What's gone wrong, what can still go wrong and what can we do about it

You'd have to be blind at the moment to not realise that our current hardships are caused by financial activities largely centred in the USA. Over a few video segments we are going to look at how this happened and what went wrong and where else is the same thing going on and why this will make things much worse.



Those same practices the turned the mortgage world sour also are used to finance pretty much everything else. So now might not be the time to buy a new car. Unless it's not hit your area yet in which case time is running out on the ability to get loans. In all honesty it has already run out.



So what can we, the guys and gals on the street, do about it?

For one we need to start living within our means again. That means that if our income over the next five years is reliably going to by at a level (let's call it x) then your expenditure when evened out over that time scale wants to be x minus a bit. However if you expenditure is a geeky y>x that is if the amount you spend is more than your income the time is going to arrive when you will need to pay that overspend and you will be lacking the funds to do it with.

I'm not saying that right now is not the time to borrow but we must borrow responsibly. That is, make short term borrowing actions and maintain a level of available funding that keeps you in personal equity against the libaility of the loan. This is easy if you have lots of assets but with just a job and the common pair of liabilities (car and house) you already need to be planning your budget of your income less the liability costs.

It's not all bad news, however.

The sudden shortage of personal liquidity is goign to cause an increase in the number of people selling cars, second homes, spare funiture, second TVs and all sorts of electrical and valuable goods. Many sales lowers the price which is good if you are buying.

Be prepared to haggle hard and ask for discounts. Ask for the biggest discount you can say without blushing. That's the price you want to be knocking them down to. Get an idea of the lowest prices in the area. Be sure to mention that you are aware of these lower prices. Push the price down as far as you can.

Now is, in short, the time to buy.

However buy carefully. There is little credit to float you should you come short of liquidity so make your investments carefully and plan them for the long ride out the other side.

Things that will lower you liabilities and help you maintain better personal liquidity are selling the car, using the bus, getting a push bike, negotiation to telecommute to work and doing everything from the home.

If you work for a company with a car pool make use of it. Better yet see if the boss can be pushed into providing a company car so the costs of the car become his and not yours. They've been doing the same externalisation fo the costs to you for years by making you pay for your travel to work anyway.

Okay time to close with an interview that I am sure will put things in perspective for you.

This is how bad it could get

If you remember recently we asked "How Bad Can It Get?" and on the whole things were quite positive and up beat. However the comments privately via Stumble Upon and the like were are little more down beat. While the feeling was "if all do not panic it will probably be all right" there were stories of British VCs having the US backer pull out suddenly and reports of well established "mavens" of the making money online world dropping staff and slimming down.

But the IMF is not confident that things are going to look better and others asking the same question as us feel that even the IMF is being overly optimistic: Economic Predictions for 2009 takes a US-centric look at the problems and the what could happen.



Already we are seeig talk of "the great depression" also known as the World Economic Crisis (WEC). The WEC started in America when the unregulated financial industry blew it's own head off with of all places Nazi Germany the first to recover.

Oh yes, we can possibly thank the American Leadership in the 1920s for the rise of one of the most hated Europian leaders of all times. How many people knew that? Did you also know that Japan side stepped the crisis with a large dose of deficit spending?

If this crunch becomes like that of the 1930's what will it be like?

» Continue Reading: This is how bad it could get

Just how bad can things possibly get?

Recession fears hit stock markets says the BBC. Apparently all sorts of industries are bracing for a hard time. So is it as bad as all that?

Apparently the slide comes after the Dow Jones share index in New York fell to its lowest level in five years. which is news speak for "uh oh! things look a bit dodgy."

However the BBC also reports [while] many retailers are feeling the pinch, the food industry is prospering with convenience food proving to be a popular item for many families who are eating out less than before.

Gold prices (the barometer of financial health world wide) seem to be returning to "normal" reports walesonline.co.uk and some parts of the worlds are left unaffected.

So have we learned the lessons of history?

How much worse do you think things will get?

Just how bad can things possibly get?

Lower Household Energy Costs

This video might have segments not especially suitable or applicable for us in the UK but that's not to say that (a) this is not helpfull - readers in the US, for example, might find this most handy and (b) useful anyway.

In this video an expert talks us through things that can lower costs in the home - things you can do yourself.

How to save a fortune by shopping smarter

Supermarkets use dirty tricks to make you buy more stuff.

supermarket ethics say "we need to sell more stuff" - selling stuff is what the super market exists to do. No mater how much they claim to be about the little guy, or caring for the housewife or being all about value the bottom line is that they do this to sell stuff. Selling stuff to you is the whole plan.

This article is about reducing the cost of shopping by not only becoming wise to the sales tricks of Supermarkets but by using them, when you have to, to greater personal effect.

In part reducing the cost of shopping is going to be part of creating a positive personal environmental impact insofar as reduced consumerism (the life-style of consuming things) will lead to reduced costs. What we are searching for is a form of sustainability in our own lifestyle.

That sustainability can only come when we are aware of the mindset big chain stores are keen to create for their own benefit and not for yours.

1. Consider the trade off between quality and quanitity. As Stubsy points out at financesandmoney.com [...] at Tesco right now, Andrex 4 roll, plain white, bog standard – pun intended – loo paper is £2.25 but Tesco’s value loo roll 4 pack is 43p! So in order for a packet of Andrex to be more efficient each pack of four would have to last 5.2 times longer. In my experience Tesco loo roll lasts a third of the time of better rolls. So while Tesco Value roll is cheaper and not so good you can afford to buy three times as many for less and so come out on top. (Tesco is the big UK Supermarket for low prices)
2. Have a big lunch before you shop. If you shop hungry those impulses to buy are much stronger and those chocolate bars at the checkout are going to look very yummy and perfect for a post shopping snack.The managers put those there because that is where they sell best as hungry tired shoppers go to pay for their goods. You and your waste line don't need the sweets.
3. Ignore your nose - go when not hungry. This is real the same point as have a big lunch - hunger is a powerful selling tool and big chains are good at making it worse. Big supermarkets put bakeries and other cooked food areas in to make you feel hungry. Hungry people buy more food. Pay no attention to the smell.
4. Make a list and stick to it. Supermarkets are very good at placing content so that you want to buy it. Everything in the shop is about selling you more stuff. By sticking to a list you can reduce the impact of the impulse to purchase extra things. That tasty looking two-for-one offer is false economy designed to make you make extra purchases.
5. Walk to the back of the shop first. A modern supermarket is laid out in such a way as to get the maximum sale from you. First you hit the fresh stuff and the tinned is at the back. After all that you must then walk to the front of the store to pay. Skip a whole passage of temptation and buy nothing that until you are at the back. When finished you will be at the front of the store and ready to pay.
6. Beware of missed deals. Many times stores will put a special on bigger sized units but not on the smaller. For example it is not uncommon for a litre of Bells Scotch Whisky to be priced lower than the 75cl bottle at Tesco stores. When I say less I mean that it is actually a lower price for a bigger bottle. This happens a lot because special offers are not worked out on the shop floor.
7. Share the shopping load. Bulk purchases can save you money but sometimes ten tins of beans is too much. By sharing the shopping load with otehrs you can share the saving of the bulk purchase too. This saves everyone money.
8. Learn to spot free food. Did you know that on more than one occasion I have walked out of a Tesco richer than I went in? The magic discount works when foods on special (50% off, BOGOF, 80p off, etc) are reduced to sell. The "50% discount" on a £2 item is actually a £1 refund at the checkout. You look at the receipt you get and you will see "multibuy saving -0.83" or similar. When food, especially fresh vegetables are reduced that refund is often still active so when you purchase you actually are being given the item for free plus free money.
9. Spot Errors with the Promotion. Famous examples are the man who got his local Tesco to give him all of their bananas (a full pallet of the things) buy demanding the club card points as cash; or the "two pound off offer" that coincided with the one pound trial price. Sometimes what seemed like a good idea at the time can, for sharp eye shoppers by a freeby waiting to be discovered.
10. Ignore the front row. Older stock is placed a the front to stop the store being left with out of date stuff. The items at the back are the freshest and will last longer. By purchasing these instead you will make you food last longer and be less ready to go off.

What tricks have you learned over the years?

Talk About Icland

So there has been a lot of news about Iceland and her banks and so forth. For some this is easily under stood yet for many there is still confusion as to what happened and what it means. Coming as I do from Kent (near London, UK) I have access to Kent TV and this item does a good job of framing the story so that it can be understood.



Did you feel the effect of Iceland's problems? Did the UK act wisely or badly? Can you clarify an issue or point?

Share your opinion here.

5 Tips for Looking Good on a Budget

With the economy on the slide, and prices going up, beauty products may seem like an unnecessary expense. However, don’t worry that you have to ditch them altogether - perish the thought! - there are plenty of cost effective ways to look good without spending a fortune. Here are my top five, but stay tuned for more.

1) Don’t feel pressured into buying expensive brands of moisturiser in the belief that they will make you look twenty years younger, the chances are they won’t. Cheaper, own brand makes may not look as good, but will be just as effective. You could even try baby lotion which has the advantage of being formulated for delicate skin, so is less likely to cause a adverse reaction.

2) That old tip about cucumber slices as eye compresses actually works. And there are numerous other beauty treatments that can be made using products found in your kitchen. Banana makes a good face-pack, and oatmeal a great exfoliant. A quick search of your favourite search engine will turn up plenty of sites featuring recipes for home-made beauty products.

3) Vaseline may have a slightly unsavoury reputation, but it should be a permanent fixture in your make-up kit. Use it to shape eyebrows, mix it with lipstick to create lipgloss, or dab on as a night cream. Buy the version made for babies, if you find the regular stuff too greasy.

4) Shaving gels have become popular in recent years, which is no surprise, because lathering up with soap and water frequently lead to dry skin. However, hair conditioner makes a much cheaper alternative, and leaves your skin feeling silky smooth.

5) Back to the baby products - you could spend a tidy sum on a make-up removal cream or pads, or you could use wet wipes, which are just as effective, but kinder on the skin.

Interest rate drops - how does it effect you?

With UK Interest rates dropping by 1.5 to 3% and EU rates dropping slightly to 3.25% (See BBC for more on UK drop and EU drop) what do you think this says about the state of play?

How will this effect you?

Caution to the Wind

They say that the third time is the charm and after my last two successes I thought I'd give you another song. Candle in the wind rewriten for the credit crunch - take it away boys.