The pinch at home
Despite his continued revenue, Rosado, who still resides in the Bronx, has begun to feel the effects of a bad economy in his personal life. His gas and electricity bills have risen sharply, and he has had to contend with a subprime mortgage on his home. He re-budgets every month to accommodate gas prices that have risen from $350 per month to $900. He further saves on gas having switched from a large SUV to a modest-sized one. His electricity has increased from $160 per month to up to $600 for his store. His private electricity costs have risen even higher. He used to pay $70 per month; now he pays around $430.
Despite these rising costs, he feels able to be generous. He reduced the rent of a family that leases a floor of a building he owns from $1,200 per month to $500 as a courtesy until they get back on their feet.
Rosado's household budget is now about $5,000 per month. He has three children, the eldest of whom is married and no longer relies on him. He lives with his wife and youngest son, 4, and supports his middle child, a 14-year-old daughter who lives with her mother.
He attracted national attention on CNN when he took on a shady mortgage company that gave him a subprime mortgage without his consent. The company, Aquin, is currently under investigation. Following the CNN coverage, he was able to get stable financing and now has a 30-year mortgage at a fixed repayment rate of 6 percent. The house cost $400,000 four years ago.
Aside from his mortgage, Rosado does not use credit, with the exception of a business American Express card that has no annual percentage rate and is easy to pay off every month. In fact, he likens credit card companies to loan sharks, who raise interest rates without warning or reason.
Jonathan Nadler, a gold expert with Kitco, said trends in the commodity market can tell us a lot about gold prices.
“Liquidations for cash are a big fad these days,” Nadler said. “With 160,000 to 170,000 jobs being lost in the financial sector [in New York City] alone, it’s no surprise that people are going to pull out their old Rolexes.”
So when should you sell a Rolex?
Nadler said it's possible to predict gold prices by paying attention to a few different markets. The jewelry sector accounts for two-thirds of the global gold demand. When jewelry sales slow down, so does the commodity market.
Another critical watch factor is India’s market, where gold jewelry is as important to the economy as it is to the culture. Nadler reports that India is slowing its gold jewelry manufacture in favor of resale opportunities.
Finally, investigate the scrap market. When there is a high yield in a short period of time, predict high and volatile processing.
-Meredith Melnick
Light at the end of the tunnel
Rosado has strong political opinions. He thinks the economy will get better now that Barack Obama is the next president. For him, the most important issue is universal health care. This may be because of his recent medical problems. He has had two surgeries on his ankle, which he broke in an accident at home. Luckily, he has health care, but says the cost of his premiums increases every month.
He would happily pay more taxes, he says, to ensure that people have a safety net on things like health care and education.
"If you ain't paying taxes, you won't have police services, ambulances, subway system, bus system, gas and light," he said. "If you don't wanna pay taxes, then live in the mountains with goats and herd sheep."
Despite his solid revenue stream and ability to help out his neighbors, he predicts financial difficulties for himself and his industry if current economic trends continue. He relies on a stockpile of jewelry that is six months to a year old, but business can be slow these days just as his outflow rises.
However, he's confident things will turn around within the next three years. His business is about assuming risk, he says, and so he knows how to gamble.
"I'd bet on Obama," he said. "He can turn this around."
1. Make sure that your investment portfolio has as few loans as possible. Instead, rely on your earnings for re-investment capital.
2. Minimize the use of credit cards. If possible, deal with only one credit company. It is easier budgeting and paying your expenditures when doing business with one credit company. Keep to your limit, ensure that you do not exceed the credit limit set on your card. It is bad for your credit status every time you go over your limit.
3. Be flexible in your household budget. Make sure it reflects the status of the economy. Minimize your expenditure, during an economic recession, cut on your luxuries and only go for the necessities. Enjoy the worldly pleasures when the economy is booming.
4. Pay your bills on time, be it for household or business. First, settle your utility bills as early as possible. They are the services you cannot afford to go without.
5. The rule of thumb in surviving an economic recession is always keeping track of what you spend, that is, the checks you write and the cash you withdraw. It helps in the long run.
6. When shopping for goods and services, it helps to do a little market research, for example, online. You will find quality goods at affordable prices.
