Ask Mary
Posted by Mary | Filed under Economy, Featured, Investing, Lifestyle, Personal Development
Question:
I read the headlines…everything seems to be “the worst since the great depression.”
What defines a depression?
Answer: A depression is a recession on steroids. It is often defined as a drop in consumption by 10% or more. Others simply define it as a severe and prolonged recession with weak economic productivity, high unemployment and falling prices.
The Great Depression lasted nearly 4 years.
Question:
Is this a good time to start a business?
Answer:
This is the best of times and the worst of times. Some familiar success stories were created in bad economic times, names like Microsoft, HP, and Disney. But some businesses armed with great ideas and an otherwise winning plan never get off the ground. If you have a superior idea that is filling a need in this environment and beyond, and you have access to capital, this can be a great time to start a business. You have fewer competitors and you have access to a much stronger labor pool because of the high employment. You are also forced to be on the top of your game from your lenders, vendors and customers.
Question:
I got laid off and have a few months severance, because the job market is so bad, should I go back to school instead of looking for work right now.
Answer: Before you decide, you need to make sure you can afford it and have a firm grip on what skills will you gain. Bottom-line—what is the return on your investment? Here are 5 things to think about.
1. How long is the commitment to finish the program?
2. How will pay the bills during the program?
3. Will you have healthcare coverage?
4. What will the program give you that you don’t have now?
5. Is that skill desirable in this job market and in years to come?
Ask Mary your own question below.
Tags: competition, depression, disney, education, entrepreneur, Great Depression, healthcare, HP, jobs, labor, layoffs, microsoft, recession, ROI, start up
13 Responses to “Ask Mary”
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Mark Dudzinski Says:
March 11th, 2009 at 4:56 pmHi Mary – love the website and miss the show. I too was recently laid off by my company. I am lucky to have several months severance pay. My question relates to credit cards. Should we try to pay them off or pay the minimum and put more in our savings in case the severance runs out or I have to take a lower-paying job? Thanks!
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Mary Says:
March 11th, 2009 at 6:27 pmHey Mark! Great question. The best scenario is to pay off the credit cards, because the interest is outrageous. I am sure you have already done this, but cut out all unnecessary spending to get those cards to a zero balance. That could mean rethinking cell phone plans and where possible try to cut down energy use. Lowering utility bills is money in your pocket each month. That said– you know your finances better than me, if you need to chip away at the balance instead of aggressively paying it down– do what you have to do. And more importantly– don’t freak over it if you have to carry a balance for a few months– we have all been there.
The job market is super tight right now– it will get better but probably not as soon as we all would like. Taking a lower paying job is what a lot of people are doing right now. Just try to keep your skills sharp, even through extra curricular activities or non-profit work so that you remain marketable on the other-side of all of this. Bottom line– do what you have to do to get food on the table and a roof over your head right now. You aren’t abandoning career aspirations, just prioritizing. -
Kathy Says:
March 12th, 2009 at 12:34 pmHi Mary, my husband & I invested last year. Our current portfolio is down significantly. I’m trying not to freak, keep hearing the economy will recover, etc. However, I’m also hearing that now is a good time to invest in stocks…what should we do? Give more money to our broker? We’re just very apprehensive from watching our account plummet. We are 34 yrs old, have a baby on the way, have no debt except our mortgage payment (1800/mo.) & we have a savings acct. Thanks, Mary!
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Mary Says:
March 12th, 2009 at 3:01 pmKathy,
A big loss is very tough, especially since you were trying to do the right thing by saving and investing. I think it is always healthy to question the people who handle your money. They should be comfortable answering your questions in easy to understand terms. In defense of your broker, the entire market is down. That said my answer to your question comes in two parts; 1) the advisor 2) the investments.
First the advisor. A few questions to think about when judging the person handling your investments. Did they promise a certain rate of return. Anyone who does that when talking about stocks has too much in common with Bernie Madoff for my comfort. Did they talk to you about your risk appetite and how soon you may need to dip into your investments? If they didn’t– I would drop them. I like “fee only” financial advisors who do not make commissions off of the specific investment products they recommend to you.
2) The investments. What is your time horizon for these investments? If it is 5 years or longer then stocks may be a good vehicle for you. Understand that the losses in the market over the last 6 months won’t be wiped away anytime soon. The bad economy will will take its toll on american and international companies for sometime. Some companies won’t make it– others will struggle, but there will be companies that thrive. This is where it pays to know what you are buying. What stocks or what funds does your advisor have you in and why. There are bargains in the market right now and a good argument can be made for long term investors to be dollar cost averaging into the market now. But remember cheap doesn’t mean a bargain. With a baby on the way and a mortgage, make sure you have 6-months to a years expenses in an emergency fund that is not in stocks. Kathy the bottom-line is, this is your money. If you do not feel comfortable with the losses or with the individual handling your cash, don’t invest with the person or in the investments they have you in. Keep us posted on what you decide. Thanks Mary -
Australia McArdle Says:
April 2nd, 2009 at 2:15 pmI used my severance to payoff my credit card debt. I get enough unemployment to pay the mortgage for now. Should I still try put something away in savings even if it’s far less than what I did when I was working?
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Mary Says:
April 6th, 2009 at 2:12 pmAustralia,
By all means continue to save. Unemployment compensation does not last forever and whatever cushion you can create for yourself the better off you will be. Try to maintain 3-6 months in expenses in an emergency fund. Now that you do not have credit card debt, try to keep it that way. The other bit of savings to think about is stashing some cash for retirement. One thing you may want to investigate (after you have that emergency fund) is a Roth IRA. Tax rates are the lowest they will be in our lifetime. (They will have to go up in the next few years to pay for all the gov spending). That makes a Roth IRA attractive, you pay the taxes on the front end and get the tax benefit on the back-end. Its not for everyone — so do your homework and consider meeting with a financial professional. Good luck with the job search and thanks for writing! -Mary -
Carrie Says:
January 24th, 2010 at 2:30 pmYour TV show today, Sunday, Jan 24, 2010 is there a tape available?
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Keysha Says:
February 7th, 2010 at 1:40 pmI am looking for some financial advice and financial planner!!! I am 9 months behind my mortgage working part time, applied for a modification several times, credit is bad, home value depreciated in value and unable to sell right now…do not have a savings … I could go on and on… want to know where to start! Please offer any suggestion!!!
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Mary Says:
February 18th, 2010 at 7:03 pmemail us by hitting the contact tab and we will get you the information. Thanks for watching!
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Mary Says:
February 18th, 2010 at 7:05 pmKeysha,
You are in a tight spot. But email me by clicking on the contact us tab and we will try to get you some information. Thanks for the comment! -
H. Morton Says:
March 6th, 2010 at 5:51 pmHi Mary, I am watching your show tonight (March 6th) on WPVI channel 6 in Philly. I was very interested in the Discount Gourmet Grocery stores, but when I put in the town that I live in (and I put in Montgomery County) nothing came up. I know you aren’t supposed to promote a specific store, but what store did that woman go to? Those were great deals!!!
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Mary Says:
March 11th, 2010 at 4:15 pmThanks for watching! Here is the info you requested. Good luck!
BB Grocery Outlet ( It’s located in the Manufacturer’s Outlet Mall in Morgantown, PA, just off the Pennsylvania Turnpike)
6180 Morgantown Rd #208
Morgantown, PA 19543
(717) 786-3210 -
leso. troutman sr. Says:
June 27th, 2010 at 2:42 pmi would like to get into penny stock but i dont know how to go about it. thank’s les troutman sr.
