Earlier, I posted a summary of the first half of Money Magazine’s newest feature, Your Six Biggest Money Fears. In the feature, six general fears regarding personal finance are discussed and debunked, and for each an alternate concern is posited.
Outsourcing makes many white-collar Americans concerned about their job. Still, it’s mostly blue-collar jobs that are being shipped outside the United States. “Global competition is heating up, certainly. But the big threat to our jobs comes not from cheap foreign workers but from technological change and the creative destruction inherent in capitalism.” The true fear should be obsolescence.
Suggestions: Build your network, attend conferences, be in a growing rather than dying business, gain more skills, and be social with your co-workers.
There are a lot of people running around like chickens without heads screaming, “The sky is falling!” if by “sky” they mean “housing market.” It’s no wonder people are concerned about a big pop in the housing bubble. Even Greenspan has said that the boom will simmer down. “The real bubble, though, isn’t in housing but in housing finance, says strategist Ed Yardeni of Oak Associates. Variable-rate, interest-only mortgages have seduced people into buying more house than they need.”
Suggestions: Downsize, buy only what you can truly afford, don’t get suckered into interest-only mortgages, understand what might happen if your house value drops 30 percent, and lock in low rates while you still can.
Identity theft is a problem, especially with stories in the media about companies losing sensitive data and hackers penetrating websites. The bigger concern should be accidental errors on your credit report. If you’re unaware of inaccurate negative items and therefore do not take actions to remove them, you could be spending more money on mortgage interest than necessary. “A 2004 U.S. Public Interest Research Group analysis of 200 reports found that 79 percent had mistakes and 25 percent contained serious errors, such as false delinquencies or accounts that didn’t belong to the consumers, that could result in a denial of credit.”
Suggestions: Get your free credit report three times each year, once from each of the three credit reporting bureaus.
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