New Year. New You. New Nest Egg.

by Natalie Pace.

The markets have only returned –0.2% per year for the last 10 years, not 12%. You need a new plan now!.

Includes a Report Card on the Natalie Pace stock picks in 2008. (70% were winners!)

The stock market lost 38% in 2008, but if you lost more than 20%, your problem wasn’t really the stock market. It was the design of your nest egg. Storms occur in markets, as they do in the real world, but your home shouldn’t be flooding every time it happens.

You know intuitively that your retirement plan doesn’t work. Your nest egg has drowned twice now in the last eight years. You were elated with your returns in 1999 and then devastated when your assets imploded during the DOT COM bust of 2000-2002. Same thing when Dow Jones Industrial Average broke through 14,000 in October of 2007, only to drop below 8000 in 2008. If you had a healthy fiscal plan, your nest egg wouldn’t be sinking all of the time. Imagine all of the gains you would have made and how much bigger your nest egg would be if you were rebalancing your portfolio once a year!

And contrary to what your financial advisor may be telling you, the markets returned only -0.2% over the last ten years, not 12%. Treasury Bills earned 3.2% annual gains, with very low risk.

General Stock Market Performance in 2008

Sound Nest Egg Strategies:
Rule #1: Always keep a percent equal to your age.

Modern Portfolio Theory, the cornerstone of a healthy nest egg, has been around for half a century and Harry Markowitz, the economist who wrote it, won a Nobel Prize in 1990. Many financial professionals are paid on commission to sell you mutual funds, so, if you weren’t protected from the 2008 financial crisis, chances are that either 1) your guru just didn’t know the theory, or 2) s/he wasn’t paid to employ the theory, or 3) s/he had bosses who pushed sales hard and couldn’t employ the theory, or 4) s/he was dumb enough to think s/he could outthink a genius Nobel Laureate.

Grade Your Guru
You wouldn’t hire an architect whose buildings flood in a storm. Since there are so many "professionals" and "pundits" who are spouting off -- when in reality they drowned their clients’ nest eggs in 2008 -- it’s your job to take charge and design a better dream life. As TD AMERITRADE Chairman Joe Moglia says, "Nobody cares more about your money more than you do." Chairman Moglia believes that I do a "terrific job of explaining how and why you should be taking more responsibility for your own financial well being" in my new book, Put Your Money Where Your Heart Is. You can buy it now at Amazon.com or your favorite bookstore or bookselling website.

Bears get lucky in bear markets. Bulls get lucky in bull markets. Sound nest egg strategies work in any market!

How to Grade Your Guru
1. Add up your losses. If you lost more than 20% in 2008, your guru isn’t making the grade. If you are 25 and were keeping 45% safe (your age plus 20% because we are in a recession), then your maximum losses in 2008 should have been under 20%. The average 50-year-old should have been exposed to maximum losses of 11% (keeping 70% safe).
2. Check your allocation. If you didn’t start 2008 with a percent equal to your age SAFE in Treasury Bills and/or high-rated bonds (General Motors, Fannie Mae, Sears etc. DO NOT QUALIFY), your guru isn’t looking out for your best interest and/or is stuck in the old way, thinking the markets return 12% per year.

My Grades
Nest Egg:
The pie charts and strategies outlined in Put Your Money Where Your Heart Is saved Bill (a handyman) and Nilo (an office administrator) Bolden’s nest egg, while Nilo’s bosses lost hundreds of thousands of dollars. Since employing my strategies, they haven’t lost anything.

Traders:
Before I give you the details on my track record this year, which was outstanding, please note that novices have no business trading individual stocks in this financial storm anymore than beginning surfers should race into the jaws of a tsunami. Don’t trade individual companies in 2009 unless: 1) you know how to buy put options and have had a few years of successful trading long and short, and 2) are willing to take your profits early and often. Obviously, if you don’t know what I’m talking about, you need to focus on sound nest egg strategies first and education second – perhaps at my Get Rich and Enrich Retreat. (Check out the banner ad on the home page at NataliePace.com for more details.)

70% of the companies I featured in my monthly article and stock report cards were winners. Of those winners, more than half (58%) were shorts, i.e., companies that we expected to go DOWN in value. All of the losers were long positions. (It’s hard to swim upstream against the tide!) So, if you were buying expecting the share price to go up, you were probably losing money, unless you were taking your profits early and often. If you were buying put options, earning gains was as easy as opening up a package of M&Ms and popping them into your mouth.

Act Now to Get In Great Fiscal Shape!
Blind faith lost you a lot of money in 2008. 2009 is poised to be another stormy environment in stocks, which means that if you don’t pull your head out of the sand and get a better dream life plan, you’re going to be get buried.

So what do you do now to position yourself for gains in 2009?

My Golden Nest Egg Formula
1. ALWAYS KEEP A PERCENT EQUAL TO YOUR AGE SAFE. Cash is King! Treasury bills are the safest investment today. (High-rated bonds, money markets and CDs are traditionally safe, and will be again in the future.)

2. DURING RECESSIONS, OVERWEIGHT 15-20% ADDITIONAL INTO SAFETY. Cash is King when stocks and real estate are both losing value, i.e. not losing is winning. You will not be stuck overweighted in cash forever – you will just be protected while the landslide of lost assets continues to cave in. If the markets continue to drop in 2009, as they are poised to do, you’ll be glad you employed this defensive strategy, and you will have cash to invest, while those around you are scrambling to hang on and/or are forced to sell low to cover basic needs.

3. REMAINDER IN YOUR NEST EGG SHOULD BE DIVERSIFIED INTO 10 ETFS.

You will find detailed pie charts in my new book, Put Your Money Where Your Heart Is.

4. EMERGING INDUSTRIES, NOT DYING COMPANIES. General Motors and Ford Motor Company combined are worth less than one-tenth of Toyota Motor Company’s $102 billion. It is not just that Ford and GM have more labor, pension, health care, etc. expenses. GM and Ford lost market share because their gas-guzzlers were far less popular than the fuel-efficient Prius and other Toyota models.

5. KNOW WHAT YOU OWN, i.e., not mutual funds. The top mutual fund holdings in the U.S. in 2007 included some of the most poorly run companies, including General Motors, AIG, Fannie Mae and Phillip Morris Tobacco Company. ETFs allow you to target sections of the stock market by size (small, medium and large), style (value and growth), industry (gold mining, clean technology, international, biotechnology, etc.) and more.

6. DON’T TRADE. If you don’t know how to take your profits early and often and/or if you don’t know how to buy put options, do not buy and sell individual companies at all in 2009. (Own companies you love in ETFs where you are more protected from the price fluctuations of any one individual company.)

If you used this 6-step formula and rebalanced only once a year (say in January), you could have captured your gains in 2000 at the NASDAQ high. Likewise, in January of 2008, you would have captured your Dow Jones Industrial Average gains before the major fall-off and redistributed. Identifying where your gains are coming from allows you to capture the gains and redeploy your assets back into a sound, dream life blueprint – which is a combination of Modern Portfolio Theory, ETFs, common sense and basic investing recipes.

These strategies and more are outlined in my book, Put Your Money Where Your Heart Is. Buy it now as part of your New Year; New You; New Dream Life! And be sure to forward this article to a dozen of your closest friends, family, clients and co-workers who need to get fiscally fit and resurrect their dream life. Change is in the air. Be a part of positive industry!

Monthly Featured Companies and Their Performance (2008)

Legend:
Bold: 19 Companies that were winning investments.
Blue: 11 Companies that were shorts. (All of my shorts in 2008 were winning investments.)
Negative numbers: Companies that were losing investments (so far).

SPECIAL OFFER FOR SUBSCRIBERS
If you purchase my book on Amazon before January 31, 2009, you can register FOR FREE to participate in my pre-recorded 21-day wealth consciousness coaching call series. (value: $595). When you commit to anything for 21 days in your body, mind, spirit, actions and interactions, you transform your life. This 21-day wealth consciousness coaching call series is designed to have you take small, simple steps toward designing a healthy, happy nest egg that allows your wildest dreams to come true.

You can also use this as a great $600 gift for friends, clients and family for the low price of just $16 and change!

FREE 21-DAY COACHING CALL SERIES: INSTRUCTIONS

1. Go to NataliePace.com.
2. Select Buy the Book and purchase my book on Amazon.com.
3. Go back to NataliePace.com and enter my site.
4. Click on Join Now.
5. Opt for the 21-day Coaching call series.
6. Type in the name and the correct email address of the person you are registering (you or your friend, family member, client or co-worker).
7. Select a user id and password and signup!

(You only need an email address and to select user id and password to register for the coaching call series online at NataliePace.com. You do not have to enter in your credit card information.)

Get Rich and Enrich Educational Retreat
Come to my Get Rich and Enrich Retreat and I will personally teach you how to research the ETFs you most wish to own, how to find the perfect Certified Financial Life Partner, how to earn easy gains in any type of market, simple, effective options trading strategies and much, much more. Many past retreat attendees are earning enough gains to pay for the price of the retreat within the first 30 days! Click on the Get Rich and Enrich banner ad on the home page to learn more and to register online.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

7 Reasons Putting Your Money Where Your Heart Is is Better.

by Natalie Pace

...Than Blindly Putting Your Money in a Big Pot that Gets Sold Off to the Highest Bidder.

Breakdowns are necessary to facilitate breakthroughs. When you are sailing quite happily through life, why would you want to think about doing things differently or that there might be a better way that will lead to heaven here on Earth?

Whether you believe in paradise or not, I’m sure glad someone took the time to invent airplanes. I would have hated to ride a pony from Santa Monica to New York every time I need to appear on television.

Likewise, I believe that the 2008 financial meltdown provides the opportunity to take ownership of our nest eggs, understanding that the companies we own can create a better world while they provide a great return on investment. (In fact, poorly run companies that make bad products provide a lousy ROI, as we’ve seen in 2008.) Someone has invented that 401 (k) plan and the innovative financial products that allow you to become an informed, wise investor, and if you start flying in them, the sky’s the limit!

Below are seven reasons that the financial meltdown can create a much better tomorrow – if you become the change you wish to see. Your change will make you rich and will help our world to prosper and navigate through the economic storms with greater ease. If you become an example of better living for your friends, they join the creation of a better tomorrow as well! Whining never produced a fantastic new invention for the world!

1. Airplanes Work Better than the Pony Express:
The status quo at the turn of the century was the Pony Express. The Wright Brothers were fringe kooks! Look to the reputable people who are pushing the envelope and finding a better plan for your money, rather than settling back into the old way of blind faith in the economic system, and shock and horror when it crashes and burns. (Beware of people trying to pretend they have a better plan. The wolves will be out in force to capitalize on your confusion right now.) Put Your Money Where Your Heart Is explains why commission-free brokers have your best interest in mind, why Modern Portfolio Theory is a great foundation for your nest egg (and explains it in easy-to-read pie charts), where to find great information (hint: not the free stuff you get on television all the time) and outlines a simple formula for constructing the life and nest egg of your dreams, which requires "rebalancing" only once or twice a year. Not more time or money, just both spent more wisely, with better results to enjoy in the bargain.

2. Greenies Own Oil and Gas! Peacemakers fund the oil fields in Iraq! Does this make sense? Over the last eight years, I’ve been telling anyone who would listen to take charge of their money, to align their stock ownership -- nest eggs, pensions, annuities, et al -- with their idea of a better world, instead of blindly funding the status quo. World leaders in the peace movement were funding the oil fields in Iraq in their annuities. People who pushed hard to outlaw cigarettes in public places owned, perhaps unknowingly, stock in cigarette companies in their pensions. Greenies owned and funded oil and gas, instead of alternative energy in their mutual funds! Everyone I spoke to wanted to align their money with the products, goods and services that they actually want to flourish in the world, but no one had the time to figure out how to do it! Well, now that so many have lost so much, everyone has the time and attention to figure out a better way. Be the leader of the enlightenment by being the first to read and recommend Put Your Money Where Your Heart Is. (It just hit the newsstands this month!) Employ the strategies and watch your life shift immediately!

3. You’ll make a lot more money. Those who did have the time, like Bill and Nilo Bolden, are very happy that they took the 5-10 minutes to read the pie chart I drew up on a napkin. They haven’t lost any money to date! Other NataliePace.com subscribers who were invested in clean energy in 2007 earned sixty cents on the dollar on average. That’s $60,000 on every $100,000 invested. The stock markets have returned only -0.2% on average every year for the last ten years, so you can make a lot more money by owning the products, goods and services of an emerging world than you are making by providing life support to dying industries.

4. Gnashing of teeth is hell; Creating Paradise is much easier. Now that you have lost so much money, if you want to replace whining and horror and "Oh my God! What Happened!" and finger pointing and screaming and gnashing of teeth with wisdom and a plan for a better life (for you) and our world, you can read the book that will advise you on how to realign your nest egg with a better blueprint that will protect you from recessions and poise you for greater returns when the market recovers. Put Your Money where Your Heart Is is receiving an average 5-star rating on Amazon.com from people who bought it and read it in a day! Buy it and read it and hand it out to your friends!

5. Cronies make poor visionaries. The person who has been convincing you to sell your money to the highest bidding corporations on Wall Street (AIG, Fannie Mae, General Motors, Phillip Morris Tobacco company were among the top holdings in mutual funds in 2007) will tell you that you shouldn’t make any changes because you will be "selling low." That person is employed by a big brokerage or insurance company (or buys products from them) and is part of a big system that has been around for more than a century. The friends who mill about at the top of that pyramid help themselves to your money, but the view from the top (where all the money is) is too far away from the land. It takes vision to make the Earth below a better place to live, and that vision is created through innovation and necessity – the Mother of Invention – not through greed, cronyism and "I’ll scratch your back if you scratch mine." That person who is telling you to keep your investments the way that they are is saying that in order to keep his/her job and lifestyle, not because s/he has the vision to know the best plan for your dream life.

In fact, the efficacy of their plan is seen in the returns. If you lost a third of your nest egg, you lost a third of your nest egg and probably are negative on the last ten years. There is a better way and the sooner you employ it, the more returns you’ll enjoy!

6. The markets have only returned –0.2% per year for the last 10 years, not 12%. Meanwhile, hot industries, like clean energy in 2007, can earn sixty cents on the dollar or more. You need a better blueprint for your dream life now!

7. Your investments create our world! You are a creator of our world. When you drive less, the price of gas goes down. Your retirement dollars are invested in the corporations that define our existence. When you realize the power of your spending and investments as tools to make you rich and to also enrich our world, we will start building a better tomorrow.

No one invites the storms into their sailboat. But when the ship runs aground, as the U.S. economy certainly has, there is then the opportunity to learn something different and create an even better, more delicious, more prosperous world by investing in the products goods and services of tomorrow. Imagine owning Google at the IPO or Microsoft or even Opsware. These companies have made their owner/investors very rich, while making our world a much better place.

When you start investing in things that you know and love, instead of with fear and greed, your life will change immediately, and this world will become a much more beautiful place. A life like this increases in value every single day and becomes more valuable not just to you but to those around you as well.

The Madoff Ponzi Scheme.

by Dr. Gary Becker.

December 21, 2008

The recently exposed Ponzi scheme by Bernard Madoff is named after Charles Ponzi, an immigrant to the United States, who ran his swindle in 1920, based supposedly on profits from postal reply coupons. He took in a great deal of money for those days that was partly spent on high living. After less than a year he was exposed by a newspaper, and spent many years in jail before being deported back to Italy.

In a Ponzi scheme, investors in a fund typically receive good rates of return on their investments for a while because they are paid with new monies that are invested in the fund. Even when such funds do not make bad investments, or when managers do not spend a lot on themselves and their families, Ponzi funds must attract new investors at a rapid rate in order to pay good returns to prior investors. With wasted spending and bad investments, the required growth rate in new monies is even higher. Since high growth rates of new investments are hard to maintain over time, eventually Ponzi funds collapse. Then comes the day of reckoning as investors are shocked to discover that they have been duped, and have lost most or all of what they invested.

Ponzi-type swindles probably go back to Greek and Roman times. Over 50 years ago, I had a wealthy uncle who invested with an individual who seemed to be doing remarkably well with a secretive investment strategy: he paid high returns in the form of monthly dividends, and allowed people to withdraw their investments. My uncle not only increased his investment, but advised other family members and friends to do the same (my father was either smart or lucky enough not to do so). After a couple of years, the manager vanished, and investors lost all they had given him. It turned out that he was paying these good dividends not from returns on his investments, but from the new funds he was raising- a typical Ponzi scheme. While he did not lose most of his considerable wealth, my uncle went into a year-long depression after he found out he had been "taken".

What was unusual about Madoff's swindle is that it continued for over two decades, and was the largest Ponzi scheme ever uncovered, with perhaps $50 billion lost or missing. It was also the first fully international Ponzi scheme, with investors from Europe, the Middle East, and China, as well as mainly from the US. One hedge fund, the Fairfield Greenwich Group, put over $7 billion into Madoff's fund, and encouraged others to invest in it as well. Bernard Madoff is a 70-year old apparently affable but retiring, person who did not live especially lavishly. He was very active in Jewish circles, so that, many of his investors were wealthy Jews, such as Jeffrey Katzenberg, Steven Spielberg, and Mortimer Zuckerman, and Jewish organizations, including the Eli Weisel Foundation and Yeshiva University.

The enormous scope of Madoff's swindle raises two obvious questions 1) how could this scheme go on for so long without being exposed, and 2) how could so many sophisticated individuals be taken in by a fund that provided almost no information on how it was able to achieve consistent returns of from 8-13 per cent for many years during both good and bad times?

In regard to the first question, various hedge fund managers were puzzled by how Madoff could make such consistently high returns with the information provided about what he did. Apparently, one claim was that he placed both put and call options on say the S&P 100 index. That might make money when stocks are falling rapidly, but the fund should have lost money on average during the mainly good years of the scheme's existence. One former hedge fund manager, Harry Markopolos, reported him for a decade to the SEC and also to state regulatory bodies. The SEC conducted some rather superficial investigations, but nothing much came of them-the SEC is now looking into why the swindle was not discovered much earlier. I believe this is another illustration of what has happened frequently, namely, that regulators too get caught in the hype surrounding an investor, or the economic viability of different banks.

Of course, it is well documented that after a catastrophic event, many "obvious" signs are discovered that if taken seriously could have prevented the event. For example, after 9/11 it was revealed that the FBI did not investigate carefully warnings that some major terrorist act was being planned. This was also the case with the Japanese attack on Pearl Harbor. Roberta Wohlstetter in her outstanding book, Pearl Harbor: Warning and Decision, explains why the Japanese plan to attack Pearl Harbor was not discovered despite the considerable prior intelligence about their plans for an attack.

This is also the case with the Madoff swindle, which makes it more puzzling. Why did many sophisticated individuals, funds, and other organizations entrust so much money to his management, and to management by various intermediaries, without doing any significant amount of due diligence? Part of the answer is that these individuals are not sophisticated in financial matters, and each successive set of investors assumed that previous investors had done some investigation. This led to an example of "information cascades", where private information is revealed sequentially over time to different individuals. Later participants can be badly misled if the information of earlier participants is far from accurate.

Moreover, Madoff had developed an outstanding reputation. He was a respected member of the financial community and exclusive social circles, and a former president of the Nasdaq Stock Market. He helped pioneer electronic trading of stocks, and continued this profitable stock trading business while independently building up his asset management business. He did not let everyone invest with him, so that those who were accepted felt privileged. His activities went on for so long without exposure that newer and older investors alike considered his investments to be legitimate, even if secretive. He bolstered his clients' confidence by quickly refunding investments to anyone who asked.

Natalie’s Note: According to the SEC’s press release of December 11, 2008, Madoff served as vice chairman of the NASD, a member of its board of governors, and chairman of its New York region. He was also a member of NASDAQ Stock Market's board of governors and its executive committee and served as chairman of its trading committee.

Stock markets are not fully efficient, and a small number of investors, such as Warren Buffet, can consistently do better than the major indices over very long time periods. However, markets are sufficiently efficient that such a record is extremely difficult to maintain. It takes very many years to establish a good investment track record that is due to skill instead of a good record due to plain luck. The numerous investors not well versed in financial matters have great difficulty appreciating that there are no magical or secretive ways to consistently beat the market. This is why when anyone asks me for advice, I recommend buying a diversified portfolio of stocks and other assets that controls risk while providing decent returns. Some money managers may be able to beat that in the long run, but it is extremely difficult to discover who they are. As a result, most investors looking for exceptional returns are likely to be taken for a ride either by charlatans, or by lucky fund managers whose luck eventually runs out.

Dr. Becker is a University Professor, Department of Economics, and Sociology Professor, Graduate School of Business, The University of Chicago. He won the Nobel Prize in Economics in 1992 for his groundbreaking work in "human capital."

To keep track of Dr. Becker's continuing research and commentary, visit his web site and blog. To hear more of his research and recommendations for strengthening the U.S. economy, consider attending the 2009 Milken Global Economic Conference. Dr. Gary Becker has been a keynote speaker at the conference every year since it began!

Teaching Your Teens to Thrive

by Natalie Pace.

...with Healthy Money Habits You Never Learned.

Whether you are a billionaire, a thousandaire or a widow with only one mite, when you are buried in basic needs, you are not living a very rich life. The trouble is: how do you escape the rut of basic needs when most of your income is eaten up by housing and transportation and you’re always running out of money before the end of the month!

Since we’re not taught how to budget in high school or college, it really is up to you to teach your kids how to thrive, instead of merely surviving. Most people pay bills and then try to scrape a life together on what’s left over. This recipe for the rich life has you savoring life first -- before you pay the bills!

Let’s say that your teen’s allowance is $100 a month…

The Thrive Budget: 50% to thrive and 50% to survive
10% (or $10) Buy My Own Island fund
10% (or $10) Charity
10% (or $10) Education fund
10% (or $10) Fun, Immediate
10% (or $10) Fun, Big Ticket
50% (or $50) Basic Needs (housing, car, insurance, clothes, taxes, everything you need to survive)

With electronic banking, this should be fun and easy to do each month! Essentially, you set it up once and then everything happens automatically.

1. Buy My Own Island fund: Set up a minor’s Individual Retirement Account through your brokerage. This should be the first auto-deposit every month – money that earns money while you sleep! The habit of investing is what’s important to establish first. If you don’t know which stocks or funds to buy, just use a Treasury bill ETF for now. (PowerShares.com has one.)
2. Charity: Have your teenagers write a check to their favorite charity and pop it in the mail! (Let it be their choice, not yours.)
3. Education fund: College savings plans, aka 529 plans, are a great way to save up for college and the contribution should be tax deductible.
4. Fun, Immediate: CASH!! Whether it’s a movie or ice cream, when the cash runs out, the fun must become free – like picnics, like board games, like spin the bottle (just kidding).
5. Fun, Big Ticket: Most bank accounts have a savings account attached these days. Let that be where your teen saves up for the new iPod or even a car!
6. Basic Needs: Standard Bank Account. The key here is to have 50% spent on thriving first – before basic needs -- so that the focus is on living a rich life, instead of struggling to survive. Now, your teen has 50% of the $100, or only $50 to spend on basic needs. Your teen won’t have to worry about food, housing and insurance yet, but why not let them buy their own shampoo, after school snacks, gas, clothes, etc?

The Thrive Budget is a great way to teach your kids healthy money habits, where the focus is on building a better life, rather than just paying bills.

These budgeting strategies are explained in greater detail in Put Your Money Where Your Heart Is, my new book! Buy it now on Amazon.com, or in your favorite bookstore or website! Play the Billionaire Game and discover that it is possible right now to live as if you had all the money in the world (though, perhaps, on a smaller scale, initially).

Subscriber Feedback:
Ask Natalie: The Thrive Plan sounds great, but my teen is already complaining that s/he’d rather have fun than give to charity. What do I tell her?

What we’re doing with the Thrive budget is teaching the average person exactly what it takes to get ahead in life – to live like a billionaire. Self-made billionaires, like Steve Jobs, the co-founder of Apple Computer, understand the flow of money. They sleep on couches to launch their dream businesses. They sit on non-profit boards to meet the great minds and deep wallets who will invest in their dreams. They never overspend on basic needs or fleeting fantasies. So, tell your teen that this is Billionaire Boot Camp! S/he’s never going to get rich by burning through her dough and/or blowing her charitable contributions on movies.

If s/he wants more money for fun, there is one easy way to do that while remaining in the dream come true life budget -- increase income. If her basic needs are out of whack – which is easy to do with high gas prices – there’s a solution for that – get creative with cutting back on basic needs spending!

My teenage son discovered that he was spending over $50 a week on gas going to work and college. The second week, he bought a bike and pedaled around town for free. That was an instant reduction in basic needs! Get creative. Carpool. Take public transportation. Buy a hybrid or an electric car. Ride a bike.

The best solution to a surly teen, however, is to start these money habits earlier – when they are in middle school. Teens are so busy trying to buy more freedom from you that they’ll forget to attack the family traditions that have been ingrained since elementary school. In other words, if you establish this thrive way of life early enough it becomes the norm — the natural way that things just are -- rather than something that the teen gets to argue with you about.

Natalie Pace knows what it's like to be flat broke and to work her way out of it. Now one of the premier financial pundits in America, she reports on the news, information and education you need to succeed at NataliePace.com. Her first book, Put Your Money Where Your Heart Is, is available now on your favorite bookselling website. Get more tips, news and information at NataliePace.com.

Job Dislocation: Managing the Financial Impact of Unexpected Job Loss.

FINRA Investor Alert.

You may not be able to control if or when your company closes a plant or lays off workers—but you can plan ahead and take steps to manage the financial impact of those events.

This Alert contains tips on how to:
* Ask the right questions about your company's benefit plans;
* Plan ahead to cushion the blow of a potential job dislocation;
* Keep your finances on the right track in the event of unemployment; and
* Protect yourself when getting financial advice.

Understand Your Company's Benefits
The most obvious benefit you get from your company is the regular paycheck that you count on for doing your job. Another benefit that you probably use frequently is your health insurance.

Other company benefits, such as a 401(k) or pension plan, help you build retirement security over time. Your employer may offer a variety of retirement benefits, and it is up to you to take the initiative to understand them, sooner rather than later. Do not be shy about asking questions. Below is a brief description of commonly offered plans:

Pension Plans:
These plans usually provide a series of payments, also called a defined benefit, after you retire. The amount you receive is normally calculated based on a combination of salary, age and years of service. Pension plans that replace a good chunk of your before-retirement salary are becoming rare. Employees who leave a job before a certain age or specified years of service with the company may not receive anything. This may happen when they have not met the eligibility requirements to become entitled, or vested, in the plan benefits.

401(k) Plans:
These plans are referred to as defined contribution plans because they allow you to contribute a portion of your salary to retirement savings, and receive certain tax benefits. When you participate, the taxable salary that your employer reports to the Internal Revenue Service (IRS) is reduced by the amount of that contribution. Income taxes on that money and any earnings are deferred, or postponed, until you withdraw from your account. Generally, if you withdraw before age 59 1⁄2, you will pay a tax penalty. Some companies also offer a Roth feature to the 401(k) plan that allows you to contribute after-tax dollars—known as designated Roth contributions. You pay taxes on designated Roth contributions up front, but their earnings grow tax-free. Earnings on the Roth contributions may be withdrawn after age 59 1⁄2 so long as the withdrawal is made five years after the initial Roth contribution.

The maximum amount you can contribute to a 401(k) is set annually by the IRS. For 2008, the maximum contribution is $15,500. If you are 50 or older, you can add another $5,000 in "catch up" contributions for a pre-tax total of $20,500. If your company allows you to make both pre-tax and designated Roth contributions, you may determine how much you want to contribute to each. You must, however, count both contributions towards the annual limit.

A 401(k) plan may give you several investment choices. The company may also match some or all of your contributions on a pre-tax basis. You will owe tax on any pre-tax contributions and their earnings when you withdraw funds from the plan. The money that you have contributed to the 401(k) plan will not be affected by events impacting your employer because you are always entitled to or vested in your own contributions. Your employer will decide how long you must work before you vest in the matching contributions. You may move (rollover) your 401(k) savings when you leave an employer allowing continued deferral of the taxable portion of your account.

Cash Balance Plans:
These plans provide for a benefit that is stated in terms of an account balance. Each employee has an account to which the employer contributes a specified dollar amount every year. The funds in the account earn interest at a guaranteed rate that is independent of the actual investment performance of the plan. Generally, you can take an annuity or a lump sum.

Employee Profit Sharing Plans:
The company contributes a certain amount of its annual profits to participating employees. Each worker's account is credited with its share of the contributed profits. The amount contributed often ebbs and flows with a company's financial performance.

Employee Stock Bonus Plans:
The company contributes a certain number of shares of its own stock to its employees. As with profit sharing plans, the amount of shares received tends to fluctuate according to the company's financial performance.

Ask the following questions to understand what you get:
1. What are the terms of the plans that cover me? Ask for the summary plan description (SPD), the document that contains a complete description of the benefits owed to you and how they are calculated. Your company's human resources department, the plan trustee or administrator, or your labor union should have a copy of this document.

2. When do I vest and how much is my benefit? The plan administrator or the company's human resources department should tell you exactly how long you must work before you become entitled to or vested in your benefits and how much those benefits will be. Understand how the benefit is calculated so you can double check that the amount reported to you is correct. Also check previous benefit statements that you have received along the way to ensure that the calculation is correct. Keep in mind that you are always vested in the amounts that you have contributed to a plan. Your employer, however, may require employees to work for a designated period to vest in the amounts contributed by the company.

3. When can I start getting payments? You need to know when you can start receiving your benefits so you can plan accordingly. It is possible that you may not have a right to receive payments as quickly as you would expect even if you retire under normal circumstances. Some plans may provide for an early retirement option under certain circumstances if you have met the length of service requirement even if you do not meet the age requirement. This option usually results in a reduced benefit to the employee. Before you opt for payments, make sure that you understand what level of benefit—full or reduced—you are getting, the reason causing a benefit reduction, and how long you have to wait to get the full benefit provided by the plan.

Health Insurance: Learn about COBRA to Stay Healthy
One of the most significant risks of job dislocation is the loss of your health insurance. A federal law, known as COBRA, provides for continuation of health coverage up to 18 months after a job loss, under certain circumstances. Learn more about COBRA.

Plan Ahead: Start from Day One
Taking steps to create a financial safety net from the first day you begin working is the right thing to do. Here are some smart tips:

* Build an Emergency Fund: Save enough to completely cover 3-6 months of expenses. Keep it in a savings account or other safe place where you do not incur investment risk.

* Develop a Budget: Know how much comes in and what goes out. Set an amount to save from every paycheck. Try to save at least 10% of your salary. Make deposits to your savings account on a preset schedule. Over time, the amount saved will add up.

* Contribute to Your 401(k): Try to contribute at least the amount matched by the company. The match is additional money working for you. Start saving as soon as you are eligible to do so.

* Avoid Taking Out Loans Against Your 401(k). Loans put a drag on your retirement savings by reducing the amounts invested on your behalf. In the event of a layoff, 401(k) rules generally require that employees pay back loans within 90 days of leaving or face both income taxes and a hefty 10% penalty tax on the withdrawal. You should inquire whether your plan would allow for partial loan payments during the 90 days if you will not be able to pay the full amount in one payment.

* Use Credit Wisely: There are times when it makes sense to incur debt. Remember, however, that it needs to be part of your budget planning.

Job Dislocation: What to Do after Your Company Announces a Plant Closing or Layoffs
Whatever the reason for your job dislocation, you now face a period when handling your finances correctly will be critical to you and your family. These tips can help you take charge of your financial situation:

* Act Quickly to Reduce Spending. With less money coming in, you should take immediate action to reduce spending wherever possible. Resist the temptation to buy on credit.

* Assess Your Short-Term Situation: Figure out how much cash you have readily available or can get on short notice, how much you owe—mortgage, rent, credit cards, car loans—and the monthly payments associated with those and other debts. Establish how long you can make ends meet on the financial resources that you already have in hand.

* Ask About Dislocated Worker Services: Your employer may work with state and local officials to provide services such as job placement, retraining, or resume writing. Maximize your opportunity to get a new position as quickly as possible by taking advantage of these services—make finding a new job your full-time job. If you belong to a labor union, also ask your union what it can do to assist you.

* Inquire about Unemployment Insurance: A representative of the state's unemployment insurance office will likely be at your workplace to offer guidance and assistance in filling out the necessary applications. Ask the representative if you qualify and find out how the insurance may be affected if you get other payments from the company. Knowing how much you can claim and how long you can expect to receive unemployment benefits will help you handle your finances.

* Get Financial Advice: Your company or union may offer guidance regarding the financial decisions you face. Your state or local employment agencies may also provide information. Ask questions as early as possible to help determine what is right for you. Consider working with a credit counselor or financial professional who can help you develop a plan to see you through your unemployment period and beyond. See below for tips to protect yourself when considering a financial professional.

Long-Term Job Dislocation: Smart Choices in Difficult Times
The prospect of an extended period of unemployment will require some difficult decisions that could affect your long-term financial health. Managing severance pay, choosing the form of payment from benefit plans, and preserving your retirement funds if you are still years away from retirement age are high in that list. Keep in mind the following tips when deciding what to do:

* Conserve Funds Meant for Your Retirement if You Can: Tap into your retirement funds to make ends meet only as a last resort. If you have a choice, choose to keep those funds invested and working for you until you actually retire.

* Understand the Tax Bite: Income taxes apply when you tap into retirement funds prior to age 59 1⁄2. The plan administrator is required to withhold 20% of the amount you cash out to ensure that you will pay the taxes that apply. An additional 10% penalty tax may apply if you are under 59 1⁄2 years of age. In order to avoid income tax and a tax penalty, you must roll over your funds to an Individual Retirement Account (IRA) or other qualified retirement plan within 60 days of receiving the retirement funds.

* Use Direct Rollovers to Avoid Potential Taxes: If you elect to roll over retirement funds, you may avoid tax complications and the risk that you will not complete a rollover within the required 60 days of receiving those funds. Choose a direct rollover by having the plan administrator transfer the rollover amount directly to an IRA or other qualified retirement plan.

* Spend and Invest Lump Sums Wisely: Receiving a lump sum may tempt you to spend it on that one thing you have been wanting all your life. Do yourself a favor and wait. If you face a long unemployment period, these may be the only funds you will have to make ends meet. Even if that is not the case, give yourself time. Consider short and long term needs before you decide what to do. If you decide to invest the lump sum, take your time to consider what you are going to invest in, when you are going to make the investment, and how much of the lump sum you want to invest in different types of investment such as stock, bonds, or non-financial assets.

401(k) Hardship Withdrawals—A Choice of Last Resort
Your company's 401(k) plan may provide for hardship withdrawals. You need to be aware of the tax and long-term financial consequences before tapping into your retirement funds this way. Learn how 401(k) hardship withdrawals work.

Protect Yourself: Check Before Hiring an Investment Professional
The right investment professional can help you plan for your financial health from your first day of work. A professional can also work with you to make good choices during periods of job dislocation. Legitimate investment professionals must be properly licensed.

To protect yourself when dealing with one:
Always Do a Background Check:
* For a broker or brokerage firm, use FINRA BrokerCheck at www.finra.org/brokercheck or call toll-free (800) 289-9999.

* For an investment adviser, use the SEC's Investment Adviser Public Disclosure Web site at www.adviserinfo.sec.gov or call toll-free (800) SEC-0330.

* For an insurance agent, check with your state insurance department. You will find contact information through the National Association of Insurance Commissioners (NAIC) at www.naic.org or call toll-free (866) 470-NAIC.

* For brokers and advisers in any state, be sure to call your state securities regulator. Contact the North American Securities Administrators Association at www.nasaa.org or call (202) 737-0900 for the state's number.

Beware of Investments that Promise Too Much:
The announcement of your plant's closing or mass layoff may have received national or local press coverage. If all of a sudden you find that you are receiving unsolicited offers for the investment of a lifetime, beware. If it sounds too good to be true, you know it probably is. Avoid becoming a victim by checking the credentials of the person offering these investment opportunities.

To receive the latest Investor Alerts and other important investor information sign up for Investor News.

Putting the Recession and the Stock Market in Historical Context.

by Liz Ann Sonders, Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.

Updated October 30, 2008

We have always reminded investors that the stock market is one of the better economic forecasting "tools" there is—with a track record of anticipating economic turns in both directions, that beats the vast majority of actual economists. I'm long on record believing we've been in a recession since late last year, but recently it's become a more consensus view, the absence of a recession's official declaration notwithstanding.

If you're using the stock market as a guide, there's no question we're in a recession. Since the market's top in October of 2007, the S&P 500® is down 36%, which is more than the post-World War II bear market average—but not by much. Since we have yet to see any sign the market is signaling an upcoming economic turn, it's still a safe bet that this recession will be longer than the norm.

I've written about this before. In fact, this report is a newly edited version of my Recessions and Bear Markets: A History of Inconsistencies report. But these times suggest an update is in order to help put some historical meat on the current sordid state of market and economic affairs.

Let's get the definition of recessions straight first
Why can I be so convinced we're in a recession when gross domestic product (GDP) has remained positive? Indeed many, including noted economists, look for two back-to-back quarters of negative GDP growth to define a recession. It's odd that this is the accepted or "traditional" definition, when in fact it is not accurate.

The National Bureau of Economic Research (NBER) is the official arbiter of recessions. They are notoriously late in declaring both recessions' start dates (typically with about a seven-month lag) and recessions' end dates (typically with about a 15-month lag). Part of the problem is that recessions have multiple metrics, all of which are subject to revision. The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale retail sales."

With the exception of real GDP, the other four metrics above are well in recession territory, employment decidedly so. And, the only reason real GDP has remained positive is due to a statistical quirk in calculating the deflator (subtracted from nominal GDP to get real GDP). That statistical quirk involves subtracting import prices from export prices. Our biggest import is oil, and it had its biggest jump in the second quarter, artificially lowering the deflator and in turn artificially raising real GDP.

Looking ahead, given the dramatic drop in oil prices during the third quarter, we might see the opposite effect on real GDP—a higher deflator being subtracted and therefore a much lower real GDP being reported. The upcoming third quarter headline for GDP may actually more closely match the angst the average American is feeling.

Market behavior around recessions
The market behaves differently around each recession, but there are some notable similarities. As you can see in the table below, of the 10 recessions we've endured since the end of World War II, seven have been accompanied by bear markets, while the other three have brought less-severe, but still double-digit corrections. Regardless of the magnitude of the accompanying market decline, the majority of the corrections and/or bear markets began in advance of, or early in, each recession. Our current market's peak last October fits squarely in this historical mold.

S&P 500 Performance Around Recessions

1. As of October 27, 2008. Bear market = 20% or more drop in S&P 500. Correction = 10% to 20% drop in S&P 500. Bear market/correction occurred anytime 1-year prior to recession start through 1-year following recession end Sources: Bloomberg, NBER, and Ned Davis Research, Inc.

Shorter recessions, longer expansions
In modern times, recessions have been getting shorter while expansions have been getting longer. The average recession since World War II lasted 10 months, while the average length was more than twice that in the nineteenth century. Conversely, the average expansion since World War II lasted twice as long as those in the nineteenth century. Unfortunately, today's recession is likely to be a doozy, both in duration and magnitude terms.

In addition, the government and the Federal Reserve have been playing more significant roles in moderating recessions, especially since the Great Depression in the 1930s. Unemployment insurance has helped to reduce the loss of income during recessions while monetary policy has been used more effectively to lower borrowing costs and increase credit availability. I won't use this space to illustrate what's been done to date by the Fed and the Treasury Department because we have reams of reports on that currently posted on Schwab.com. Suffice it to say today's interventions have been truly unprecedented.

Pattern consistencies
There is a lot of historical consistency in terms of the pattern of returns for the market around recessions, if not the magnitude. As you can see in the chart below, which combines all of the 10 prior recessions into a single average line, the market typically peaked about seven months before the recession began, but bottomed quite decisively by about six months into (or 60% of the way through) the recession, with an average peak-to-trough decline of just under 25%.

S&P 500 Performance Pattern Around Recessions

Indexed price-only data from 1947-March 31, 2002. Source: Ned Davis Research, Inc.

In fact, history has shown some of the deepest bear market bottoms and/or buying opportunities have come during the depths of recessions. The S&P 500 is currently down 36% peak-to-current, so we're clearly beyond the historical norm. Since it's anybody's guess as to when the market will bottom, this may be the market's way of telling us this recession is likely to be a tougher one than usual.

But let's not forget that historically, a significant percentage of bear market finales have occurred during economic recessions. In fact, six of the nine last bear markets ended during recessions. And the subsequent rallies/new bull markets can be fierce and quite rewarding … that's assuming you haven't fully bailed out of stocks during the pain on the downside.

Note in the table below the performance averages for the market during various periods following stock market troughs in recessions.

S&P 500 Performance Following Recession Lows

Source: Ned Davis Research, Inc.

Nobel Laureate Robert Solow once said: "It is acutely uncomfortable to have so much in macroeconomics depend on how one deals with a concept like expectations, for which there is (inevitably?) so little empirical understanding and so much room for invention." However, uncertainty is not only normal, but pervasive, in the economy and markets. As such, future expectations become a critical variable in most decisions (economic or investment).

Most stock market observers are aware of the sentiment effect—peak levels of optimism are often followed by corrections and vice versa. Much is the same with economic cycles: The economy typically falls into recessions not because of random shocks or crises, but because extreme optimism and euphoria is replaced by extreme pessimism and despair. Today's recession is a function of both: a crisis that continues to exacerbate what was already a feeling of despair. But the key is not letting your despair cause you to panic.

Important Disclosures
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Any investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and are not intended to imply future results.

Past performance is no guarantee of future results.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

General Motors Owes One Hundred Billion Dollars.

Op-Ed By Natalie Pace. Includes Four Questions for Picking Winners.

Is it Smart For the U.S. Treasury Department to Loan the Corporation More Dough?

Partially excerpted from Put Your Money Where Your Heart Is by Natalie Pace.

While picking winning stocks (and companies) is tricky, you can go a long way to mastering it by using the Stock Report Card (outlined in my new book, Put Your Money Where Your Heart Is), by trying the products and services of the competition before you buy the stock, and by asking the four basic questions (listed below) for determining a leader. In my new book, I actually compare Google’s success with General Motors’ failure by applying these four questions to the business environment of both companies back in 2004 when I first touted Google as likely to become the most successful IPO of all time (it did) and General Motors as most likely to implode (it did, as well).

Winning investments have a lot in common with one another, and losing investments tend to be lacking in one or more of four critical areas. Three out of four of the questions I use to determine the leader in a sector can be answered with information you have as a consumer. And it turns out that this tool is great for evaluating whether or not the current proposed bailout of General Motors is the best solution for a company that has lost over $51 billion dollars over the last three years and still owes $91 billion in long term debt, pensions and other post employment benefits (like health care). (With the new U.S. Treasury loans, GM will owe over $100 billion by the end of February 2009.)

The Four Basic Questions for Picking a Leader
1. What’s the product?
2. Who’s going to buy it, and why would they like that product more than the competitor’s version?
3. Can the company continue to make a superior product now and going forward and get it to the masses while the appetite of their customers is piqued and the product is fresh?
4. Who’s running the company, and how motivated are the employees to deliver a superior product faster, cheaper and better?

An extraordinary number of things have to go right within a company for a superior product or service to show up in the stores at a reasonable price. If a company is doing enough right to get you to come to them and buy their product, a thousand things have gone right from the executive suite, down to the shipping dock, over to the store, and finally in the accounts receivable department. If you’re choosing Product A over the competition, you have a good understanding of why. And most of this research involves something many of us love: shopping. Not one mind-numbing chart.

I have a motto that says, "Happy people make better products faster, cheaper." That has been a key ingredient in some of the greatest success stories in this last decade, including Google. It is also, unfortunately, behind the demise of some of the most beloved brands of our country, including General Motors. Some of this is the fault of management, but not all.

What’s the Score?
When I scored Google using each of the four questions, Google ranked an A+ in all four. As such, I predicted on May 1, 2004: "I don’t need to tell you that if the editors of American Heritage are forced to include a noun as a verb in the dictionary, you’re witnessing an historic phenomenon….Google continues to break the mold and is committed to continuing that trend, with an unprecedented IPO, which is likely to become one of the most successful IPO’s ever."

Google did in fact post the most successful launch for a public company ever. By May 2006, the company had a valuation of $136 billion. Dr. Eric Schmidt has the distinction of being the only CEO to take a company from IPO to over $136 billion in market capitalization in under two years.

Readers of my ezine who heeded my reporting and bought Google at the IPO were dancing on the ceiling by 2007. By the end of 2007, Google was worth more than 200 billion dollars, with $12 billion in annual sales. By comparison, Yahoo (a Google competitor and the clear laggard for investors) had grown from a $33 billion market capitalization to a very modest $44 billion, with annual sales of $6.5 billion, over the same period. Google’s share price rocketed from the initial public offering price of $85 to $747 per share at its high in 2007.

Now, let’s use the questions to evaluate a company that was on my Cooling Off list from 2004 to 2007—General Motors. In my July 1, 2004, article, "Hybrids: Car of the Stars, But Should You Own the Stock?" I warned that General Motors and Ford were going to hit tough times. In that article, I predicted, "Good-bye SUVs" and hello hybrids.

We knew about global warming back then—an ice sheet the size of Rhode Island had fallen off of Antarctica—though there were many who were still trying to deny it. Honda and Toyota had made a large investment in hybrids and alternative energy cars, while General Motors was still backing research and development in hydrogen fuel cells and had a substantial production commitment to large trucks and SUVs. Here’s how the Four Questions applied to GM as early as 2004 (and why it prompted me to warn investors that the share price was poised to implode). As you can see, the conditions that brought about GM’s demise over the last four years have not changed substantively, which is why the company continues to be a bad investment for investors and taxpayers and governments (bailouts) alike.

What’s the product?
In early 2004, before the heart-stopping spike in oil and gas prices, GM was producing mostly SUVs and Hummers, while Toyota and Honda were promoting the new hybrids. General Motors had production lines that were committed to continuing the production of SUVs because SUVs were still testing well in focus groups, while Honda and Toyota had the vision to understand that hybrids were the wave of the future, even if the soccer moms of America didn’t know that yet. The Toyota Prius Hybrid was named Motor Trend’s Car of the Year in 2004, while GM’s major ad campaigns and production lines still promoted gas-guzzlers.

Who’s going to buy it, and why would they like that product more than the competitor’s version?
After gas prices spiked in 2003, the bottom began falling out of the market for SUVs and Hummers, but even prior to that, you could see and feel the growing wave of concern over global warming. It was no accident that Motor Trend picked a hybrid to be the Car of the Year in 2004. Celebrities were arriving at the Academy Awards in hybrids. The stigma of driving gas-guzzlers was something that was hard on a career. California Governor Arnold Schwarzenegger, the Governator no less, had to install a hydrogen fuel cell into his Hummer so that he wouldn’t be perceived as a hypocrite—promoting "green" while his car guzzled gas like water. Everyone ran hard and fast to fuel-efficient vehicles and green, while GM was stuck in union talks, losing billions of dollars, fighting off angry board members and struggling to revamp production lines.

Can the company make a superior product and get it to the masses while the customer’s appetite is piqued and the product is fresh?
A big part of the problem with General Motors was lack of vision. If the company had the vision to invest in fuel efficiency before gas became black gold, even when the focus group data said soccer moms still wanted their SUVs, Toyota might not have topped General Motors to become #1 in sales and profits. Another part of the problem, however, and one that was easier to see, was that "Generous" Motors was having trouble getting their costs under control. The cost of certain goods, like metals, had tripled, causing an industry-wide concern that wasn’t unique to GM. However, the cost of labor for GM and Ford was substantially higher than the Japanese auto manufacturers and once GM started losing money, the focus of upper level management shifted from making great cars to raising capital to continue operating, mostly through debt and derivatives. You can easily see how with all of these challenges, the CEO at GM was not focusing on leading the industry with new product ideas. He was buried in problems, behind in innovation, and stuck in the rut of building cars that people didn’t want to drive anymore.

How could you uncover all this stuff about pension plan debt and capital constraints and costs out of control? Well, all of the major money sites – MSN, Yahoo, the brokerage sites, etc. -- have financial information on publicly traded companies with one easy click. Additionally, you can access the earning reports at Sec.Gov and power search the documents, using the key words "pension," "net loss," "Other Post Employment Benefits" (or "OPEB"), "debt," "risk" and "liability." By going straight to the areas of concern, you could have found out the seeds of discontent and unprofitability at GM in just a few easy minutes. Additionally, the high costs, pension difficulties, labor union talks and other red flags at General Motors were making headlines very routinely at some of the most reputable news and business companies, including the New York Times, Wall Street Journal and NataliePace.com.

Who’s running the company, and how motivated are the employees to deliver superior product faster, cheaper, better?
While no one is offering awards to them for outstanding business leadership, the CEOs of both Ford and General Motors are reasonably respected for sticking with it – for showing up everyday, trying to find solutions in a very tough environment and keeping these legacy corporations afloat through some of the same challenges that forced so many airlines to go into bankruptcy—high materials costs, high labor costs and crushing debt obligations to pensions and health care for their retirees (those OPEBs). Ford and GM both faced a global market that constrained their ability to price their product higher (as do airlines). On the other hand, GM was rightfully criticized for not switching to fuel-efficient cars more quickly.

Unfortunately, in a stormy climate of salary slashing and benefit slicing and dicing, staff morale typically drowns. It’s tough on your smile when you get your pay cut or your benefits reduced, and it takes a saint not to want to blame the boss who’s running the company for the tough times. In that climate, General Motor’s Chairman and CEO Rick Wagoner had his work cut out for him just to keep the company in business. Making the business profitable would require a multiyear turnaround strategy that hasn’t happened for the past four years. In most businesses, if the top dog has a losing record four years running, he gets the boot. Most businesses that lose billions year after year, go bankrupt, as General Motors would have done, without the Treasury Department’s December 19, 2008 loan bailout.

General Motors received $4 billion from the U.S. Treasury Department on December 19, 2008, will receive an additional $5.4 billion on January 16, 2009 and will have to get approval from Congress to receive a third installment of $4 billion on February 17, 2009. Is it smart to loan $13.4 billion to a corporation that lost $23 billion last year, $51 billion over the last three years and still owes over $100 billion dollars in debt and pension obligations? Couldn’t a new visionary/leader bring better products into Detroit -- like electric cars -- and reinvigorate the city, as President Elect Barack Obama has recommended?

Winner or Loser?
When applying the four questions to General Motors as early as 2004, the company got Ds across the board. Over the next four years, General Motors remained on my Cooling Off list, where I warn of stocks that are under pressure and are poised to lose value on Wall Street. Today, with over $100 billion owed (long-term debt, pensions, OPEBs and the new Treasury Department loans), General Motors owes over fifty times its market value. Wall Street prices GM at under $2 billion currently.

Even with the 2008 pullback, Google is still worth $97 billion, with a return on investment of over 261% for June 2004 IPO investors. Meanwhile General Motors’ investors lost more than 92 cents on each dollar invested since July of 2004 (when I first warned investors of some of the challenges the corporation was facing).

The Bottom Line
So, if you can pick good fruit at the supermarket, you can apply those same skills, under the framework of the Four Questions, to select the quality goods (and weed out the duds) at the stock market, too. While no one wants to see Detroit out of work, and the unemployment situation, particularly in the auto industry, needs some seriously proactive and immediate business solutions, it is hard to justify funding a corporation that has been bleeding red all over its balance sheets for years, is crippled with debt and labor costs and continues to manufacture products that are considered inferior by today’s car consumer.

NataliePace.com Note: The opinions expressed in this article are the opinions of the writer and do not represent the official stance of the Women’s Investment Network, LLC. The editors invite well-written articles expressing a different vantage point, which includes up-to-date, reputable data.

Suffer-Purge-Recover-Better Than Ever!

by Chellie Campbell, author of Zero to Zillionaire.

"The season of failure is the best time for sowing the seeds of success."
—Paramahansa Yogananda

Photo credit: Mary Ann Halpin

Well, there’s nothing like a bout of illness to get you to appreciate good health. And it gives you time that we don’t often take in our hurry-scurry lives - time to rest and reflect and reset our habits, intentions and goals. As I pondered my fate between groans, I saw that the cycle of learning is always the same – with the economy, with health, with relationships, with work.

First you Suffer:
Two weeks ago my back "went out" (whatever that is) and I suffered some really bad back pain. I went to bed and did the ice pack & Advil thing…

Got up to go to my niece Marissa’s fantastically fun "Fairy Party" for her little girl Kara Lynn, who turned one. All of us family and friends gathered ‘round for a backyard barbeque, piñata, presents, and a scrumptious cake made out of individual cupcakes all frosted together in beautiful hot-pink icing.

But somebody had the stomach flu. Within 24 hours, ten people who had been at the party were throwing up. (And then the people who lived with them got it, so we know it wasn’t food poisoning.)

Somehow, I escaped and didn’t catch it. Whew. I congratulated myself on my good fortune and joined the family for Thanksgiving dinner, love and blessings.

Then you Purge:
But Typhoid Mary still lurked unsuspected and unknown. Two days later, I was worshiping the Porcelain God for the next 48 hours. Oy. This did nothing good for my back pain as you might imagine. And no Advil to help because I couldn’t keep anything down. Add to that: No coffee=no caffeine=bigtime headache. Couldn’t read, focus on TV, write, go anywhere, and the only music I heard through my delirium were endless refrains of Peggy Lee’s "Fever".

I was a mess, I tell you, a complete mess. But I did manage, in a few lucid moments, to apply the Law of Attraction, and focus on radiant, glowing, life-affirming Health. I held to that vision and knew the only thing standing between me and that reality was Time.

Next you Recover:
Eventually, Time works its magic. You make it through to a better day ("out with the bad air, in with the good air…") and little by little, your glowing good heath returns. You start thanking God and all the angels for the absence of pain. You vow not to take your good health for granted ever again.

The Opportunity to be "Better-Than-Ever":
Now I can just get up and go about my business as usual, return to all my prior habits and ways of being. But I see an opportunity to improve things. I had been thinking about changing some of my habits, like having fewer soft drinks, less coffee, less sugar, more exercise, etc. and maybe this Purge comes as a help to me, after all. I’m not in the grip of any of these habits at this moment – they have all been broken through this experience. Now I can factor back in those food habits I choose – the ones I feel are beneficial. I’m not stuck in the trap of my habits any more. I can forge new habits that I know will get reality to match my affirmation of glowing good health.

Relate This to the Economy
Our financial habits were debilitating to our health. The fancy financial creations of Wall Street turned on their masters and ran away with the banks. Housing was so expensive no one could afford to buy except with no money down, liar loans, and pay later doom dates that people hoped would never arrive. We lived on credit cards to afford lifestyles beyond our means. A lot of us didn’t save anything. Those who did saved for "retirement" without understanding what 401ks were or what they really invested in.

When the force of all the bad habits caught up with us and the economy got sick, there was a lot of pain and suffering. We’re in the purge cycle now, as failed institutions crash and burn, people lose homes and jobs, and retirement dreams recede.

But it is bad habits that are dying here, creating the opening for better ones. Have faith – better days are coming! It may be winter now, but spring always comes again. We’re headed for recovery every day, and our best and brightest minds are working to facilitate it and choose better habits for the future. Cheer them on. Hang on. Help where you can. Give where you can. Believe in your bright future and see it as yours today. Keep a smile on your face, confidence in your step, and love in your heart. The fearful world needs joyous dolphins to light the way to love, peace, and prosperity. It is already yours.

Love and blessings,

Chellie

As a professional speaker and author of The Wealthy Spirit and Zero to Zillionaire, Chellie has been teaching Financial Stress Reduction® Workshops since 1990. The Wealthy Spirit was a book-of-the-week on the Doctor Laura Schlessinger radio show and a GlobalNet book-of-the-month selection. She has been quoted in Good Housekeeping, Lifetime, Woman's World, and Essence, and more than 30 popular books.

Chellie has also been responsible for helping countless people to increase the profitability of their businesses. If you are stuck having too much month at the end of your money, learn Chellie's time-proven strategies to success in her Financial Stress Reduction® Workshops. If you are interested in becoming a certified coach/owner in Chellie's workshop franchises, be sure to contact her right away. Space is limited. Go to Chellie.com for more information.

 

How I Went from Copper Miner’s Daughter to Wall Street’s Golden Girl.

by Natalie Pace.

Excerpt from Put Your Money Where Your Heart Is. Available now on Amazon.com.

Photo by: Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Arlene Hylton-Campbel, 818-710-0079.

Brokers and Lovers: It Pays to Pick a Good One
Coming from a copper mining family – my dad was a welder in the smelter – I always felt like I was born without a silver spoon. But, being born "poor" wasn’t my only challenge. My mother died when I was just seven, sparking a series of life challenges for me. Somehow, despite the early tragedies and the personal heartbreak, I managed to make something of myself -- to get enough grants, loans and scholarships to graduate from USC and to go on from there to become a bestselling book author. But the real key – the hidden blessing of those tough times -- was the confidence that I gained by carving my own pathway to success.

So, by the time I had my virgin experience with a mutual fund salesman, I had enough spunk to stand up for myself. On a breezy Santa Monica lunch period in August of 2000, I met with a certified financial planner recommended to me by my banker. Steven Snappy (obviously not his real name, which I’ve forgotten) had a set of impressive initials after his name—NASD, SIPC, and so on, which lent him credibility. I felt that I was in good hands. He told me that if I tossed my recent real estate profits into a bowl of mutual funds, I’d churn up a minimum of 12 to 15 percent return per year. If, that is, I also dumped in an additional $500 a month, which was the minimum amount I could commit to.

"Twelve to 15 percent," he said in a whisper, behind a cupped hand, "is very conservative." (Never mind the fact that I’d have to give up eating to afford the $500 per month.) His mutual funds, which he proposed to put all of my money into, boasted up to 43 percent returns on funds anchored by AOL, Global Crossing and Enron. These brochures quoted returns from March 2000, at the stock market high, something Mr. Snappy neglected to tell me, even though our meeting occurred after Nasdaq had already tumbled about 40 percent (dragging those quoted gains right into the gutter).

When I met Snappy, I thought "P/E" was the company in the movie about Erin Brokovich. I had no idea what Cisco did. I did know, however, that the telecommunications companies were overbooking revenue. As an executive in that industry, I was on the phone daily trying to get hundreds of thousands of dollars worth of credits from a major company that had been over-billing my company at triple the contracted rate for almost a year. If telecoms were cooking the books, what other companies were doing it?

Snappy became very impatient with my questions. It was perfectly easy to see from his charts that the mutual funds he was recommending were amazing. By diversifying into three different funds, I would be protected from the fluctuations of any one sector. How hard was it to see this? Besides, he was making a huge, unauthorized exception for me by lowering the minimum buy-in. If my money sat in savings at 4 to 5 percent interest, that was less than inflation. We were talking ten times gains in upside potential. Just what was it that I didn’t understand? (If you ever hear someone talking to you like this, run. In fact, the stock market returned only -0.2% over the last ten years, nowhere near the 12-15% that Snappy tried to sell me. His strategies would have lost almost everything I had!)

When a life crisis comes at you, as it certainly did for the world in 2008, you will feel so overwhelmed with responsibility, fatigue, hopelessness, time constraints, confusion, shock and grief that the temptation to trust in strangers on serious and consequential matters will feel like a matter of necessity.

And right now, chances are, your instincts are likely screaming, "Help!" Whether you are an investor or a human resources executive or a certified financial planner or even an investment banker, you know that the information you had and the research you relied upon didn’t work or you wouldn’t be in a crisis today. (Brokerages that had been around for decades – some more than a century -- imploded in 2008.)

If Lehman Brothers and Bears Stearns don’t have a clue, how are you supposed to find your way out of this mess? (Keep reading…)

There I was—a professional woman in sharp new clothes with a pen poised to sign a slew of documents I didn’t believe in because I wanted some sleazy salesperson to approve of me. And here you might be poised to do the same thing, having blind faith in someone new, just because the last relationship didn’t work out so great and you need someone beside you.

Think fast, Natalie.

At the time, Al Gore was campaigning on eight years of prosperity and how he was going to be the candidate to continue it. In fact, who could continue eight years of prosperity, when markets always ebb and wane? How could technology companies like Amazon.com continue to operate for years in the red? So many red flags. Too many.

What red flags do you see in today’s world? Do you really think that the same plan that lost you so much money is the right plan to stick with in 2009? If not, then you need to invest in getting answers to your questions from someone who had a great track record in 2008, as well as for the past decade. My strategies work in bull and bear markets, my 2008 track record is outstanding (as have been all of the years from 2000 on), and my new book, Put Your Money Where Your Heart Is, is endorsed by TD AMERITRADE Chairman Joe Moglia, bestselling authors Michael Bernard Beckwith, Mark Victor Hansen and T. Harv Eker, as well as Nobel laureate winning economist Dr. Gary Becker. Put Your Money Where Your Heart Is costs only $16 and change. Some people have read it cover to cover in less than a day. Imagine educating yourself on the basics of sound investing in less than a day and at a price that costs less than dinner!

I left that day without signing Snappy’s papers, using the lame excuse that I was late for work. Snappy was exasperated, but that didn’t keep him from continually calling and nagging me. I was too busy researching P/Es, PEGs, Debt/Equity ratios, and the 10-Ks of my favorite companies to take his calls. (Thank God for the ignore option on my cell phone!)

By the end of 2000, while I still only understood the basics of all of this new terminology, my instincts that publicly traded companies were overpriced was proving to be accurate. So instead of throwing away my life savings on Snappy’s “big winners”―Enron, Global Crossing and AOL—my investment chugged along at four percent interest in a certificate of deposit.

What was the top-performing asset class of the year 2000 (and 2008)?

Cash.

When I did invest in the stock market – just one year later, in August of 2001 -- Opsware was on sale at 83 percent off. I tripled my money in just four short months—without shorting. Since then, I’ve had extraordinary gains in the markets. In fact, in 2008, 70% of the companies I featured in my monthly articles and stock report cards were winning investments. And I was able to found and become the majority shareholder in my own financial news company―all of which led to this book.

The Bottom Line
Put Your Money Where Your Heart Is gives you the tools and information to build your dream life. And the great thing is that it is not about mind-numbing charts or getting a Ph.D. in economics. Rather than trying to think like a Wall Street analyst, you’ll learn how to use and value information that you already have as a shopper. As you can see from my track record, that is a winning strategy.

A version of this article first appeared in From Inspiration to Realization, edited and published by Christine Kloser.

About the author:
Natalie Pace knows what it's like to be flat broke and to work her way out of it. Now one of the premier financial pundits in America, she teaches people about money at NataliePace.com. Her first book, Put Your Money Where Your Heart Is, is available now on your favorite bookselling website. Get more tips, news and information at NataliePace.com.

How Winter Darkness can Lead to Physical and Mental Doldrums.

by Julie Gengo.

...and What you Can Do to Charge Up the Light.

Winter is coming and when the number of daylight hours dwindles, often your vitality and energy seems to go with it. Some of us experience the symptoms of SAD (Seasonal Affective Disorder) as soon as we turn back our clocks. The lack of sufficient light can have a significant affect on your overall well-being and as a result damper your lifestyle and energy levels.

The most obvious detriment from the lack of sunlight is not receiving enough vitamin D. The ultra violet (UV) rays from sunlight stimulate vitamin D synthesis in the body. The sunrays’ intensity also diminishes in the winter months and the 10-15 minutes of recommended exposure daily might not be enough for proper nutrient absorption depending on one’s skin pigmentation. To make up for the intensity level we may need to stay out in the sun for an hour a day and finding the time may be difficult for most people.

In actuality even in Southern California, most of us do not get the necessary amount of vitamin D regardless of the season since we wear sunscreen. Any sun block product that is over SPF 8 will block out at least 95% of the rays.

According to the Medical College of Wisconsin, "The major biologic function of vitamin D is to maintain normal blood levels of calcium and phosphorus. Vitamin D aids in the absorption of calcium, helping to form and maintain strong bones. It promotes bone mineralization in concert with a number of other vitamins, minerals, and hormones. Without vitamin D, bones can become thin, brittle, soft, or misshapen. Vitamin D prevents rickets in children and osteomalacia in adults -- skeletal diseases that result in defects that weaken bones."

Since vitamin D is an essential nutrient, having it into your body in the appropriate amounts is crucial. So how much should we take and who can determine this? At HealthWalk™, we offer a comprehensive approach to helping you achieve and maintain vibrancy regardless of the time of year. With evaluation through live blood analysis (Vital Hematology) and an advanced biofeedback system called Galvanic Skin Response (GSR), we can assess your body’s vitamin D level based on analysis of your cells and from GSR testing.

At HealthWalk™, we recommend nutritionally bio-available vitamin D products to ensure you have the optimal potency and efficacy. Other supplements may also be indicated in the analysis and we suggest the appropriate ones for your specific needs, along with specific protocols to rebalance your mind and body. Some common supplement needs are for ReGenesys™ to support enhanced energy, normal sleep patterns and stress recovery and Subrexi™ for balancing hormones, support your body in synthesizing proteins and to support mental well being. ReGenesys™ contains some of the highest concentrations of intestinal and digestive enzymes to promote proper absorption of nutrients and to facilitate the absorption of the supplement’s powerful blend of calcium, magnesium, dimethylglycene and boron for muscle and nerve function enhancement, malic acid for detoxification and adaptogens to help the body recover from stress. Subrexi™ delivers a broad spectrum of free form amino acids by combining 18 essential and non-essential amino acids to help restore your energy and gain nutritional support for healthy neurological functioning.

HealthWalk’s modalities can also assess if there are other factors which may be exacerbating or creating your winter blues and doldrums. There are several factors that can bring you down emotionally as well as physically. One solution you can do right now is to reframe your thought pattern to a more positive one to help create an inner light source even when it is dark outside. Our MindSoul Brain Technology takes your efforts a step further by mapping your brain waves; analyzing the images; and designing a specific therapeutic protocol that can help bring your mind and body back into balance, promoting inner harmony.

Initially it may take some conscious effort to achieve and maintain vibrancy and wellness. The good news is that once you understand your circumstances and how to get the resources you need to manage them, you will have the power to forge through the winter darkness with joy, confidence and clarity.

HealthWalk™, the leading edge non-invasive healthcare center and products company has specially priced Health and Wellness Services Packages and Discounts on Products and Services for NataliePace.com subscribers. HealthWalk is offering 10% discount for NataliePace.com subscribers on all individual HealthWalk products and services. Please mention the discount code, HWNP upon ordering.

HealthWalk™ offers customized, non-invasive and effective support to enable your body’s own innate powers to regain and enhance health, performance and healing. HealthWalk™ is dedicated to supporting and empowering you to achieve and maintain vibrant wellness. HealthWalk™ is a non-invasive, integrative healthcare facility with a global umbrella of leading edge technologies, services, natural supplements and products backed by over 20 years of research. HealthWalk is based in Carlsbad, CA. www.healthwalk.com

In today’s high stress world, you face a host of special health needs and challenges from work and home demands. Health issues include physical and emotional stress, sleep issues, memory and information retention, weight control, gastro-intestinal distress, hormonal imbalances and emotional and physical health.

MindSoul Brain Technologies
MindSoul Brain Technologies creates a brain map of the brain’s neuro pathways which shows the imprints in the brain that an individual experiences as memories, trauma, thoughts and experiences. MindSoul Brain Technologies supports the rebalance of the misfiring, blocked or damaged neural pathways to restore homeostasis and balance to the brain and to reduce or eliminate negative symptoms associated with emotional and physical stress and trauma, memory issues, addictive behavior(food, smoking, drugs etc), ADHD, ADD, dyslexia, autism, loss of mobility due to stroke, physical trauma etc. Some of the symptoms may include the inability to focus, frustration, anger, headache, hyper vigilance, impaired memory, multiple competing priorities, stress-related illness, weight gain or loss, gastro intestinal discomfort, mood swings, insomnia, depressive symptoms, fight or flight response, physical movement impairment etc.

A thorough assessment Mind Map and a series of ten sessions - $1,500

HealthWalk In Clinic Package
In one full, comprehensive and enlightening day at HealthWalk’s clinic you will learn more about your health and bodily functions (hormonal balance, blood composition, biological activity, diet analysis) than you have ever known. The whole analysis and consultation process is non-invasive, thorough and deeply informative. You will come away with the solutions, supplements and support to guide you on your path to enhancing, regaining and maintaining your vibrant health.

HealthWalk’s special package includes Vital Hematology, Comprehensive Hormone and Adrenal Analysis and Consultation, Digital Infrared Thermal Imaging (breast and lymph screening), Galvanic Skin Response (G. S. R.) and a consultation session with the Health Guide.

Special discount for NataliePace.com subscribers - $995 regularly $1170

HealthWalk’s Remote Program allows you to obtain a comprehensive analysis and support for your health so you can achieve wellness from your own location. HealthWalk has contracted with labs throughout the country to work with you to obtain the blood and saliva samples to do a thorough analysis and consult with you via phone and email on your specific health issues and to offer you appropriate support. This program gives you a comprehensive analysis and solutions on what and how your body is functioning at the adrenal, biological, hormonal, cognitive, mental and metabolic levels. The significant majority of all illnesses and promotion of wellness can be related to the proper functioning and understanding of the endocrine system, the biochemical aspects of the body and the proper functioning and understanding of nutrient uptake, allergies, inflammation, and potential or current toxins in the body. This program will give you the information and support you need to enhance, regain and maintain vibrant health.

The cost of the Remote Program is $1395

Call HealthWalk at 877-255-4703 or email info@healthwalk.com

www.healthwalk.com

HealthWalk, 5825 Avenida Encinas suite 111, Carlsbad CA 92008

You can lose everything in life and make it all back
With one exception… Your Health

Please note: This article has not been evaluated by the Food and Drug Administration. The information herein is not intended to diagnose, treat, cure or prevent any disease.

HealthWalk is a separate entity from NataliePace.com and NataliePace.com offers no guarantees of, nor do we endorse, their products and/or services.

Make Love With Your Money.

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

January 2, 2009

General Stock Market Performance

If you want to get a better life, you have to start thinking like a rich person, instead of a victim. Victims fear money, worry about money, think that they are owed money, think they deserve money more than the next guy, and spend all their time gambling or trying to win the lottery, instead of embracing healthy money habits that lead to lasting wealth. Rich people know where their money is invested, know how much they should keep in safer investments (i.e., not the stock market) and would have recession-proofed their portfolio in February of 2008, when I first wrote an article warning to do that.

A lot of people have fear around money. I call it "investing with stomach acid," instead of your intellect. When you buy a home or stock in a company or even a Beanie Baby with fear and blind faith (and a whistle and a prayer), the odds are that you will buy high and sell low. That is what fear does, even though it is the exact opposite thing that everyone knows―with their brain―to do. (Blind faith is a brother of fear. Wisdom and right choice are very different strategies.)

Believing you have to make money fast before the world ends or the bank takes back your home is the kind of vulnerability that scam artists and shysters feed upon, which means you are more vulnerable now than ever – especially if you are biting your nails while you read this. When you secretly believe that you are destined to lose money on your investments, you don’t drink in the education and research you need in order to make a successful purchase in the first place. When you make wise, informed investments in companies that you believe are creating the best products and services on the planet and when you have a sound wealth blueprint that takes into consideration your age and diversification needs, then you believe that you are going to make a fortune in the markets, not that you are going to lose.

When you invest in what you know and love, your wisdom as a shopper and passion about the product immobilize fear, and that’s when you can really start making confident and correct choices that will pay off for you. Ask yourself this: "Would I rather own a Hummer or a Prius?" If you answered Prius and had invested there when Prius won Motor Trend’s Car of the Year in 2004, then you would have made a lot of money! General Motors and Ford combined are worth less than one-tenth of the value of Toyota today.

You know how to place a value on what you own and are less likely to sell it on the cheap. Imagine now how it would feel to own Google at the Initial Public Offering (IPO). Or Microsoft. Or Suntech Power Holdings (a solar energy manufacturer). Or Starbucks. Or Toyota.

Become the Best You
Some authors make investing too complicated. Others make it too boring. Some have cookie-cutter investment strategies, like cutting out coffee or using fancy software, that frankly don’t work because no two people have the same talents, passions, goals, time or intelligence. My investment recipe works because you supply the ingredients. The Billionaire Game works because you decide what’s charity, what’s education, what’s fun and what to invest in, and the fact that you are invested in achieving your own success—instead of relying on someone else to do it or drowning in basic needs—is the fuel that drives prosperity.

Choosing Faith Over Fear
If you think of all the time you spend worrying about money, you know that getting smart about investing is actually going to take less time. Becoming a successful investor who earns gains while you sleep doesn’t cost more than being a fear-based investor who loses money every time the economy hits a recession. It’s simply investing the same money you put in your 401(k) or IRA more effectively.

If you can shop, you can pick stocks. If you tithe, you can become a millionaire. If you can pick a great life partner, then you can select the second most important person in your life―your certified financial planner. If you know your age, then you know what percent of your retirement plan you should keep safe, i.e. not invested in stocks.

How would you live if you had all the money in the world? What companies would you invest in? The beauty of the stock market is that with very little money, you can create that life now. You can become not just a rich person and a great investor, but someone who does all that by putting her money where her heart is―by making love with money. When people start investing with heart and soul and wisdom, instead of fear, blind faith and greed, this world will become a very, very beautiful place. There is no end to the problems that can be solved when we move trillions out of the old industries of oil, gas and cigarettes and invest it in clean energy, goods and services that contribute to a healthy, sustainable world.

If this resonates with you, please buy and read my new book, Put Your Money Where Your Heart Is. The information found therein will provide a blueprint for your path to wisdom, to great profits and to a much richer life and world.

Investor Alert:
On December 15, 2008, the Honorable Louis L. Stanton, a Federal Judge in the United States District Court for the Southern District of New York, appointed Irving Picard as Trustee for the liquidation of Bernard L. Madoff Investments Securities LLC ("BMIS") pursuant to the Securities Investor Protection Act ("SIPA") as set forth in the attached order.

Mr. Picard supersedes Lee S. Richards, the previously appointed Receiver for BMIS. All claims by customers of BMIS will be processed by Mr. Picard as SIPA Trustee. Customers and claimants should refer to the website of the Securities Investor Protection Corporation for information about the processing of claims at SIPC.ORG.

Mr. Richards continues to serve as Receiver for Madoff Securities International Ltd. The Trustee Irving Picard has engaged Lazard Frères & Co. LLC to assist in the sale of the trading operations of Bernard L. Madoff Investment Securities LLC.

Should you have further questions, please contact the Trustee at the following number: 888-727-8695.

How does the Madoff Hedge Fund implosion impact you?
Madoff imploded because he had too many "redemptions" to honor. In other words, his clients were asking for their money back. BMIS has not yet released extensive details on the hedge funds holdings (which companies will be impacted if there is a liquidation of stock into cash). Additionally, there were some corporations, like General Electric, that had money invested (on a client basis) with BMIS. The ripple effect of this $50 billion (reportedly) implosion will continue to be felt over the next few months. Proceed with caution and make sure that you have your defensive game on as we head into another year of financial storms. What is your defensive game? Buy and read Put Your Money Where Your Heart Is now to learn the fundamentals of successful investing, in a world where the stock markets returned less than zero for the last ten years.

Market Report:
Stormy, gloomy, volatile, down-trending, with tsunami warnings of hedge funds that might be imploding. In other words – plain English – your new year, new you, new nest egg and new world will have to be built upon the ashes of an investment strategy that didn’t work in the past and won’t work going forward.

It is time NOW to make sure that you have recession-proofed your nest egg and positioned it to have the ability to resurrect in 2010, after another year of the worst financial storms of all time.

I know you’re shell-shocked, but sitting down on the battlefield can be life-threatening. There are only three possibilities – the markets go up, stay flat or go down -- and all three require action now to position you for a better tomorrow.

1. The markets go up in 2009. This is not predicted, but if the markets go up in 2009 and you are still invested in the old way of mutual funds and whatever other people tell me to do, you are as vulnerable now as you were in 2007 and in 2000 (when the DOT COM burst and you lost all of your gains). Additionally, you are not positioned to recover well or capture gains, even if a particular segment or industry performs well, because mutual funds are too big for you to see where the gains are coming from. Most don’t have any holdings in emerging markets, where most of the gains are made. ETFs are targeted by size, style, industry and more, allowing you to see when a particular sector has run up, and capture those gains in a timely manner, with once or twice yearly meetings with your CFP to rebalance your dream life nest egg blueprint.

Solution: Get smart. Recession proof. Diversify into ETFs. Take charge of your financial future and dream life! The idea that you are selling low (what people will tell you to get you to do nothing) makes no sense. You are where you are, and if you adjust things now, you could be positioning yourself for great gains that you have the ability to capture instead of pitiful market returns that can bust at anytime without warning (as they did in 2000 and again in 2007.) The markets have returned -0.2% per year for the last 10 years, not 12% (source: Hulbert’s Financial Digest). You need a new plan. The old way and decades of the experience in the old way is like knowing how to ride ponies to deliver mail when the airplane was invented.

2. The markets stay flat in 2009. This is not predicted, but if the markets stay flat in 2009 and you are still invested in the old way of mutual funds and whatever the tv pundits, insurance agents, analysts, etc. say, you are as vulnerable going forward as you were in 2007 and in 2000 (when the DOT COM burst and you lost all of your gains). Additionally, you are not positioned to recover well or capture gains, even if a particular segment or industry performs well. In this scenario of a flat market, you could rebalance everything, essentially selling and buying at the same price for a zero net gain, while positioning yourself much better for the future! If you have capital gain losses, they can be declared on your income taxes and if you have more losses than you need in 2008, then you can carry the losses forward into 2009 and 2010 or backward, as you desire and as is allowed in the tax code.

Solution: Get smart. Recession proof. Diversify into ETFs. Take charge of your financial future and dream life! The idea that you are selling low (what people will tell you to get you to do nothing) makes no sense. If you adjust things now, you sell and re-buy at the same price, while positioning yourself for better gains going forward because you are employing a better plan that adjusts with your age and market conditions. Any capital gain losses that you declare will lower your tax payment this year.

3. The markets go down in 2009. This is predicted, and if the markets go down in 2009 and you are still invested in the old way of mutual funds and whatever my money manager says, you are going to lose more money without any ability to stop the losses, just like you did in 2008, in 2007 and in 2000 (when the DOT COM burst and you lost all of your gains). Additionally, your nest egg may become damaged beyond your ability to recover well or capture gains when the markets are poised to start posting gains again.
   
   Solution: Get smart. Recession proof. Diversify into ETFs. Take charge of your financial future and dream life! The idea that you are selling low (what people will tell you to get you to do nothing) makes no sense. If you adjust things now, you sell to protect yourself from further losses, while, at the same time, better diversifying and positioning yourself for future gains. By setting up your nest egg properly, you can make sure that you are taking advantage of all of the tax-protected IRAs, 401(k)s, college funds, trusts, foundations, etc. that you qualify for, which is one of the most important strategies for building and keeping wealth. Can you really afford to lose more of your nest egg? If not, then you must ACT NOW.

Here is a simple question to ask yourself about your nest egg: Did I have a sound strategy for my Buy My Own Island Fund (formerly called your retirement plan)? If you are over 50 and you lost more than11% or over 25 and lost more than 20%, your nest egg was cracked to begin with. You were not properly diversified, nor were you recession-proofed. You need a better plan.

The easiest way to get smart, take charge, recession proof your portfolio, develop a resurrection strategy and diversify into industries that are poised to do better in this hostile marketplace is to buy my new book, Put Your Money Where Your Heart Is, at Amazon.com and to attend my 3-day retreat, where you will work hands-on in an intimate setting on how to set up the perfect nest egg, how and when to rebalance it, how to pick the perfect certified financial life partner, options trading in your education and/or fun budget, and much more! All while having a great time! (You know if you just buy the book, you won’t do the work. Plus if you take the three days to do this, you are set up for life going forward! It actually gets done, while the book serves as a constant reminder of how to adjust going forward!)

Go to the NataliePace.com home page for a link to buy the book on Amazon.com.

Click on the Get Rich and Enrich Retreat banner ad to register for my next retreat.

Track Record of our Reporting
While the markets have fallen in 2008, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 41 positions listed below – 68% -- have delivered impressive gains this year, even while the Dow Jones Industrial Average is down -33% over the past year! Only fourteen of our listings went in the opposite direction of the reporting, which is quite impressive given the horrible market drop of this fall. Additionally, in 2008, nineteen out of 27 companies that were featured in our monthly articles and stock report cards posted strong gains. That is a 70% winning track record! See the article, "New Year. New You. New Nest Egg," in vol. 6, issue 1, for the chart and more details.

Yes, the majority, but not all, of our top performers were shorts, which is why we added options training to the retreat. Remember that the trading portfolio should be a small portion of your nest egg, equal to your experience, and should not be part of your nest egg. (The nest egg is money you earn while you sleep, not while you day-trade.) If you’re new, you should be using education or fun money, not your nest egg, to learn on. Take your profits early and often in this volatile, down-trending year.

3 out of 6 Company of the Year selections more than doubled.  My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively.  MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.   OSI Pharmaceuticals, my 2005 Company of the Year is back on track for gains and we still believe that Suntech Power Holdings, which is the market leader in solar panels and our 2008 Company of the Year (for the 2^nd year in a row), will be a big winner going forward! (Sometimes it takes a few months for the news to get out to the rest of the world.)  So three out of six are superperformers, one performed well above the market and two are down (in a recession). That’s the kind of record that puts you on top on Wall Street.  (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)

TipsTraders.com continues to list me as a Highly Recommended Stock Picker, with their independent ranking system, where I’ve repeatedly occupied the #1 position. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%. (Some of the best picks in 2008 were put options – on the Cooling Off list. Look there for details on the incredible gains options investors enjoyed on Wells Fargo, Fortress Investment Group, Sears Holding, Fannie Mae, Toll Brothers, KB Home, Novastar Financial and more there.)

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate was cut on December 16, 2008 to "0 to ¼ percent." In the 12.16.08 press release, the Federal Reserve Board further elaborated on the reasoning behind the rate cut, writing: "Labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further."

The next meeting takes place on Tuesday and Wednesday, January 27-28, 2009. The day before the Bureau of Economic Analysis releases the advance GDP growth rates for the 4^th quarter of 2008. (Uh Oh. With the rates at zero, the Feds are left with not much magic to pull out of their hat before we are "officially" in the recession, with a second quarter of negative GDP growth.)

Final GDP growth rates for 3Q 2008 were released on December 23, 2008 at 8:30 a.m. ET.  The BEA preliminary estimates were negative, at -0.5% (revised downward from the advance numbers of -0.3%).

Advance GDP growth estimates for 4Q 2008 will be released on Tuesday, January 30, 2009 at 8:30 a.m. ET. For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the press release of the December 16 and 17, 2008 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read!

The tentative FOMC meeting schedule for the 2009 calendar is: January 27-28, 2009 (Tuesday-Wednesday), March 17, 2009 (Tuesday), April 28-29, 2009 (Tuesday-Wednesday), June 23-24, 2009 (Tuesday-Wednesday), August 11, 2009 (Tuesday), September 22, 2009 (Tuesday), November 3-4, 2009 (Tuesday-Wednesday), December 15, 2009 (Tuesday).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, life coaches, economists, respected money gurus, real estate veterans and CEOs! Be sure to check out the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com.

Don’t miss the subscriber’s only chat with Natalie Pace on Wednesday, January 7, 2009 at 8:45 a.m. PT.

3. Survey Results:
Each month we have three new surveys so that we can stay in touch with your needs and desires. What do you think is the most important thing to change in 2009 for yourself, for your country and for the world? Simply click on the survey that is currently on the home page, and you will be taken to a page with all three of the current surveys. Cast your vote there!

4. Euro interest rates: At the European Governing Council meeting on December 4, 2008, it was announced that the ECB would lower rates to 2.50% (main refinancing), 3.00% (marginal lending) and 2.00% (deposit facility). The next meeting and interest rate announcement is scheduled for 1.15.09.

Hot Stocks List
Investors who "never pay retail," note that the BOLD highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com’s article. This may be a good buying opportunity. (If the stocks are not highlighted, then in our estimation, this is not a good time to buy. Reasons are explained in the news commentary.) The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well (if you have already purchased them). There are never any guarantees in life, and all stocks are risk-based investments. Consult your certified financial planner before making any changes to your investment strategy. And remember that these "Stocks on Steroids" are not intended to be part of your nest egg strategy at all – not even for "pros." If you’ve never traded individual stocks before, this is your "fun" or "education" money. You should not stake your future on anything that you don’t have mastery over.

Hot News List (highlighted).  Be sure that you are buying low.
Altair Nanotechnology (ALTI)
EBay (EBAY)

DELETIONS (Take your profits early and often):
American Superconductor (AMSC). 50% gains between 12.1 and 1.2.09!
Conergy. If you purchased the stock at $4.50, then you should have taken your profits of 51% at the Nov. 7, 2008 price of $6.80.
MEMC Electronics (WFR). 21% gains between 12.1 and 12.15.08.
Suntech Power Holdings. 69% profits since 12.1.08. Take them!

HOT NEWS on COOL STOCKS LIST

Recently Deleted/2008 Companies featured:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%. Genentech (8.1.08) +40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek (deleted on 8.18.08) lost 30% before being removed. LDK Solar was deleted on 9.2.08 with 46% and 29% profits. U.S. Gold profit taking on 11.6.08 amounted to 72% gains. Conergy gains of 51% were taken on 11.7.08. American Superconductor posted 33% gains between 12.1 and 1.2.09. MEMC Electronics (WFR) had 21% gains between 12.1 and 12.15.08. STP had gains of 69% between 12.1.08 and 1.2.09.

Recently Deleted from the Hot News list:
Short term gains on U.S. Gold & Conergy (11.7.08), American Superconductor and MEMC Electronics (12.12.08) and Suntech (1.2.09).

Stocks to Watch
Some of these are great companies that we’re thinking of adding to the Hot List and some are stinkers we’re thinking of adding to the Cooling Off List.  Read carefully to identify which is which!  

Note that right now most of our favorite companies are on the Watch List, anticipating continued weakening of the stock market, and share prices.

Recent Additions:
Wells Fargo (1.01.09)

Recent Deletions:
eBay (moved to Hot News list) 12.15.08
TJ Max (TJX) 1.2.09

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a decline in value. Investors who have them in their portfolio should read the recent news and consider whether it is time to sell and take profits, dump losses, short the position and/or simply weather the storms, while keeping the company in their long-term portfolio. At any rate, always consult your certified financial partner before making adjustments to your portfolio. (Again, note that the stocks on this chart are expected to go DOWN in price.)

Highlighted Companies (Cooling Off List):
None

Recent Deletions:
Wells Fargo (11.6.08 and 12.1.08)

Recently Deleted in 2008:
Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put. Apple was deleted on 8.1.08 with 35% gains on the put. The Google put, deleted on 8.1.08, was another great performer, with over 50% gains. First Solar had gains of over 32-34%. Mentor was deleted on 9.30.08 with 75% gains on the put option (-17% on the share price); Medicis was deleted with gains of over 37% on the share price (down direction). Boston Properties, Las Vegas Sands and Macerich were deleted on 10.9.08 with gains of 16-30%, 66% and 28-42% respectively. Wells Fargo was deleted on 11.6.08 with 35-50% gains on the put and again on 12.1.08 for 50-70% gains.

Recently Deleted:

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

NataliePace.com Calendar.

Buy Natalie Pace’s new book, Put Your Money Where Your Heart Is now on Amazon.com and at your local bookstore! Resurrect, protect and profit in your nest egg and help others save theirs, too!

The NataliePace.com Calendar section features conferences, teleconferences, retreats, educational opportunities, cultural events, galas, market events and online chats with executives and VIPs. Stay plugged in! We add online chats, article updates, teleconferences, etc. as they are booked, so be sure to visit the calendar section early and often. Below is only a partial listing of what’s happening this month.

See below for just a few of the amazing educational and networking opportunities that world-class organizations are offering for you. To access links to the event website and registration, go to the Calendar section at NataliePace.com.

Put Your Money Where Your Heart Is by Natalie Pace
Natalie Pace's first book is available now! Be the first to own it! Review it on Amazon.com. Make sure your friends know what a great nest egg saver the strategies outlined have been over the past decade.

21-day Get Rich and Enrich Coaching Call Series
Monday, January 5th, 2009
How would you live if you had all the money in the world? Wake up to Natalie for 21 days in a coaching call series designed to activate and maximize the creative, abundant potential in your life. (value: $595). Free to anyone who purchases Put Your Money Where Your Heart Is on Amazon.com! Buy your book now and then click over to the Join Now link on NataliePace.com to register for FREE for the 21-day call-in series. No credit card necessary. Just type in your name, email address, user id and password. We’ll email you instructions on how to access!

Get Rich and EnRich Retreat, Santa Monica, CA
Tuesday, February 10-12, 2009
3-day retreat with Natalie Pace. Resurrect Your Portfolio, while keeping it recession-proofed. Learn how to profit in downtrending, turbulent times. Invest in the companies of tomorrow and avoid dying industries. The October and November Retreats SOLD OUT, so be sure to ACT NOW to ensure your seat at this life-changing, transformational, educational retreat. Only two seats remain to join a dozen people in this intimate, hands-on training retreat! Imagine getting such intimate, personal training with one of the most successful financial pundits of this decade!

LA Opera: The Magic Flute by Mozart
Saturday, January 10th, 2009
7:30PM through 10:00PM PT
The Magic Flute is both a fanciful fairy tale and an allegory hinting at deeper mysteries at the same time. This ever-popular work has enchanted young and old alike for over two centuries.

International Builder's Show, Las Vegas, NV
Tuesday, January 20th, 2009
7:00AM through 11:00PM
If it’s new, hot or green it’s probably on our exhibit floor. This registration gives you access to the exhibit floor for four full days, January 20-23. With more than 1,700 exhibits you’re going to need all four days!

Get Rich and EnRich Retreat, Santa Monica, CA
Tuesday, February 10th, 2009
9:00AM through 8:00PM PT
3-day retreat with Natalie Pace. Resurrect your nest egg. Recession Proof Your Portfolio. Learn how to profit in downtrending, turbulent times. Clean and Green, not dying industries. Only a dozen+ people at this intimate retreat!

LA OPERA: Das Rheingold by Richard Wagner
Saturday, February 21st, 2009
7:30PM through 10:00PM PT
Gods, goddesses, giants, and dwarves struggle to be lords of the ring, but as Wagner's mammoth music drama unfolds, the ring's curse unleashes its vengeance. A vivid musical experience never to be forgotten.

Natalie Pace at Agape Seminar, LA, CA
Saturday, March 21st, 2009
10:00AM through 1:00PM PT
Natalie Pace will lead this special seminar, which is hosted by Agape. How would you live if you had all the money in the world? Live that life now with nest egg resurrection strategies that really work and information on green investments for those of you who wish to Put Your Money Where Your Heart Is and earn great gains in the bargain.

LA Opera: Die Walkure by Richard Wagner
Saturday, April 4th, 2009
6:30PM through 11:00PM PT
"You really must beg, borrow, steal, or preferably buy a ticket to see Plácido Domingo as Siegmund," according to The London Times. His compelling love story between the doomed hero and his soul mate features some of Wagner's most memorable music.

L.A. Opera: The Birds by Walter Braunfels
Saturday, April 11th, 2009
7:30PM through 11:00PM PT
Walter Braunfels freely adapted the ancient Greek comic-dramatist Aristophanes’ play The Birds to compose what he described as an "airy play of imagination...everything here is a game, a metaphor." Soprano Désirée Rancatore, makes her Company debut.

The Milken Global Conference, Beverly Hills
April 27-29, 2009
This 3-day conference brings together some of the most extraordinary people in the world – business executives, institutional investors, asset managers, government leaders, academics and Nobel laureates. Network, share & learn.

NOTICE: NataliePace.com is NOT a stock brokerage service, and does not operate or act as one.