Stock market grows at 7 percent a year? No wonder the kids coming out of our institutions of "higher learning" can't function. A professor of finance telling everyone that there is a 7 percent growth per year average in the stock market? Look at what growth there has been this decade. The DJIA started the year 2000 at about 11,000 and now in late 2008 it is what? ABOUT 11,000! IF there was around 7 percent growth (lets do simple interest not compounded) the DJIA SHOULD be around 17,000+ right now.

The "stock market" has been like going to a casino and placing your bet. The only ones in the game who MAKE MONEY are the "house" (your broker if you don't understand what the "house" is).

Why do they tell you to diversify and then say that stocks are the best way to go? The answer is that the financial institutions make the most off of you that way!

"on average" @Carl A. - Did you miss the "on average" part; of stocks growing at 7 percent a year.
I found this article to have good sound financial advice.

good sound financial advice @BearLakeGuy - I definitely agree that most of the article has good advice. But only until the last bit about what to do with any extra money (or your 401k for that matter).

And I did do an average over what, 8 & 1/2 years, to show that stocks are not really that good of an investment.

I've always been a contrarian investor and that has been much better for me than the small (if any) returns that go with the stock market averages.

Carl A. @Carl A. - I don't know if you're being serious or if you're just mad that you've lost some money this month. You can't dispute the fact that the market will average over 7% in the long term. The S&P has averaged about 8% since 1950. You can't just look at the last 7 years because we've had a lot of stuff going on (9/11, war on terror). The stock market as a whole has earned closer to 12% over the long run. If you are close to retirement than you probably don't want to be in volatile stocks. But for those of us who still have 30-40 years before retirement this is a great time to buy. I'm getting into the market at a 15% discount right now.

I know I am going against @Josh R. - a huge swell of popularity for investing in the stock market, but the recent downturn has emboldened me to speak my mind, and eventually as the market falls, I know more people will see the flaws of 401(k)'s and mutual funds.

During the 20th century the Dow rose from 66 to over 14,000. Comforting? Yes, but using proper compounding math gives an annualized return of 5.3%, and you can add 2% for dividends. It was a wonderful century!

Turning to this century, to merely match the 5.3% gain of last century, starting at 14,000 (which right now some would be happy to get back to) the Dow would have to close at 2,000,000 on Dec. 31, 2099. And those expecting 10% annually are implicitly forcasting a level of 24,000,000 on the Dow by 2099.

Maybe I am just being pessimistic here but I really don't see that happening.

I think the thing that will really make people rethink their investments this year, though, is when the fees still get deducted from their accounts even though they lost money.

To El Viejo below: what if everything in your "portfolio" goes down to near zero are you just going to sit there and wait for that next bull market?

Your still wet behind the ears @Josh R. - When you have been in the stock market for 30-40 years you will have a real education then

Long-term investment returns @Carl A. - You need a remedial economics 101 course. There are capable, well-educated people who can help you. I've learned from them that there are what financial types call "bear" markets, "bull" markets, and "consolidation" periods. Over the years (about 30 years) I've seen all three market types affect my modest, diversified investment portfolio, and I've averaged about what the author observed. Even with the tumultuous roller-coaster markets of recent years, I'm still ahead from when I began. One of the keys is to determine your risk-tolerance level, devise a plan and stick with it. If my financial advisor determines that I need to rebalance my portfolio from time to time based on present day market conditions (i.e. commodities vs. services, money markets vs. mutual funds, annuities, real estate investment trusts, etc. etc.), the sharp up and down turns of the market can be smoothed out. To say that the only ones in the game who make money are the brokers is naive at best, and stupid and short-sighted at worst. Write something again after you've learned a little about the subject.

Did everyone take note of the bankruptcy graph channel 5 provided??? @El Viejo - 05' more bankruptcy's filed than ever why is this???

Congress changed bankruptcy law in 05' but the law did not take affect until 06'. Prior to 06' a leaching family who lives way beyond their means could walk in bankruptcy court tell the judge nope do not have any money so judge strickens the debt from the record. The person who filed bankruptcy pays nothing back zero/zilch/nothing just like a welch pays nothing.

Now we have the change in bankruptcy law as of 06'. You now get to pay evberything back. Only now you are also put on a time table if you do not meet that time table trustee walks in court tells the judge you did not comply, judge tosses your whole bankruptcy out so now you have the vulchers/creditors breathing down your neck again which you deserve for being so stupid to live beyond your means of income.

The basnkruptcy overhaul is the best legislation i have seen ccome out of DC in years. It was s tated in the congressional PDF's that Utah "abused" bankruptcy worse than any other state in the nation. I stioll have the congressional PDF's if anyone wants them. Utah mormons, Utah people with mega kids on welfare, utah families who live over your means simple fix stop cranking the babies out and you will not have such a financial burden now will you or make a law to make the church responsible for the financial short falls. it is my understanding the curch promotes large familes so since the church promotes have huge 10 kid 50 kid per family, families it is only right the church bite the financial responsibility for its teachings to have mega kids even if you can not afford them. Go check out records at the Federal courft house folks you will see it is big huge families with little incomes that filed all those bankruptcy's which in my eyes is FRAUD and should be a prosecutable offense. Take all the negligent parents monsters they do not deserve them. To many of you people in Utah use your ranting monsters as a excuse. It is pathetic.

It is obvious @So Happy I Hope Everyone Is Happy - that you are unfamiliar with the LDS Church's teachings, as it has been stressed by the Church for decades to live within your means, be self-reliant, etc. For the last 5 or so years (most likely more, I just cant remember when it was brought up or by which recent prophet) but members have been encouraged greatly to reduce their debt loads, going so far as to say that there are only 2 - 3 things wherein it is acceptable to go into debt: a higher education, a house, and MAYBE for a car.

Debt loads @Peachy - I do not consider higher education a worthy cause to indebt oneself for 10 years when all higher education provides is a High School Equivalancy degree. Higher education in Utah is not a good investment, unless you need a high school education that the public school system doesn't provide. This is not a good system of education in Utah.

Investments @El Viejo - The majority of retirement investors don't have a clue about how the stock market works and just let everything ride at the whim of the brokers or the company they work for. That is why people should stop putting money in to retirement investing and put it towards something more tangible and has value. Gambling on your retirement is not good advice and is a poor investment, especially when you don't understand it. If you sit in an office chair all day with nothing to do but follow your stock portfolio you may come out ahead like El Viejo does. Following a retirement portfolio is rather moot because most people can't do anything about where the money is going, they signed this over to brokers with powers of attorney when they open the accounts. Any investment accounts should be considered at risk and losing it will not affect your economics. Consider it a bet in a Las Vegas casino or slot machine, you lose more than you win.

Emergency Family Finances: Part2. I am happy to report, since Emergency Family Finances: Part 1, I have not run out and spent myself into the position of so many other morons. No Emergency. Took heed on matters of finance the first 50 thousand times I heard about how to save. Maybe this time all the people will listen....ya right!

The constant onslaught of explanation on how you should save money, much like the same information they have been offering for the last 25 years, can be defined by one simply adage:

You can lead a horse to water, but you can't make him drink.

There comes a point when @budwa - you can lead a horse to water, but you can't make him swim on his back.

But given @Ordinary guy - a neo-mammalian brain, he SHOULD be able to learn.

@budwa - My mother is in town this week and we were talking about the article from yesterday. I told her a little about Dave Ramsey and she said "you guys shouldn't need that here, the church has been telling you that for the last 100 years." I had to explain to her that not everyone in Utah follows all of the rules.

I'm just glad that KSL didn't put any stories about some poor innocent families that were victimized by the predatory lending habits of evil mortgage and credit card companies. I was going to throw away my computer if I had to read about another person that wants to blame the economy for their interest only mortgage, $700/mo. car payment, and $40,000 credit card debt that they can't afford because they only make $30,000/yr.

Good Tips But those who are in the trouble of Emergency Family Finances...Probably are not reading or putting into pratice the advise given by people on the board and in the article.

Those who are in trouble will stay in trouble because they have never had a real hard time and had to dig themselves out.

@Nemisis - And they won't have to dig themselves out this time either. The government is working on plans to help them out, even if that means taking more from you and me. It's really better that way though, I mean we can spread out the risk over all 330 million Americans and then everyone will be equal.

Hmm... @Nemisis - Are you sure they can even read? The news guys don't seem to interview many college-educated people when they do their sob stories about people who didn't read or understand what they were signing up for when they got a subprime loan.

If you have any money left... You may want to invest in these mergers...

1. Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W.R. Grace Co. will merge and become: Hale, Mary, Fuller, Grace.

2. PolyGram Records, Warner Bros., and Zesta Crackers join forces and become:
Poly, Warner Cracker.

3. 3M will merge with Goodyear and become: MMM Good.

4. Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will merge and become: ZipAudiDoDa.

5. FedEx is expected to join its competitor, UPS and become: FedUP.

6. Fairchild Electronics and Honeywell Computers will become: Fairwell Honeychild.

7. Grey Poupon and Docker Pants are expected to become: PouponPants.

8. Knotts Berry Farm and the National Organization of Women will become: Knott NOW!!!
and finally –

9. Victoria 's Secret and Smith &Wesson will merge under the new name: TittyTittyBangBang.

Greggie, @Greggie... - I have no clue who you are but your post was funny.

Digging out of a hole It really isn't as hard as most people think. One step at a time...after a few steps, it become much easier.

I dug my myself out of a HUGE financial hole 8 years ago. When I first met my wife, we couldn't even pay our rent let alone buy groceries. The first step to overcoming this struggle was ROUTINE!!!!! Get yourself in a routine...I started by finding a job that paid a little better (yes just a little). As we started to be able to pay our rent and buy food, I focused on paying off one debt. After a while, each of my debts started to disappear until there were none.

Now to jump ahead 8 years. I have a college degree, OWN two cars, a home, and save 25% of our combined incomes every single month.

Start with $10 out of each pay check and slowly increase to 10%, 20%, and so on....

Is it me? Ohhhh, wait a minute!!!

Now I know why the comments are slow and far between!!!

It is Friday and the STATE has Friday off!!!!!

DUH!!!!!

How I became a millionaire I only go out to eat, 6 or so times a year. More not but then.. The rest of the time I made my own meals, chicken soups, chicken stews, roast chicken, lots of chicken, same with beef, pork, buffalo and turkey and raised many of my own vegetables, you'd be surprised in what you can do with 400 or even 200 square feet. People waste more than a third of their income on food. I did not. I never bought a new car and did my own work on the ones I used, I've never had a cell phone and will never get one. I've got a quality TV but I won't ever get cable, don't need it. I have a quality computer and broadband, I buy new clothes a few times a year, kept them to functional. I don't invest in the stock market and kept my saving in high yielding cds. I bought a house as soon as I could, not a new one, fixed it up, lived in it for a few years and bought another one, but did not over extend myself or my credit, speaking of credit I only have one credit card and pay it off every month. I have a wife for recreation. in fact I'd be a multi multi millionaire if let her go, but then I'd nothing worth living for.

What are you living for now? @gardenofwrath - I completely agree with living within your means but what's the point of having a million dollars if you're never going to spend it? I'm not advocating new cars every year, but what about charity, vacations, college education for your kids or grandkids, etc..?

Maybe I misread your comment, if I did than I apologize, but I think that you need to enjoy life. I guess if eating chicken noodle soup everyday is what you enjoy than thats great. I love to travel, golf and go to the BYU football games. Someday when I can pay cash for one, I'd like to get a nice big boat. It's like they say, you can't take it with you.

Josh R. @Josh R. - I totally agree with you!! A proper balance to everything. Save for the future but at the same time, realize you may have a limited future. My father scrimped and saved for years for his retirement, much like "gardenofwrath" did, but he just underwent surgery for prostrate cancer for which many men, is too late. Fortunately for him, it appears to have been the right decision and will prolong his life.


Anyway, the point I'm making, is enjoy life while you're younger. You never know when your time is up. you can slave away and scrimp for forty years to amass big $ in the bank, only to find out upon retirement you only have 6-8 months to live. Find your happy medium and don't regret spending a little on yourself and loved ones to enjoy life. After all money itself is worthless when it's just money. It's what money can do for you where the value truly lies.

SIMPLE I don't understand why people have such a hard time with money. Its simple, don't buy anything unless you can pay cash. Banks have made it way to easy to get credit and debit cards; stay away from both. If you need a credit card for travel, LOCK IT UP until you need it ! SIMPLE !!!

No need for a credit card @Kevin R. - you can get a debit card with the Visa or MC logo on it that will work anywhere the credit card works.

Why stay away from debit cards? @Kevin R. - I don't understand. Aren't debit cards essentially the tool used to extract money from your bank account? I am aware that banks sometimes give customers the leeway to overdraft, but then they're charged a nasty overdraft fee for the bank's inconvenience, which they need to pay back before they can use their account further, right? So why stay away from debit cards? I use mine all the time - because it's my money and I keep it in a bank account. I don't feel comfortable carting around all my cash or even cashing my paycheck and taking it home to a safe... At least at a bank my account is FDIC insured up to $100,000. No insurance for a safe (other than personal property insurance, I suppose).

TRY IT..... @Sssaucy - Debit cards make it easy to spend. I guarantee, you would spend less not having one, try it. I don't have one, and its a pain spending money.

This is getting old This is getting old fast. We hear it on the news every day. If it was not for the dumb people out there america would not be were it is at now. It is not the banks falt nor it is the goverments fault. It all dumb people who do not know how use a budget and buy what they can really afford. Stop spending what you cant really afford and lets get America back on track.

I sort of agree, jkh101 @jkh101 - There are some people in our government who have capitalized on the bubbled market - before it exploded into the mess we have now. Many of our decision-makers on Capitol Hill have profitted greatly from the economy by passing bills with pork attached.
I do agree, however, that a lot of people were ill-qualified to make their own financial decisions. There are many people who seem to think it's okay to be only marginally informed on finances, that it somehow makes them ready to tackle big decisions like purchasing a house with $150,000 interest-first mortgage while only making $20,000 per annum. Sure, they can afford it for a year (or two or five or whatever the mortgage stipulates), but then what happens? Try to refinance in this market, it seems to me you'd be hard-pressed to find a bank willing to finance with a conventional loan unless you've got outstanding credit.

If I got... on track, I could take pictures of the Frontrunner, right?

If that's what motivates you... @Greggie... - then go for it, Greggie...! You may end up in prison for being a potential terroristic threat, but follow your dreams. This is the land of opportunity!

Borrow from family? Borrow from family. Are you kidding!?! What kind of advice is this? It's like saying "don't worry, when your money runs out you can live off your parents, siblings, grandparents." Ridiculous!

Well... @Lisa M. - I think there are a lot of people who, if they struggled, wouldn't want their family to know they were struggling, that they'd "get by". I know I wouldn't want to go to my family asking for money, even if I were in a financial mess. Perhaps it's one of those "pointing out the obvious" things - sure, you can ask your family. They don't have to say yes!

DAVE RAMSEY Sounds to me like this professor needs to take Dave Ramseys class....

DAVE RAMSEY SAYS TO NOT BORROW YOUR WAY OUT OF DEBT!!!! Its still debt!!!!

True @SLEEPLESSINUTAH - Dave Ramsey also says, in certain situations, it may be best to borrow from family, if you're willing to take the risk that you may fall on to worse times and ruin the relationship by defaulting on that loan too. He's hesitant to encourage borrowing from family for that reason and the one you stated, SleeplessinUtah.

we all need to re think this Over the last 50 years if a stock went bad the dow simpley drops them out and picks another company! You as an investor doesn't have that option. So that 100 year average is a bunch of bunk.

here ya go Dr. Jerry Basford, who teaches a personal finance course at the University of Utah, suggests a written plan to get rid of debt and to save money.

yeah its called BANKRUPCY, did wonders for me.

Good Advice This is a very good program to use to get some security and stability back in to ones family and personal lives. However, the Bush Cartel is telling america to do just the opposite and keep themselves in debt and rely on credit to live on. The Cartel gets most of the attention and it makes it hard for consuerms and citzens to break this hold that the financial industry has on the american people. Just as citizens over their heads in debt and credit are having difficulties, so is our government. I have always maintained two principals, pay myself first with a savings account, and never have more than one credit card. Not even an ATM, or debit card. They are both disruptive and uncontrollable to regulate the amount of debt you don't realize you are incuring. ATM and debit cards are easy for children to access and abuse without parents approval. Keep things simple at home, no cell phones, limited electronic toys (even batteries are expensive), keep childdren off the internet, and control utilities and waste in the home. A land line phone is cheaper to use and maintain that only has a ringer and you don't need costly and excessive features on a phone. A message recorder built in to a phone is all the service you need. Keep debts and credit simple and short term and enjoy your family. You don't need toys of pleasure or a 52" LCD TV for that. Embrace credit as your enemy and debts as a curse, you'll do fine. You don't need new furniture, car, or carpeting every three years, pay yourselves first. Interest charges on credit cards and debt alone can make a substantial savings account deposit if you add it up over a year. And it would all be yours and there for an emergency.