EUREKONOMICS.com

The Four Pillars of Every Successful Personal Economy

Third Pillar - Whether you face a disability, employment concerns, a family crisis, uninsured medical or long-term care costs, unplanned expenses or any other financial challenge, you'll have money in your EUREKONOMICS™ account to handle it.

You are here: Home >> The Pending Recession and Personal Financial Armor…
  • Decrease font size
  • Default font size
  • Increase font size

"Fasten your seatbelts. It's going to be a bumpy night." All About Eve, 1950

John and Marion's business is just beginning to pay off after two years of struggling to get started. Unfortunately, their business is not recession proof so making sure their personal economy is prepared for the negative effect a major slump might have on it - and them - is critical.

When the economy gets bumpy, there are two of the Four Pillars to which you need to pay close attention; freedom from debt and having ready cash to deal with the surprisingly unsurprising surprises that life sends your way. This is especially true for small business owners who rely on cash flow more than the employed worker.

John and Marion have decided to re-organize a few things to assure liquidity if a down-turn affects their personal economy to a greater extent than they anticipated.

  • First, they refinanced their home at a significantly lower interest rate, so their monthly payments remained about the same.

  • They also "harvested" an extra $20,000.00 of equity from the refinancing and used that money to eliminate all of their other debt - mostly credit card debt - freeing up several hundred dollars each month.

  • That leaves them with just one other debt to repay; a loan they made to themselves from the cash values of their life insurance policies - their EUREKONOMICS™ Accounts. This loan will be eliminated quickly using the extra cash flow. This will restore the cash values in their policies. These values are guaranteed to grow every year regardless of what happens in the general economy and become the family's and the business's first line of defense against life's surprises.

  • Their mortgage then becomes their only debt.

  • They also obtained a $100,000 equity line of credit today that they may not be able to get later. Should the business encounter "a bumpy night," and their business or their personal economy requires it, John and Marion can tap into their HELOC.

There is one aspect of John's and Marion's personal economy that would be troublesome in a severe recession; their investments. Most of the money they have invested is in mutual funds that could lose significant value in a recession. The couple has decided to watch their mutual funds and the market more carefully in the months ahead and to move the money into cash or cash equivalents if the values begin dropping a lot.

Their mutual fund sales rep suggests that they should ride out the "bumpy night" and that the market will rebound - eventually. John and Marion believe that they would rather lose the potential for an eventual gain in return for a smaller guaranteed one today.

The EUREKONOMICS'™ Money for Life taught John and Marion the strategy that armors them against recessions, depressions, inflation, deflation or stagflation. Ask yourself whether or not that strategy makes as much sense for you as it does for them. If so, then take advantage of this...

Comments (1)

Subscribe to this comment's feed
...
jeffforrest
Jeffrey---
Right on! Clear, concise, accurate and true. So many Americans can....and should do....what you outline above...
jeffforrest , August 22, 2010

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy