My Wealth Journey

With talks of the Feds probably going to lower the discount rate once again to help prevent the economy from going into recession, I’ve been trying to see how I can hedge against the dollar getting weaker.

Investing in gold and commodities is my current strategy. I’ve been wanting to start investing in foreign currency, specifically the Australian Dollar. I was doing some research and found that one way some people have been playing the currency market is through forex or by opening bank accounts through banks online such as Everbank.

However, the easiest way I’ve come across is to simply invest in Rydex’s ETF funds. The ETF funds seem to match the current currency exchange rates pretty closely. For example, as of right no, the Australian Dollar Trust (Symbol: FXA) is trading about $90.5, which is just about the exhange rate between the American dollar and the Australian dollar. Check out Rydex’s site for their other available ETFs to start hedging against a weak American dollar.

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The market took a huge plunge today. It happened steadily as the day went on. There were some small attempts at a rally but after the Dow started to gain 10 or 15 points, it went down another 20 points.

Why did it drop? I think it was a lot of people taking profits off the table along with bad economic news from banks with renewed worries about another credit crunch. What was surprising was that Google (GOOG) reported great profits and still barely gained 1% on the day. I did take the opportunity to buy a Google $640 Nov call.  BIDU and AAPL report next week, so it’ll be interesting to see if good news from those companies can get the market back on track. I do have positions in both of those stocks.

Is the world economy going to slow because of the US? There has been some talk about how vital the US economy is to the world economy. It’s not the center of the world economy as it was a number of years ago but any slowdown would definitely hurt the overall world economy. China exports to the US would slow.

I’m no economist but I’m still bullish on the overall economy. Housing and financials may suffer but overall, our economy should be chugging ahead.  I’m just fortunate that I did not invest or buy a personal residence in California. I still have some holdings in Texas and Utah, which I bought for cash flow. Any appreciation are bonuses for those properties. I do realize the chances of selling those homes right now are slim with the credit crunch so I am stuck with the properties.

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Have you ever wonder how much money franchises like Cold Stone, Jamba Juice, McDonalds, or other non-food related franchises made? Well, the answer is when done properly, it can provide a very nice lifestyle. Yesterday, I ran into an old friend who got into the franchise business with a restaurant a few years ago and we started chatting a bit about her business.

I learned that while it is very hard work and long hours, especially with a restaurant, the payoff and ROI is very attractive. She has already made all her money back and it is only her second year. Franchises usually require a start-up fee, which in this case was about 40K, an annual franchise fee based off gross income, and they typically require you to purchase supplies from them. In my friend’s case, she did not have to purchase supplies from them because the franchise is not too large and did not have it’s own supply chain just yet.

To learn more about franchise opportunities in business, check out this site here.

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