8 money moves in 2008

I’m not going to predict what’s going to happen this year (you can read that in our main feature “Where to Invest in 2008” on p.46), but I’m going to take some action steps that will impact my financial life. I suggest you make your own list.

1. Tighten belt. Soaring gas prices, construction costs, baby expenses, 2.6% inflation rate be damned! I’m going to have to watch my cash flow like a hawk and make some sacrifices along the way (goodbye, Chrysler 300c!). This has never been bad advice, so tighten yours as well.

2. Switch cards. After figuring out what I really want from my credit card (see last issue’s “What Credit Card Type Are You?”), I plan to switch to another card that will give me exactly the benefits I want. Now, if you’re a revolver and find yourself with too much holiday debt, pay it off. And don’t put it off (see “Drowning in Debt?” on p.54).

3. Increase passive income. I love when money works for me, not the other way around. I want to up my passive income to a quarter of my total, with the ultimate goal of generating a lean, mean, passive income cash machine replacing most if not all of my income.  That means selling some hard assets for something more liquid – and finding that elusive automatic cash cow, and I don’t mean 10% monthly guaranteed income scams (see “How to Spot and Avoid Scams” on p. 51).

4. Start a business. We just set up another company partly as a legitimate tax shelter and mainly as another income stream. Give entrepreneurship – even part-time – some serious thought.

5. Buy property. This is still a great time to borrow money to buy or build a house. We signed up a 25-year mortgage at a good fixed rate. If you’re planning to buy a house or condo unit, don’t pass up the opportunity.

6. Open a PERA account. I had been remiss with retirement planning, but if this PERA bill finally becomes a law (it was erroneously reported that it was months ago) and financial products tied to it finally get into market, I will definitely start my contributions. Retirement may be decades off for you as well, but early is always better than late (see “The Home Stretch” on p. 60, an excerpt from columnist Efren Cruz’s second book).

7. Invest in euro. I have some US dollars dropping in value even as I write this (read the Index section on 26). I really should at least recover my losses by investing in a higher-yielding US dollar investment or switching to euro. You should too.

8. Travel abroad. Okay I won’t, but if I don’t have more pressing priorities, I would. The falling US dollar means it’s becoming a lot more affordable to travel to the US (or buy stuff online for that matter). So if you can and you’ve got your financial house in order, go ahead. You deserve it. I know I do.

By the way, you know this is our first anniversary, right? If I’m going to do just one prediction for 2008, it’s this: MoneySense will just get better and better. Thanks for your support. And please spread the word.