I didn’t really think that setting up an emergency fund was necessary until I was off for a month. I had to resolve into using credit card just to pay my car insurance. I had only $300 in my saving account. I got panic and didn’t really know what to do. I finally save $1000 for my Emergency Fund. I don’t know what situation you are in now, but I know that putting at least 5 months of money in an Emergency Fund is a wise decision.

You Could Get Fire Any Day
I deal with customer a lot doing networking. If I say something wrong and the customer report it to my project manager, then I can be written up or get fire. You can never think that you are safe because you have work. Work is not a backup for when things goes wrong. If you cannot save at least 5 months of saving for emergency, then you should at least save $1000. I didn’t work for a month but I was happy that I have some money save to supplement my paycheck.

Unexpected Things Always Happen
You never know when you car is going to break down. You friend might tell you that he is going to have a wedding. You could lose your job tomorrow. You will always have a rainy day that is a fact. You could lose your house if you don’t have work, and can’t pay the mortgage. We have to set aside some emergency to counter these unexpected events. When you are saving for emergency, you should only use that money for emergency. Don’t buy your girlfriend $500 phone and say it is for emergency; that is not a emergency. Emergency is when you can’t pay your light bill or mortgage payment. Emergency is when your car breaks down.

You Feel Better When You Have Some Money Save
I guess when your in a hard time and you have a few thousands save for emergency fund; you don’t get a lot of stress on what happening with the economy. Do you agree? When you have money save up for 5 to 7 months for emergency, you feel the sense of wealth. You might not have a million dollar but you feel secure when you set back up for yourself.

Final Thought
If you have not start a plan to save for Emergency, then I suggest you work hard to save a thousand by this month. We can never know what is going to happen tomorrow, but we can always be prepare for it. If you like this article please consider becoming a member and subscribe to get your free blog daily using the RSS feed.

I am no different from many people. I am in debt. I am in $6000 credit card debt now. I can pay it off within 6 month if I do follow these 5 steps. I must identify the problem. I must put a freeze on my credit card. I also think that you should have at least $1000 in emergency fund in case you lose your job.

Identify The Problems
The common problem that people have is that they can’t stop spending. You partner might be part of your problem. You need to know if you girlfriend is a type of person that see things and must have it now. You need to tell her this has to stop because you’re really in debt. If she doesn’t care then she is just using you for your money. You need to know what is stealing your money from your wallet. How much is eating out with your girlfriend? How much is gas costing you when you go see her if you have long distance relationship? How much is hotel costing you? Create a spreadsheet and identify what is costing you.

Freeze Your Spending On Credit
Don’t add more to your credit card balance because you can never get it pay off. Put you credit card away, and hide it from yourself. Put it into a safe so you don’t even touch it.

Use Cash For Most Of Your Spending
Put a sticker on your credit card and remain yourself that this is only for emergency only. Learn to break away from credit card by using cash to pay for most of your spending.

Have $1000 At Least In Your Emergency Fund
This $1000 should only be use for when you are running late on payment or lost your job. What ever you earn in the future should be use to pay of your debts. I recommend that you pay on the one you own the least amount. If you own $1000 in one credit card, and the other in $5000 in another credit card, then I want you to pay the $1000 first so you can get a quick victory from combating debts. The reason for it is that you are making progress when you start from small to big.

Learn To Use Cash Instead Of Credit Card
When you are so use to paying most of your items with a debit card or credit card, it is very difficult to pay in cash. Start using cash every time you spend and see what different it make.

I never read any books about Warren Buffett. I respect the old man. Our investing style is very similar; the only different is that I am still young. If I were a young Buffett, what would I do? I would do what I been doing. I would need to have more courage and discipline just to be at his skill. I learn my investing skill from the same teachers that taught Warren Buffett.

Warren Buffett vs. New Young Buffett
I am sure that everyone is working hard to be the next Buffett. I don’t want to be the next young Buffett. I want to be the next young Graham and Fisher. The only reason for that is I read their books and I learned most of my investing from them. I respect them as my teachers who taught me so much about investing. I guess the hardest thing for me is that I have to believe in my abilities. I listen to the market too much and let the market become my master. I sell when the market is telling me to sell.

The Young Buffett’s Strategies
I would like to have the courage to hold outstanding company almost forever. I like to buy trash that I believe can become gold. I don’t like to pay too much for any stock. I like at least 30 percent discount. I like to have some margin of safety. The market doesn’t really scare me even though we’re in a recession. I just keep buying more outstanding and promising companies that are really cheap. I like to find quality companies that can be a great long-term investment. I don’t want tech companies such as (XMSR) XM Satellite Radio, Sirius Satellite Radio, or (VMW) VMware that I don’t really understand and know much about.

Final Thought
Compare to Buffett, Graham and Fisher, I am still learning. My investing need a lot of touch up compare to those three. I also want to prove to the person that said that old wisdom doesn’t work in current market. I think he is full of himself to say those comment. If Graham was alive, then he would have already saw the tech bubble and the housing bubble before it happen. The reason for that is because he already lives through it. When people are pushing tech stocks and housing stocks to dangerous level, it was bound for a crash.

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Even though the economy is in bad shape you can still find ways to protect yourself from the recession. You can still shift your money to government bond. When we are in a recession people tend to want to put their money in a safe place. You can use Forex to trade currency, but I don’t know much about it. I will leave to someone who has strong understanding of it.

Buying A High Yield Stocks
When I think about this approach, I have to tell you I don’t like it. I think owning company that pay high dividend yield in a taxable account doesn’t make sense very much. Would it be no different than owning a government sponsor bond? Where do you shift your money into when we are in a recession? I think owning high paying dividend stocks in a ROTH IRA make more sense because you don’t pay tax on that yield. I still own (PFE) Pfizer in my ROTH IRA account for long term. If your a large corporation and you can’t come up with a new drugs, then I think that is stupid. I believe that (PFE) Pfizer have the money and brainpower to come up with new drugs.

Shifting Your Portfolio To Bond
Do you think that shifting to commodity would be the ticket to fight inflation? I guess it would make sense if you got in early when commodity was cheap. When Treasury Bond is somewhere between 4 to 5 percent according to ValuBond that is not much at all, because it can’t even beat inflation now. Should you shift some of your portfolio to Treasury Bond? I guess you could shift some of your portfolio to government bond since you’re back by the government 100 percent.

Cash Is King
I think that putting your money in a online saving account would make some sense because you are safe from any market shift except the interest you get from it. You can find which banks offer the most rate by visiting bankrate.com. You also have to think about inflation because it is decreasing your buying power; plus you would have to pay tax from the interest in your saving account. This stuff is very confusing.

Final Thought
I don’t know what the best solution would be best but I am going to do what I been doing. I am going to buy more of what people dump. Yup, I am digging in the trash for the stocks that would be a comeback. If I had bought Sear Holding when people were dumping it and it was around at $10 a share, then I would have made a big profit from it. I was dumb back then not to recognize a business. When people only look at stock quote, they forget how much the business is worth.

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What should you do when oil is up to $140 a barrel? Should you sell your stock because the Dow is down 400 points? When I look back on my past investing, I realize that I usually buy when everyone panic or scare from what happening with the market. Do you think I am stupid when everyone is dumping financial stock but I am buying more of it?

The 1929 Depression
If I remember my history correctly, this is not the first time financial were in trouble. During 1929 depression home could be bought for a few thousands dollar compare to today. The banks were closing and not opening to consumers because they don’t have any money for them to redrew.

The deposits dry up because banks used those deposit to bet on the stock market. When President Roosevelt came into power and created the New Deal campaign; the economy got back on it feet.

The Past Cannot Be Used
The past cannot be uses to determine the future because the condition are not the same. What we can do is learn from it so that it does not repeat. Why do I say that? We can see a pattern on how the market behaves but we cannot be 100% sure. I don’t believe that in time things will sort itself. What must be done is to have a leader like Roosevelt that can solve problems. Nobody want a leader that think things will sort itself out while he is having a party at his Hampton home.

Final Thought
I think that panicking is the worst thing you can do when the house is on fire. What you must do is to be calm and try to find a way out. Panicking wouldn’t do you any good since you already lost money on your 401k or stocks. Should you sell out and take the lost or buy more? The question I should ask is can the company you owned weather the storm? If the company you owned cannot weather the storm like Country Wide then there is no reason to be dreaming and hoping.