It seems counterproductive to define our own self worth based on something that should be used as a tool to provide for our life, and not define our life.

With all of this turmoil, is there anything we can control? YES!!!

Debra Kunz shares ways to create your life instead of just react to it. Learn to shift your perspective from living by default to defining what you want; and from fearing the economy to understanding what you can control.

About the Facilitator
Debra Kunz, MBA, CSLP is a speaker, author and coach on life and business issues such as strategic life planning, team dynamics and business changes. She teaches individuals, groups and businesses to create their life and business instead of react to it.

Contact her for information about presenting this program, and others, for your organization. dkunz@iia-kc.com or 913-897-2074.

The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent, the highest level since December 1993.  As such, economists believe that a rise in personal savings rate is a good change in the long run, but they worry that may make the rebound from the recession slower than it otherwise would have been.Consumer spending accounts for about 70 percent of total economic activity. Thus, more consumer spending equates to economic growth.  However, excessive borrowing and spending is what got us into this economic mess.  Therefore, you can’t expect to have increased consumer spending as they adjust to the financial / economic setbacks that has befallen them over the last 12 months.  Paying down current debts / bills and rebuilding their nest eggs is a priority and a necessity, especially since social security and pensions will play an every decreasing role in peoples’ retirements. 

I find it ironic that the stock market would react negatively this morning to this news, because it is not a surprise.  Consumers need to address their current financial obligations and get a much better handle on their personal finances before they can open up their wallets and pocketbooks.  Don’t preach the message of savings, prudence and taking fiscal responsibility and then be disappointed when consumers spend less and save more, especially in an environment where unemployment is at a 25-year high.

No one is immune to excess spending

Michael Jackson was not only an entertainer, but also a billion-dollar business.  Unfortunately, both came to an end with his death yesterday at age 50.

The “King of Pop” sold over 61 million albums in the U.S. and lived lavishly.  However, at the time of his death he was reportedly awash in about $400 million in debt and trying to make a comeback.  Details of Michael Jackson’s excessive lifestyle and spending were disclosed in a 2005 trial, which ultimately ended in an acquittal.  One forensic accountant testified that Mr. Jackson had ongoing financial problems and was spending $20 million to $30 million more per year than he earned.

Unfortunately, for all his musical talent and the hundreds of millions (if not billion) of dollars he earned over his career, part of his legacy will be dying as pauper.

Cap and Trade and what it means to you

Cap and trade pertains to legislation that would regulate greenhouse gases emitted by businesses and result in some of them paying penalties or having to buy credits for exceeding a certain level of emissions.  I believe in a clean environment and recycling is a priority at home as well as the office.  That being said, there are various opinions on global warming and its impact.  As such, I am not going to enter this debate.  My only reason for broaching this issue is to make you aware that there are costs involved with all of this.

This morning I heard a KCP&L spokeswoman (energy provider for the greater metro KC area) state that the current legislation being proposed, if passed in its current form, would raise electrical rates by a minimum of 50% for its customers by 2012.  This rate increase would befall consumers and businesses.  The increase would be the result of KCP&L being required to pay penalties on current electrical plants, while at the same time begin constructing new (less polluting) plants.  All of these costs will be passed onto its customers.  No matter where you stand in this debate, I have attached to links that you may find of interest.
http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=14175714
WSJ.com – Opinion: The Climate Change Climate Change

I only bring this up because by 2012 the U.S. and world economies should be much improved and growing.  However, if such legislation is enacted the costs borne by businesses will be passed on to their customers.  This will result in much higher costs and have a significant impact on consumer’s ability to save and spend.

For us in the U.S. 2012 is of particular interest because in 2011 the current tax rates will expire, and the expectation is that they will go higher to address the expanded deficit.  As a result, it could be very dicey for a recovering economy to be hit with higher energy costs that impact all sectors of society and higher taxes.  This does not mean consumers will stop buying tooth paste or going to McDonalds, but they may buy less of various items and definitely reduce their spending on non-essentials and entertainment.  Unfortunately, these industries will be in full recovery mode by 2012 and won’t need new challenges.  Otherwise, those employees who were hired within the last two years (2010-2012) may find their job security very temporary.

Overseas news

The European Central Bank, our version of the Federal Reserve, has lent $622 billion to European banks in an effort to stabilize its financial system.  The Europeans have lagged the U.S. in addressing their banking crisis; however, they are taking steps to stabilize their banks.  The sooner European banks become financially stable, then the sooner they commence with providing loans to individuals and businesses, which is a necessity for economic growth.

Ironically, China has different concerns.  Chinese banking regulators have urged the country’s commercial lenders to tighten up their lending practices.  Authorities have growing concerns over the abuse of bank loans for stock and real estate speculation.  There has been explosive growth in commercial loans in recent months, and they do not want this money to artificially inflate prices and create “bubble like” conditions.  Irresponsible lending and speculation played a major role in the current global recession.  As a result, I sincerely hope the Chinese take a very prudent approach to their lending practices.

Events Update
We had a nice turnout for the “client appreciation” event earlier this week.  It was very rewarding to see individuals and couples who have been clients less than a year and some for over 20 years.  Toan, Sally, Deb and I truly appreciate allowing us the opportunity to get to know you and be part of your lives.

Quotes

“No success can compensate for failure in the home.”
        David C. McKay, religious leader

“The true leader serves.  Serves people.  Serves their best interest, and in so will not always be popular, may not impress.  But because true leaders are motivated more by loving concern rather than a desire for personal glory, they are willing to pay the price.”
        Eugene B. Habecker, President Taylor University

‘Remember that the biggest gap in the world is between “I should” and “I did”.’
        H. Jackson Brown, Jr. writer
       
By Tony Moeller

The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only.  It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.

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