O My Word!

In the short-term, there are probably many of us who may not feel the immediate impact of the international financial downturn and the recent bailout, but in the long-term, we'll all feel it.

Whether it's when we try to buy a home, a car, renegotiate the terms of a loan or credit card, all those items have been affected. It's just a matter of when we'll feel it.

Some predicts that this financial crises may take at least 10years to repair itself before we see a marked improvement on a global level. Some say it may be longer.

If you have a job, chances are that you are heading for a bumpy road ahead. Maybe it's time you start to explore other avenues to cushion the blow of losing your job before it happens.

Global financial markets are experiencing some of the most challenging conditions ever witnessed. In recent days, as global financial conditions have deteriorated markedly, governments around the world have taken unprecedented steps to guarantee the liabilities of their financial systems.

The Australian financial system is demonstrating its resilience to the international financial market turbulence. Australia’s banking institutions remain sound, well-capitalised and profitable with high asset quality.

The Australian financial system is however being affected by global events. Recent developments in the international wholesale funding markets have created acute funding pressures that now pose potential risks to the total supply of finance to the Australian economy.

This has the potential to slow further domestic economic activity.

Quote:
"Prime Minister Kevin Rudd has warned that economic growth and job security could be in jeopardy as the global financial crisis entered a "new and dangerous" phase.
As he equated the current financial turmoil to a national security crisis, Mr Rudd today signalled the jobless rate for next year was likely to be higher than originally forecast in the May budget.
While Australia remained in better economic shape than many of its contemporaries, Mr Rudd said there would be challenges.
"Australia is better positioned than practically every other country in the world to see its way through this crisis," he told reporters.
"(But) this global financial crisis has entered a new and dangerous phase with real consequences for growth, for jobs and therefore for the future.
"We are in the economic equivalent of a rolling national security crisis.
"The challenges are great but the government has set a strong course of economic policy to see Australia through this economic storm."
In the budget, the government forecast a jobless rate of 4.75 per cent by June next year but that prediction was made prior to the global financial crisis.
"Given the developments in global financial markets and what has been a really turbulent couple of weeks, as night follows day there's a roll-on impact in terms of the real economy and jobs," Mr Rudd said.
"So, unemployment is likely to be higher. That's just levelling with people ... It's likely to be higher than has been projected. We don't have numbers on that."

I have an investment portfolio. Part of it is invested in the stock market. Obviously, I lost money, but I don't feel “awful” about it because these are paper losses. I won't need this money for at least a few more years and selling now for cash may be penny wise pound foolish, so short-term losses are meaningless. If you are young and have several years before you will actually need your super or investment money, you are correct in thinking that your retirement finances does not worry you.

If you're retired (or will be soon), chances are you're obsessed with exactly one thing, getting a predictable income stream that's as safe as possible while still delivering a decent return!

For people who are near retirement, this is scary, maybe they should change the way their asset are allocated, not sell, but take a closer look at it now. Regardless of what anyone says, no one over 50 should have more than 30% of their portfolio in the stock market.

Even if you haven't been affected, I'm very happy that you haven't, but it makes sense to prepare. If you have debt, take advantage of any low interest rates, the banks passes it on to you, to pay off as much of that debt as you can. Try to get used to living more simply and mind your money. If you have a good job, make sure you are perceived as valuable, so that you can escape possible future layoffs.

But I think what really scares most of us, is the possibility of the global economy sliding into depression. If that happens, it will affect each and every one of us. There are ways that you can avoid the pain when this happens. But you must be prepared to do so NOW. Educate yourself to see the signs and mind your money. Why not prepare your own rescue package now.