Permalinks .htaccess

I created .htaccess, set chmod to 666, updated my permalinks, everything works great. But, when you try to access the blog it asks for your login UN and PW (from .htaccess). I can get in fine since I created the file, but anyone else trying to get to the blog is asked to login first.

My Q – How do I update my permalinks and keep .htaccess set to at least 660 without having to delete it so people can actually get to the site?

Side Note: My blog is at falkininvesting.com/blog so i created .htaccess at falkininvesting.com/blog/.htaccess

Appreciate the help in advance,

-StockTrading101