What If It Was Me
Today I was thinking, “What if it was me?”
I’ve always tried to run my company and business by running my decisions or recommendations through that filter. What if it was my family?
The Mission Statement for SAFE Harbor Financial is: ”Our goal is to conscientiously provide Estate & Retirement Financial advice consistent with what we provide for our own families.”
So, accordingly, I called my son who works for a music distribution company and asked him about his 401(k) he told me that he had lost about 25% in the past three weeks. I gave him the following advice and said that this is what I would do if it were me with a 401(k) or any amount of money in the market right now regardless of age or retirement status. I said,” Go into your 40109k/broker account, get as SAFE as possible right now (money Market, cash). When you suffer a wound, the first thing you do is STOP THE BLEEDING!”
Once you have a pretty good feeling (your gut, financial talking heads, Kiplinger, etc.) that we are very near bottom, then jump back in as aggressively as you can stand because NOW there is SO much more room to grow -practically nowhere to go but up! My son is in his 40s, so that was appropriate. If you’re retired, of course, you should be more careful to risk anything because time is not on your side. When you’re retired, there are more variables, so it’s not cut and dried.
Do you have TIME to recoup losses?
Can you stand further losses if the market still has not reached the bottom? When it comes to retirement, my advice generally is, “If you don’t have much, why risk the little you have? And if you have adequate money to live on, considering inflation, health issues, and life expectancy, why risk anything at all?”
I believe that unless you have “Stupid Money” (the kind that losing $50,000 or more wouldn’t cause you to worry-play money). You shouldn’t take any risk with your nest egg. That IS stupid!
These are my personal beliefs about our current crisis. I feel very strongly about this. In not any particular order:
- I think this has changed everything. This is a turning point, not just in America but for the world.
- This is a new reality, and we will have to get used to this, and the restrictions that may come with it-I don’t believe we’ve seen the full impact yet. Things will get worse before they get better.
- Whole industries are, after three weeks, struggling for their very existence. Airlines, hotels, restaurants, cruise ships, professional sports, casinos, movie theatres, just to name a few obvious ones.
- The two trillion dollar stimulus package is a drop in the bucket-a finger in the dike. When that runs out, then what?
- Mortgages will go into default, maybe worse than in 2008. This could all be worse than in 1929.
- Has anything ever stopped Church Services? It is serious, folks.
People are already going stir crazy—cabin fever. I’ve read domestic abuse is up. People are buying guns and ammo who never considered it before (my brother in law is one). Hopefully, all of these new gun owners are going to be responsible and take basic gun safety classes.
Will there be riots? Quite possibly. Crime will go up. States are releasing Prisoners, and not just nonviolent ones, to ease overcrowding and Coronavirus concerns. I know there will be new industries, new businesses created; there will be many who will shut their doors forever.
I apologize for the Gloom and Doom. My purpose is to say that I’ve told both my son and daughter the same things that I’m telling you. I told them to get safe for now, stop the bleeding. Get back in the market when all signs point to ‘there’s nowhere to go but up’ if you’re still working. If you’re retired, get back in IF you have “Stupid Money.”
“What if it was me? It is, and this is what I’ve done and told my own family. It works for my wife and me; I think it will work for you, too.
For my clients who followed the advice that my wife and I have taken, other than an inconvenience, this crisis hasn’t hurt us. We, my clients, and I have Guaranteed Income for as long as we live-no matter, virus, wars, stock market crashes, etc. We don’t have to worry if we live too long-our income will continue no matter how long.