The goal of this post is to educate and inform you. It’s not a political stance to blame existing or past administrations. If you approach things that way as an investor, you end up like a cat chasing it’s tail. One of the most common characteristics among the most successful investors is they are able to look at data and facts objectively and understand how they may affect things. They are not tied to a particular ideology.

Ideologies are a set of ideas that directs one’s goals or a way of looking at things. What do you think of when I say Republican or Democrat? Liberal or Conservative? In the world of investment this can be seen in statements like I would never invest in Real Estate. Or, Real Estate is the only investment that doesn’t go down. Or, I would never buy gold. Or, the U.S. Dollar is going to 0 eventually. These aren’t ways to invest. They’re just things rehashed statements. Whenever you marry these ideas, you shut off your ability to think critically about the world around you. You miss seeing other doors opening. This was probably the best advice I ever learned from my mentor. (More on him in another post.)

What you begin to recognize is very very few people ever even look at data or facts. Even if they do, they will refuse to look at it objectively because it is out of line with their ideology. They hear something in a sound bite and buy into it. Then they hear it somewhere else and it reaffirms their “belief” which is really based on nothing. So, where am I going with this?

When we look at certain markets there are very predictable long term trends. By long term, I am referring to 20-50 years. Inside of these trends we have many other trends. Surely, you’re aware that things are a bit different economically today. Things have changed versus 5 years ago. If you watch and listen to the media you may think the world is going to end or that there is no end to the bad news.

Beginning in 2007 we reached what could be called Peak Debt. Huh? Think about it this way. Whenever you want to understand any investment idea, apply it to your personal situation and it will make all the sense in the world. So, if I am a US worker making 50,000 per year, that means I can handle a certain amount of debt. How much though? $20,000, $30,000, $100,000? At some point I reach a level of debt that my income just wont support. After that, most people go bankrupt. Now let me ask you this: How many Real Estate or Mortgage shops do you know that have closed their doors the last 2 years? How about restaurants? Car dealerships? The list goes on. In general housing was in very long term up trend, more than 50 years.

I am going to tell you something you probably won’t hear many other places. This “debt crisis” will eventually turn into a currency crisis. All that means is that governments can’t pay back their debt. You can start to see that now with the ongoing news about California and other states that are having trouble meeting their obligations. I am not telling you this to scare you. Oh no, quite the opposite. There are opportunities everywhere. But I must warn you first; if you are stuck to an ideology you may miss out. These days I keep pretty quiet about what I am investing in. First, it’s not good to go around spouting off what you are investing in. Secondly, most people think I am crazy for investing in the things I do. It’s not a big deal. Actually, its a really good sign.

So, onto the facts I wanted to share with you about this post. That was one heck of a lead in ha? Remember while this is a personal finance blog, I promise to mix things up to keep it interesting. What I am going to share with you are some simple facts. These aren’t my opinions or anyone’s ideology. I want you to think about the news the last 2-3 years and realize how drastically different things are today. Why is this important? Because if you are going to have a good shot at being an above average investor, you will need to learn to think and look at data. Once you can do that, you are on your way.

So, read these and ask yourself: “How will this affect the investments I already have? How does this affect the question How will I invest in 2010? More on this later. It’s not the end of the world; it’s just that most people don’t know what to expect. You have got to either adapt or you will get left behind. Things are never as good or bad as they may seem because things are changing all the time.

Fact 1 – The total number of Americans is approximately 300,000,000. The total consumer debt of Americans is $3,000,000,000

Fact 2 – The average debt per household is $30,000.

Fact 3 – The number of households not paying their credit card balances each month: 6 in 10.

Fact 4- The official national debt now stands somewhere between $12 and $13 trillion.

Fact 5 - The obligations for Social Security, Federal Pension Obligations, Medicare and Medicaid are now over $100 trillion.

Fact 6 – Local, county and state governments are now between $2- $3 trillion in debt. Many states will need federal assistance in meeting their obligations.

Fact 7 – In 2005 and 2006 lenders wrote 3.2 trillion in new home mortgages

Fact 8 – In order to maintain these mortgages and keep rates low, the Federal Reserve has created $1.25 trillion “out of thin air” to buy Mortgage Backed Securities.

Fact 9 - Total number of consumer bankruptcies in 1980 was 287,463; in 2009 it was approximately 1.2 – 1.5 million. To put that into context that is 3,000-4,000 bankruptcies every day. Of course the population has grown but not 5 times.

Fact 10 - Last year Washington added $1.4 trillion to the national debt. This year there will be approximately 1.5 million added.

Source of Information: US Department of The Treasury and Bureau of Labor Statistics

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1. How to Invest for the Summer Months