Clark Howard's Tips

Clark's advice for tough economic times

August 22, 2007

Before coming to the studio today, Clark was talking to a man about the stock market. It got him thinking about how what happens on Wall Street affects Main Street America. If you're one of those people with leveraged investments (investments you've made with borrowed money) this is not a good time.

You may be getting "margin calls" from the broker who lent you the money. That's when they call you up and basically ask for more dough or they'll sell out your position.

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A lot of people are hurting financially; the very rich have gotten burned by hedge funds and those who are struggling to get ahead in the housing market are getting clobbered on their mortgages. Are the rest of us also going to get squeezed soon?

There are so many unknowns. But Clark has a standard piece of advice he gives people when the economy is facing tough times: Reduce the amount of debt you carry. Get your life in a position so that regardless of larger economic trends you're not feeling squeezed.

Clark himself is now doing something that he hasn't done in 26 years: He's putting cash into a tax-free money market fund. He wants to build reserves because he believes that next year there'll be good opportunities to buy distress real estate.

More Clark Howard Money Management Tips Beware of impostor money market fund investments  Investigate charities thoroughly before giving them money  Clark's 529 Plan Guide has been updated!  Mandatory private accounts may solve SS dilemma  Free budgeting tools online!  Avoid the full-commission stock broker trap  Avoid the full-commission stock broker trap  Scams heat up when economy cools down  The dangers of purchasing employer stock  Free budgeting tools online!  Full list