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It has become increasingly clear as January 1, 2000 approaches that there is a significant amount of disagreement over the level of impact of the year 2000 problem. This is the case in many, many industries and perhaps none more so than the financial industry. Predictions run anywhere from banks closing, countries collapsing, the stock market crashing, to little or no negative impact, or perhaps a bull market in January (when everyone is relieved that the date has passed). More than likely, what will happen is somewhere in between. Will there be major disruptions in service because of the bug? Will people panic and cause fluctuations in financial markets? The truth is that no one really knows. This bookÕs purpose is to make sure that you are comfortable in knowing that you are ready for this event.
In creating The Y2K Financial Survival Guide, we had a great appreciation for this uncertainty. In fact, the authors have differing views of the impact of the Y2K. We think this is important because the resulting book has a balance that would not have been achieved if one view (rosy, or doom and gloom) was allowed to manifest itself. It is left to the reader to decide what the impact of the Y2K will be. For the most part, the authorsÕ opinions are left out so that you get an unbiased view of your financial options before during and through the New Year.
Our mission was to create a guide that took all of these scenarios into account and suggest possible options for the reader based on the readersÕ own beliefs on what might happen. Everyone agrees that there is enough risk in the Y2K situation so that it would be foolish to ignore. Atheme of the book is to minimize unacceptable risks and make sure you are safe. You may want to be more liquid in this time frame than normal. There may be specific investments that do not make sense. You may have timing issues that you are concerned with. However, you donÕt want to abandon long term plans. All of these issues are addressed in the book. Essentially, you as the reader, need to decide what you think your risks are and plan for this event. In doing so, you will likely learn a lot about your own financial situation and find that you are not taking full advantage of possibilities suggested in the book. So there are some things that you should definitely do regardless of what you think will happen. For instance, it would be quite foolish to only have a few bucks on hand when the year turns. There are many other financial considerations that you should consider and these constitute the focus of the book.
The book is organized very simply into chapters on assets such as cash, money market funds, stocks, bonds and so on. So it is very easy to find what you want. The first part of the chapters offers a brief review of what the asset is and how it works. In doing so, the book serves a purpose as a basic finance guide. After the brief review, the risks are explored and scenarios are suggested. It is here that you will need to inject your beliefs into the mix to come up with appropriate decisions. Many of the scenarios offer the potential for profit. While much of the book discusses how to avoid losing money, it also points up opportunities for gain.
We found that many of the real financial options that be considered should begin some time in the Year 2000. While many "preparation" options should be accomplished before the New Year, most of the really interesting action will take place after the Year 2000. At that point, you will get a sense of the impact of the Y2K problem and if you have planned well, you will know how to react. For instance, if the stock market falls and it looks like growth may be effected, the fed may respond by lowering interest rates. This would be an after the fact impact of the Y2K, and our book points out a number of options that should be considered if this should arise. The point is that this is a book about financial planning before and after January 1, 2000.
Every attempt has been made not to overstate or understate a potential problem. It is our hope that the unique manner in which this book was prepared will truly help you with an unbiased approach to the problem and its consequences.