devastated the shorelines of Vietnam, Thailand and other SEA countries. He and his family survived but 7 P&G employees were missing. He called his boss, and his boss instructed him to find those who were missing no matter what the cost. So he bought a helicopter (with his American Express Credit Card, mind you) and searched for the missing employees. All seven were found; sadly, one was already dead. Just to give you an idea how P&G mean its statement that they CARE for their employees, the other companies during those chaotic times only relied on the embassies to find their employees or take care of those who were injured. I think only P&G created their own search force and even helped find those who are not related to their company. Many companies say, ” we care for our employees” or “we value our employees” but as what Mr. Lafferty said, you can only measure how a company values its employees at the worst times. Make sense right?

Here are some interesting quotes from Mr. Lafferty

When asked about whether an MBA degree would matter, he said: (may not be his exact words)

“Harvard Business School only transforms one from mediocre to arrogant….”

“An MBA is like a kiss. It’s a manifestation of a possibility”

His thoughts on what a great company is in terms of HR management:

“A great company is measured on how it treats the lowest in its ranks.”

He shared his experience in one company who tried to hire him offering a salary 4 times his current salary in P&G. Who would say no to 20 million dollars per year (man, with that you’re one heck of a millionaire; you can even have your own plane!) so he went for the interview. He said that when we go to interviews we should “smell at the back of our neck” what kind of company we are planning to enter. It’s like choosing a boyfriend or girlfriend. You don’t ask them to let you make an analysis of the pros and cons of saying yes to you, but you vibe whether you are a fit. SO back to his story, while walking around the office the first thing that entered his mind is that company is full of “sharks.” The office is so silent; it’s as if fear is all over the place. To confirm his observations he asked the manager to let him have lunch with the secretaries. During the lunch with 3 secretaries he kept on asking questions regarding the culture of the company but no one gave a unsafe answer. After a while one of the secretaries said to him “Since you are an honest person Mr. Lafferty I’ll tell you this as a compensation, honestly, the moment I get a better job, I’ll leave this company the next day and I don’t care what they will say.” Then another secretary shouted, “you go girl!” then they high-fived each other. No need to explain further; the three secretaries already said everything about the company.

Now, how can we be part of his company? Mr. Lafferty looks for three things first in the applicant — a resume with no typo error, a firm handshake and the hunger. I’m sure you would be thinking that only a heartless man would not allow a small/petty typo error. But we’re talking about big business here. If you don’t even have time to proof read your resume, then imagine how much it will cost the company for any small mistake you commit for not checking on the figures even just for a while. About the handshake, the rationale behind is simple. A handshake tells you a lot of things about the person — we all know how. And hunger matter as explained earlier.

I really admire Mr. Lafferty for the wisdom he has. I learned a lot from him. :)