Wednesday, June 15, 2011


Marion Pellicano Ambrose
Former Secretary of Labor Robert Reich recently warned that the U.S. is likely headed back into recession. Such a move would bring us into what is called a “Double Dip Recession”. This is when gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession .The causes for a double-dip recession vary but often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn. A double-dip, or “W Shape” Recession is a worst-case scenario, yet many experts in the economic and financial sector have voiced concern.

What can you do to protect yourself and your family in the event of such an occurrence?
First: If possible, have an emergency fund set up in a high interest FDIC insured bank account. This will keep its full value no matter what happens in the market and will give you access to money in case of a layoff or cut in pay.
Second: Diversify! Don’t have all your money invested in one place. Remember Grandma’s saying “Don’t keep all your eggs in one basket”? This is what she meant. Savings, varied stocks, money market, savings bonds are all areas to consider. Also, look to the long term. Don’t sell your stock at the first drop in the market. Patience and vigilance! Watch for a cyclic pattern.
Third: Mother Seton said: Live simply that others might simply live.” Don’t live above your means. Be thrifty and conservative. Avoid using credit whenever possible. Put off unnecessary spending until the economy improves. If you and your partner are a two income family, try to live on one of those salaries and bank the other. Not only will you gain wealth, but you will be prepared in case one partner is laid off or experiences a pay cut.
Fourth: Be careful with your credit score. It’s better to have a few older credit cards than several new ones. Pay bills on time and if possible, pay more than the minimum payment. Your credit will improve, you’ll save a huge amount of money, and you’ll pay debts off more quickly.
Fifth: Find a financial advisor you can trust and who has a good history of wise investments. These days, financial matters are so complex that there is no shame in admitting you have no idea what’s going on! I often feel like the paperwork for my retirement is written in a foreign language! When I’m confused or feel like I don’t have a full grasp of the situation, I call my financial advisor and he explains it in simple English so I can make an intelligent decision.
I admit, I’m not a financial expert, and I didn’t even stay in a Holiday Inn Express last night, but reading, researching, and talking with those who are experts has taught me a great deal, which I’m happy to share. I hope you and your family will be secure and prepared in the event of a Double Dip Recession.


  1. I read this when you first posted it and didn't think much about it but now I'm beginning to worry that you're right!

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