It’s no joke but it sounds like one. What’s the difference between a bank, a casino and a bookie?

Experience shows us that the answer is that the banks gamble but the bookie and the casino benefit from gamblers and which are the ones who make money all the time? Once again it is the bookies and the casinos.

It is shocking that the people we expect to know most about handling and investing money are the ones who are the least capable but it is also interesting to note that bookies and casinos are carefully regulated. So, perhaps the conclusion we must draw from all this is that without regulation people’s greed overcomes their common sense and leads to huge mistakes.

We have more rules and regulations than ever before but it seems that while the goverment were thinking up new ways to arrest people they didn’t worry about defending the country against greedy people whose actions were to bring the country to it’s knees.

We all got suckered in to some extent or another. We all thought house prices were ridiculously high but few of us wanted the rise in house prices to stop and now we know why. We were living in a house of cards and when one of the weak foundations eventually collapsed it brought down the whole edefice.

So what can we as individuals do in the future to protect ourselves from financial problems? That is the million dollar question. Be cautious in your financial dealings would seem to be the answer. Beware of getting too much in debt, keep your investments in secure places and avoid the temptation to cash in any increases in house values as they may not be permenent.

The chances are we will recover from this current financial mess and there may not be another one like it in our lifetimes but we will all sleep more soundly if we take a more cautious approach to our finances in the future. We will all benefit from the savings we make on interest payments by avoiding too much debt so we could all be better off by dumping most of our credit cards and using real money for a change. That will feel strange for a while but I am sure we will get used to it.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

You know you are suffering a recession when you begin to see companies like Google, Intel and Ebay all losing jobs and suffering their worst figures ever.

These darlings of the internet age might have been expected to ride the credit crisis and recession pretty well. I was particularly surprised at Ebay not doing better since everyone is looking for bargains at this time. I wrote about finding bargains on eBay here. I don’t do anything with Ebay myself but I have heard grumbles from people who used to do a lot of selling on Ebay that they have changed a lot of things in recent months and that has made sellers less enthusiastic about eBay.

Nevertheless, when people are trying to save money you would expect them to use the websites that are well known for offering good value so this must surely be a sign that people have finally decided to stop buying stuff.

We have all been busy buying new gadgets, equipment and toys for several years now and even apart from the credit crunch it might be we had got to a point where we just didn’t need any more stuff.

With things as they are perhaps what we should be buying now is gold coins to store under the mattress.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

There are broadly, two types of debt. You have the good debt which is broadly used for investing in yourself and in the future in the belief that it will prove beneficial in the long term for us and our families. The bad debts are the more frivolous debts which might be for buying a smart new car, a new tv or on holidays and vacations.

The good debt could be for learning a trade, investing in your business or borrowing a student loan to enable you to improve your education. Good debts offer the opportunity to have a better life in the future for you and your family.

The bad debts are money borrowed to treat yourself and enjoy life now but the cost is to be paid in the future. Buying a big tv on a loan now is all very nice for life today but you may still be paying for that tv long after the tv has gone to tv heaven and you will be needing to buy another tv to replace it.

Whichever type of debt you are considering you should always look at the costs and make sure you can afford the loan. You may feel happy to go without other things to invest in your future but starving yourself to get a new tv is not a sensible option.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)