Subject: The Best Christmas of my Life
Author Unknown

Pa never had much compassion for the lazy or those who squandered their means and then never had enough for the necessities. But for those who were genuinely in need, his heart was as big as all outdoors. It was from him that I learned the greatest joy in life comes from giving, not from receiving.

It was Christmas Eve 1921. I was fifteen years old and feeling like the world had caved in on me because there just hadn’t been enough money to buy me the rifle that I’d wanted so bad that year for Christmas. We did the chores early that night for some reason. I just figured Pa wanted a little extra time so we could read in the Bible. I was still feeling sorry for myself and, to be honest, I wasn’t in much of a mood to read scriptures. But Pa didn’t get the Bible, instead he bundled up and went outside. Soon Pa came back in. It was a cold clear night out and there was ice in his beard.

"Come on, Matt," he said. "Bundle up good, it’s cold out tonight." I was really upset then. Not only wasn’t I getting the rifle for Christmas, now Pa was dragging me out in the cold, and for no earthly reason that I could see. I knew Pa was not very patient at one dragging one’s feet when he’d told them to do something, so I got up and put my boots back on and got my cap, coat, and mittens. Ma gave me a mysterious smile as I opened the door to leave the house. Something was up, but I didn’t know what. Outside, I became even more dismayed. There in front of the house was the work team, already hitched to the big sled. Whatever it was we were going to do wasn’t going to be a short, quick little job. I could tell. We never hitched up the big sled unless we were going to haul a big load. Pa was already up on the seat, reins in hand. I reluctantly climbed up beside him.
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A few weeks ago, we had a lesson in church about managing personal finances for an economic downturn. At lot of what we do is based on where we are in our lives. Obviously, some of these points are focused to Latter-Day Saint culture, but they should be applicable across the board to people of all faiths and lacks-of-faiths.

My personal belief is that the six months to one year time table grossly underestimates what we are going to go through over the next eight to ten years, although I believe we are going to see some improvements in the markets in six months to a year, followed by a major slow down in the stock market (perhaps down to ~5,000 for the Dow). I am a follower of demographic forecaster Harry Dent — see his site for more information.)

The bottom line, irrespective of what happens in the future, is to be prepared. The following are the tips given at church with my own comments in parens.

For every age plan–

1. Make tithes and offerings; (obviously for the Latter-Day Saints — irrespective of the economy, our first obligation in to our Heavenly Father; Blessings don’t come until after the trial of faith.)
2. Live within a budget; (this is a tough one, but applicable to all income levels.)
3. Keep some liquidity: (a) cash at home for emergencies; (b) cash in bank for immediate access; (here in California, we are encouraged to have cash on hand — if and when the need arises, we can’t expect the banks to be restocking ATM’s with cash, which may be necessary to buy necessities.)
4. Think through plan for what next, where, and how while remaining flexible;
5. Reduce or restructure debt (pay down, even pay off your mortgage); and
6. Save regularly (a) for the next big expense–house, braces, college, retirement; and (b) the maximum allowed for retirement in IRA and 401k. (Saving is the key to preparation — save for retirement, save for expenses.)
   

Some “now” thoughts–

1. Inflation—not for a while; deflation is likely for next six months; keep eyes open for “buys ” (car, house, TV, etc.); (during down economic times, there are bargains to be found if you have the cash set aside; house prices are likely to fall by 1/2 their 2005 values by 2010-2011.)
2. Jobs—going to get tougher next six months; examine options for alternative employers or job types; discretely float "feelers ;" (the best way to deal with being laid-off is to have a job offer in your back pocket.)
3. Cash—build reserves so that you have at least 6 month cash out flow saved (the minimum time to find another job); shop CD’s online; (be wary of online CD’s to buy only from reputable sources; nevertheless, online will save costs.)
4. Stock market—Off 35+% has happened before; if not yet sold, probably best to stay put; but diversify , <10% any company/industry; US only; (not sure I agree in principle with this as I think the market is going to get much worse in the years to come; that said diversification in both industry and holdings is important–everybody who got killed by bank stocks thought they were safe. Lesson: there is no safe enough to stock right now to have all the eggs in one basket.)
5. Interest rates—down for next year; look at longer maturities for yield (5-8 years); if higher tax bracket, look at tax exempt bonds ;
6. Housing prices—down for next 9 months; probably not return to prior levels for four plus (4+) years; if not yet sold, probably best to stay put ; (I think this prediction is wrong. I think house prices in California are going to drop at least another 20%-30%, and thereafter will slowly appreciate slightly ahead of inflation. In other words, the bubble is over. Get used to lower house values.)
7. Mortgage—if you have 30 yr fixed below 5.25%, hold;  if adjustable or fixed above 5.5%, keep eye open to refinance if you have 20+% equity; if under water, push-push for workout ; (as was stressed, if you are under water on your mortgage, call up your lender and ask to renegotiate. If you strike out with the first person you talk to, talk to somebody else until somebody works with you.)
8. Investments–balance stocks and fixed income so that fixed income equals age ; invest in stocks only what you can earn back;
9. Credit quality—there are no guarantees but keep in investment grade or higher level stock ratings range;  any investment promising returns over 3% above ten year treasuries should be carefully examined; and
10. Self—invest in your self through expansion or improved productivity of business or more training/education.

Use resources–

1. Read newspapers’ financial page and magazines, especially Money Magazine;
2. Visit web sites (a) http://www.bloomberg.com/markets/rates/index.html ; (b) http://www.providentliving.org/channel/1,11677,1709-1,00.htm ;
3. Ask advice and opinions of those who are ahead of you on the age profile.

The bottom line when all is said and done is not to panic, but prepare for hard times.

This came as an email forward, but pretty much sums up my feelings regarding lights on the house.

His wife had been on his case to get the Christmas lights up for a couple of weeks.

They are up now and for some reason she will not talk to him – go figure.

Prop. 8, just won’t go away. I had to post this quote because I find it funny every time nonreligious people try to speak religious-speak.

"The campaign they funded was one of lies and deceit, clearly in violation of the religious tenet of “thou shalt not lie. ”

Oh yes, the eleventh commandment. Probably related to "thou shalt not bear false witness."