- Personal Finance, Politics
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Jasmine Presley - Personal Finance, Politics
Just stop right here and BREATHE. The sky isn’t going to fall (completely) and we are going to live through what feels like an apocalyptic nightmare. The coronavirus pandemic understandably has everyone in a fear frenzy. Grocery stores have been bare for days, businesses are closing, millions of job losses are projected, and the stock market is plummeting while death tolls continue to rise. All 50 states and D.C. have confirmed at least 11,000 cases of coronavirus and 164 people have died (CNN World, 3/19/2020). Government officials are advising us to practice social distancing to help contain the spread of the virus and announcing economic relief to prevent people from going bankrupt. Take another deep breath- I know it’s unbelievable that our fast-paced, privileged American ways have come to a screeching halt. I challenge you to think of what good can come of this…
Are you panicking or planning?
I’m honestly surprised that my anxiety hasn’t gotten the best of me during this global crisis. The inner work that I have been implementing must be paying off because my mental approach to the coronavirus has been calm and fearless. It’s like the world is crumbling around me but I still have internal balance, and for that I am grateful. In the state of KY, restaurants, salons, theatres, bars, and most businesses have closed; even the KY Derby has been postponed until September! Small business owners and entrepreneurs are praying their businesses will recover and their livelihoods aren’t in jeopardy. Schools have closed down for weeks, which has created a ripple effect in the workforce as some parents struggle to make arrangements for childcare. I’ve never witnessed so much chaos in my lifetime, honestly.
Most people are understandably panicking. They are hoarding groceries, toilet paper, ammunition, and selling off their stocks. They are spreading fear, perhaps not realizing that fear weakens the immune system. Unfortunately, many Americans are already feeling the financial impact of the novel coronavirus as retirement savings take a hit. Now we are faced with big financial decisions motivated by faith or fear: pull the money out or stay the course? These are questions that you should present to your financial advisor so you have guidance during the decision making process.
*Disclaimer* This blog article will combine fact & opinion. So again, consult with a financial advisor to gain clarity on what to do in your specific scenario. It is suggested that you get a non-conflicted, fee for service advisor, who accepts fiduciary responsibility.
Those who have studied the history of the stock market and have faith in it’s recovery are planning for future financial gains during this time. While some people are selling their stocks, there are still a few people entering the stock market and/or buying during these times of volatility. Since stocks are being sold for cheaper in the current market, those who are buying get more shares for their money.
Several Americans are also cashing out their 401k to put the money in a safe haven, while others are choosing to stay the course and leave their money invested. Although I wouldn’t recommend over-checking your 401k balance right now, it is a good idea to revisit how your assets are being allocated. Be sure to diversify your allocation to mitigate risks.
Let’s also be mindful that nearly half of Americans do not have a retirement account. The sooner you start planning for retirement the better. While employers sponsor 401k plans, a Roth IRA may be ideal for self-employed people and small business owners. Here is a breakdown of some of the other differences between a 401k and Roth IRA:
As you can see, there are clear pros and cons. I have a 401k and Roth IRA because I think they are both excellent wealth building tools. Individual Retirement Accounts offer traditional investments like stocks, bonds, mutual funds, and CDs. Self-directed IRAs are growing in popularity among retirement savers and investors. SD IRAs offer non-traditional investments, allowing you to invest in real estate, precious metals, tax lien certificates, and more.
For those who have implemented Dave Ramsey’s 7 Wealth Building Baby Steps, I bet you are so thankful that you have access to an emergency fund. Financial experts suggest saving 3-6 months of expenses for an emergency, like the one we’re in now. The added peace of mind is priceless. If you haven’t started an ER fund, I highly recommend you do as soon as you’re financially stable enough. Even if you start with $25 a month, just start building!
Many Americans retire poor and I refuse to be another statistic. I know it’s hard to think too far into the future with all the coronavirus fears, but I have faith that I will see you on the other side. Please stay safe and healthy. Also, be sure that any money moves you make during this national emergency are strategic. Finally, if you’ve decided that you should be taking this wealth building journey with me, be sure to subscribe to the blog.
Let’s elevate!
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