May 19, 2010

On May 5th, 2010 Channel 2 (KTVU) news reported, "Suisun City is operating in the black, and has none of the financial issues facing so many cities in California or the nation." That deserves a "Standing Ovation."

Suisun City demographics (www.city-data.com) reflect their estimated 2008 population at almost 27,000 with an average household income of almost $80,000. While it's a relatively small city within CA, their average household income is well above the 2008 estimated State average of $61,000. The City is located roughly half way between San Francisco and Sacramento, in a rural setting.

So how are they running in the black? They are using a little known and rare financial strategy called fiscal prudence and conservative investing. First, as reported by Channel 2, "during the bubble economy days, they were saving 40% into their savings or reserves." This is an astonishing number to say the least, which is so different than what other cities in CA have done for years. This accomplishment is worthy of praise.

Secondly, "They repeatedly avoided the temptation to buy risky investments, synthetic swaps and real estate back bonds." It's another amazing accomplishment of brilliance and prudence. If you can't explain your investment in laymen terms, you have no business making them, especially with someone else's money. It's that easy, and Suisun City leaders went the contrarian route, and I love that. Kudos all around to the leaders of Suisun City.

Read the entire story and interviews at Safe Haven - Preservation of Capital.

By J.D. Rosendahl - Safe Haven