Protect Your Finances From the COVID-19 Recession

Protect Your Finances From the COVID-19 Recession by Doing These Things Now

 By Doug Whiteman  MoneyWise  March 17, 2020

Protect Your Finances From the COVID-19 Recession by Doing These Things Now

As restaurants close, airplanes are grounded, sports arenas and theaters go dark, and financial markets implode, economists and President Donald Trump are acknowledging that the economy may be heading into a coronavirus recession.

Some experts are even saying a recession — sparked by the virus and the disease it causes, COVID-19 — is already underway, despite the Federal Reserve's extreme measures to prevent one.

The economy has been healthy and growing since 2009, the longest stretch without a recession in U.S. history. But if the downturn has finally arrived, you need to take immediate action to protect your family finances.

Here's how to be ready for the coming financial storm.

1. Don't assume hiring has halted

Apply for jobs and keep networking, virtually.

True, many employers — including Apple stores, ski resorts, Las Vegas casinos and Walt Disney World — have shut down operations to stop the spread of COVID-19 and have laid off legions of workers.

But other companies are still operating, though typically with their employees working separately from their homes and keeping in touch via instant messaging and video chat. Often, hiring processes are still going on, too, but without the in-person interviewing.

So if you're already out of work or fear that you could find yourself in that position, get out there and pound the virtual pavement. While you're sheltering in place, be looking for and applying for jobs.

Keep up your networking via LinkedIn, and review and update your resume. Make sure it looks professional, and add any additional skills or experience you’ve gained recently.

2. Treat your credit score like gold

Your credit score is your most valuable financial asset. So take good care of it.

If the worst happens and you lose your job in a COVID-19 downturn, you may need to take out a personal loan to make your house payment or cover an unexpected medical bill. If you have bad credit, it'll be much more difficult to get a loan, especially at a favorable interest rate.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/protect-finances-covid-19-recession-224922127.html

35 Hard Truths To Know Before Becoming “Successful”

35 Hard Truths To Know Before Becoming “Successful”

​ 1. It’s Never As Good As You Think It Will Be

“One of the enemies of happiness is adaptation,” says Dr. Thomas Gilovich, a psychology professor at Cornell University who has studied the relationship between money and happiness for over two decades.“We buy things to make us happy, and we succeed. But only for a while.

New things are exciting to us at first, but then we adapt to them,” Gilovich further states.

Actually, savoring the anticipation or idea of the desired outcome is generally more satisfying than the outcome itself. Once we get what we want — whether that’s wealth, health, or excellent relationships — we adapt and the excitement fades. Often, the experiences we’re seeking end up being underwhelming and even disappointing.

I love watching this phenomenon in our foster kids. They feel like they need a certain toy or the universe will explode. Their whole world revolves around getting this one thing. Yet, once we buy the toy for them, it’s not long before the joy fades and they want something else.

Until you appreciate what you currently have, more won’t make your life better.

2. It’s Never As Bad As You Think It Will Be

​Just as we deceive ourselves into believing something will make us happier than it will, we also deceive ourselves into believing something will be harder than it will.

The longer you procrastinate or avoid doing something, the more painful (in your head) it becomes. However, once you take action, the discomfort is far less severe than you imagined. Even to extremely difficult things, humans adapt.

I recently sat on a plane with a lady who has 17 kids. Yes, you read that correctly. After having eight of her own, she and her husband felt inspired to foster four siblings whom they later adopted. A few years later, they took on another five foster siblings whom they also adopted.

Of course, the initial shock to the system impacted her entire family. But they’re handling it. And believe it or not, you could handle it too if you had to.

The problem with dread and fear is that it holds people back from taking on big challenges. What you will find — no matter how big or small the challenge — is that you will adapt to it.When you consciously adapt to enormous stress, you evolve.

3. There Is No Way To Happiness

“There is no way to happiness — happiness is the way.” — Thich Nhat Hanh​​

Most people believe they must:

First have something (e.g., money, time, or love)

Before they can do what they want to do (e.g., travel the world, write a book, start a business, or have a romantic relationship)

Which will ultimately allow them to be something (e.g., happy, peaceful, content, motivated, or in love).

Paradoxically, this have — do — be paradigm must actually be reversed to experience happiness, success, or anything else you desire.

First you be whatever it is you want to be (e.g., happy, compassionate, peaceful, wise, or loving)

Then you start doing things from this space of being

Almost immediately, what you are doing will bring about the things you want to have

We attract into our lives what we are. This concept is confirmed by loads of psychological research. In his popular TED talk, Harvard psychologist Shawn Achor explains that most have happiness backward.

They believe they must first achieve or acquire something to be happy. The science shows that happiness facilities success.

For example, Scott Adams, the creator of the famous comic series Dilbert, attributes his success to the use of positive affirmations. 15 times each day, he wrote the sentence on a piece of paper, “I Scott Adams, will become a syndicated cartoonist.”

The process of writing this 15 times a day buried this idea deep into his subconscious — putting Adams’ conscious mind on a treasure hunt for what he sought. The more he wrote, the more he could see opportunities before invisible to him. And shortly thereafter, he was a highly famous syndicated cartoonist. It couldn’t not happen.

I personally apply a similar principle but write my goal in the present tense. For example, rather than saying, “I will become a syndicated cartoonist,” I write, “I am a syndicated cartoonist.” Writing it in the present tense highlights the fact that you are being who you want to be, which will then inform what you do and ultimately who you become.

4. You Have Enough Already

To continue reading, please go to the original article here:

https://benjaminhardy.com/35-hard-truths-you-should-know-before-becoming-successful-2/

The Worst Things About Being a Millionaire

The Worst Things About Being a Millionaire

By the editors of Kiplinger's Personal Finance | June 14, 2018 Updated for 2019

Who wants to be a millionaire? The more intriguing question would be, “Who doesn’t?” For most people, a million smackers conjures up images of vacations on the Riviera, Arabian racehorses and mattresses stuffed with freshly ironed $20 bills.

But being a millionaire today isn’t all it’s cracked up to be. Low interest rates and high living costs mean a million bucks in the bank doesn’t necessarily allow you to retire at 35, 45, 55 or even 65.

What’s worse, today’s million dollars comes with all the burdens of wealth: greedy relatives, rapacious lawyers and grasping investment advisers.

A Million Isn’t What It Used to Be

Financial advisers say a sustainable annual withdrawal from retirement savings is 4%. With a million-dollar nest egg, a 4% draw-down means annual income of $40,000. And that’s before taxes. If you stick with the 4% withdrawal rate and earn an average 8% on your money annually, you’ll be in good shape for the long run.

But can you really live on $40,000 a year? Most millionaires don’t want to. “If you are 45, 50, 55 years old and spend like a millionaire, then you are doing two things with your money that may well not work for you long term,” says Tom Davison, a financial planner in Columbus, Ohio.

 “The first is not saving extra dollars now, and the second is establishing a lifestyle cost that, for most people, will be hard to cut back on later.”

That being the case, let’s say you pull $100,000 a year from your savings, you earn 8% a year, and you don’t adjust upward for inflation. Here’s how your account would fare: at the end of Year 1, you'd have $972,000 left; Year 5, $835,735; Year 10, $594,376; Year 15, $239,741; and Year 18, $0. Yup — broke in retirement.

Millionaires Are Big Targets for Strangers

When most of us have an auto accident, we simply curse our luck, exchange insurance numbers and pay the deductible. When you’re a millionaire, however, lawyers might look to you to alleviate their clients’ “pain and suffering.” If your insurance doesn’t pay, those lawyers will be eyeing your million-dollar stash.

The best solution: Make sure all your insurance policies are up to date, particularly the liability portion of your auto and home insurance. And consider a personal liability umbrella policy to cover what your other insurance won’t. Many umbrella policies will even pay for a lawyer if you need one.

A million dollars of umbrella insurance coverage costs about $150 to $300 a year, according to the Insurance Information Institute. The next million should cost around $75, and every million after that will add about $50 to your annual premium.

Millionaires Are Big Targets for Friends and Family, Too

To continue reading, please go to the original article here:

https://www.kiplinger.com/slideshow/investing/T052-S001-the-worst-things-about-being-a-millionaire/index.html

10 Best Things to Keep in a Safe Deposit Box

10 Best Things to Keep in a Safe Deposit Box

By Bob Niedt   September 28, 2018

As digital records and cloud storage become the norm, the stodgy safe deposit box is under threat to join our growing list of things that will soon disappear forever. “They’re probably going to be extinct at some point,” says Michele Awash, a certified financial planner with Family Office Solutions in Greenville, Del. “Everything is electronic these days.”

But don’t rush to declare the safe deposit box a relic of the past just yet. You still need to be able to produce certain original documents, rather than digital scans or photocopies, and some valuables simply can’t be digitized.

Installing a safe in your home is one alternative to a safe deposit box, but they aren’t foolproof, says Luke W. Reynolds, Chief of the FDIC's Community Outreach Section. Home safes are more susceptible to fire and water damage, not to mention theft, than bank safe deposit boxes, he says.

“Personally, I use both,” says William P. Simons IV, president and CEO of Rust Insurance Agency in Washington, D.C. Hard-to-replace items that Simons might need frequently, such as his passport, are kept in the home safe, while other important items he rarely needs stay in his safe deposit box. Here are 10 of the best things to keep in a safe deposit box at your bank.

Social Security Card

Your Social Security number falling into the hands of an identity thief can be the start of years of headaches as you are forced to file disputes, freeze accounts and monitor credit reports for signs of financial fraud. It’s why we rank the Social Security card among the worst things to keep in your wallet in case it’s ever lost or stolen.

Stow your Social Security card in your safe deposit box. On the rare occasions when you actually might need to produce it, say, for a real estate closing, you can plan in advance to retrieve the card. Meantime, memorize the number, if you haven’t already, for filling out routine paperwork.

Birth, Marriage, Divorce and Death Certificates

Vital records that are rarely needed but a hassle to replace are prime candidates for your safe deposit box. Think birth certificates, death certificates, marriage certificates and divorce certificates. Ditto for adoption-related documents; in particular, foreign birth certificates from an overseas adoption are extremely difficult to replace if lost or destroyed.

Government agencies typically can issue certified copies of vital records, but it’ll cost you time and money. You’ll also need to provide proof that you are entitled to copies. Virginia, for example, charges $12 per certified record, and it can take weeks to receive the document by mail.

Expedited delivery through a third-party service called VitalChek takes just 2-5 days, but the charge is $20.80 per certified record, plus an $11.95 service fee. Overnight delivery costs an extra $18.50. VitalChek says it works with every state plus Puerto Rico and the District of Columbia.

Paper Stock and Bond Certificates

Bookkeeping for stock and bond ownership and transactions is handled electronically these days, but there was a time when actual paper certificates were issued to investors. The New York Stock Exchange eliminated its requirement for physical certificates in 2001, and paper savings bonds haven’t been available from banks since 2011.

To continue reading, please go to the original article here:

https://www.kiplinger.com/slideshow/saving/T005-S001-best-things-to-keep-in-a-safe-deposit-box/index.html

9 Things You'll Regret Keeping in a Safe Deposit Box

9 Things You'll Regret Keeping in a Safe Deposit Box

By Bob Niedt  | September 18, 2018

In today’s digital age, in which seemingly anything that matters is stored virtually “in the cloud,” a physical safe deposit box comes across as a relic of the bricks-and-mortar past. But don’t be too hasty to dismiss the importance of keeping certain valuables securely tucked away in your bank’s vault. A safe deposit box can offer critical protection for important documents and prized possessions.

“I have birth certificates and Social Security cards and old valuable baseball cards that were my father’s in a safe deposit box,” says William P. Simons IV, president and CEO of Rust Insurance Agency in Washington, D.C.

A safe deposit box isn’t a wise choice for everything, however. We talked to experts to come up with a list of nine things you might come to regret locking away in your bank, which isn’t open nights, holidays or perhaps even weekends. Instead, Simons recommends storing important items that you need to access more frequently or on short notice in a fireproof home safe that’s bolted to the floor. See the list of safe deposit box no-no’s.

Keeping a stash of cash in a safe deposit box isn’t a good idea for several reasons, warn experts. First, if you need the money in an emergency, but the bank is closed, you’re out of luck. Second, the idle cash loses buying power over time due to the effects of inflation.

It’s better to put the money in an interest-bearing account or certificate of deposit. Third, some banks expressly forbid storing cash in a safe deposit box. Read the fine print of your agreement.

Keep in mind, too, that cash in a safe deposit box isn’t protected by the Federal Deposit Insurance Corporation, says Luke W. Reynolds, chief of the FDIC’s Community Outreach Section.

To receive FDIC insurance, which covers up to $250,000 per depositor per insured bank, your cash needs to be deposited in a qualifying deposit account such as a checking account, savings account or CD.

Passport

Let’s face it: Unless you’re, say, an international jet-setter or global business executive, you probably don’t need your passport in hand 24/7. So it’s tempting to store it in a safe deposit box where it won’t get lost, damaged or stolen. Our advice: Avoid the temptation.

A planned trip is one thing, but emergency trips by their nature are unplanned – and inevitably arise during non-banking hours. A child getting sick while studying abroad or a parent suffering an accident while on an international cruise can spark a scramble to book tickets to leave the country on short notice.

“When we talk about important documents [to store in a safe deposit box], a passport would be a bad idea for that last-minute trip to Europe that you booked at 5 p.m. and your flight is at 9 p.m.,” says Rust Insurance Agency’s Simons, who keeps his passport in his home safe. “If your passport is in the safe deposit box, you’re staying home.”

Original Copy of Your Will

It’s fine to keep copies of your own will, your spouse’s will and any wills in which you’re named the executor in a safe deposit box. However, do not store the original copy of your will there – especially if you’re the sole owner of the safe deposit box.

Here’s why: After your death the bank will seal the safe deposit box until an executor can prove he or she has the legal right to access it. This could lead to long and potentially costly delays before your will is executed and your heirs receive their inheritances.

To continue reading, please go to the original article here:

https://www.kiplinger.com/slideshow/saving/T005-S001-best-things-to-keep-in-a-safe-deposit-box/index.html

What To Do When The Stock Market Crashes

What To Do When The Stock Market Crashes

By J.D. Roth March 9 2020

Can you feel it? There's panic in the streets! We're in the middle of a stock market crash and the hysteria is starting again. As I write this, the S&P 500 is down six percent today — and 17.3% off its record high of 3386.15 on February 19th. S&P 500 status

Media outlets everywhere are sharing panicked headlines. Panicked headlines

All over the TV and internet, other financial reporters are filing similar stories. And why not? This stuff sells. It's the financial equivalent of the old reporter's adage: “If it bleeds, it leads.”

Here's the top story at USA Today at this very moment: USA Today headline

But here's the thing: To succeed at investing, you have to pull yourself away from the financial news. You have to ignore it. All it'll do is make you crazy.

Note: This is an updated version of the article I publish whenever the stock market crashes. I last shared it on 21 January 2016. Some comments are from previous versions of the piece.

Bad Behavior

The sad truth is that people tend to pour money into stocks during bull markets — after the stocks have been rising for some time. Speculators pile on, afraid to miss out. Then they panic and bail out after during a stock market crash. By buying high and selling low, they lose a lot.

It's often small individual investors like you and me who make these mistakes. During the Great Recession, one Get Rich Slowly reader shared the following story:

“I'm in the [financial] industry…I can tell you now that when the markets tanked during October [2008], people with less than (approximately) 100k behaved significantly different from investors with 100k+ in the market. Also, people who did not have an emergency fund behaved significantly different than those who did, generally to their own detriment.

“These actions lead me to believe that people with substantial assets tend to ride out the market and not worry about short-term fluctuations, whereas people with smaller amounts of assets lock in losses by removing assets from the market at poor times. Then, when/if they get back in, they’ve missed out on several days of big gains…

“As it was happening I was shocked by the clear income demarcation that seemed to separate rational behavior from irrational behavior. Do small investors make behavioral mistakes that keep them from becoming wealthy?“

Instead of selling during a downturn, it's better to buck the trend. Follow the advice of billionaire Warren Buffett, the world's greatest investor: “Be fearful when others are greedy, and be greedy when others are fearful.”

In his 1997 letter to Berkshire Hathaway shareholders, Buffett made a brilliant analogy: “If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef?” You want lower prices, of course: If you're going to eat lots of burgers over the next 30 years, you want to buy them cheap.

Buffett completes his analogy by asking, “If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period?”

Even though they're decades away from retirement, most investors get excited when stock prices rise (and panic when they fall). Buffett points out that this is the equivalent of rejoicing because they're paying more for hamburgers, which doesn't make any sense: “Only those who will [sell] in the near future should be happy at seeing stocks rise.” He's driving home the age-old wisdom to buy low and sell high.

Doing this can be tough. For one thing, it goes against your gut. During a stock market crash, the last thing you want to do is buy more. Besides, how do you know the market is near its peak or its bottom? The truth is you don't. The best solution is to make regular, planned investments — no matter whether the market is high or low.

Meanwhile, ignore the financial news.

No News is Good News

The mass media is in the business of selling news, and to do that, they sensationalize it. Fueled by the over-eager reporting, irrational exuberance can quickly turn to pervasive gloom. Neither state of mind makes sense. They're both extremes that lead investors to make poor choices.

For example, I know a couple of people who “invested” in Bitcoin when it was all over the news. Now they wish they hadn't but they bought into the hype. My brother lost two homes to foreclosure and declared bankruptcy because he bought into the U.S. housing bubble during the mid 2000s.

Meanwhile, the people I know who ignore financial tend to prosper.

To continue reading, please go to the original article here:

https://www.getrichslowly.org/what-to-do-when-the-stock-market-crashes/#more-487

5 Lies You’ve Been Told About Generational Wealth

5 Lies You’ve Been Told About Generational Wealth
By Pavithra Mohan

From the Recaps Archives, originally posted on 7/20/2019

From TNT --  Ify: This Article explains why RayRen continues to say NOT to gift large monies but to Educate your children, grandchildren... Article on Generational Wealth:

Here’s what you have wrong about people who inherit money.
5 Lies You’ve Been Told About Generational Wealth

The markers of generational wealth are manifold, from the promise of a good education to the security of homeownership. Wealth begets further wealth, but not always through inheritance of assets.

“Much of the transmission of wealth to the next generation goes through these earlier life processes, such as supporting children’s education, supporting their ability to purchase a home, or to get married,” researcher Fabian Pfeffer wrote in a recent study at the University of Michigan. “All of these—education, homeownership, marriage—in turn help you accumulate wealth.”

But the extent to which family money helps future generations retain and build on their wealth—or acquire financial literacy—is less marked than you might imagine. Here are some of the commonly held misconceptions about the beneficiaries of generational wealth.

1. Their Wealth Lasts Many Generations

We don’t have to look further than one Donald Trump to see how wealth can trickle down and set up future generations for success. But generational wealth is actually harder to maintain than America’s richest families might lead you to believe: About 70% of wealthy families lose their wealth by the second generation, and 90% do by the following generation.

One reason that happens is the next generation may not be equipped to manage the money they inherit. But it’s also that family wealth can be diluted as it is divided amongst children, especially if each has a different stance on how to invest or manage the family finances. (Think of the family jockeying on Succession.)

Some financial experts even recommend that—not unlike businesses—families come up with a “mission statement” to establish financial values and goals, in an effort to preserve wealth across future generations. 

2. Their Parents Talk To Them About Money

You might think parents with money share their financial know-how with their offspring. But that’s not necessarily the case. “Some parents don’t want their kids to feel like they have a huge landing pad or that they may not need to work,” says Emily Green, a financial adviser at Sallie Krawcheck‘s investment platform, Ellevest.

“A lot of times, they don’t talk to them about money at all.” That can mean parents not only don’t disclose how much their kids stand to inherit but also don’t necessarily offer guidance on how they should spend and invest their money.

“I find that a lot of them get to their thirties, forties, maybe even fifties and still don’t really know anything about money,” Green says. Sometimes, even financial advisers make assumptions about people who have money—presuming, for example, that they are well-versed in investing. In truth, the folks who inherit tens of millions of dollars may know less about money, and especially investing, than someone who saved a million dollars.

To continue reading, please go to the original article at

5 lies you’ve been told about generational wealth

Predictions Are Hard. But Here Goes…

Predictions Are Hard. But Here Goes…

Notes From The Field By Simon Black   March 12, 2020  Bahia Beach, Puerto Rico

We certainly live in extraordinary times.

Even people who have been irrationally dismissive of the Corona pandemic up until this point finally had to wake up and smell reality yesterday. The NBA. Tom Hanks. European travel ban.

Our human brains, while magnificent and inspiring, are also wired in bizarre ways. We’re filled with countless ‘cognitive biases’ which affect our judgement, usually for the worse.

Among them is that human beings often cannot accept the possibility that tomorrow could be radically different than today.

Things that were completely unthinkable just a few days ago have now happened. And pretty much everything is on the table right now.

So I wanted to spend a bit of time today thinking through some potential outcomes that might have seemed inconceivable before this outbreak.

I’m not suggesting these are foregone conclusions. But they’re definitely possible.

1) Supply chains will break down

Nearly everything you buy at the store or online is the result of a ridiculously complex, global system of commerce, finance, and logistics.

This computer that I’m using right now was sourced from hundreds of different materials—plastics, metals, etc. that were mined and produced from dozens of places. The component parts were manufactured by different suppliers, assembled in China, and transported on boats and trucks to wholesalers, retailers, etc.

The whole process involves countless people, dozens of companies, and thousands upon thousands of miles.

This system works great under normal conditions. But it’s not resilient. It’s unable to cope with severe global shocks like we’re seeing now.

I think we could see (and are already seeing) factory workers stop coming to work. Mail delivery could be curtailed. Or just imagine there’s an outbreak at an Amazon Fulfilment Center, and the company goes down to minimal staffing.

All of this will have an impact in the smooth production and delivery of goods around the world.

I don’t think we’ll have any sort of Mad Max shortages. But the virus effect could likely create scarcity, especially for anything that’s manufactured outside of your home country.

2) Rationing and export prohibition

Countries will become increasingly protectionist, especially with critical items like masks and medicine. We’ve already seen the German government blocking a shipment of 240,000 face masks to Switzerland.

And demand for several items is going to skyrocket. You might have heard about the toilet paper heists across Asia, or fistfights breaking out in Australia over antibacterial cleansers.

Here’s a photo that a friend sent to me a few hours ago of the hand sanitizer section at Walgreens-- almost empty. LINK

 This isn’t going to stand for very long before the companies themselves start to limit purchases, or governments impose full-blown rationing. And that leads to…

3) Some people will become totally unglued. Others will be saints

Let’s be honest— there’s already so much anger in the world. Strikes, riots, protests, Twitter rants… even armed thugs in the streets (Antifa) physically assaulting people with ideological differences.

Introduce a little bit of scarcity into all that anger and a few people will become totally unhinged.

Just think about how violent some shoppers can be on Black Friday, punching each other’s lights out in WalMart for the last big screen TV on special.

At the same time, this pandemic also has the potential to bring out the best in people. And countless others will be at their very best: respectful, generous, and responsible.

4) Curfews and martial law

This one is extremely realistic right now given that we already saw martial law in China, and it’s happening in Europe now too.

It could easily happen in the US, with state governments deploying the national guard to enforce curfews, or even the federal government deploying the military to keep the peace. It already happened in New York state, and we could see a lot more of it soon.

5) The Federal Reserve intervenes directly in the stock market, cuts rates below zero

It’s not remotely unprecedented for a central bank to buy stocks. Central banks in places like Japan and Switzerland took their total equity holdings to more than a trillion dollars last year.

And it’s totally reasonable that the Fed begins printing money again and buying stocks directly to prop up financial markets.

I do think that negative interest rates are nearly a foregone conclusion. The Fed’s headline interest rate is already as low as 1.5%, and the real economic impact of the Corona Virus hasn’t even been felt yet.

Just imagine how low they’ll go once people start losing their jobs. They won’t be bound by zero for long.

6) Some incredible discoveries and developments will come out of this

I’ve written this several times before—the world is not coming to an end. But I think it’s reasonable to assume that all of our lives are going to be a lot quieter and simpler for the next few months. No big outings, no big trips, and a lot of time at home with the family.

And that’s going to be whatever we make of it.

Back in the mid-1600s after an outbreak of the Bubonic Plague (more than 300 years after it originally surfaced in Europe), the University of Cambridge made the decision to close its doors for TWO YEARS in an effort to reduce the spread of the plague.

Isaac Newton had just completed his degree at the time. But his budding academic career had to be put on hold because of the university’s closure.

So he threw himself into independent study, retiring to a small farmhouse where he spent the next two years developing calculus, optics, and gravitational theory.

In other words, some of Isaac Newton’s most profound and lasting work came from his own quiet period.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/predictions-are-hard-but-here-goes-27525/?inf_contact_key=72b139cf549e6c41c2a0a12e1447904eb7af0999dac2af6212784c39e05d2aef#photo

10 Lessons Learned From 30 Years of Writing About Money

10 Lessons Learned From 30 Years of Writing About Money

Nobody Told Me By Jonathan Clements  |  February 8, 2020

I HAVE DEVOTED my entire adult life to learning about money. That might sound like cruel-and-unusual punishment, but I’ve mostly enjoyed it. For more than three decades, I’ve spent my days perusing the business pages, reading finance books, scanning academic studies and talking to countless folks about their finances.

Yet, despite this intense financial education, it took me a decade or more to learn many of life’s most important money lessons and, indeed, some key insights have only come to me in recent years. Here are 10 things I wish I’d been told in my 20s—or told more loudly, so I actually listened:

1. A small home is the key to a big portfolio. My first wife and I bought a modest house, because we worried that we couldn’t really afford anything bigger. I ended up living in that house for two decades.

Financially, it turned out to be one of the smartest things I’ve ever done, because it allowed me to save great gobs of money. That’s clear to me in retrospect. But I wish I’d known it was a smart move at the time, because I wouldn’t have wasted so many hours wondering whether I should have bought a larger place.

2. Debts are negative bonds. From my first month as a homeowner, I sent in extra money with my mortgage payment, so I could pay off the loan more quickly. But it was only later that I came to view my mortgage as a negative bond—one that was costing me dearly. Indeed, paying off debt almost always garners a higher after-tax return than you can earn by investing in high-quality bonds.

3. Watching the market and your portfolio doesn’t improve performance. This has been another huge time waster. It’s a bad habit I’m belatedly trying to break.

4. Thirty years from now, you’ll wish you’d invested more in stocks. Yes, over five or even 10 years, there’s some chance you’ll lose money in the stock market. But over 30 years? It’s highly likely you’ll notch handsome gains, especially if you’re broadly diversified and regularly adding new money to your portfolio in good times and bad.

Over the past decade, I’ve upped the bond position in my portfolio, so today—at age 57—I’m at 60% stocks and 40% interest-generating investments. (The latter includes the private mortgage I wrote for my daughter.) But long before then, I spent an awful lot of time debating whether to invest more in bonds. It simply wasn’t necessary.

5. Nobody knows squat about short-term investment performance. This is closely related to point No. 4. One of the downsides of following the financial news—or, worse still, working as a columnist at The Wall Street Journal—is that you hear all kinds of smart, articulate experts offering eloquent predictions of plummeting share prices and skyrocketing interest rates that—needless to say—turn out to be hopelessly, pathetically wrong. In my early days as an investor, this was, alas, the sort of garbage that would give me pause.

6. Put retirement first. When I was in my 20s, I remember a financial expert saying that, “If you don’t own a house by age 30, you’ll likely never own one.” I didn’t realize it at the time, but not only was this alarmist nonsense, but also it prioritized the wrong thing.

Buying a house shouldn’t be our top goal. Instead, retirement should be. It’s so expensive to retire that, if you don’t save at least a modest sum in your 20s, the math quickly becomes awfully tough—and you’ll need a huge savings rate to amass the nest egg you need.

To continue reading, please go to the original article here:

https://humbledollar.com/2020/02/nobody-told-me/

No, The World Is Not Coming To An End…

No, The World Is Not Coming To An End…

Notes From The Field By Simon Black  March 9, 2020  Bahia Beach, Puerto Rico

This is going to be a rough day for a lot of folks. But it’s one that I’ve been writing about for quite some time.

I’ve been saying for years that, at some point, there will be a severe financial reckoning. We wouldn’t know how, and most likely, we would have very little advance warning.

As an example, in June 2018 I wrote “whatever causes the next major downturn can be something completely obscure and unpredictable. And no one realizes it until it’s too late.”

That day is now upon us.

Financial markets have crashed around the world. Stock markets from Britain to Japan to Australia fell as much as 7% in a matter of hours, and are off 20% over the past few weeks. Oil prices crashed as low as $27 earlier and are down by nearly 50% from just 2 weeks ago.

And bond yields have crashed to lows that have never been seen before in the history of the world.

You can now loan money to the US government for THIRTY YEARS and earn just 0.85% per year. Or you could loan money to the German government for five years and earn NEGATIVE 1% per year.

Most of this is obviously due to the Corona Virus.

First thing’s first: DON'T PANIC.

If you’re like most people, you probably spent a good part of the weekend watching Corona Porn.

There’s so much of it right now… people making scary videos with grand predictions that you’ll be dead in a week unless you buy a HAZMAT suit or load up on their special supplement.

And in a weird way that stuff is strangely entertaining for us. Deep down, fear stimulates our brain chemicals and body chemistry so profoundly that the effects can be somewhat addictive. It’s why so many people enjoy horror movies.

But seriously-- the world is NOT coming to an end.

I believe a large part of my role in the world is to call bullshit wherever I see ridiculous complacency in spite of obvious risks.

This is why I write so much about unsustainable sovereign debt, overvalued financial markets, unfunded pensions, etc. Nobody ever worries about that stuff. They think it’s all going to be fine even though the facts clearly demonstrate otherwise.

It’s complacency at its worst, and part of my job is to hoist a giant red flag.

Frankly I’m compelled to do the same thing when there’s excessive panic. And that’s what I’m seeing right now.

So let’s rationally examine a few facts:

According to the CDC, roughly 50 MILLION people worldwide contracted the FLU over the past five months.

That’s right. The flu. 50 million people. That works out to over 300,000 people PER DAY, which is pretty typical for a flu season.

Moreover, the CDC estimates that more than 50,000 people DIED of the flu during this past season.

But where was the mass panic? Where was the stock market crash? Where was the hysteria?

Now, I’m not specifically comparing Corona/Covid-19 to the flu. Or to SARS, Ebola, Bird Flu, Swine Flu, or even HPV (which infected 14 million people last year in the US alone).

 These are all different things-- apples and oranges. For instance, Corona is relatively benign in the vast majority of patients, but it spreads more rapidly than the flu.

The point is not to hash out which virus is the nastiest, but to determine whether the panic matches the facts.

Frankly the Corona panic reminds me a little bit of life after 9/11 in the United States nearly two decades ago. People everywhere were terrified that terrorists would strike again in their home towns. They stopped going out, they stopped attending sporting events, etc.

In reality, though, people had a higher probability of being crushed to death by a vending machine than of being killed in a terror attack.

There have been around 4,000 people die in terror attacks over the past 40 years in the United States. Roughly the same number people died YESTERDAY from heart disease.

22 people in the US have died so far from the Corona virus over the past few weeks. According to FBI statistics, that’s half as many people who were MURDERED yesterday in Land of the Free.

Yes, Corona is probably going to spread quickly and the numbers will get a lot worse before they get better.

To be honest I’d expect a huge jump in infections once they start testing more people in the coming days. The infection rate will grow exponentially at first… and then likely slow, turn linear, and stabilize.

But try to keep it all in perspective. Again, the world is not coming to an end. And neither are you.

Having said all of that, Corona will absolutely have a huge impact—economically, socially, even politically.

For any country with major elections in 2020-- South Korea, Singapore, several countries in Europe, and obviously the US-- Corona will be a top issue… and incumbent governments could be easily unseated if they’re viewed as having bungled the public health response.

Economically, we’re almost certainly going to see a recession. Consumers aren’t spending as much, businesses aren’t investing as much, asset prices are falling… and neither the government nor the central bank has the power to stop any of it.

We’ll talk about the economic impact a lot more later this week.

But for now, again, try to keep a sensible perspective. Life can be a little bit scary when financial markets crash and the Internet tells us that we’re all doomed.

There are obvious challenges in front of us. But also enormous opportunities for anyone with the courage and presence of mind to keep a level head.

 To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

 https://www.sovereignman.com/trends/no-the-world-is-not-coming-to-an-end-27433/

10 Smart Things To Do Right Now — Instead Of Panicking About The Dow’s Plunge Or Coronavirus

10 Smart Things To Do Right Now — Instead Of Panicking About The Dow’s Plunge Or Coronavirus

Published: March 9, 2020 at 4:46 p.m. ET  By Elisabeth Buchwald

‘Freaking out doesn’t help.’ 10 smart things to do right now — instead of panicking about the Dow’s plunge or coronavirus

Worried about COVID-19 and the plunge in the stock market? There are healthy actions you can take

Instead of throwing yourself into a rabbit-hole of panic and anxiety, here are 10 ways to regain your sense of control. MarketWatch photo illustration/iStockphoto

First off, remember to breathe.

The Dow Jones Industrial Average DJIA, -7.78% and S&P 500 Index SPX, -7.59% plunged Monday, causing trading to be temporarily halted, as traders digested news of a possible oil price war between OPEC and Russia. The news did not come at a good time, which may be an understatement, given how rocky the markets have been in recent weeks on the back of the seemingly unstoppable, silent spread of COVID-19, the disease caused by the new coronavirus.

Rather than freaking out about the market’s rollercoaster ride, there are several steps you can take to improve your physical and financial health.

Hyper-ventilating about every rise and dip isn’t time well spent, experts said. Rather than freaking out about the market’s rollercoaster ride or the COVID-19 epidemic, there are several steps you can take to improve your emotional, physical and financial health. The World Health Organization has a set of recommendations for how to deal with stress stemming from the virus.

WHO recommends people limit the amount of time “you and your family spend watching or listening to media coverage that you perceive as upsetting.” It also recommends gathering information about the virus from a credible source like the WHO or a local public health agency. Financial advisers say the same is true for those who are worried about their 401(k) or their investments in their favorite stocks, whether it’s AAPL, -7.90% Google GOOG, -6.38%, Tesla TSLA, -13.57% or Facebook FB, -6.40%.

“Freaking out doesn’t help you stay healthy,” said Catherine Belling, a professor at Northwestern University, Feinberg School of Medicine, who studies the role of fear and anxiety in health care “It just makes you feel really bad and keeps you from doing the rational things that actually might help you stay healthy.” Instead of throwing yourself into a rabbit-hole of panic and anxiety, here are 10 ways to regain your sense of control.

1. Distract yourself from alarming headlines

If you’re a relatively young, long-term investor, don’t even look at your account balance It is too difficult at this point to predict the market’s levels years into the future, when young investors will be cashing out accounts such as their 401(k)s. Money that people are saving for short-term goals shouldn’t be invested in the market.

So instead of obsessively checking account balances, working out or socializing with friends can be more beneficial, she said Exercise has even been linked to financial health; a 2016 study from the American Heart Association found that individuals who exercised moderately paid about $2,500 less in annual health care expenses related to heart disease than those who did not exercise

Better yet: Do a job you can earn money for, like babysitting, dog walking or signing up for an app like TaskRabbit Extra money can go toward debt or savings. Just don’t distract yourself through “retail therapy”: Anxiety is linked to making financially risky decisions And shopping to relieve stress and anxiety can leave you in a worse financial state than before.

2. Take time to evaluate your budget

To continue reading, please go to the original article here:

https://www.marketwatch.com/story/freaking-out-doesnt-help-10-smart-things-to-do-right-now-instead-of-panicking-about-the-dows-plunge-or-coronavirus-2020-03-09?siteid=yhoof2&yptr=yahoo