Why You Need a National Emergency Fund
.Here’s How Much Emergency Cash You Need Stashed if an Emergency Happens
Jaime Catmull GOBankingRates April 1, 2020
You’ve probably heard time and again that it’s important to have a rainy-day fund set up “just in case” something unexpected were to happen. But we’re now at a time when having an emergency fund is more vital than ever.
The coronavirus pandemic has already had devastating effects on the economy at large and, on an individual level, it has led to job loss and reduction of hours for many workers around the world.
Even if the coronavirus’ financial impacts haven’t hit you personally yet, here’s how to be prepared in case it does — plus how to set up a fund for unexpected future national emergencies.
Why You Need a National Emergency Fund
Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. When you can’t rely on accessing your funds electronically, you’ll need some legal tender to buy food, gas or other necessities.
“Whether it’s Mother Nature or some other disaster out of your control, you always want to be prepared by having some emergency cash on hand,” said Annalee Leonard, an investment advisor representative and president of Mainstay Financial Group. “Banks and ATMs may not be up and running for days after a strong storm. I recommend my clients have three to five days’ worth of spending money, just in case.”
How To Decide How Much To Save
How to Manage Your Finances During a Depression
How to Manage Your Finances During a Depression
By Enero Febrero
By all measures, it has been a bad month for the American economy. Whether or not we’re about to enter a deep full-scale recession — or possibly even a depression — isn’t quite clear yet.
However, it’s fairly obvious that the coronavirus pandemic has had a significant impact on the monetary outlook of virtually every person on the planet.
Given that fact, it’s important for business owners, investors, entrepreneurs, and professionals in all walks of life to understand how to manage their finances during an economic downturn. Thankfully, there are proven ways to help you do exactly that. Here are four of the most basic ones:
Don’t Panic!
One of the hardest things to do during a recession is to remain calm. After all, no one likes to see the stock market plummet, interest rates hitting near zero, or a spike in unemployment.
How to Deal With Unexpected Change
.How to Deal With Unexpected Change
By Karima Mariama-Arthur March 26, 2020
Change is inevitable. When you’re expecting it, the transition can feel easy. When you’re not, it can be devastating.
Without question, your perception of change influences your response to it: Will the shift produce a positive or negative outcome for you? Will it be challenging, causing you to stretch and experience some periods of discomfort? Or, will it inspire you to get up early and stay up late, preparing for its new and prominent role in your life?
For better or worse, here’s what to do when change rears its head and requires you to pivot with it:
1. Acknowledge that the change is the new normal.
Denying the existence of change rarely frustrates its staying power. Instead of rejecting change, our most rewarding course of action is to acknowledge its presence and effect on our way of life.
In a new and riveting TED Talk called Coronavirus Is Our Future, global health expert Alanna Shaikh shares insights on the global pandemic in a straightforward and approachable way. She makes clear that our collective, human experience is the new normal.
She urges that while we cannot escape the multi-faceted impact of this crisis, we can admit our vulnerability to it and appreciate its influence on our global ecosystem. To be clear, this is the first logical step in confronting any kind of change and initiating the way forward.
First Thing’s First-- I Screwed Up
.First Thing’s First-- I Screwed Up.
Notes From The Field By Simon Black
March 31, 2020 Bahia Beach, Puerto Rico
First thing’s first-- I screwed up.
Yesterday I wrote to you about the US government’s initiative to loan money to small businesses, and I was wrong about an important detail. https://dinarrecaps.com/our-blog/the-small-business-administration-is-now-bigger-than-walmart
I said the maximum amount of the loan was equal to 2.5x a company’s annual payroll expense. That’s incorrect.
The correct maximum loan amount is 2.5x a company’s average MONTHLY payroll expense over the past 12 months.
[The total amount that the government intends to shovel into the economy through this program-- $350 billion-- is still correct.]
So, apologies for the error… that’s what I get for reading legislation at 5am on Sunday.
A few readers alerted us to my oversight. And when I re-read the legislation to confirm my mistake, I couldn’t believe what I was seeing.
Honestly, a loan of 2.5x annual payroll made sense to me. It would give small businesses plenty of firepower to stay afloat for the long haul.
But this bailout is just 2 ½ months! That’s nothing. It implies that the government thinks everything will be back to normal by mid-June.
This is the “V-shaped recovery” theory-- the idea that, while the economy has come to a screeching halt, it will come roaring back in a few months… and we’ll see an economic bonanza by the end of the year.
Most of the world certainly seems to buy into this belief, swinging from one extreme to another.
Not even ten days ago the general mood was abject terror, fear, and hysteria. Today we’re back to complacency and misguided optimism.
How To Use Your $1,200 Stimulus Check
.How To Use Your $1,200 Stimulus Check
Here's how to use your $1,200 stimulus check from the government's coronavirus relief package
Aimee Picchi, USA TODAY March 30, 2020
Millions of workers and their families will receive a one-time check from the government as part of the coronavirus stimulus package. Most adults will get $1,200, while children will receive another $500.
For workers who have already lost their jobs because of the pandemic’s hit to the economy, that extra money will likely be immediately put to good use — paying rent, mortgages, utility bills and more.
But if you have a paycheck, what’s the best use of that money? Should you save it, pay down debt or spend it to help keep your local economy working?
It’s a tricky calculation given the unknowns facing many families, such as whether the pandemic will linger for months or if businesses will resume normal operations within weeks. Layoffs are rippling through the economy, not only hurting restaurant workers but professionals such as lawyers and insurance providers.
The ‘Small’ Business Administration Is Now Bigger Than Walmart
.The ‘Small’ Business Administration Is Now Bigger Than Walmart
Notes From The Field By Simon Black
March 30, 2020 Bahia Beach, Puerto Rico
As you’ve probably already heard, the US government unleashed a giant tsunami of money on Friday, passing a $2 trillion stimulus bill to help boost the economy during the Covid pandemic.
Let’s put that number in context:
$2 trillion is more than it cost to wage 18+ years of war in Afghanistan and Iraq.
It’s nearly THREE times the size of the bailout from 2008.
It exceeds ALL corporate and individual income tax revenue collected by the IRS last year
We are clearly living in unprecedented times… and this bailout is equally unprecedented.
How Much Gold and Silver Should People Own?
How Much Gold and Silver Should People Own?
By Len Penzo
Ever since I started writing about the importance of owning physical gold and silver as insurance against the inevitable failure of the US dollar, I’ve been receiving an increasing volume of questions in my inbox from folks curious to know more about precious metals.
With that in mind, here’s one that I received last week from Joshua:
How much gold and silver should a person own? I’m 38, with a wife and three kids. My only debt is a mortgage and a small bank loan. Going by your prep list for a possible financial collapse, I’m well prepared.
My plan is to start buying precious metals mostly as an insurance against dollar devaluation. So how heavily should a middle-class guy be buying precious metals, assuming I have an extra $1000 per month?
The Most Important Insurance We Never Buy
.The Most Important Insurance We Never Buy
By Len Penzo
It’s ironic, but bankers and fiscally irresponsible governments despise gold and silver. Why? Because precious metals demand accountability, that’s why.
In short, gold-backed currencies force responsible governments to live within their means.
That is precisely why, back in 1971, Richard Nixon was forced to nullify the Bretton Woods agreement, which was signed at the end of World War II, and permanently close the gold window.
As you might expect, Nixon felt he had no choice. The US had been living well beyond its means for more than a decade, printing lots of federal reserve notes to pay for expensive endeavors the country couldn’t truly afford, like the Vietnam War and LBJ’s so-called “War on Poverty.”
That, in turn, led to an increasingly devalued US dollar. So, in order to preserve their wealth, many of the world’s central banks — led by West Germany, France and Switzerland — began redeeming their rapidly depreciating US dollars for the gold stored in Fort Knox; so much so that by the time 1971 rolled around, America had only half the gold reserves it did in 1960.
The 50 Biggest Money Mistakes Household CEOs Make
.The 50 Biggest Money Mistakes Household CEOs Make
By Len Penzo
I’m not ashamed to admit I make mistakes. After all, everybody screws up occasionally; for us humans, mistakes come with the territory.
For example, I remember the time I decided it would be great fun to play Wii golf for eight consecutive hours. Unfortunately for me, my middle-aged left shoulder vehemently disagreed — after the fact, of course — and so I spent the next week popping acetaminophen tablets like they were M&Ms. I know.
It can be even more costly when we make mistakes managing our personal finances; I know I still make them from time to time.
How Will The Coronavirus Affect Your Personal Finances?
.How Will The Coronavirus Affect Your Personal Finances?
By J.D. Roth —12 March 2020 (updated 19 March 2020)
How quickly things change.
Last week, the coronavirus (or Covid-19, if you prefer) was a distant problem. It was something other people in other places had to wrestle with. Sure, there was a looming sense that maybe this runaway train was steaming our way, but it still seemed distant enough that maybe it'd stop before it reached us.
Not anymore. Now it's clear that the coronavirus isn't just headed to the U.S., it's already here in our communities.
I'm fascinated by the financial implications of the coronavirus. They're going to be huge — they're already huge — but I don't know who is going to bear the burden or how we, as a society, are going to make sense of this in the long run.
The stock market is tanking, obviously, and will likely continue to tank for some time. But I expect (hope?) that when the dust has settled, things there will largely return to normal.
Yes, I know it's impossible to make predictions about the market's direction. But I believe the current movement is largely due to the coronavirus and its immediate implications.
When this event has receded into the past — in a few months, say — I expect stocks to regain most of what they lost. Not all, but most. (And again: I could be full of shit. Don't make any market moves based on what I personally believe will happen. I'm just a random guy behind a keyboard.)
But outside the stock market, there are a whole host of financial implications. We're entering uncharted territory. I don't know what to expect, and I don't think anyone else does either.
Here are some of my questions.
What’s the Best Way to Give a Financial Gift?
.What’s the Best Way to Give a Financial Gift?
By Anum Yoon
When it comes to gifts, we all know it's the thought that counts -- which is why there are certain self-described gift-giving mentors who don't encourage financial gifts. Of course, those same folks have probably been on the receiving end of monetary ... ifts and were ecstatic.
As with all things in life, there’s a right way to give a financial gift, and a lot of that has to do with the recipient and their age. Here are some things to consider for the next time you reach into your wallet for a gift:
Gift a 529 Account