Email Article Print Article

When a Recession Becomes a Depression.

By Rob Lambert - Email Editor

Date : October 9, 2008

Dear Valued Reader,

We are watching a meltdown.  Many of you are worried and some are terrified.  I have a few comments on this before I get to the promised comments on LLCs.

Sure, there are many fundamental issues with our economies (note the plural!)… little things like lack of liquidity and lack of trust between institutions, but the real problem is with the expectations of the common purchaser.  See, especially in the USA, we just don’t make much anymore.  Everything we make is 10 times cheaper when it is from some place like China or Thailand. So, who really cares where it is made? We care about price.  Our economy is not driven by our ability to make things.  Instead, it is driven by plain old consumers wanting to buy something. 

The problem is our consumers are not spending.  Discretionary items like a new car or umbrella are being put off indefinitely and with the mandatory items like food, Joe Consumer is buying cheap hamburger instead of a prime steak.  

It is one thing to speak about this stuff academically.  We can all cry in our beer, but at least we have beer.  It is another thing to lose your job or your home.  When it hits you square in the groin, this discussion of recession rings hollow.  When you are unemployed and unable to provide for yourself or your family, you realize we are in a full fledged depression.  Using the word “recession” is like saying Jabba the Hutt is a little overweight.  Hell, Jabba is hideous.  In the same way, this “recession” quickly becomes a “depression” when it impacts your family.

My next newsletters are going to deal with some practical things you can do to keep the downturn from becoming a personal depression.  Particularly, I will be presenting a series on what to do when your home is in trouble or your mortgage is about to adjust itself into a credit ruining monster or the collectors are beating your door down (even if it is the door to your tent).

Now, to the promised comments on LLCs.  Somehow this seems so mundane as we watch our financial institutions burn, but here goes. 

LLCs are probably the most flexible entity we have.  It is my favorite entity for individuals to hold investments of all types.

LLCs are like chameleons.  They can be classified as partnerships or C corporations or S corporations.  They offer the much over-touted Charging Order Protection and even some “corporate veil” aspects.  They are also cheap and easy to form.  There is much on these entities on the Trustmakers and Asset Protection Corporation sites.

The only two things LLCs don’t do well are: 1) separating ownership from control (see last week’s newsletter) and 2) insulating non-managing members from suit on a personal basis. 

The really wonderful thing about an LLC is that in some jurisdictions, both in the USA and abroad, it is possible to form them with a great deal of anonymity.  In short, you can keep your name off the pubic records.  Yes, the IRS will always know, but your actual and future creditors will only know you own something through a properly formed LLC if you tell them.

Now, I am going back to Bloomberg.com to go watch the world melt a bit more. 

Two thoughts: There is sure a lot of money to be made when Rome is burning and if you don’t have an Asset Protection Plan in place you are just being careless with your, and your family’s, future.

Have a healthy and protected week.

Rob Lambert

RELATED ARTICLES:

• Protect the equity in your home
• Asset Protection Plans
• C.A.L.M. Introduction
• Get educated on Asset Protection