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Last week, Andrea from one of my favorite blogs Fools and Sages wrote a piece called The Slippery Slope of Consumer Protection. Her conclusion was that a double-standard exists in the area of consumer protection. Here on Hope to Prosper, I am a bit of a consumer advocate. So, I decided to write a post dedicated to consumer protection and responsibility. This is a topic that has a host of financial ramifications and a number of moral dilemmas.
People without Conscience
 Photo by DaveToaster There is a segment of the population who feel they shouldn’t be held accountable for their actions. They believe it is their basic right to do whatever they choose and allow the responsibility to fall upon others.
They know how to work the system that was put in place to protect the weak and the vulnerable. They run up debt and then declare bankruptcy. Or, they look for opportunities to sue others, even if they are primarily at fault. They have no qualms about taking from others nor are they embarrassed by their lack of integrity. Often, they will joke or boast about their transgressions.
It’s fairly easy to cast judgements upon people. But, it’s not so easy to legislate morality. It’s nearly impossible to write effective laws to protect consumers, without allowing opportunities for the caniving. There is no perfect solution to this problem. Compromises are inevitable.
What is the most effective way to deal with schemers?
Continue reading Consumer Protection & Responsibility
At some point in our lives, most of us will experience money problems. For some, these problems may be minor and short-lived. For others, these problems may be severe and last a lifetime. Money issues can cause health problems and marriages to fail. So, it’s not something to be taken lightly.
The good news is that money problems can often be overcome. Even the worst financial conditions can be turned-around or at least improved. There are simple steps to mitigate money problems and turn the corner towards prosperity.
Step 1 – Face the Problem
 Photo by What Meg Said I read a sad story in Yahoo Finance about a woman with $555,000 in student loan debt. Her loan balance was around $250,000 when she graduated from medical school in 2003. But, she deferred her loans and then defaulted. So, the interest and penalties more than doubled the outstanding loan balance.
This illustrates an important aspect of personal finance and life in general. Ignoring a problem almost always makes it worse. You can’t make money problems go away by ignoring them. You have to face them head on. Even if this is unpleasant for you.
Step 2 - Identify the Cause
Every situation is different. But, here are four main causes of money problems:
- Too little income to support yourself
- Too high of expenses for your income
- Lack of spending or budgeting discipline
- Debt interest undermines your finances
Continue reading Overcome Money Problems
A shaky stock market can scare investors away at precisely the time when they should be investing. A booming stock market can lure investors in at precisely the time when they should be selling. So, how do we know when to go all-in and when to get out?
The answer is, no one really knows. There is always someone who claims to know. And, there are even a few who were right about the last bull or bear market. But, no one has been proven to consistently time the market. So, I don’t recommend this approach. There are more reliable ways to make money in a shaky stock market, without a crystal ball.
Dollar Cost Averaging
 Image by Nick Douglas Most investors know about Dollar Cost Averaging. This is where you invest the same dollar amount every month. Most financial advisors recommend it, because it benefits both the customer and the advisor. The big promise of Dollar Cost Averaging is that it forces you to buy when the market is down, so you are “buying low” as you invest in a down market. The bad news is that it also forces you to “buy high” in an overpriced market.
Here is why I like Dollar Cost Averaging and have been doing it for decades. Investing consistently is the key to accumulating wealth. It’s not so much the averaging of the share prices as the habit of investing that is the secret. Once you get used to investing every month, that habit quickly replaces the habit of spending all of your money. This is the first step on the simple path to wealth.
Continue reading Investing in a Shaky Market
Yesterday, the Democratic establishment got a huge shock when the state of Massachusetts voted Republican Scott Brown into office for the U.S. Senate. Massachusetts is a staunchly Democratic state and Brown was elected to take Edward Kennedy’s seat. Kennedy was a big supporter of Government health care, which Brown and most voters are not. Brown’s election victory has revoked the Democrat’s super-majority and killed any prospects for a Government run health care system.
Most important, it has sent a message to politicians that voters will no longer be ignored. They are angry with the Government and they are doing something about it. They are voting out incumbents, as they did in November to the Governors of Virginia and New Jersey. I predict incumbents will lose a lot of seats in the next election and not just Democrats. Republicans have shown an equal am0unt of arrogance and incompetence. And, they share the blame for our Government’s failures.
Balancing the Budget
 The Federal Government is slow to catch on to what most Americans figured out last year. No one can keep spending money they don’t have. But, while most Americans have started to balance their own budgets and save for their futures, the Federal Government has gone on a wild spending spree, with the taxpayer’s money.
Just as the Government is attempting to raise the debt limit by another 1.9 Trillion dollars, Americans are starting to realize our precious tax dollars are being squandered away. There is very little benefit to Main Street Americans, because most of our tax money is finding its way to wealthy entities, like banks and energy concerns. Our economy cannot recover under the burden of a voracious Government. And, there are very few opportunities for the hordes of unemployed.
Continue reading The End of Reckless Spending
How it Works
 Photo by MV Hargan For those of you who aren’t familiar with The January Effect or a Santa Claus Rally, it is caused by investors who sell at the end of the year for tax purposes and then buy again in January.
This causes a surge in the prices of small-cap stocks, which may lift the broader market. It is also possible this surge is helped by year-end bonuses, some of which is invested in the market.
In the past couple of weeks, we have seen a lively rally in the stock market, courtesy of the January Effect.
- Russell 2000 +7.5%
- NASDAQ Composite +5.5%
- S&P 500 Index +3.1%
- Dow Industrials +2.6%
Continue reading How to Profit from the January Effect
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