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This Is Not the Great Depression II

In the space of 10 minutes, prepping for a segment on the Today Show this morning, I had one staffer say to me, “Everyone younger than 50 just needs to relax!” while another asked, “Is this really going to be another Great Depression?”

It’s distressing to be a part of a paradigm shift. What’s happening very much on the outside (Washington, big banks failing, the stock market), hits us right at home, inside. Kids are talking about it, parents, friends, the coffee-shop guy, our cousin who’s losing her once-thriving business, and Pop-Pop as his retirement looks that much less rosy. It makes us question a lot.

But before you make any big moves, if you haven’t already, take the time to learn. This may be the biggest opportunity we have as a nation to learn about where our money is—everything from credit to insurance to 401k’s to cash deposits—and how the financial systems work.

Here are some lessons to keep in mind that mirror the most common questions I get, especially as emotions run strong and markets run south:

· “What about my account with Local-National Bank?”

Heavy banking drama and watercooler, neighborhood gossip aside, know that your cash is safe in your FDIC-insured bank (big, small or even web-only) as long as the total of your individual accounts does not exceed the new (temporary, one year) limit of $250,000. Joint accounts, up to $500,000. Reassure yourself at FDIC.gov.

· “I want to just pull all my money out of my retirement account—why not?”

Investing for retirement is a long-term commitment. Make decisions based on how long you have until retirement as well as your ability to handle the ups and downs of risk. Don’t ask for a ‘divorce’ and pull everything out in fear. Instead, educate yourself on all your options, on what makes a good portfolio for your age and risk-level before making any moves.

And to the lovely lady who asked about the Great Depression II: “Nope.”

If you know the rules, what really makes you question them these days? What do you feel really confident about when it comes to your money? I can’t wait to hear from you…

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