Uncommon Advice

The Credit Crunch just gets deeper and deeper. Today it was announced that new car sales have reached their lowest level since 1966! Also, sales are down a whopping 18.6% on last year. My sympathies go to those who are suffering due to this - the workers in the car production factories, the in-house engineers, and the salesmen. However, this situation could've been predicted. As the Credit Crunch "becomes real" for people (generally, when they come off their mortgage fixed rates) some items will become surplus to requirements.

Notice that the Credit Crunch is linked in with Mortgages. If you live in a Council House then it is very unlikely that the Credit Crunch is going to affect you at all. Life will become tougher but due to the recent rise in inflation, especially food prices, rather than the global liquidity crisis.

It is a different story for the Middle Class though. As you come off your fixed rate, and struggle to remortgage due to the Credit Crunch, you will come up against "Rate Shock". This is the pain felt when your mortgage jumps up by hundreds of pounds at the end of a fixed rate deal. As the cost of a mortgage rises, it leaves less disposable income for other activities. Typical Middle Class purchases will therefore be hit harder than more mundane items. Watch these industries see reduced sales in 2009:

• New cars will continue to see reduced sales.
• People will think twice before sending their kids to expensive private schools.
• Super flash foreign holidays to Florida and beyond will die down.
• People may be moving house less, but this doesn't mean that home improvements will increase. Watch new kitchen and bathroom sales decrease.

It is not this era's way to do without though so here is what will benefit in 2009:

• "Almost new" car sales will increase.
• Toy sales will buck the trend as people overdo it for their kids at Christmas and Birthdays "to prove they love their kids".
• Spain, Greece and France will still see good numbers of holiday makers despite the dip.
• Many people will redecorate their homes - could we see Changing Rooms back on TV.

As always, what goes up must come down; try to look through the headlines to understand the reasons why. By understanding it is then possible to see the opportunities.

Free Downloadable ebook at http://www.uncommonadvice.co.uk shows how to maximize your credit score.

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