Archive for March, 2009

The Stimulus Bill and You!!


The Stimulus Bill, or The American Recovery and Reinvestment Act of 2009, passed by the Senate and House earlier this year will have a significant impact on US households for several years to come. So how will it affect the average US household?

The first thing we must understand is what data the New Administration is using to make its decisions. The findings in the report “Income, Poverty, and Health Insurance Coverage in the United States: 2007” which is the most recent data published, we find the following key bits of information:

  • The Real Median household income in 2007 was $50,233
  • The number of people living at or below the poverty rate in 2007 was 37.3 million people
  • The number of people without health insurance in 2007 was 45.7 million people

These numbers are staggering which is why the Legislative Branch passed the Stimulus bill and the New Administration has proposed a $3.6 Trillion budget for FY2010.

So to determine if you will be affected by the Stimulus Bill and the New Administration’s proposed tax-and-spending plans compare your financial situation with the data above.

In short, as listed in the Wall Street Journal, the winners in the upcoming years:

  • Middle-class Families (<$250,000 household income)
  • Low-wage workers
  • Lower-income retirees
  • Veterans
  • Preschoolers
  • College Students
  • Homeless

The big losers:

  • High-wage earners (>$250,000 household income)
  • Wall Street hedge-fund managers
  • Oil and Gas investors
  • Corporate executives
  • Well-to-do seniors
  • Washington lobbyists

So what should you do?

Be proactive!! Don’t sit back and let life happen, you need to sit down with your Financial Advisor and build a sound financial plan based on your current financial situation, career goals, family goals and retirement goals. Once you have defined your plan put it into action, do NOT try to time the market. If you have defined your goals realistically then you should be able to implement your strategy effectively to reach your goals in the shortest amount of time. Remember, your strategy is the long range plan you will still have to adjust your plan on a regular basis to take into account changes in your career and family lives as well as all the changes to the tax and investment regulations.