How to be Rich, Happy and Free from Scams

A growing number of advisers say that until you think hard about that question, you can't have a successful lifelong financial plan. They're right. By George Mannes (Money Magazine) -- Yes, the stock market is down. But you can handle it, can't you? Certainly you could do without the sick feeling you get each time the Dow takes another triple-digit dive. But - and here's a pep talk you've probably given yourself more than once in the past few months - there was a reason you took on the perils of investing in stocks: You couldn't reach your goals without the returns that a higher-risk investment offered. And your goals are worth a little discomfort, right? Right? Of course. Your pep talk has a better chance of success, though, if the goals in question matter deeply to you. "Goals" here doesn't mean only general concepts like retiring by 62 but something bigger and more fundamental: serious dreams that you've taken the time to think hard about an...

With every dip in the Dow, that inner voice urging you to sell gets louder. Here are four reasons you shouldn't listen. By Janice Revell, Money Magazine senior writer Reason No. 1 Your brain is wired for panic. Money Magazine) -- Don't give in. Pros have all sorts of clever computer models for assessing risk. But even those brilliant machines misjudge risk from time to time (like in the subprime meltdown). So how can the rest of us expect to be right on risk when all we have to work with is that carbon-based computer we keep between our ears? "Most people just can't think about risk in an analytic way," says Paul Slovic, a University of Oregon psychologist and an authority on how we assess risk. "The average person goes by gut feelings." As behavioral scientists have proved, those feelings are notoriously unreliable in a market like this. Part of the problem is that your brain evolved to feel the pain of loss more acutely than the pleasure of gains. That...

by Leslie Haggin Geary The news is grim. Housing values are dropping, subprime mortgage meltdowns are spreading, the stock market's uncertain and the overall economy seems to be heading into a recession. No wonder plenty of us are worried. Still, you can protect yourself. Here are some experts' top five must-make strategies to do your best now that the economy is likely in for a choppy ride. Rule No. 1: Don't panic The stock market's gyrations can give even the hardiest investors a case of the jitters. However, converting all your investments to cash is likely to cause you far more harm than good, says Joe Baker, CFP and president of Alcus Financial Group in Mount Pleasant, S.C. "People are scared," he says. "They're asking, 'Is the economy crashing? Should I move my 401(k) to a money market?'" Baker answers: "Please do not, unless you need the cash tomorrow. You'd be making a huge mistake." Unless you need the mone...

By Terence Hunt, AP White House Correspondent Bush: Federal Government Must Guard Against Overcorrecting Economy With Sweeping Changes WASHINGTON (AP) -- President Bush on Saturday said the government must guard against going too far in trying to fix the troubled economy, cautioning that "one of the worst things you can do is overcorrect." Democrats said Bush was relying on inaction to solve the problem. Bush, in his weekly radio address, said the recently passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high. "If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse -- and end up hurting far...

By Terence Hunt, AP White House Correspondent Bush: Federal Government Must Guard Against Overcorrecting Economy With Sweeping Changes WASHINGTON (AP) -- President Bush on Saturday said the government must guard against going too far in trying to fix the troubled economy, cautioning that "one of the worst things you can do is overcorrect." Democrats said Bush was relying on inaction to solve the problem. Bush, in his weekly radio address, said the recently passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high. "If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse -- and end up hurting far...

By Eileen Aj Connelly, AP Business Writer The Stock Market Will Remain Volatile, but Some Analysts See Signs That the Bottom May Be Near NEW YORK (AP) -- Investors nursing whiplash symptoms after watching the market's recent wild swings may find that Wall Street will deliver some relief in the coming weeks. While volatility isn't going to disappear overnight, some experts suggest the market may be near the beginning of a recovery. "I think we've seen a bottom," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc., a division of Wachovia. "It's probably not 'the' bottom," he said, "I think it would be presumptuous to call it 'the' bottom." Some might consider any positive view contrarian, especially given the shock caused Friday by news of a bailout needed by investment bank Bear Stearns Cos., but Goldman said he thinks long-term investors have reason to start expecting some relief ahead. "I...

By Madlen Read, AP Business Writer Stocks Rebound From Steep Drop As S&P Forecasts End Is Near for Asset Write-Downs NEW YORK (AP) -- A fractious Wall Street rebounded from an early plunge to finish moderately higher Thursday, after Standard & Poor's predicted financial companies are nearing the end of the massive asset write-downs that have devastated the stock and credit markets. The S&P projection gave investors some hope that the seemingly unrelenting losses from the mortage and credit crisis might indeed be bottoming out. Standard & Poor's Ratings Services said it estimates writedowns of subprime asset-backed securities could reach $285 billion globally, up from its previous projection of $265 billion, but added that "the end of write-downs is now in sight for large financial institutions." "The S&P comment was a positive for the market because investors were relieved to think that the subprime problem may be behind us," said Al Go...