Shari Olefson P.A. - Financial Fresh Start: Your Five-Step Plan for Adapting and Prospering in the New Economy

ACKNOWLEDGMENTS

W riting a book, in some ways, feels similar to what I suspect infidelity might feel like. Particularly as deadlines approach, weekends, evenings, and virtually every spare moment in between are spent cheating on your spouse and kids to be with your book, essentially putting the goodthe value you hope to add for readersabove your own familys needs. And so, now that Financial Fresh Start is complete, it seems appropriateokay, downright necessaryto say thank you to my entire household, including our dog Zoe, for your patience with dirty laundry, the litany of other chores that went undone, take-out dinners instead of home-cooked meals, and for tolerating gazillions of early mornings and late nights at the computer. Naturally it takes more than even the most wonderful, amazingly supportive family in the world to bring a book to life. Enter Bob Nirkind and Chris Murray, professionals, mentors, and confidants extraordinaire. These guys epitomize passion, drive, and untiring support--on occasion reminiscent of a strict high school principal, and they completed the proverbial circle, helping to create what I believe you will find to be a truly worthwhile book. Finally, there have and continue to be many people working hard every day to help insure that America and Americans just like you get their fair shot at an intelligent and successful financial fresh start. Please check out the online acknowledgments at www.askshario.com/acknowledgments so we can be sure these folks get the credit they well deserve.

CHAPTER ONE

Getting a Handle on Your Big Picture

What Will You Learn from This Chapter? This chapter connects the dots for you by explaining what the heck happened in America and around the world in financial markets and how the meltdown has impacted your own financial situation. Youll also be introduced to the new rules and reforms created in the wake of Americas Great Recession. Youll learn what they are, what they really mean, why they matter, and what you can expect next.

How Will This Knowledge Help You? Being uninformed translates to disadvantage, missed opportunity, and a higher likelihood of facing more financial obstacles. After reading this chapter, you will have the basic need to know background and broad-stroke understanding of the new rules and reforms that impact every facet of your fresh start plan toward financial prosperity.

First, a Look Back

A fresh start is all about moving forward. But the path you decide to take and, more important, where that path will take you depend on where you are starting from and what is going on all around you as you journey forward. This chapter sets the stage for your own personal fresh start by explaining what the hecks been happening around you, undetected, right before your eyeseconomically, politically, culturallythat has ultimately climaxed in the financial challenges confronting you today.

In many ways, these worries are the very things you are feeling (but perhaps cant quite put your finger on) that keep you awake at night. Whats been happening to your income, expenses, assets, and debts? What about the countrys finances? What does what happens in other parts of the world have to do with your finances? How do the reforms and new rules from Washington in reaction to the Great Recession impact you? How can these rules and reforms help you rebuild your prosperity? This knowledge will allow you to understand the big-picture backdrop behind your current financial situation (and the nations) and also understand the broad strokes of the rules and reforms that emerged from Americas financial challenges.

And this chapter will more easily identify elements you need to incorporate into your own fresh start action plan, so youll be better able to adapt to inevitable changes to rules and reforms and prosper in the new economy.

Why Americas Economic Evolution Matters to You

If youre like some folks today, you find yourself checking out when discussions turn to the economy. Partially becauselets be honestit sounds a tad boring, or maybe things just seem to have gotten too complicated. But its also because it feels as if theres not much you can do about the economy anyway. The general assumption today is that rich people, big companies, and politicians control the economy. Average folks like you have no say in these things, right?

Wrong! Knowing the basics about whats going on, the buzzwords you should be listening for, and what you can safely ignore are all imperative to making the right choices in your own plans for achieving your own financial goals. In fact, perhaps most ironically (as you will soon see more clearly), it is oftentimes the everyday American whose behavior actually determines the course of the economy. Take, for example, the way banks and Wall Street panicked in 2008 and Americas government and politicians woke up and sprang into gear when average Americans on Main Street, just like you, stopped paying their home mortgage loans.

Americas economy matters to you because, in many ways, the country is like a company and you are one of The America Companys shareholders. When The America Company is in good financial shape, the benefits of its success flow to you as a shareholder in countless ways. For example, you may wind up paying less for your own healthcare because The America Company can afford to provide you with some of those services. Or maybe you get a break by not having to pay income taxes on the money you spend on childcare, again because The America Company can afford to run its business without needing that extra cash from you. The financial health of The America Company sets the pace for pretty much the entire business climate, which translates to your own financial situation. When the country is doing well, there are direct and indirect and immediate and long-term ways you wind up with more money in your own pocket and a better shot at improving your own financial situation.

But the opposite also holds true. When The America Company faces financial struggles, you get less from it, and the countrys struggles, one way or another, wind up costing you hard-earned cash in more ways than you may know.

The connections between Americas economy, your own financial situation, and some of the ways you can protect yourself and your money will become clearer for you very shortly. For now, suffice it to say that even if conversations about the economy feel alien, overly complicated, redundant, or boring, there is no denying that Americas economy has a very direct and very big impact on your personal financial situation and your own life, plans, and goals. Fortunately, the few things you really do need to know about Americas economic evolution in order to protect yourself and prosper are simple. And you can rest assured that this discussion will focus only on basic, must know aspects of Americas economy that are easily accessible and immediately useful to you and your personal financial situation, and well do that together in under ten pages.

Americas Financial Goals Are Just Like Yours

If youre like most folks, your top financial priority is ensuring that your income exceeds your expenses so that you can pay your bills and make ends meet. In the bigger, longer-term picture, your goal is ensuring that the amount by which your income exceeds your expenses continues to grow so that you can enjoy an increasingly robust lifestyle, build up your savings and investments, and pay down any debt you might have accrued, so eventually you wont have to worry about money and can retire on time, all without feeling like youre sacrificing. Is that really too much to ask for? The term upward mobility is commonly used to describe this shared vision. And, over time, it has become an expectation that Americans often simply assume will come to fruition.