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What to Do Now

As an investor:

• Only stick with companies that have little or no debt. Avoid any that are getting life support from the Federal Reserve – it's too shaky to assume they'll be able to stand on their own two feet once the crutch of government financing is taken away.

In your personal life:

• Borrow only if you have to and on the conservative side.
• Refinance your house by taking advantage of low interest rates before they start rising again.
• Pay off your credit cards each month.
• If you have trouble with plastic, shift to a cash-only lifestyle for a while.
• And make sure that any new debt you take on is debt you can afford to pay off.