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Highlights of the December 2007 Issue of MONEY

[Full stories also available online at www.CNNMoney.com]

 

SPECIAL REPORT: MAKE MONEY IN 2008

THE OUTLOOK 2008, by Asa Fitch, Amanda Gengler, Janice Revel, Donna Rosato, and Walter Updegrave, page 87
What will matter most to your money next year.
A survey last summer found that two-thirds of Americans believed the economy either was already in a recession or would be in the next year. The litany of depressing news has only seemed to get worse since then: surging oil prices, mortgage defaults, investment banks writing off subprime loans, the dollar skidding to new lows — pass the Prozac. If you delve behind the headlines, you'll find that despite all of these challenges, the economy has actually held up pretty well this year. And key indicators suggest that next year should be even better. Here's a closer look at the big stories that are likely to have the greatest impact on how you manage your money next year.

  1. The Economy: Slow growth, but no recession.
  2. Housing: Home prices sink deeper.
  3. Investing: Stocks brace for a rough ride.
  4. Credit and Savings: The credit squeeze is still on.
  5. Your Job: No big layoffs, but no big raises either.
  6. Spending: Paris will be tres cher; TVs, tres cheap.

ALL THE RIGHT MOVES FOR 2008, by Asa Fitch, Amanda Gengler, Janice Revel, Donna Rosato, and Walter Updegrave, page 96.
The 22 best ways to keep safe, spend smart, and make your money grow in the year ahead.
Considering all the black clouds hanging over the economy, you probably think there's no way you can really expect to prosper in 2008. If that's what you're thinking, we're happy to tell you that you're wrong. There will be plenty of opportunities to make money next year — yes, even in real estate — as well as ways to insulate your finances from the most serious economic challenges ahead. True, you can't count on double-digit gains in stocks or a quick profit from flipping houses anymore. But by following the strategies, you can buy or sell a house at a fair price, score solid returns on your portfolio, land a good raise, nab the best rates, cut your energy bill, and grab some great deals. That adds up to a pretty decent year after all.
PLUS: THE PLAN: 2008, page 103
A month-by-month guide to a safe, smart, prosperous year.

THE BEST LITTLE DEAL IN BANKING(k),by Carolyn Bigda, page 107
Credit unions offer sweet deals on credit cards, low rates on auto loans, the best CD rates and heaps of personalized service. And yes, you too can join one.
A recent study by Informa Research Services found that a higher percentage of credit union members liked their institutions than did bank customers. And you don't need to belong to a church or work for a company that has a credit union to find one you can join. Not convinced? See if these five reasons change your mind.

  1. Savings: Park your cash in these accounts and you'll earn real money.
  2. Credit Cards: Low rates, low fees, low penalties.
  3. Auto loans: They're the best-known credit union deals for a reason.
  4. Home loans: Financing you aren't likely to get from a bank nowadays.
  5. Perks: Take a class, get a deal on kids' savings.

FORECLOSURE INVESTING: IS THIS A GOLDEN OPPORTUNITY?, by Stephen Gandel, page 110
Foreclosure investing is nothing new, of course. It's simple and seemingly foolproof premise has long captured the imaginations of aspiring real estate millionaires. Buy at fire-sale prices from homeowners desperate to avoid foreclosure or from banks eager to unload seized homes, then sell for an easy profit on the open market. What makes the old formula so compelling today is the unprecedented volume of distressed properties to choose from. Earlier this year, homes in some stage of foreclosure hit a 30-year high of 640,000 and a recent congressional report estimated that 2 million homes would be in the process or have gone through it already by the end of 2009. If you're ever been tempted by foreclosures, you have to wonder if now's your best chance.

GIFT GUIDE: THE GREATEST GIFTS EVER, by Charles Passy, Noah Rothbaum, and Wilson Rothman, page 129
Who's at the top of your holiday list? A foodie? A sports nut? A child? Let them unwrap one of these perfect gifts and watch them jump for joy. The greatest gifs ever for: foodies, music lovers, sports fanatics, globe trotters, couch potatoes, tree huggers, and kids.

PUT ID THEFT ON ICE, by Pat Regnier, page 25
Now you can "freeze" your credit files, so scammers can't steal your name. Should you?
Recently the three major credit bureaus — Equifax, Experian, and TransUnion — gave consumers nationwide the right to turn off access to their credit reports. These "freezes," when set up with each of the three bureaus, make it impossible for an imposter to get most kinds of loans or credit in your name. A good option, for sure, and one that many have long advocated. But it's not without its drawbacks.

YOUR MONEY & YOUR LIFE: SINGLE? THEN YOU NEED A PLAN OF YOUR OWN, by Jean Chatzky, page 34
The system just isn't set up for households of one. That means planning is even more important for you.
In the 1950s, married couples made up 80% of the country's households. Today they account for a hair over 50% and singles are poised to take the lead soon, according to the Census Bureau. Being on your own has its upsides, no doubt, but getting you to focus on your finances isn't one of them. Just as with married couples, though, the older a single gets, the more assets he or she accumulates. And if you're single you have an even greater need than a couple to put a plan in place that will protect what you've got, including your earning power.

  1. Stash more cash
  2. Get the right insurance
  3. Put the right documents — and people — in place
  4. Don't forget the tax man

SHIFTING GEARS AT MID-CAREER, by Karen Cheney, page 39
A grad degree can help you begin a new chapter. Here's how to afford one.
No question, returning to school in your forties or fifties is a stressful decision. You almost certainly have a mortgage to pay and may have kids to provide for, as well as retirement looming. Then there's the sticker shock. Most graduate students face steep costs — averaging $22,000 a year at a public university and $34,100 at a private school, and most students finish with heavy debt. On the other hand, grad school may be the means to breaking into a career you really enjoy, like law, finance, or teaching at a university. It may be the key to a higher paycheck too. Whatever your goal, here's how you can be sure grad school will pay off.

  1. Make sure a degree is the ticket you need
  2. Try to keep your day job
  3. Get some help
  4. Map out a budget
  5. Take advantage of tax breaks. Use your assets
  6. Bring your family on board

THE EASY WAY TO COLLECT CASH, by Carolyn Bigda, page 49
Cards that make it easy to collect your rewards.
A study last year from GMAC Mortgage found that 41% of consumers with a rewards card rarely or never redeem their bonus dollars (or points or miles). The hassle of making a claim was cited as a major reason. Many issuers put the onus on you to track and request rewards online or by phone. But some card companies give consumers a helpful hand by automating the redemption process, says Curtis Arnold or CardRatings.com.

LAST OF THE RED-HOT MARKETS, by Joe Light, page 53
Why is housing in some cities still booming? The answers may help you navigate your own market.
While housing prices increased only 3.2% nationally in the year ended June 2007, according to the Office of Federal Housing Enterprise Oversight, a government regulator, prices in Wenatchee, WA shot up 24%, partly because a recent influx of retirees boosted demand for housing. Wenatchee is not the only hot spot bucking the national trend. Markets in the Pacific Northwest, Utah and Colorado still boast annual appreciation rates of 10% plus, along with a scattering of bright spots in the South and even in the East and Midwest. How to account for these exceptions? For the most part, the iron laws of supply and demand explain what's going on — with the added element of wild and crazy speculation. If you understand how such factors are playing out in these red-hot markets, you'll be better able to anticipate changes — and develop smart housing strategies — right at home.

WHAT THE SINKING DOLLAR MEANS FOR YOU, by Paul J. Lim, page 67
Stocks have soared even as the greenback drops like a brick. History suggests that won't last.
When you're traveling abroad, it's easy, if unpleasant, to grasp the impact of a sinking dollar. Now that the euro is at an all-time high against the greenback, dinner for two at a modest Paris café will set you back $200. When you're trying to decide how to steer your 401(k) or other investment accounts, the implications aren't so clear. But if history is any guide, the dollar's woes will eventually weigh down U.S. stocks. MONEY explains how you can keep your portfolio above water.

FUND WATCH: FOUR FUNDS JOIN OUR PREFERRED LIST, by Penelope Wang
These new MONEY 70 picks share good performance and a record of looking out for their investors.
Sometimes the best portfolios have to change, even the MONEY 70. In putting together our list of recommended funds, we look for a consistent strategy, expenses that are no worse than average and long-term performance in the top half of a fund's peer group. We'll still keep a fund on the list if performance slips but we have confidence in management. We don't jump in and out of funds — and neither should you. Nevertheless, this month we're replacing four MONEY 70 funds. Two are now closed to new investors. Two others received mediocre grades from Morningstar when the rating firm tightened its standards for how funds should treat shareholders. The closed funds are Royce Opportunity, a small-cap value fund, and SSgA Emerging Markets, which buys stocks in developing countries. The closed funds substitutes are Bridgeway Small-Cap Value (BRSVX) and American Funds New World (NEWFX). The two funds that fell short under Morningstar's tightened "stewardship" standards were Neuberger Berman Fasciano and Aston Mid Cap. Their replacements are Royce Value Plus Service (RYVPX) and Fairholme (FAIRX).

MONEY is available in digital format.  To access this version go to http://digital.money.com

 

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