If you are a small business owner, you know there was welcome relief in the American Recovery and Reinvestment Act of 2009, popularly known as the Stimulus Act. So what was so great about the Act? Among other things, section 501 reduced the fees paid by borrowers so they did not have to pay the dreaded “SBA loan guarantee fee”. This was traditionally 2% of 75% of the loan amount on the large 7(a) loans. Also, section 502 increased the guarantee percentage which pays banks their losses upon default, from 75 to 90%. Cause for celebration? Absolutely. But we must temper our excitement with the fact these benefits may no longer be in effect if Congress does not appropriate more money. In fact, some pundits think it may run out in December based on the volume of SBA loans.
So, how to proceed? Assume that you are so fed up with stocks that you are willing to tie your money up in a five year Treasury note. This “chaining yourself to the mast” approach will get you a 2.8% yield as you sail through the troubled waters. There is a better alternative. It is easy to construct a portfolio of a basket of blue chip stocks with an aggregate dividend yield in the range of 3.5% to 4.0%. Further, these companies are like to increase or at least maintain those dividends. This gets some of your cash, one third is a good target level, back in the market with downside protection from the dividends. In fact, your return will surpass even the ten-year Treasury note.
Who will have authority over the funds? Local and state politicians whose prior management of the area is suspect to say the least? The federal government? An independent agency? Who?
Open your home up. You may live near enough to the disaster area to be able to help an individual, a family, or an emergency worker by providing temporary shelter. The goodwill you show in providing shelter for free can go a long way toward helping the How to recover my lost funds effort. If you can’t open up your home, consider volunteering as a food service provider, or by sending in cold drinks and ice to recovery teams, or by preparing a hot meal for an afflicted family.
Although recovery can be a rough road, it does not mean that relapse is inevitable. In fact, a promising statistic is that over half of the people who get treatment eventually reach a state of sustained recovery.
For what has been reported you can find details about allocated funds and recovery projects. You can even search by zip code for projects in your area.
To fully appreciate what it might take to ignite a financial meltdown, we need to get a clear picture of where we are today. If the economy was growing from a base of solid economics, this topic would be nothing more than speculative thinking. Morbid speculative thinking of which I would have no part. My faith would tell me to focus on what’s good in life. It still does, but my experiences, skill sets, AND my faith, mandate that I write what I see and let you decide what it means for you.
Investing safely hasn’t changed over the years. Real estate has made many millionaires and will continue to do so. Recession creates fear. Fear leads to bad decisions. You should never have to play catch up with your investments. You must manage those investments intelligently in both good and bad times. Sitting doing nothing is the worst thing you can do. Making your earnings earn more is the key to becoming wealthy. Recovering what you have lost is really a step backwards. Consider investing in real estate. Keep moving forward.