5 things you should do to get ready for our new president

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Preparing for President Trump

So much for polls. Donald J. Trump has conquered long odds and will soon become the 45th President of the United States. President-Elect Trumpis now in the process of forming his administration as he prepares to face perhaps the longest odds of all: reuniting a divided nation after an extremely bitter campaign.

Regardless of which candidate you supported, you must face the future Trump presidency. How is this likely to affect your daily life in an economic sense? Nobody knows for sure — and predictions these days are not worth much — but we can hazard some reasonable assumptions about what might lie ahead.

Investments: Stay the Course

The immediate reaction of the markets on election night and the next few days was insightful. The shock of an imminent Trump win sent the futures market down more than 700 points. That loss was quickly converted into market gains during the day. The Dow Jones IndustrialAverage went on to record highs throughout the rest of the week.

Is the lesson that you should dive heavily into stocks now? Not at all — the main lesson is that the markets will be volatilefor some time while the specifics of President Trump's economic policy become clearer. Paying attention to daily gyrations over the next six months or so will make you a nervous wreck. You should focus on your long-term plan with a diversified mix of investments that meets your needs and tolerance for risk— and if you don't have a plan, develop one now.

Housing: Take Action If You Can

With a president that made his fortune in real estate, it stands to reason that he will be sensitive to the housing market— although he will find housing on a national level to be a greater challenge than his typical projects.

Most signs coming into the election pointed to a gradual rise in interest rates, and that is still likely. The Federal Reserve may not follow through in December as expected prior to the election, but interest rates are expected to rise soon, based on both expert analyses and recent Fed pronouncements. Higher mortgage rates will naturally follow.

Speaking of the Federal Reserve, President-Elect Trump has often expressed disdain for the Federal Reserve's monetary policies and would prefer a more normalized market. His stated intention to pump money into infrastructure and enact large tax cuts are likely to provide the sort of stimulus that drives up inflationary pressures and draws down a tight job market even further — exactly what the Federal Reserve has been waiting for.

In summary, interest rates really are likely to rise, but there should still be an interim period where historically low rates remain. Thus, if you've been putting off buying that new house you want, and have the means to act, redouble your efforts to find the right homenow. We're unlikely to see rates skyrocket to dangerous levels — some of us are old enough to remember paying just below double-digit mortgage interest rates for our first home and smiling at our good fortune — but you are likely to save a lot over the long term by locking into a low interest rate as soon as it is feasible for you to do so.

Jobs and Wages: Re-assess Your Personal Situation

Looking at the nation as a whole, President Trump's tax and infrastructure spending plan – if he can get it through Congress -- makes it more likely that jobswill be created and wages will rise as more businesses compete for American workers — at least in the near term. Theoretically, this should drive wages up for those employed and provide more opportunities for the unemployed and underemployed in an already tight labor market.

Unfortunately, there is no blanket advice that can be given on how President Trump's policies will affect your personal job and wage situation. Much depends on how President Trump fares in his trade deals. It's fair to say that if you work for a company that depends on exports for most of its income or on foreign raw materials for manufacturing, you have greater concerns of a potential trade war and retaliatory tariffs.

Wagesmay well rise across the nation. However, you may need to take pre-emptive action to benefit personally. If your skills are in greater demand, you may have leverage to ask your current employer for a wage increase — but do your homework to assess your value correctly.

It's wise to keep your skills current and at least consider alternatives to your current job. Increased growth may open up new opportunities in your field, or in a field that you would prefer. If you find that your skills are less valuable, it's time to set up a plan to acquire a new skill set.

Personal Debt: Keep it Low

This advice is valid whether America had elected Donald Trump, Hillary Clinton, or Pee Wee Herman on November 8th. Debt is not automatically bad, but it must be managedin the context of your overall income and a budget. (Hint to President Trump: This applies at the national level, too. It will be a challenge for the Trump administration to pay for his policies without driving debt to unthinkable levels.)

Keep your borrowing directed toward lower-rate instruments (i.e. mortgages, which have the added virtue of allowing tax deduction of interest paid) and avoid high interest credit card debt. Limit credit card spending to what you can pay off each month to negate high interest, and, if you must carry a balance, stay in touch with credit card offers to make the best use of 0% APR introductory offers and/or balance transfers.

Short-term growth under President Trump's stimulus package may make immediate spending more tempting. Remember that increasing inflation means rising prices, so keep any wage increases you receive in budgetary perspective. In other words, avoid unnecessary spending binges.

Retirement: Fend For Yourself

President Trump has promised to preserve Social Security, yet his combination of tax cuts and dismantling of most of the Affordable Care Act is likely to put seniors under greater economic pressure.

Prices may rise disproportionately on expenses that have a greater effect on seniors, such as medical costs. Programs that benefit seniors are already struggling with strained budgets and an increased number of retirees to serve. It is increasingly important that you be prepared to take care of your own retirementto the extent possible.

Take full advantage of employer 401(k) programs, and carve out a place in your budget for a monthly contribution to your retirement. Healthcare and insurance expenses remain a wildcard, so pay close attention to how the system is restructured over the course of the next year — and try to be as pre-emptive with your health as possible to limit your medical expenses regardless of the system.

The Takeaway

As surprising as it may sound, from an economic standpoint, your preparations for President Trump should not be much different than they would have been for President Clinton. Your personal situation should have more to do with your planning steps than government actions. Hillary, of course, is an exception; we don't know if she should prepare for retirement or if Trump will make room in the federal budget for his rival to enjoy room and board at the taxpayers' expense.


Photo ©facebook.com/DonaldTrump

Originally Posted at: http://www.moneytips.com/todays-headlines-5-things-you-should-do-to-get-ready-for-our-new-president/864

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