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We Need More Than Just Budgetting

 


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Some are predicting a deep recession in the US, others believe that the US is resilient enough to come out of this and just experience a slowdown. Whatever the final outcome it makes a real difference on your investments as a deep prolonged recession is not very good for most asset classes. Commodities prices will decline as this slowdown will affect Asian economies so demand will decline. Long term commodity prices will remain high and can still move upwards but expect a correction if there is a slowdown. Many advisers regard price falls in commodities as another buying opportunity.

Equity markets will have further to fall as earnings projections fall in line with gloomy economic predictions. Government bonds are already pricing in a deep recession and if inflation remains in the system then i cannot see any value in long dated bonds. Advisers are suggesting that investment grade corporate bonds are offering value as they are offering enticing yields after the recent sell off.

Advisers are always recommending that we put money away in tax efficient vehicles like ISAs and pensions but fail to teach us how to earn the extra money to actually do that. Mortgages are rising, council tax bills are a joke, energy prices continue to rise, petrol prices seem to have no ceiling and food price rises are not helping with weekly budgets. What we really need is ways of increasing our income levels in a way that the tax man does not swallow most of it so that we can pay the bills and invest for our retirement and our kids future.

With the economic picture not looking great advisers should tell us how their rich clients seem to get richer but the average worker with a 9 to 5 job continue to struggle with bills and trying to save enough in to these so called tax havens. One way is to build a successful business that will yield a decent income which often has good tax advantages as the increase in expenses can be offset against your tax bill. Looks like i will have to concentrate on my internet business course a lot more than i am. That should not be too hard to do as TV nowadays are full of rubbish anyway!

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