How to Protect Your Nest Egg From Financial Downturns

November 4, 2013 Editorial Staff
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(StatePoint) From increased unemployment to commonplace home foreclosures, it’s hard to forget the devastating effects of the 2008 financial crisis and the worst recession since the Great Depression.

While the hope is that regulatory bodies and bureaus created in the crisis’ wake will help prevent a recurrence, some experts say these reforms were shaped by the same entities responsible for the crisis — but that citizens have the power to chart a different course for their own economic futures.

“Whether policies were formed with selfless or selfish intentions, you don’t need to quietly agree to them, especially if they are misguided. We have a system that can respond to the efforts of individual citizens,” says Jay W. Richards, Distinguished Fellow at the Institute for Faith, Work & Economics and author of the new book, “Infiltrated: How to Stop the Insiders and Activists Who Are Exploiting the Financial Crisis to Control Our Lives and Our Fortunes.”

In his book, Richards suggests that complacency on the part of ordinary citizens will lead to more serious financial disasters. He encourages readers to take steps to prevent future crises and protect their own nest eggs:

• Get Informed: “Many culpable entities used the crisis fallout to lay blame elsewhere and increase their own power,” says Richards. “But with knowledge, prudence and intelligent action, history won’t have to repeat itself.”

“The only way to prevent deception and cynicism during future crises is for ordinary citizens to get informed and outraged enough to change our fiscal and regulatory trajectory,” says Richards.

• Take Control: Online educational resources can help you get informed. To brush up on basic financial skills, visit• Diversify: Experts recommend balancing different types of assets, such as cash, stocks, bonds and commodities. Having different types of investments means you might be better shielded from economic crises, because some assets might fall while others might rise.

• Don’t Rely on Your Home: If the recession taught people anything, it’s not to rely too much on home equity for retirement. Many think their homes are more valuable than they really are or will be when it’s time to retire.

• Be Philanthropic: “Those concerned about the future should be the first to grow effective local organizations providing real safety nets for the destitute,” says Richards, who believes philanthropy is a moral responsibility best left to communities.

• Think of the Future: When a consumer borrows, she or he alone bears the debt. However, when the government over-spends for short term goals, future generations are expected to foot some, or all, of the bill. “This is immoral and no fancy economic theory can change that,” asserts Richards.

• Be Civic: Your vote matters to politicians. Call, write and visit them to express concerns over economic regulations you don’t support.

More information about “Infiltrated” can be found at

Remember, you don’t need a PhD in economics to stay informed.

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