Is there a 401K treatment at the spa?

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The state of the economy has been on everyone’s mind for awhile now, but through the week of Monday September 15th, 2008 it became breaking news with the collapse of giants in the banking industry and the government’s socialist-like $700 billion save.

Needless to say, conversations in the past weeks have heightened over money matters. That includes me conversing with about seven women who are seriously contemplating withdrawing their monies from their 401k’s and mutual funds.

“This is what I get for listening to some middle-aged white man who was able to convince me that this was a good way for me to build wealth,” moaned a girlfriend who’d  waited a very long time before contributing to her 401k in the first place.

And a girlfriend dealing with re-financing from an adjustable rate mortgage to a fixed rate lashed out, “I thought I was doing something when I bought my house and could afford my mortgage without even blinking. Do you know this refinance is adding an extra $550 to my mortgage?!”

I had no real advice for them since I am not an economist, cannot predict the future of Wall Street and have decided not to withdraw anything from my 401k. But I couldn’t help but wonder if my great grandfather had it right all along. He saved all the money he made and hid it anywhere from under his mattress  to “for his eyes only” compartments in his closet. With that money he catered for his immediate and extended families, sent a few unknown kids to school and paid for his funeral expenses, leaving no debt for anyone to be burdened with. That of course was decades ago and is generally no longer our way of doing things.

Instead, you have been paying just a little more attention to the newscasts on the economy than the coverage on each presidential candidate’s next campaign speech. And you are nervous! And then you hear Donald Trump telling you, “Now is the time to buy real estate.” (Phone-In Appearance on The Situation Room with Wolf Blitzer, September 18, 2008). But for most of us, no matter how great of a deal it might be right now, the question is, “With what money?”

The truth is, some with healthy bank accounts (in the millions) are still sitting pretty and they might not feel the pinch as much as the average person would. In fact they can take Donald Trump’s advice and benefit but there are still millions of women who are not making as much as their male counterparts.  This, in many cases, is worse for minority women. So I had to truly appreciate a comment made to me by a black female Chicagoan in response to the failing economy and how it was affecting her.  “Only rich people have those worries right now, and I am not one of them,” she said. “I am going out tonight to treat myself to a nice dinner cooked by someone else, no matter how much it costs. And I will enjoy every morsel, because I have cooked all week and I am tired.”

One of the worst things to do in any situation is respond out of panic. So maybe I’ll be visiting the spa this weekend and let others have a headache about Wall Street.

This story is filed under: Business

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