A Conversation About COVID 19 with Shannon
A Conversation About COVID-19 with Shannon
In light of the recent events, I felt like I needed to have a conversation, similar to conversations I am having with my team and with my clients. I wanted to address you directly and talk through what is going on in the markets, given COVID 19 and just in general.
What are we drinking?
Shannon — Bota Box Nighthawk Black
Notes
Shannon was in Chicago last Thursday, when the decision was made to close the Financial Gyms and have everyone work remotely for the next two weeks, and potentially longer.
On Friday, Shannon flew back to New York, and everything became very clear and calm for her. She sent an note of encouragement to her team, because she is not afraid of what is going on, but she is concerned for the staff who are concerned.
The Gym implemented daily meditations and created a new Slack channel (#positivevibesonly). In times like these, it is like being in the middle of a tornado.
The Financial Gym had a new team start on Monday, March 16th (the first day of WFH) and Shannon told them that she is meant to be here. This is her purpose and she is meant to be in this seat at this time. She is only afraid of two things: heights and confined spaces. She is not afraid of what is happening or what will happen, but she is empathetic to those who are afraid.
Shannon has been through three recessions since she started working. This one looks different, but she has seen it before. Shannon was working in financial services after 9/11 and that was much scarier, because it was an unknown enemy who was extremely violent. This enemy can be killed with soap and water, common sense, and distance.
Somebody’s purpose is to help us solve this problem. This is their chance to live their purpose. It is through these challenging times that greatness comes through.
What do you do when people are hurting and you see bad out there? You look for the helpers.
Shannon is focused on being there for her team, because this is the first recession for many of them. The last recession was over 10 years ago, and we are long overdue. This is dramatic and painful, but we will get through this.
Whenever you see market disruptions and supply/demand disruptions, the only thing that levels it out is government intervention. A lot of the programs that were implemented in the depression and the 2008 recession are still in place today.
The markets are in a place right now where they aren’t happy. There are so many feelings being traded in the markets right now. At some point calmer heads will prevail and rationality will come back, it will just take time.
Social media is much more prevalent. Ten years ago, there was only Facebook, and people were not posting as actively. Everything is magnified by social media.
Take a deep breath and give yourself perspective.
Shannon and the financial trainers are refocusing clients on their plans. We are at the beginning of a recession and this is normal. Recessions usually happen every three and a half years, and it is unfortunate we haven’t seen one in over 10 years, because many have never seen one before.
We will get out of the recession before the market recovers. It took the market about four years to recover from the last one.
Think about your plan. How are you going to survive and manage through the next 12 to 13 months. That is how long it took the last time to recover from the day to day pain.
Do you have an emergency fund? If not, now is the time to start one. Examine all of your expenses — is everything you are spending on completely necessary? Will you be able to make it through the next year? Will you need a roommate? Will you need to sell your house? You may need to make challenging decisions.
Click here to listen to Jess’s story about home foreclosure.
A lot of people will lose jobs. What would that look like for you?
Click here listen to the episode about losing a job.
Now could be the time to apply for a personal loan to give yourself leeway or change credit card debt to 0 percent interest. If you have your job, now may be the time to refinance your home.
The good news is that student loan interest is being paused. If you lose your job and you have federal loans, you can go on hardship plans, so make sure you look into that and call your loan provider.
Checklist:
Do you have an emergency fund?
Cut back on expenses
Look at all debts and take advantage of the lower rates
Make a plan
You should not have your emergency fund invested. For your other investments, do you need the money in the next two to four years? It will take a while for your investments to recover.
The low on the S&P in 2008 was 683 and now we are at 2400. It will come back. Once the market hits a limit, it is likely to go there again.
If you are going to retire in the next year or two, you are not going to use your entire investment portfolio the day after you retire. If you live to age 66, the probability that you will live to age 80 is about 90 percent. That money needs to last you 20 years — you don’t need it all right away.
In 2008, nobody knew when the market low was until afterwards, and when it started going back up, it didn’t stop. The people who got out didn’t know when to get back in.
We are going to be in this a while. Find your grounding and what is going to get you through this mentally. If you are an extrovert, reach out to your teammates who are extroverts for connection, post something in the Martinis and Your Money Facebook group, etc. Find the things that are going to bring you joy and redefine it.
The Financial Gym bus tour for Financial Literacy Month is happening April 1, in Seattle, and the tour will now have more virtual components. Financial literacy is everything in times like these. Physical, financial, and mental health are everything. Financial health keeps you mentally and physically healthy.
If you are a Financial Gym client, and you lose your job, The Gym is waiving fees. The Gym is not here to profit off of your hard times. If you have been thinking about joining The Gym, now is the time to invest in yourself.
Make sure you have a plan in place and know what you are going to do over the next 12 months. The Financial Gym team is here to help.