Difficult Times . . . Practical Lessons

Difficult Times . . . Practical Lessons

This COVID-19 pandemic has brought a fair amount of financial stress to many Americans. In addition to the various quarantines, social distancing, home-schooled kids and health concerns, many are also facing job layoffs, reduced hours, and budgets that are getting stretched too thin.

Last week, a client of ours, I’ll call her Angela, came in for a scheduled annual review.  Angela is just a hot-ticket.  She is a dynamic, funny, very intelligent, professionally accomplished woman.  She is in her mid-fifties and came up through the hawspipe to earn to top sales position at a financial institution in Boston.  We talked about what we’re each sharing with our clients about the current pandemic specific to their financial troubles. As I said, Angela is very successful in her field, and our conversation reminded me that my clients often have great wisdom to share from their own experiences. She told me a story about a time when she had been at her company’s sales conference in the middle of the Great Recession in 2008. Because of her sales success, she was invited along with several other top performers to share words of wisdom on navigating difficult times.

Angela mentioned that several people had gone up to the podium before her turn and shared some really thoughtful and philosophical messages, like, “Stick with who you are and build on it,” and “The true measure of success is what you do when you are experiencing difficulty.”  She said she remembered getting a bit nervous, since some of the things being shared sounded quite wise and almost spiritual in nature. She had planned to wing-it to a degree but was now struggling to come up with something that could hold its’ own with the other deep thoughts being shared.

Angela said, “Jeff, I was walking up to the stairs to the stage, thirty feet from the podium and still didn’t know what I was going to say.” I asked her what happened. She said that as she turned to face the five hundred-plus people in the auditorium, butterflies swirling in her gut, she just blurted out, “Have a budget and plan for your retirement!”  The audience roared in approval.

Afterwards the CEO approached her to tell her he enjoyed her “talk.” She said, “I started to apologize that what I said was so simple, especially when there were so many great words of wisdom being shared.”  The CEO replied, “Heck no! if it’s not practical, it’s not wisdom.”

An you know folks . . . many, if not most of us, are learning some difficult financial lessons as a result of the pandemic. Part of me wants to console people, whether they’re family, friends, or clients, that “this too shall pass.” I know many folks are truly suffering far beyond their financial situation. I am filled with gratitude that my family is safe and healthy, but unfortunately that isn’t the case for everyone. While I’ve done my best to encourage those around me, I’ve also certainly felt the encouragement of my wife, my kids, and many wonderful friends. I hope I will continue to offer kind words and things that my own experiences have taught me. And like my friend and client Angela, I also need to look to practical advice.  

So, the broad view of the economy now is not good. Unemployment is soaring and nearly fifty percent of the American public is feeling decreased confidence in their economic situation. The pandemic has had a significant negative impact on income, and as a result, on how we save and invest. Those who have thought about buying or selling homes are facing uneasiness as home tours and open houses move to video. And while many people are afraid to travel, those who do are purchasing travel insurance at record rates

Get this, nearly three-quarters of Americans are thinking about shoring up their plans for the current and future times of economic uncertainty. This includes beefing up their emergency funds and cutting back on discretionary spending. Those who are still investing should be working with retirement specialists to review their retirement system and incorporate down-side risk management into their plans.  

On the bright side, a lot of these folks say the pandemic has made them more likely to buy local as well as increase the amount they tip to the folks on the front-line, such as those delivering their groceries and food. This gives me added hope and reminds me that folks do still pull together as Americans when faced with a crisis. We need to keep encouraging each other, including helping those in need right now.  

And of course, we also need to take care of the practical aspects of our financial situation. The pandemic-related events are painful, but budgeting, investing, and retirement planning are lifelong endeavors. We must continue to focus on the long term and seek out the help of financial professionals to safely journey through the difficult times.  

So as always – be vigilant and stay alert, because you deserve more!

Have a great week folks!!

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, Mansfield & Southlake, TX. Jeff can be reached at jeff@cutterfinancialgroup.com.

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