MAKING MONEY AS THE MARKET TUMBLES

Contrary to what we saw last year, it looks as though most investors are following the old adage, "In May, go away." With market experts predicting a 15% to 20% correction, many are fleeing stocks in favor of cash. While I'm not selling and have no plans to sell anything anytime soon, I am letting my cash from dividends build up in my money market accounts. It does seem to help you keep your nerves to have some cash on hand when the market goes into free fall.

This is one of those times I like to be in the position to buy. When the market finishes its' tumble and begins to level off, I like to jump in and pick up shares of companies that I believe are normally out of my price range, but would otherwise love to own. You don't have to pick the exact bottom to make money, you just come in as near the bottom as possible. This puts you in a great position for capital gains as the market begins to recover. As a bonus, if you're a dividend investor, you get to earn cash while you wait for stock prices to go back up. This time around, I'll be looking to up my stakes in Johnson & Johnson, Clorox and Campbell's Soup Co.. I may come up with some additional stocks that I'd like to get in on, but for now I'll be concentrating on these three.

Since starting my new job, I've managed to cut my expenses to the bone and am finding it easy to set aside extra money for cash savings as well as continued investments in my regular stock portfolio and my IRA. It strikes me as really odd that I make so much less than I used to, but I'm saving as much or more. I guess when you finally get the hang of managing your cash flow, it's almost irrelevant how much you make. You always manage to pay yourself first and keep right on building wealth. It's taken me a lot of years to get to this point. Sure wish our school systems had provided financial education when I was growing up. Could have saved me a lot of time and a great deal of money.