Troubled TimesTroubled TimesHow We Got Here, What May Lie Ahead How We Got Here, What May Lie Ahead
and What We Can Do About Itand What We Can Do About It
Ned C. HillNed C. HillNational Advisory Council Professor of FinanceNational Advisory Council Professor of Finance
Fellow, Wheatley InstitutionFellow, Wheatley Institution
Marriott School of ManagementMarriott School of ManagementBrigham Young UniversityBrigham Young University
March 2009March 2009
OutlineOutline
Prophetic warningsProphetic warnings
Seeds of the economic crisisSeeds of the economic crisis
14 suggestions on how we might deal with 14 suggestions on how we might deal with the crisisthe crisis– Managing debtManaging debt– Building reserves for the futureBuilding reserves for the future– Protecting your familyProtecting your family– Building on what you have learnedBuilding on what you have learned
President Gordon B. HinckleyPresident Gordon B. Hinckley Priesthood Meeting, October 3rd, 1998Priesthood Meeting, October 3rd, 1998
Story of Pharaoh’s dream of the seven fat cattle and the Story of Pharaoh’s dream of the seven fat cattle and the seven lean cattle seven lean cattle
“…“…I want to make it very clear I want to make it very clear that I am not prophesying, that that I am not prophesying, that I am not predicting years of famineI am not predicting years of faminein the future. But I am suggesting in the future. But I am suggesting that that thethe time has come to get our time has come to get our houses in orderhouses in order. . There is a portent There is a portent of of stormy weather aheadstormy weather ahead to which to which we had better give heedwe had better give heed.”.”
““So many of our people are living So many of our people are living on the very edge of their incomes. on the very edge of their incomes. In fact, some are living on borrowings.”In fact, some are living on borrowings.”
President Gordon B. Hinckley (cont.)President Gordon B. Hinckley (cont.)
““I urge you, brethren, to look to the condition of I urge you, brethren, to look to the condition of your finances.”your finances.”
““I urge you to be modest in your expenditures; I urge you to be modest in your expenditures; discipline yourselves in your purchases to discipline yourselves in your purchases to avoid debt to the extent possibleavoid debt to the extent possible.”.”
““Pay off debt as quickly as you can, and free Pay off debt as quickly as you can, and free yourselves from bondageyourselves from bondage.”.”
““That’s all I have to say about it, but I wish to That’s all I have to say about it, but I wish to say it say it with all the emphasis of which I am with all the emphasis of which I am capablecapable.”.”
President Gordon B. HinckleyPresident Gordon B. Hinckley General Conference, October 7General Conference, October 7thth, 2001, 2001
“ “The economy is particularly vulnerable. We The economy is particularly vulnerable. We have been counseled again and again have been counseled again and again concerning self-reliance, concerning debt, concerning self-reliance, concerning debt, concerning thrift. So many of our people are concerning thrift. So many of our people are heavily in debt for things that are not entirely heavily in debt for things that are not entirely necessary.”necessary.”
“ “I urge you as members of this Church to I urge you as members of this Church to get get free of debt free of debt where possible and to have a where possible and to have a little laid aside against a rainy day.”little laid aside against a rainy day.”
Elder Joseph B. WirthlinApril 2004April 2004
“ “Remember this: debt is a form of Remember this: debt is a form of bondage. It is a financial termite. bondage. It is a financial termite. When we make purchases on When we make purchases on credit, they give us only an credit, they give us only an illusion illusion of prosperityof prosperity. We think we own . We think we own things, but the reality is, our things things, but the reality is, our things own us.”own us.”““Some debt—such as for a modest home, expenses Some debt—such as for a modest home, expenses for education, perhaps for a needed first car—may be for education, perhaps for a needed first car—may be necessary. But necessary. But never should we enter into financial never should we enter into financial bondage through consumer debt bondage through consumer debt without carefully without carefully weighing the costs.”weighing the costs.”
Elder L. Tom Perry November 2008November 2008
“We have been encouraged at almost every general conference of the Church I can remember not to live beyond our means. Our income should determine the kind of housing we can afford, not the neighbor’s big home across the street.
“President Heber J. Grant once said: ‘From my earliest recollections, from the days of Brigham Young until now, I have listened to men standing in the pulpit … urging thepeople not to run into debt; andI believe that the great majority of all our troubles today is caused through the failure to carry out that counsel.’” (in Conference Report, Oct. 1921, 3).
The Global Fixed-Rate Investment MarketThe Global Fixed-Rate Investment Market
2000
$36 Trillion
2009
$70 Trillion
Who Are These Investors? Insurance companies, individuals,
pension funds, mutual funds, governments, investment funds, banks, municipalities, etc., etc.
Enter—New-fangled Mortgages
Mortgages from Start to FinishMortgages from Start to Finish
Individual
Mortgages
Tranche 1
Tranche 2
Tranche 3
Tranche 4Grouped
Mortgages
AAA
AA
A
BBB
$70 TrillionFixed-Income Market
CDS (AIG)
CMO
s
Huge Global Demand for Fixed-rate Debt
Factors Contributing to the Economic Crisis
The Federal Reserve and
other Regulators The Housing Market
(Easier Qualifications)
Creation of New
“Packaged” Mortgage
Securities
Accounting Rules
Then the Inevitable:Then the Inevitable:
The Housing Bubble BurstThe Housing Bubble Burst
August 2007, housing prices began to slip in key August 2007, housing prices began to slip in key markets like Phoenix, Las Vegas, California, markets like Phoenix, Las Vegas, California, Florida, etc.Florida, etc.We had built We had built 1M to 2M excess homes1M to 2M excess homes!!The actual risk of mortgages began to emerge.The actual risk of mortgages began to emerge.No one wanted to buy mortgage-related No one wanted to buy mortgage-related “toxic “toxic securities.”securities.” Very difficult to value. Very difficult to value.Precipitous drop in the prices of these securitiesPrecipitous drop in the prices of these securities—used to be “AAA” but now almost worthless.—used to be “AAA” but now almost worthless.Accounting rules—write them down Accounting rules—write them down
We Can’t Have Huge LossesWe Can’t Have Huge LossesWhat to Do?What to Do?
Close or sell the institutionClose or sell the institution– Bear Stearns (1923) sold 3/2008 to JPMorganChase for $10/sh Bear Stearns (1923) sold 3/2008 to JPMorganChase for $10/sh
(previous year was $133/sh) (previous year was $133/sh) – Countrywide Financial was bought by Bank of America (7/2008)Countrywide Financial was bought by Bank of America (7/2008)– IndyMac (Independent National Mortgage Corp.) seized (7/2008)IndyMac (Independent National Mortgage Corp.) seized (7/2008)– Lehman Brothers (1850) sold to Barclays (9/2008) and Nomura Lehman Brothers (1850) sold to Barclays (9/2008) and Nomura
Holdings (10/2008)Holdings (10/2008)– Washington Mutual seized by FDIC, assets sold to Washington Mutual seized by FDIC, assets sold to
JPMorganChaseJPMorganChase
Find a stronger institution to merge withFind a stronger institution to merge with– Merrill Lynch merging with Bank of America (9/2008)Merrill Lynch merging with Bank of America (9/2008)– Wachovia merging with Wells Fargo (10/2008)Wachovia merging with Wells Fargo (10/2008)
Infuse more capitalInfuse more capital– Government took over Freddie Mac and Fannie MaeGovernment took over Freddie Mac and Fannie Mae– Government is pumping $150B into AIGGovernment is pumping $150B into AIG
Result—A Credit FreezeResult—A Credit Freeze
No bank wanted to loan money—even overnight—to No bank wanted to loan money—even overnight—to another bank or anyone else. They’re afraid the another bank or anyone else. They’re afraid the borrower might be “next on the chopping block.”borrower might be “next on the chopping block.”The economy runs on credit—even healthy companies The economy runs on credit—even healthy companies borrow frequently to meet short-term swings in cash borrow frequently to meet short-term swings in cash flows.flows.Consumer credit—dropped through the floorConsumer credit—dropped through the floorWe ran the risk of seeing the entire economy shut down.We ran the risk of seeing the entire economy shut down.We are connected to the rest of the global economy, tooWe are connected to the rest of the global economy, too– Iceland’s major banks fail—British savers lose $8B Iceland’s major banks fail—British savers lose $8B – Some European banks failingSome European banks failing– Etc., etc.Etc., etc.
Government Bailout Efforts—A Government Bailout Efforts—A
1.1. Federal Reserve Bank infused massive Federal Reserve Bank infused massive amounts of cash into the banking system amounts of cash into the banking system and is assisting in mergers, sales and and is assisting in mergers, sales and rescues of troubled institutionsrescues of troubled institutions
2.2. Congress passed “Troubled Asset Relief Congress passed “Troubled Asset Relief Program” (TARP)—government Program” (TARP)—government authorized Treasury to use $350B (done) authorized Treasury to use $350B (done) and $350B more (if authorized by and $350B more (if authorized by Congress) to buy equity in troubled Congress) to buy equity in troubled banksbanks
Government Bailout Efforts—BGovernment Bailout Efforts—B
Recent stimulus package of $787B infuses Recent stimulus package of $787B infuses money into states, federal agencies, money into states, federal agencies, consumers (through lower taxes), etc.consumers (through lower taxes), etc.
Plans to aid homeowners in danger of Plans to aid homeowners in danger of foreclosureforeclosure
What Are Possible Outcomes?What Are Possible Outcomes?
Worst caseWorst case—prolonged depression similar to —prolonged depression similar to the 1930’s (25% unemployment, no growth for 3-the 1930’s (25% unemployment, no growth for 3-5 years, great personal hardship)5 years, great personal hardship)
Best caseBest case—short recession (unemployment 6-—short recession (unemployment 6-8%, no/slow growth for 12-18 months)8%, no/slow growth for 12-18 months)
Most likely caseMost likely case—serious recession —serious recession (unemployment 7-10%, no/slow growth for 18 (unemployment 7-10%, no/slow growth for 18 months to 2 years)months to 2 years)
Other Outgrowths of the CrisisOther Outgrowths of the Crisis
More regulationMore regulation of securities industry of securities industryRestrictions on the Restrictions on the mortgage/housing industrymortgage/housing industryGovernment may make a good return on much Government may make a good return on much of the bailout investments: buying toxic assets, of the bailout investments: buying toxic assets, buying stock in troubled institutions, etc.buying stock in troubled institutions, etc.Eventually we will see Eventually we will see higher taxeshigher taxes to pay for to pay for bailout. bailout. InflationInflation may be a problem in the recovery. may be a problem in the recovery.Some businesses (even whole industries) will Some businesses (even whole industries) will fail, fail, stronger ones will eventually emergestronger ones will eventually emerge..
How Individuals and How Individuals and Families Might Deal Families Might Deal
with the Crisiswith the Crisis
14 Suggestions14 Suggestions
Net WorthNet WorthHelps You Think About DebtHelps You Think About Debt
Net worth = Assets - LiabilitiesNet worth = Assets - Liabilities
AssetsAssets– Market value (not purchase price)Market value (not purchase price)– Real and financialReal and financial
LiabilitiesLiabilities– Credit card and other consumer debtCredit card and other consumer debt– MortgagesMortgages
Why do this?Why do this?– Net worth helps you do stuff in the futureNet worth helps you do stuff in the future– Track over time--should be growingTrack over time--should be growing– Identifies assets that could be used to reduce debtIdentifies assets that could be used to reduce debt
Net Worth
Net Worth—A PictureNet Worth—A Picture
Assets
Liabilities
Net Worth
Impact of Credit Card PurchaseImpact of Credit Card Purchase
Assets
Liabilities
Credit Card DebtStereo System
Net Worth
Impact of Credit Card PurchaseImpact of Credit Card Purchase
Assets
Liabilities
Credit Card DebtStereo System
How do you balance this?
Net Worth
What Adds to Net Worth?What Adds to Net Worth?
Assets Liabilities
Credit Card DebtStereo System
Net Worth Must Shrink!
Avoid Unproductive DebtAvoid Unproductive DebtIt Makes Net Worth ShrinkIt Makes Net Worth Shrink
Productive debtProductive debt Unproductive debtUnproductive debt
Home
Education
Minimumtransportation
Business
Consumer goods
Vacations
Car
Most credit card debt
Suggestion 1
Origin of Most Debt Problems?Spending Problems
Income Expenditures
Debt
Control Your SpendingControl Your SpendingStep 1: Track past cash flowsStep 1: Track past cash flows– 1-3 months back1-3 months back– Find Find all all expendituresexpenditures– Determine assets and liabilitiesDetermine assets and liabilities
Step 2: Agree on goalsStep 2: Agree on goals– What do we want to accomplish?What do we want to accomplish?– Agree on a budget for future cash flowsAgree on a budget for future cash flows
Step 3: Track ongoing cash flows--compare Step 3: Track ongoing cash flows--compare budget to actualbudget to actual– Use computer or any other methodUse computer or any other method
Step 4: Review monthlyStep 4: Review monthlyStep 5: Make adjustmentsStep 5: Make adjustments
Suggestion 2
Why You Need a Spending PlanWhy You Need a Spending Plan
Communicate with spouse and family Communicate with spouse and family Find out what you are spendingFind out what you are spendingExtract more money for saving and Extract more money for saving and investinginvestingGet out of debtGet out of debtPrepare for the futurePrepare for the futureKeep money from slipping through your Keep money from slipping through your fingersfingers
Remember the Pioneer Motto
“Use it up, wear it out, make it do, or do without.”
Hugh Nibley story
Be Careful Where You Borrow!Be Careful Where You Borrow!
Finance companiesFinance companies
Credit cardsCredit cards
BanksBanks
Credit unionsCredit unions
Savings Savings
Pay-day lendersPay-day lenders
0
5
10
15
20
25
30
FC CC B CU S
Suggestion 3 ~500%
If You Have Debt, Reduce ItIf You Have Debt, Reduce It
Plastic surgery Plastic surgery Reduce spendingReduce spendingUse assets to pay off debtUse assets to pay off debtReduce interest rateReduce interest rate– Careful of home equity loans!Careful of home equity loans!– Use another lower cost source of Use another lower cost source of
borrowingborrowing
Make a plan -- stick to itMake a plan -- stick to itTalk to a credit counselor if neededTalk to a credit counselor if needed
Suggestion 4
Protect Your Family with Life InsuranceProtect Your Family with Life Insurance
Term life -- pure death benefitTerm life -- pure death benefit– No savings componentNo savings component– About 1/10th the cost of wholeAbout 1/10th the cost of whole– Expires at age 65 (usually)Expires at age 65 (usually)
Whole life -- death benefit plus savingsWhole life -- death benefit plus savings– Builds cash valueBuilds cash value– Does not expireDoes not expire– Low but fixed rateLow but fixed rate– Use for estate tax purposesUse for estate tax purposes
Suggestion 5
Cash fromInsurance
Added Net Worth
Net Worth
Insurance--Makes Up for Low Net Insurance--Makes Up for Low Net Worth ProblemsWorth Problems
If you have low or negative net worth?If you have low or negative net worth?– Heirs may have difficultiesHeirs may have difficulties– Severe cash flow problemsSevere cash flow problems
Insurance creates an Insurance creates an instant estate--instant estate--it becomes it becomes an asset if you diean asset if you die
AssetsLiabilities
What Kind and How Much?What Kind and How Much?
Term insurance (6-10 times annual Term insurance (6-10 times annual income)income)
Consider convertible termConsider convertible term
Group is least costly but what if you Group is least costly but what if you leave?leave?
Have some for non-employed spouseHave some for non-employed spouse
Prepare for RetirementPrepare for RetirementYes, Even When You Are Young!Yes, Even When You Are Young!
Some Retirement MythsSome Retirement Myths““I’ll live on Social Security benefits”I’ll live on Social Security benefits”– SS will replace only 24% of your pre-retirement SS will replace only 24% of your pre-retirement
incomeincome
““Someone else will take care of me”Someone else will take care of me”““Better be safe and invest conservatively”Better be safe and invest conservatively”
Biggest regrets for retireesBiggest regrets for retirees– Didn’t take full advantage of tax deferred Didn’t take full advantage of tax deferred
investmentsinvestments– Didn’t start earlier to save for retirementDidn’t start earlier to save for retirement
Suggestion 6
ExampleBill starts saving for retirement at age 20Joe starts saving for retirement at age 40
0100000200000
300000400000
500000600000
700000800000
9000001000000
20 25 30 35 40 45 50 55 60 65
20 Start40 Start
Bill has accumulated over 5 times what Joe did by 65!
($2,000 per year at 8%)
$903,800
$172,702
How Does This Work?How Does This Work?
Compound interestCompound interest
Bill started earlier--compound interest has Bill started earlier--compound interest has more time to work its miraclemore time to work its miracle
If someone had put $1 in an account back If someone had put $1 in an account back in 1776 at 8% interest how much would in 1776 at 8% interest how much would the account have in it today?the account have in it today?
$61,000,000 !!$61,000,000 !!
How Much Will I Need in Retirement?How Much Will I Need in Retirement?Money Magazine SurveyMoney Magazine Survey
People Estimate: People Estimate: 53%53% Actual: Actual: 71%71%
One third of retirees support children and One third of retirees support children and grandchildrengrandchildren
Health care costs generally higherHealth care costs generally higher
You’ll want to serve missions, visit You’ll want to serve missions, visit grandchildren, etc.grandchildren, etc.
So you may need much more than 71%
Save at Least 10%-20% of IncomeSave at Least 10%-20% of Income
-100
0
100
200
300
400
500
600
700
20 25 30 40 50 60 65 70 80 Age
(000’s)
Borrowing
Save 10%
Save 20%
Retirement
To heirs
Suggestion 7
Life Cycle Savings
Good Rule to Live By!Good Rule to Live By!
Pay Heavenly Commitments First—10%Pay Heavenly Commitments First—10%
Pay Your Future Self Second—10% Pay Your Future Self Second—10% and then increase it to 20% and then increase it to 20%
What Should I Invest In?What Should I Invest In?
Important principle: Important principle: risk-return trade-offrisk-return trade-off– High risk--high returnHigh risk--high return– Low risk--low returnLow risk--low return
What?What?– Stocks -- ownership in a company (risky)Stocks -- ownership in a company (risky)– Bonds -- loan to a company/government (less Bonds -- loan to a company/government (less
risky)risky)– Deposit accounts -- (insured, no risk)Deposit accounts -- (insured, no risk)
How should I invest?How should I invest?– Mutual fundsMutual funds– Tax-advantaged investingTax-advantaged investing
Best and Worst Total ReturnsBest and Worst Total Returns(since 1926)(since 1926)54%
-43%
15%
0%
20%
-1%
9%
0%
17%
3%
8%
0.4%
One yearholdingperiod
10-yearholdingperiod
20-yearholdingperiod
Stocks: S&P 500
U.S. T-bills
Chances of Beating InflationChances of Beating Inflation
0102030405060708090
100
One-year 5 Years 10 Years 20 Years
S&P500
Bonds
T-bills
Holding Period
%
Chance of Loosing MoneyChance of Loosing Money
0
5
10
15
20
25
30
One year 5 years 10 years 20 years
S&P 500
Bonds
T-bills
Question: When Was the Best 5-year Question: When Was the Best 5-year Period for Stock Returns?Period for Stock Returns?
#1: May 1932-April 1937 367% Return
#2: July 1982-June 1987 267% Return
Second Best?
Invest to Match Your TimingInvest to Match Your Timing
Short period (5 years or less)—put your Short period (5 years or less)—put your money in less risky investments like money in less risky investments like savings accounts and secure bondssavings accounts and secure bonds
Longer period (10-20 or more years)—Longer period (10-20 or more years)—put your money in a well-diversified put your money in a well-diversified portfolio of stocksportfolio of stocks
Suggestion 8
Use Tax Deferred InvestmentsUse Tax Deferred InvestmentsThat meansThat means
You don’t pay taxes on that portion of your incomeYou don’t pay taxes on that portion of your incomeYou don’t pay taxes on the income or growth of the You don’t pay taxes on the income or growth of the investments investments UNTIL you take money out at retirementUNTIL you take money out at retirement
How do you do it?How do you do it?Individual Retirement Accounts (IRAs)Individual Retirement Accounts (IRAs)Roth IRAs (not tax deductible, but…) Roth IRAs (not tax deductible, but…) 401(k) (or 403(b)) -- retirement plans401(k) (or 403(b)) -- retirement plans– Employer may participate (match your Employer may participate (match your
contribution)contribution)– Loan provisionsLoan provisions
Suggestion 9
Diversify!Diversify!Never put all or even most of your eggs in one Never put all or even most of your eggs in one basketbasket
Mutual funds can helpMutual funds can help
Index funds may be best for most of usIndex funds may be best for most of us
Suggestion 10
Don’t be a
Bernard Madoff investor!
Consider a TrustConsider a TrustEstate taxes: about 50% of assets above Estate taxes: about 50% of assets above $2,000,000 per person (indexed)$2,000,000 per person (indexed)Spouse may pass on unlimited amount to Spouse may pass on unlimited amount to surviving spousesurviving spouseBUT…then only one gets the $2,000,000 BUT…then only one gets the $2,000,000 exemptionexemptionIf a couple has more than $2M, need A/B If a couple has more than $2M, need A/B trusttrustThere is huge uncertainty in the future of the There is huge uncertainty in the future of the tax law pertaining to estates!tax law pertaining to estates!
Suggestion 11
Avoid “Get Rich Quick” SchemesAvoid “Get Rich Quick” Schemes
Suggestion 12
Case Study: the Ponzi Scheme
End of January, 2006
Student reports finding this card in the Tanner Building
Reverse side claims:
Invest $6 to $6,000
Earn 44% over 12 days
New economic paradigm!
What is the Annual Return?
(1 + .44)365/12 – 1 =
5,600,000%!
Ponzi Scheme—How it Works
Etc., etc.
KEY: Return comes from new investors and not from any real
economic activity.
How to Recognize ScamsHow to Recognize Scams
Is promised return unusually high?Is promised return unusually high?– Remember the risk-return trade-offRemember the risk-return trade-off
Is product significantly above or below Is product significantly above or below reasonable market price?reasonable market price?
Does sale require pressure tactics?Does sale require pressure tactics?
Does seller emphasize “affinity”, e.g., Does seller emphasize “affinity”, e.g., BYU or Church connections?BYU or Church connections?
Is most of the product purchased by Is most of the product purchased by end users or by other distributors? end users or by other distributors?
Protect Your Data
Identity theft is on the rise– Shred financial documents– Don’t give out account #, CC #’s, PINs, etc. over phone
(unless you originated the call to known party)
Be aware of phishing
Don’t fall for “awards” or any other gimmick in which you have to send in a check
Protect your computer with anti-virus programs
Don’t give out SSNs
Keep informed—new scams are created every day!
Multi-Level Marketing TestsMulti-Level Marketing Tests
Is the product sold primarily to other Is the product sold primarily to other distributors or to actual customers?distributors or to actual customers?
Is the product really of value in the Is the product really of value in the marketplace?marketplace?
Is the price reasonable for the product?Is the price reasonable for the product?
Are the real risks fully disclosed?Are the real risks fully disclosed?
Where Should We Put Our Money?Where Should We Put Our Money?
Food StorageInsurance Health Life
MMMF, Ins. Savings
Home CheckingAccount
Conservative Stock Mutual Funds
Government Bonds
Corporate Bond Funds
Blue Chip Stocks
Growth Stocks Specialty Funds
Corporate Bonds Growth Mutual Funds
GARBAGE:Speculative Investments, LPs, Derivatives, Gambling
Start-ups
Tax-Advantaged Retirement Funds: Growth Stock Mutual Funds
Keep Track of Your FinancesKeep Track of Your Finances
Organize and know how to read your financial Organize and know how to read your financial documents (insurance, retirement, bank and documents (insurance, retirement, bank and investment statements)investment statements)
Create financial reports for your family Create financial reports for your family (assets and liabilities)(assets and liabilities)
Know your monthly cash inflows and outflowsKnow your monthly cash inflows and outflows
Use the Web for financial informationUse the Web for financial information
Develop a planDevelop a plan
Suggestion 13
Computers and the Internet Can HelpComputers and the Internet Can Help
Quicken Money
Manager
Excel
Online BankingTurboTax
Internet
Yahoo!Finance
Learn More about Managing Your FinancesLearn More about Managing Your Finances
For example, read Benna, et al, For example, read Benna, et al, Managing Your Managing Your Money for DummiesMoney for Dummies
Tyson, Tyson, Investing for DummiesInvesting for Dummies, 5, 5thth Edition Edition
Engel and Hecht, Engel and Hecht, How to Buy StocksHow to Buy Stocks, 8, 8thth Edition Edition
http://providentliving.org/media/training/peaceheart/main.html (lds.org > Home and Family > Family Finances) (lds.org > Home and Family > Family Finances)
http://personalfinance.byu.edu/ (lds.org > Home (lds.org > Home and Family > Family Finances > Other resources and Family > Family Finances > Other resources > Personal Finance> Personal Finance
Suggestion 14—Most Important of All!!
ConclusionsConclusions
1.1. Don’t panic—selling stock now may be the worst thing to do.Don’t panic—selling stock now may be the worst thing to do.2.2. In fact, now may be a good time to buy—most stocks are at In fact, now may be a good time to buy—most stocks are at
“bargain basement” prices.“bargain basement” prices.3.3. If you’re employed, become a very valuable employee, If you’re employed, become a very valuable employee,
sharpen your skills, dust off your resume.sharpen your skills, dust off your resume.4.4. Now may be a good time to go back to school.Now may be a good time to go back to school.5.5. Make sure your food supply is in good order.Make sure your food supply is in good order.6.6. Avoid/pay off unproductive debt.Avoid/pay off unproductive debt.7.7. If you can, give even more generously to fast offering, other If you can, give even more generously to fast offering, other
programs to help less fortunateprograms to help less fortunate8.8. Teach your children and grandchildren these principles.Teach your children and grandchildren these principles.9.9. Wise financial management empowers you to serve more Wise financial management empowers you to serve more
capably: family, community, church.capably: family, community, church.10.10. Surely we will be held accountable for how we manage our Surely we will be held accountable for how we manage our
resourcesresources
President Boyd K. PackerPresident Boyd K. PackerNovember 2008November 2008
“… “…in troubled times the Lord in troubled times the Lord has always prepared a safehas always prepared a safe way ahead. We live in those way ahead. We live in those ‘perilous times’ which the ‘perilous times’ which the Apostle Paul prophesied Apostle Paul prophesied would come in the last days. If we are to would come in the last days. If we are to be safe individually, as families, and be safe individually, as families, and secure as a church, it will be through secure as a church, it will be through ‘obedience to the laws and ordinances of ‘obedience to the laws and ordinances of the Gospel.’ ” the Gospel.’ ”
