The economy today and getting richer.

The economy is just fine! Actually it is fundamentally fine. The problem with big banks and other financial institutions has to do with liquidity, if they are ill-liquid they can't make loans and thus the government has to fix things because they are the only one with deep enough pockets to do so.

Behind all the mortgage backed securities are real mortgages with real people trying to pay them. So in reality the securities have some value, let us say 80% of the original value at a minimum. Home loans have always been and I believe always will be the best loans out there as people have to have a place to live and that gives homes and the mortgages real economic value.

The problem is that banks and other financial institutions have to value securities at the market rate because of the accounting rules they operate under. If there is no market for a security, what is the value of the security? Therefor the bank or institutions are technically insolvent. No bank can lend money to an insolvent institution, and still maintain their fiduciary duty. Thus, you have a liquidity problem all over the world. Time will fix this because it is in everyones best interest to get it fixed, and thus everyone is motivated to work on the problem.

This is a simple explanation to a complicated issue but the end result is the economy will do just fine because everyone wants it to and it is the only game in town. So for you and me it is a matter of taking advantage of the resulting conditions to make more money.

If you want to be richer? and you are just the average Joe, you will need to increase your monthly cash flow to get richer. That is precisely how the rich get richer. And again, the only way for us regular folks to do it. So if you have not already done so get a plan and get it in motion. Read the articles on this site and decide what area(s) you plan to use to get richer and get started.

With the economy in gyrations for the next year or so where are the opportunities?

Residential real estate is cheaper now and it is a good time to buy rental houses. Buy at prices at least down 30% from the highs and plan to hold them four or five years.

Commercial real estate might follow the down trend next year. I am seeing more vacant commercial real estate. Commercial is harder to get deals on as the sellers are generally well healed and can hold out longer trying to keep the price up. There are bargains once a bank gets it back on a re-po and other special circumstances that will allow for a bargain. Keep your eyes open and think creatively.

Stocks, there are some deals out there, so read Forbes, money and other magazines learn what a good company looks like on paper, and buy them while the price is down. Look for companies with lots of cash on hand, and look for the companies who pay a dividend. Mutual fund are bargains when the price is down, so its time to use dollar cost averaging. When the stock market turns up in twelve to eighteen months you will feel very smart indeed.

There are many other ways to make money during shaky economic times. Some of which are cover in other post on this site. Look for anything that will make you more monthly cash flow or that will increase your net worth in the future. this is how you get richer, and only you can do it.

Cash is king in times like these, and anyone with cash can get bargains. You can get deals in real estate, stcoks, bonds, equipment, businesses and the list is endless. Start thinking, start doing.