What Wall Street Crisis Means For You

Bill Schwartz, Edward Jones Investments
Bill Schwartz, Edward Jones Investments

It's being called D-Day on Wall Street... The worst financial crisis since the 1930's.

Here's the latest from Wall Street... Around 7:00 on Tuesday night, the US Government announced they will be bailing out AIG insurance. They'll be giving them a short term bridge loan of $85-billion. This comes just days after the government pulled the plug on Lehhman Brothers, allowing them to go under rather than bail them out.

From Wall Street to Main Street.... What do Wall Street woes mean for you? Let's find out in tonight's Consumer Watch Ten Report. "I think concern is probably the right word. Fear and trembling goes a little too far." Edward Jones Investment's Bill Schwartz says If nothing else, there's an important lesson to be learned. "Whether we're 19 or 90, it's important to have a diversified portfolio." So you don't end up like Merrill Lynch, Lehman Brothers and AIG. "The brokers we're seeing going under got into trouble because they had all of their eggs in one basket."

Another side effect... That house you've had your eye on might be out of reach, according to Richard Ware at Amarillo National Bank. "It's definitely going to be harder to get loans. Car loans, home loans. It's going back to the way it was five years ago. In order to get a home mortgage loan, you're going to need to have a lot of down payment." As for your 401k, don't cancel those payroll deductions just yet. Schwartz says, "Those of us putting money into 401ks every week, it really works in our favor."

Think of it this way... It's like getting something on sale. "It would be like if you went to the department store and saw that dress you've been wanting and now it costs 25or 50% less than before." Since the stock market is so volatile, it's not a bad idea to build up your nest egg. Ware adds, "Leaving money in the bank. It's always a safe bet. Cash is good to have." There is a bright spot in this whole ordeal... October's oil delivery prices will cost about six dollars less per barrel.