Cover image for Financial security in troubled times : what you need to do now
Title:
Financial security in troubled times : what you need to do now
Author:
Edelman, Ric.
Personal Author:
Edition:
First edition.
Publication Information:
New York : HarperBusiness, [2001]

©2001
Physical Description:
xiii, 146 pages ; 22 cm
General Note:
Includes index.
Language:
English
ISBN:
9780060094034
Format :
Book

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Library
Call Number
Material Type
Home Location
Status
Orchard Park Library HG179 .E34 2001 Adult Non-Fiction Open Shelf
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Summary

Summary

Ric Edelman is donating 100% of his profits from the sale of this book to relief efforts and other charities. Edelman's goal is to raise $500,000 through sales of the book.

In troubled times, it is only natural to worry about our financial security. That's why now is the time to act -- to preserve your financial well-being, and that of your family, and to ensure your peace of mind.

Financial expert and best-selling author Ric Edelman has written this guide to help all of us quickly safeguard our economic lives, and he is donating 100% of his profits from the sale of the book to relief efforts and other charities.

Edelman's eight-point action plan -- actions that you can take right now -- will help you protect yourself and your family, as well as your money, your income, your job, your home, your possessions, and your business. You'll learn how to manage the powerful emotions that can cloud your financial judgment, and find the guidelines you need to make the right investment decisions now that will secure your investments today and prepare you for the future.

And because it is more important than ever that we be generous in our charitable giving, you will learn the best ways to give, so you can lend support to all our neighbors who are in such dire need of our help. Edelman's goal is to raise $500,000 through sales of the book.

Financial Security in Troubled Times will help all of us face the future, knowing that our financial house is in order and that we are ready to meet the challenges ahead.


Author Notes

Ric Edelman is the chairman and CEO of Edelman Financial Services, LLC and the author of numerous books about personal finance. He graduated Cum Laude from Rowan University in 1980, and from the Executive Program from Singularity University in 2012.

He hosts a weekly radio show entitled, The Truth about Money with Ric Edelman, and his similarly titled tv show airs on over 200 public television stations.

His books include the bestseller, The Truth about Retirement Plans and IRAs, as well as The Truth about Money, Rescue Your Money, and The Lies about Money.

(Bowker Author Biography)


Reviews 1

Publisher's Weekly Review

In yet another demonstration of the industry's quick response to the September 11 terrorist attacks, Ric Edelman (The Truth About Money; Ordinary People, Extraordinary Wealth) offers Financial Security in Troubled Times: What You Need to Do Now. "In the aftermath of that terrible day, people have begun to wonder about the safety and security of their jobs, their investments, their homes and their families," he writes. To that end, he presents eight chapters which discuss cash reserves, mortgages, job security, estate plans, investment strategies and more. And although readers might question the quality of a book that was written "in just two days," this is nonetheless a timely financial guide. (Nov. 1) (c) Copyright PWxyz, LLC. All rights reserved


Excerpts

Excerpts

Financial Security in Troubled Times What You Need to Do Now Chapter One Is Your Investment Income Safe? We all were reminded on that day that our mutual fund and brokerage accounts can be rendered as illiquid as real estate. Bank accounts can be frozen, too, although this didn't happen in the wake of the recent attack. (It last happened on March 6, 1933, when Franklin Roosevelt declared a three-day "bank holiday" at the height of the Depression.) For most American investors, the market's four-day closing was inconsequential -- perhaps even beneficial. After all, by not being able to trade, investors were unable to sell during the worst of their emotional insecurity. The delay in trading for nearly a week gave investors a chance to calm down. Besides, most investors didn't really need to trade during that week. So what if you had to wait a few days to buy Acme Widgets or sell Ajax Hoozits? For most investors, the market's closing was more a conversation topic than an impact. But there are some investors for whom the shutdown was a problem. For these investors, the failure to reopen the markets quickly could have become a personal financial crisis. Who are these people? They are retirees and others who receive monthly income from their investments. Although most investors are socking away money for their future, for retirees the future is now. They live off the income their investments generate. They receive dividend income, interest income, and income from capital gains. When retirees establish mutual fund accounts, they often instruct the fund to send them a monthly check. Called a "systematic withdrawal," these checks go out to account holders on the 1st, the 15th, or the 30th of every month. The checks due September 15 didn't arrive. They couldn't. Not only was September 15 a Saturday, meaning transactions would be posted on Monday, but the markets were closed from the 11th through the 16th. Realizing the potential interruption that some of our clients might be facing, we quickly contacted the mutual fund companies that held our clients' assets, verified the status of their distributions, and contacted our clients with the news. The news was good: Because the markets were scheduled to reopen on the 17th, the checks would be delayed by only a few days. All our clients who were due to receive checks on the 15th got them by the 19th. No one missed a mortgage payment. This time. This is why you need cash reserves. You need to have money readily available to you in case a check you're expecting fails to arrive. This time, the checks were delayed because the markets were closed for logistic reasons, not because of nationwide financial panic, government instability, or economic uncertainty. The result was the same, however: Mutual fund companies were unable to execute liquidation requests, even routine ones like monthly redemptions for retirees. Next time, the delay might be caused by something as mundane as a disruption in mail service or as dramatic as the failure of a financial institution. Ironically, I had warned of this risk on my weekly radio show just three weeks before the cowardly attack on America. As I explained then, most people do not understand that mutual funds have the legal right to withhold liquidation requests. It takes extraordinarily rare circumstances, but it does happen. For example, in 2000, one mutual fund managed to lose 70% in a single day. Amazingly, this fund was not invested in tech stocks -- in fact, it wasn't even a stock fund! It was a fund that invested in municipal bonds. Most people consider munibonds to be among the safest investments. After all, most are government guaranteed. But this particular fund had bought munibonds that were not guaranteed. Instead, the bonds had been issued by state agencies that weren't even rated by munibond rating services. The fund's management began to realize that nobody really knew what these bonds were worth in the marketplace, and the manager decided to reprice the bonds. He cut their value by 70%, literally overnight. As you can imagine, that move angered the shareholders, who responded by filing more than 20 class action lawsuits. Federal regulators are still investigating. But get this: The regulators have frozen the fund's assets while it's under investigation. For more than a year now monthly dividends have stopped and no one has been allowed to redeem his or her money. I mention this to remind you that it is possible -- however unlikely -- that your mutual fund might not promptly execute a redemption request. Makes you question the meaning of "liquid investment," doesn't it? Is Your Paycheck Safe? Even if you're not receiving income from your investments, you still need cash reserves. Why? Because your next paycheck might never arrive. Hundreds of thousands of New Yorkers found themselves unable to go to work in the days after September 11. Thousands of businesses were closed. With no revenue, these businesses found it difficult, if not impossible, to pay their employees. If you were one of them, you suddenly had a problem. How Much Cash to Keep in Reserve So whether your income comes from pensions, investments, or a paycheck, it's important that you maintain cash reserves. Ordinarily, financial planners like meen courage consumers to maintain cash reserves in case your car breaks down or the roof leaks. After all, as I said in The Truth About Money, you need cash reserves because every single day in America, 15,000 washing machines break down (according to Sears, which sells more washing machines than anyone). The calamity of September 11 has caused us to renew our emphasis on this mundane topic. Until September 11, we generally advised that the amount you should keep in reserves depended on two factors: your monthly expenses and the stability of your income. Now we discount the stability of your income, because if there's anything that the tragedy showed us, it's that no one's income is safe. Therefore, I want you to determine how much money you spend each month. One way to do that is to simply look at your checkbook. The problem with this method, though, is that your checkbook might not fully reflect credit card charges or expenses that occur sporadically (such as annual tax or insurance bills). Financial Security in Troubled Times What You Need to Do Now . Copyright © by Ric Edelman. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold. Excerpted from Financial Security in Troubled Times: What You Need to Do Now by Ric Edelman All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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