With all the buzz about Cash for Clunkers, it’s easy to think that it was a great way for people to get a better set of wheels. But was it really? No way! Cash for Clunkers was simply a way for broke people to buy cars that they really couldn’t afford. It was a bad idea on multiple levels. But before digging into that, let’s take a little history lesson.

About a decade ago, a fair housing program was started, called a sub-prime lending market. The idea behind it was that everyone “needed” to own a home—including broke people. The government decided to start a program to reinvest in communities, which allowed pretty much anyone to borrow money to buy a house. Lending companies charged high interest rates, causing already struggling families to go even further into debt.

Basically, this was a program designed to encourage broke people to buy houses. Most people didn’t even know it existed until it unraveled and became the number-one cause of our recent recession. The government took those stupid loans back and securitized them, which created the financial mess last fall. Helping broke people buy houses didn’t turn out to be a great government program. Guess what? Helping broke people buy brand-new cars—and now home appliances—will turn out just as bad.

The Cash for Clunkers program was designed exactly for people who should not take advantage of the program. You trade your $2,000 clunker in for a brand-new, shiny $20,000 car, and the only way you can afford it is with a high-interest payment. That just means you really couldn’t afford it to begin with. Doesn’t this sound like the sub-prime mortgage problem all over again?

When you drive that new car off the lot, you’re immediately going to lose $4,500. The worst car accidents happen on the showroom floor. New cars go down in value like a rock. The government thinks it’s going to save the American auto industry by putting broke people into cars they can’t pay for. It’s going to come back to bite them—and the rest of us—in the form of taxes galore.

Another bad thing about this program is that we, the taxpayers, are paying for the new cars! It’s morally wrong of the government to take money away from us—against our will—in the form of taxes and give that money to someone else to buy a stupid car they can’t afford in the first place! This is theft, plain and simple.

Cash for Clunkers is a program that redistributes wealth in the name of the environment, and it’s going to be a curse on the car dealer and the manufacturer that carries the paper. It’s going to hurt the broke person who bought a car he couldn’t afford. And it’s already a problem for our country, because it’s adding dollars to the national debt.

There’s always a twist with government programs like this. They try to think of creative ways to help people, but the situation usually ends up worse than it did before they “helped.” In the end, I should decide what to do with my own money. If I want to buy you a car, I will! And if you can’t buy a car without actually paying for the whole thing, then you’re better off keeping your “clunker.”

So good riddance to a really bad program that has done more damage than good.

I’m a huge fan of Roth IRAs

I love them because they allow my money to grow tax-FREE! As we’ve covered before, with a Roth IRA you invest your money after taxes are taken out. When you withdraw your money at retirement, you don’t pay any taxes. Essentially, you pay taxes today but escape them in the future.

So if you invest $3,000 per year from age 35 to 65, and your mutual funds average 12%, you will have $873,000 tax-FREE at age 65. Uncle Sam can’t touch it!

A traditional IRA works the opposite way. In other words, you invest your money before taxes are taken out. But, keep in mind you will pay taxes when you withdraw the money at retirement.

Is converting your traditional IRA a smart move for you?

That depends on your situation. If you’re 10 or more years away from retirement and expect to be in a higher tax bracket when that time comes, then switching over to a Roth IRA might be a good idea. If that’s you, a Roth will allow you to pay the least amount of taxes by keeping you in today’s tax bracket.

In order to make this decision, you should talk with your investment advisor. He or she will be able to tell you if converting is right for you.

Why now?

When you convert from a traditional to a Roth, you want to do it when prices are low—like in today’s market. By converting when prices are low, you won’t pay nearly as much in taxes. That means you’ll save money! And right now, all of us can afford to save extra money.

The Tip:

I’m not against you owning traditional IRAs. I simply think, depending on your personal situation, a Roth IRA might be better for you. If converting to a Roth makes sense for you, now is the time to do it—you’ll pay less in taxes. Just make sure you can afford to pay those taxes out of pocket. Don’t use the IRA money to pay the tax bill.

Dave Ramsey is a Best Selling Author of several books including the Total Money Makeover and hosts a National Radio Show ~ The Dave Ramsey Show.  You can find out more about Dave Ramsey at www.DaveRamsey.com.

Breaking Free From Debt

• Priority Based Budgeting
• Learn the simplest and most effective way to control your money (in 1 hour or less per month)
• How to stop overspending
• How to ensure you and your spouse are on the same financial “sheet of music”
• Setting up your household bank accounts
• Dealing with irregular income
• How to stay your course even when it’s tough

Location:
Alliance Church of the Valley
1259 State Road 35
St. Croix Falls, WI 54024

Date: Tuesday, March 22, 29, & April 5,  2009
Time: 9:30 am (Fellowship Hall/Sunday School Hour)

Costs: FREE
Please RSVP: kirk@rivervalleycoaching.com or call 715-483-9037

Kirk Anderson is a Internet Marketing & Business Consultant, Teacher, Coach, and Entrepreneur. I work with individuals helping them move to their highest potential personally, financially, and vocationally and businesses helping them develop business, marketing, and technology solutions that work.

If I can support you in your business & coaching practice or with integrated technology services, it would be a pleasure to talk to you. You can contact me at kirk@interactive123.com. When you contact me, I will send you your free SWOT Analysis right away!

Have a Happy New Year!

Kirk Anderson
Midwest Marketing Mastermind
River Valley Coaching
Interactive Business Solutions

We want to thank you, our clients and friends, for your involvement with River Valley Coaching in 2008. You made it a very successful year; we have enjoyed helping you achieve your business, financial, and personal goals through the inspiration of coaching. In 2009, River Valley Coaching wants to wish you all the success in the world in your business, finances, personal relationships, and lives.

As always, if there is anything that we can do to support you in developing a strategy for ultimate success in your life or business, please let us know.  We are happy to begin with a Free 30 minute coaching session.

If you are interested in Business, Financial, Career, Personal, or Life Coaching – but don’t know where to start, simply give me a call to receive 30 minutes of Coaching for free! See if working with me is right for you; I want to see you be the best you can be!

River Valley Coaching
102 N. Washington St., Suite B
St. Croix Falls, WI 54024

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River Valley Coaching is presenting a
Free Financial Education Seminar:

“Breaking Free From Debt”

• Priority Based Budgeting.
• Learn the simplest and most effective way to control your money
• How to stop overspending.
• How to ensure you and your spouse are on the same financial “sheet
of music.”
• Setting up your household bank accounts.
• Dealing with irregular income.
• How to stay your course even when it’s tough.

Seminar Location:
Alliance Church of the Valley
1259 State Road 35
St. Croix Falls, WI 54024

Date & Time:
Tuesday, October 7th, 2008
6:00-7:00pm (Q&A time following session)

REGISTER TODAY by calling: 715-483-9037

For this and other events in the area, visit: www.moneysmartwi.org

We have found that if you are observant, you can do the same thing yourself, without paying for the membership.

• Did you know that most groceries (including paper products) go through an approximate 12 week cycle for sales? That means if you can stock up on items when they are on sale and get you through the next 12 weeks, you can schedule purchasing only while they items are on sale!

• Most people don’t know that stores prices vary by location. This means what you pay for diapers at one Wal-mart (or any store) may be different than what you pay at another store different city.

  If you find this to be true, buy at the cheaper Wal-mart ONCE, then save your receipt and bring it in each time to the store you shop at to get the cheaper price.

  This may sound like a pain, but for something that you use consistently like diapers or medication and the price doesn’t change very often the savings can be well worth the effort.

• Avoid non-grocery items at a regular grocery store. Usually there is a high mark-up on diapers, paper products, laundry detergent etc at grocery stores. The exception to this is the “Super” stores such as Wal-mart and Target.

• If you are within close proximity to a warehouse club such as Sam’s Club or Costco it is usually beneficial to pay for a membership. Just be careful that you price check with your grocery store. Buying in bulk is not always cheaper!

  Also, make sure you don’t walk out with more than you need or extra “great deals” (Did you really need 6 bottles of mustard??). If the extra 12 pounds of meat went bad then it wasn’t a good deal for your family.

• Finding stores with little overhead such as Aldi is also a money saver. Again, make sure it is in close distance to your house because you have to factor in gas prices. At Aldi, you bring your own bags to put your food in and bag them yourself, but they don’t pay for the glitz, so neither do you.

Article by Kirk Anderson, Financial Counselor :: As a Personal and Business Coach, Kirk helps others take control of their most powerful wealth building tools, their income. Business, Financial, and Personal Coaching may be exactly what you need to get out of debt, plan for retirement, build wealth, and enjoy life. For more information on gaining control of your financial future, contact us at www.rivervalleycoaching.com for your FREE 30 minute consultation.

Today we are going to give you a few money saving tips to help you with the out-go side of the equation. Food happens to be a good-sized portion of most family’s budget and it is also quite variable. The grocery store is one area that you can see savings TODAY if you are willing to change the way you shop. Here are some money saving tips.

• Shop with a list and then STICK TO THE LIST! This one tip alone can save you a lot!! Impulse purchases tend to be expensive as well as unnecessary.
• If at all possible, go grocery shopping alone. Statistics reveal that you spend more with children and even your husband (sorry guys) in tow.
• Stay away from pre-packaged convenience foods. If you shred your own cheese, chop your own lettuce and make your own “frozen dinner” you WILL save money…today!! (These are great tasks for kids old enough to use a knife etc.)
• NEVER go grocery shopping hungry!! Again, stick to your list!!
• ONLY use coupons for things you would already purchase and only if it is cheaper than other brands (including generic).
• Figure out what things are by the ounce. Bulk is sometimes cheaper but not always. You should keep a calculator with you.
• Shop generic. Many times the quality is just the same (or even better) and sometimes it is even made in the same factory as the name brand product.
• Look for meat that has been marked down by the butcher because it is nearing its use/freeze by date. This is also done with bakery items as well.

If you utilize these tips you can save money at the grocery store today with no gimmicks or “special deals”.

Look for part 2 of “Money Saving Tips” soon.

Article by Kirk Anderson, Financial Counselor :: As a Personal and Business Coach, Kirk helps others take control of their most powerful wealth building tools, their income. Business, Financial, and Personal Coaching may be exactly what you need to get out of debt, plan for retirement, build wealth, and enjoy life. For more information on gaining control of your financial future, contact us at www.rivervalleycoaching.com for your FREE 30 minute consultation.

It only takes about 30 seconds of watching the news to really get yourself freaked out about the economy. Gas prices, the housing market, a shortage of rice and the “recession” we are in seems overwhelming!

May I suggest you TURN OFF THE NEWS!! It is the media’s job to get good ratings and dramatic and fearful news sells. Sad but true.

Yes, you are feeling the hit at the pump, your investments may be currently losing and your house may not sell, but did you know that we are NOT in a recession. Our growth has slowed and our economy is sluggish. By definition, a recession is when the Gross Domestic Product (GDP) (which is the statistic used to measure the economy) growth is negative for 2 consecutive quarters or more. Did you know we haven’t
had even 1 negative growth quarter?

The 3rd quarter of 2007 had a GDP of +4.9% and the 4th quarter was +0.6%. The BEA will release the numbers for the 1st quarter of 2008 in a couple of days. Yes, things are slowing and a recession could be in the future, but we are not in one now. In fact, most forecasting projects a slow but continued positive growth.

By the way, how scared do you need to be even if we were in a recession if you had no debt? What if you also had an emergency fund of 3 – 6 months of expenses set aside? Then you would maybe be frustrated about gas prices, but not fearful or stressed out. You don’t have to make very much to survive if you don’t have any debt and payments!

What if you aren’t at a place where you are debt free and have an emergency fund? Use the sluggish economy as a motivator to get there quickly! Don’t let the news or friends and family get you down. There are jobs out there and you have abilities. You may have to be more creative and work harder (and turn off the TV), but you can do it! Your tax stimulus check should be coming soon. Use that to get your debt snowball going or put that into savings if you are out of debt (besides your mortgage).

Contact River Valley Coaching today for a FREE 30 minute consultation to discuss you financial future.

Call: 715-483-9037 TODAY!

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