The Five Best Financial Moves for 2007

by Suze Orman

There's no shortage of advice on the hot investments for the coming year during the holiday season. But as far as I'm concerned, the best financial moves you can make -- and need to make ASAP -- aren't about the outlook for corporate earnings growth or capitalizing on geopolitical trends.

Far more important is how good a job you're doing at taking the best care possible of yourself and your family.

Here's my checklist of must-do items for 2007:

1. Lose your balance.

In a few weeks, the credit card bills for the holiday season will start rolling in. For many of you, so will remorse.

I've always considered January to be the most dangerous financial month; it's when so many of us set in motion decisions that can either save us or sink us. The most pivotal decision is what to do about those credit card bills: pay them off completely, or just pay the minimum due and start running a month-to-month balance.

This is your big moment to do what's right, not what's easy: Find a way to pay off the bills completely. It sets you up for a much more prosperous 2007 and beyond.

Not only will you avoid the high interest charges, but you'll have made the most valuable of resolutions: Choosing to be powerful over your money, not vice versa. That sense of accomplishment and control will have an incredible effect throughout your personal and financial life.

Wondering where to come up with the money? Well, if the interest rate on your credit card is higher than what you earn on your savings account, I say tap the savings.

2. Make sure you rate high.

Everyone loves to talk about what's going on in the stock market, but I've yet to hear anyone boast about their great bank savings rate. But not paying attention to what you earn on your savings is a costly mistake.

First, do you even have a separate savings account, or do you just let all your cash sit in your checking account? Most checking accounts that bother to pay any interest on your balance offer a lousy rate -- less than 1 percent on average -- or require you to keep too high a balance to qualify for a decent rate.

Meanwhile, there are plenty of savings accounts -- especially at Internet banks such as EmigrantDirect and HSBC -- where you can earn about 5 percent right now. That's too huge a difference to ignore.

3. Win the match game.

About 20 percent of people eligible for a company match on their 401(k) contributions don't invest enough to qualify for the maximum match. That's equal parts misguided and tragic.

No matter what's going on in your financial life, it makes no sense to turn down this great deal from your boss. Make sure you invest enough in your company plan to snag the maximum company match.

Consider this: If you turn your nose up at the opportunity to get an annual match of just $1,000, over the next 10 years you could be throwing away not just $10,000 of retirement money, but more like $100,000 or so.

How's that? Well, if you manage to earn 8 percent on the company match, and after 10 years just let what has built up continue to grow for another 25 years, that's what the value of the company match could grow to. I'm assuming you and your family can't afford to ignore six-figure payouts.

4. Face your mortality.

What's mortality got to do with prosperity? Everything, if you love your family.

I know this isn't exactly a favorite topic of conversation, but if you have any dependents -- be it young children, a spouse, or older parents -- you want to make sure they're provided for even if you die prematurely.

If you're at a stage in your life where you have yet to build up sizable assets, the simple solution is a term life insurance policy. And I mean it when I say it's simple: Term life is easy to purchase and incredibly inexpensive.

A 40-year-old, non-smoking male in good health can buy $1,000,000 of coverage for just $100 a month or so. There are more details in my earlier column "Insurance: What You Need and What You Don't."

5. Stop kidding around.

This one is for the parents of young children. If you want your kids to grow into happy and responsible adults, you need to take the time to teach them about personal finance. Don't assume they'll just learn as they go, or get instruction in school.

I often hear from young adults who feel let down by their parents on this front; the kids end up running up huge credit card debt in college because they had no clue what was going on, or they panic when they learn Mom and Dad have "paid" for everything by going deeper and deeper into debt themselves. These young adults now face the reality of having to support not just themselves, but also their parents.

The single best gift you can give a child is to teach them the incredible value of living within your means. This doesn't have to be a downer, and you're not being mean. You are, in fact, liberating your kids -- they won't grow up to have a screwed-up approach to money that leaves them deep in debt and deeply depressed.

One of the smartest financial moves you can make is to give them a credit card education. If you have a solid FICO credit score -- above 720 or so -- then I recommend adding your teenager to the account as an authorized user. It's their training wheels in the world of finance.

Let them use the card, and involve them in the bill paying; literally have them sit down with you when it's time to send in the payment. Explain the dangers of falling into the minimum payment trap, and the cost of paying high interest on an unpaid balance. They may not thank you in 2007, but in years to come I guarantee they'll thank you for giving them the tools to be financially smart and secure adults.

Think steps ahead

A: Kalo telinga bapak dipotong, gimana?
B: Saya jadi gak bisa baca
A: Aneh, kok bisa jadi begitu?
B: Karena saya jadi gak bisa pakai kacamata

Kadang kali atau sering kali, orang-orang yang mampu berpikir beberapa langkah ke depan (walau hanya 1 langkah) akan dianggap aneh. Kemampuan yang dimiliki oleh orang-orang spesial tersebut sulit diterima oleh logika kebanyakan, kadang mereka dianggap GILA.

Saya ingin sekali punya kemampuan tersebut. Beberapa tahun terakhir saya mempelajari bagaimana cara membuat ramalan, tapi bukan ramalan ala paranormal dengan bantuan jin. Ramalan ini murni dengan melihat situasi sekarang, belajar dari sejarah, dan membuka mata lebar-lebar akan perubahan. Mungkin seperti ilmu futurologi juga.

Di satu tulisan saya yang lalu menuliskan harga emas 24 karat yang kemungkinan akan naik hingga 300 ribu rupiah per gram. Alasannya adalah kemungkinan resesi di masa depan.

Beberapa hari yang lalu saya perhatikan tingkat suku bunga deposito mulai menunjukkan gejala aneh, gejala yang biasa terjadi kalau investor institusi mencium kemungkinan adanya masalah finansial di depan. Suku bunga deposito 12 bulan dipatok lebih rendah daripada bunga deposito dengan periode lebih singkat, 6 bulan. Saya artikan bahwa bank mulai tidak mau lama-lama memegang uang rupiah kita. Karena kita kan menitipkan uang rupiah kita dalam bentuk deposito dan nanti bank akan kena beban untuk membayar ke kita sejumlah uang (bunga). Mungkinkah keperkasaan rupiah akan segera berakhir?

Ingat krisis tahun 1997. Tahun depan adalah tahun 2007, sudah 10 tahun. Banyak pihak percaya bahwa krisis biasa datang 5 tahun sekali dan seringkali terjadi pada tahun ke-2 atau ke-3 masa kepemimpinan presiden US. Tahun 1992 krisis datang setelah perang teluk 1991, harga minyak naik, harga emas membumbung. Tahun 1997 krisis moneter datang, rupiah terjungkal, dollar naik, harga emas membumbung lagi. Tahun 2002 isu terorisme menghantam dunia, krisis datang lagi tetapi waktu itu amerika langsung menggelar perang kemana-mana. Sepertinya presiden US percaya bahwa perang adalah cara paling cepat menangkal krisis, karena perang adalah proses penghacuran dan pembangunan kembali yang pada akhirnya membuat roda bisnis bergerak, perusahaan dapat pekerjaan, dan masalah ketenagakerjaan berkurang. Tahun 2007?

Krisis juga kadang ditandai dengan selesainya proyek mercu suar. Krisis moneter tahun 1997 ditandai dengan selesainya menara Petronas, dan tahun kemarin saya dengar bahwa menara Al-Burj di saudi sudah selesai juga. Nah looo...

Pertanyaan: Kalo kita dikasih balik lagi ke tahun 1996, apa waktu itu kita mau pegang rupiah?

Bunga deposito rupiah memang naik sampai 30-60% setahun, tapi kalo kita pegang dollar US, maka kenaikannya bisa sampai 500% atau 5 kali lipat, dahsyat booo...

Tapi sebetulnya rupiah dan dollar itu sama aja, sama-sama uang cetakan politikus, keduanya bisa bergerak saling bertolak belakang atau sama-sama naik atau sama-sama turun. Yang pasti nih, emas akan selalu sama nilainya. Punya rupiah lebih dan bingung mau disimpan ke mana? Coba tukarkan ke emas. Bisa dalam bentuk batangan atau sertifikat, lalu simpan di safe deposit box kalo mau lebih aman. Saya sudah melakukannya.

Mungkin ada yang berpikir, apa-apaan sih ini atau ah pemerintah pasti bisa bertahan. Saya sih lebih percaya dengan apa yang saya rasakan. Eh iya, harga beras sudah mulai naik ya... sudah bisa dipastikan angka inflasi naik dong, itu juga kalo BPS ngitungnya bener...

Terakhir yang mungkin bisa jadi pertimbangan adalah "Nabi Nuh tidak mulai membuat perahu saat hujan mulai turun rintik-rintik, tapi saat sebelum hujan."

Live long and prosper

How to Escape from a Terrible Boss

by Barry Lenson

I've had some horrible bosses over the years. I bet have you have had some too. My personal life list includes a control freak, a classic bully and a "Jekyll and Hyde" lady who was my best friend one day and a screaming monster the next.

Why did I put up with these people? Because I needed a paycheck and I couldn't just walk out the door. But I finally did escape. If I did it, you can too.

Here are some strategies that can help you keep moving toward your own goals, even if your boss is a psychopath, a tyrant, or worse.

Step One: Stick to the Higher Ground

No matter how hard your boss tries to derail you, maintain an excellent attitude and a strong professional image. Never let the quality of your work slip. Other people in your organization will notice your professionalism - in fact, they will notice it even more because you have an awful boss. Just be sure to take Step Two too . . .

Step Two: Be Patient

Your boss isn't only making life miserable for you. The bad stuff he or she is throwing around is also angering company leaders, colleagues, clients, suppliers and lots of other people. If you are patient, your boss will probably get the boot a lot faster than you realize. (Unless he is the brother of the CEO, in which case you should move immediately to Step Four.) And then you will be well positioned to move up, provided that you make sure to follow Step Three . . .

Step Three: Increase Your Exposure

Don't let your boss hide your excellence. Find ways to work with people from other departments. Volunteer for interdepartmental projects and task forces. If opportunities like that are scarce in your company, start a community outreach program, a charity drive or another initiative that gets you working next to people from other divisions. When they notice how good you are, they will come looking for you when an opportunity arises in their sectors. But the most important thing to do is follow Step Four . . .

Step Four: Plan Your Escape!

Don't just fantasize about giving your boss notice and walking out the door. Even if you need that paycheck now, start making plans to chart your own life by starting a company, buying one, entering into a high-tech partnership - whatever your dream may be.

Planning your future today, aggressively, can help you keep your head on straight, even if you are laboring under a terrible boss.