Losing money in the credit crunch

So Billionaire Roman Abromavich lost 3bn in the credit crunch. I lost a couple of thousand myself, but I don't feel so bad knowing that this has happened to many other people, some on a much larger scale. Even wealthy clients at Coutts the Queens official bank have lost serious money. It proves that everyone is affected by the credit crunch no matter how wealthy or knowledgeable they seem to be.

Things will never be the same again for credit. Banks will be far more stringent in who they lend money to, and less money will be lent out. The Bank of England have made it quite clear that this is the path they will follow. Most other banks will follow suit.

Sometimes the economy goes up, and sometimes it goes down. Right now it is going down, so it is more important now than ever to make sure that you live within your means. The economy will eventually go up, but I intend to continue to practise the sound principles of saving and investing conservatively and continuously so I can ride the wave on the way up.

Now, presents a perfect opportunity to make modest investments in well selected stocks and shares, which I will be doing in 2009. Billionaire John Templeton used the strategy of buying cheap stocks during a recession and holding onto them to achieve great results. Any investment is a risk, so only ever invest a fraction of your net worth in order to stay diversified.