Ben Bernanke, Chairman of the Federal Reserve, announces another interest rate cut . . . Wall Street rallies and Americans cheer. But how does a cut in interest rates really affect Americans anyway?

For savers, who like guaranteed returns from high-yield savings accounts, money markets and CDs, the Federal interest rate cut is not particularly good news. When the Federal Reserve “cuts rates,” they are lowering the short-term interest rate for borrowing money from the Federal Reserve. This directly impacts the interest rates paid by borrowers and businesses.

Banks often look to borrowing your cash as a way to bring in funds, particularly in this rocky credit environment. When your money is most attractive, they can typically pay you an attractive 5% or more on your money via a CD, money market fund or high-yield savings agreement. But when the Federal Reserve drops rates, it makes the Fed’s money and low interest rate an attractive alternative. As a result, the interest they are willing to pay you decreases as their borrowing options increase.

Banks will not be too quick to cut rates before their competitors, but in time you will likely see a lower yield offered on your savings. Particularly if there are more federal rate cuts on the horizon.

So, where do you go now to get those great, guaranteed returns? If you are locked in to a CD, you have nothing to worry about. The interest rate you are receiving on your CD will not change until your investment matures and you re-negotiate the terms on the CD. Money market funds and savings rates, however, can virtually change at the bank’s discretion.

Generally, when the Federal Reserve cuts rates, the stock market rallies as a result of:

• People taking money out of savings to seek better returns in stocks
• Businesses paying lower interest rates on loans, which improves their profits
• Businesses can now stretch their dollar and benefit from increased purchasing power

However, with constant news about the weak dollar, credit crisises at banks, sub-prime mortgage problems, soaring oil prices, a poor housing market, record foreclosure rates and a gloomy or unpredictable economic forecast, the stock market may not exactly been the best place for a short-term investor to put his/her money.

Typically, when the federal interest rate goes down, the dollar weakens and causes inflation. This, in turn, generally sends the price of gold soaring, but even gold might not be a safe play right now. With the already, pre-existing weak dollar, gold has reached new highs. Buying gold at it’s 28 year high does not make it an attractive entry point.

So, where does that leave you? If you act fast, you can still lock in pretty attractive rates on CDs before banks adjust their yields. Go to www.bankrate.com to search and compare your best options.

It’s stock market performance season and market timing experts are well aware that stocks should give solid returns over the next five months. Historically, the market tends to perform best between the beginning of November through the end of April. This period is when the major indexes earn almost all net gains, whereas May through October tends to be a flat, or sideways, performing market. Secondly, we have more historical data that shows that pre-election years are very strong opportunities for making money in the stock market. The year immediately prior to a presidential election has been the best performing year historically in the stock market. Stocks will continue to do well through the first year of the presidential election, and worst during the two years following the election.

If you are trying to make money by market timing, these two seasonal indicators tell us to buy stocks now. The combination of the November through April stock performance season and being in a pre-election year are strong indicators for tremendous stock growth. Be sure to consult a financial advisor before making any major decisions. The stock market has also recently been on quite a bull rush and reached new highs, but has been followed by a great deal of volatility. The instability of the housing market and other economic indicators have also created discussions about the economy possibly entering a recession.

This Bankrate.com article appeared on 10/24/07. By: Dana Dratch.

When you need advice, it’s usually best to go to the experts. So Bankrate did, collecting the thoughts of eight personal finance gurus on increasing your wealth. In some cases, the experts had to learn the lesson themselves (usually after a few hard knocks). Many times, a sound example was offered by someone successful who was already living it. And in every case, the person who later became an expert recognized the wisdom for what it was — and is still using it to build wealth.Learn what these successful people said they consider the best personal financial advice they ever received.

Experts’ best advice. Get advice from the authorities. Here’s what these personal finance experts had to say:

1. Gary Belsky
2. Wayne W. Dyer
3. Neale S. Godfrey
4. George Kinder
5. Robert Kiyosaki
6. Rieva Lesonsky
7. Peter Navarro
8. Dave Ramsey

Gary Belsky, co-author of “Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics”:

“Be afraid when people are greedy, and greedy when people are afraid. It’s basically, ‘Buy low and sell high.’ In general, I’ve been doing better than market averages when I’ve been handling my investments. I’ve basically done that by being conservative when the market is frothing and aggressive when the market is down.”

Wayne W. Dyer, Ph.D., author of “Your Erroneous Zones” and “It’s Not What You’ve Got: Lessons for Kids on Money and Abundance”:

The lesson “for me was, first, pay yourself,” Dyer says.

While in the Navy stationed in Guam, Dyer saved 90 percent of his pay over the last 18 months he was there. “So I came home with enough money to pay tuition for four years of school and a car. Even today I pay myself first. If you want to be financially independent by the time you’re 30 years old, pay yourself first.

“When you get your paycheck, take a percentage — between 10 percent and 30 percent — and put that away,” Dyer says. “You’ll be rich enough to be financially independent within a short period of time.”

Neale S. Godfrey, author of “Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children,” and chair of the Children’s Financial Network:

“Step away from the television and the magazines. All they serve to do is show you how stupid you are because you’ve missed whatever they’re talking about. It’s old news. It’s already happened.”

The advice came from her financial adviser, she recalls. “I used to call him and say, ‘Why didn’t we …?’ He’d say, ‘Stop it. Step away from the television. It’s done.’”

She realized that he was right. “By the time you see it or read it, it’s done; it’s happened,” Godfrey says. And if you listen and follow the hot news, she says, “You will buy at the top and sell at the bottom — exactly what you’re not supposed to do.”

George Kinder, Certified Financial Planner, author of “The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life,” and founder of The Kinder Institute:

“It’s about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life,” he says, then, “the asset allocation, the estate plan, the retirement plan might as well be thrown out the window.”

His best advice: “Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this,” Kinder says. “Nobody can do this themselves.”

A life trainer, he says, “is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize.”

Robert Kiyosaki, co-author of “Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money — That the Poor and Middle Class Do Not!”:

“My rich dad gave me lots of advice. One of the better ones: There’s good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it.”

One example: “I’m closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket.”

Rieva Lesonsky, co-author of “Start Your Own Business,” and senior vice president and editorial director at Entrepreneur magazine:

Lesonsky’s best advice “was from the owner of our magazine, Peter Shea,” she recalls. “He said, ‘Housing prices have gone up — get a second mortgage and pay off your debt.’ I did, and I’m debt-free.”

Peter Navarro, Ph.D., author of “The Coming China Wars: Where They Will Be Fought and How They Can Be Won,” and associate professor of economics and public policy at the University of California, Irvine:

“Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don’t need or want. Think for yourself.”

Navarro says he learned that lesson after a bad experience with a financial adviser. “I lost some money, then took control and never looked back,” he says.

Dave Ramsey, author of “The Total Money Makeover: A Proven Plan for Financial Fitness” and host of a nationally syndicated radio show focusing on personal finance:

“A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is ‘The Tortoise and the Hare.’ Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.

“If you try to impress other people, you’ll lose the wealth race, as well,” Ramsey says. “It sure did give me a nice metaphor. It’s a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets — an overlay for everything.”