I'm writing this a few days after the US government took control of American International Group (AIG) in a $85 billion deal. And this is fresh after the collapse of Lehman Brothers and the takeover of Merrill Lynch & Co by Bank of America Corp.

The U.S. has also taken over mortgage-lending giants Fannie Mae and Freddie Mac as they teetered near collapse. And the House of Representatives has rejected a $700 billion bailout plan that will allow the government to buy up risky loans and allow the economy to move forward.

And that's just this month, September 2008.

So, in an environment where even banks are failing, what should we do about our financial security in the years ahead? While there is no right or easy answer, I have put together some ideas on how you can ensure and increase your income, and how you can maximize the potential of the money you already have.

Invest In Yourself

Sometimes, the best asset you have is yourself. And you are more of an asset that you realize.

Spend some money and take up a course to upgrade yourself, and maybe in a subject that is completely out of character for you - who knows, you may find a talent you never you had. Education is never wasted and it may just open up new perspectives on what you are involved in now.

Diversify

If you are putting your money in the bank, remember to split it between different banks.

And if you are investing your money, don't just concentrate on one type of instrument. Find a few instruments with relatively low and reasonable returns, and split your money between them.

Eliminate Debt

Debt is bad. If you have any debt, whether it's credit card, or mortgage, or others, do something about it.

There are many sites and articles on how to eliminate debt but you must know that not getting out of debt is costing you money. The interest that you pay on your loan, although it might not seem like much on a monthly basis, is really costing you a lot of money in the long run.

As an example, assume you borrow $100,000 from the bank at an interest rate of 5% with a repayment period of 30 years. I did a simple spreadsheet calculation and your monthly premium should come up to about $550.

In the first month, of the $550 monthly payment, $414 actually goes to paying the interest on the loan and only $136 goes to paying the principal. In other words, in the first month, after paying $550 to the bank, the amount that you owe the bank goes down by only $136.

The example is at a minimal interest rate of 5%. The credit card companies charges you double digit interest rates!

I say again - debt is bad. If you are in debt, do something about it.

Somebody should tell the US government that, but that is the subject of another hub. ;)

Save Money

Get rid of the unnecessary extras. If you are in the habit of going for expensive dinners, I'm sure you can find a cheaper place where the food and service is just as good. Or you can just go less often.

A good way is to keep a daily diary of how much you spend. After a few weeks, you might be surprised to find out where your money is actually going.

Start A Online Business

An online business is a great asset in today's uncertain world. It acts to supplement your income, and can potentially become your main source of income should you lose your job. Advantages of such businesses include:

• Low startup cost.
• Low running cost.
• Does not need any inventory.
• Can be run from your garage in your spare time.

Conclusion

The world is in the midst of unprecedented change. What used to work well in the old days, like good skills, a good job, good spending and saving habits, are no longer a guarantee of financial security in this new century.

The best way would be to stay agile, stay hungry and stay informed. Not only will you survive, but you will definitely thrive with such an altitude.