Most of the posts we try to put out are to present information like it would be in a classroom setting or as part of a college course. But continuing to talk about buying a car or marginal tax rates hasn’t felt right over the past couple weeks, so we took a break to try and absorb what is happening in our world. This is truly an unprecedented time in our lives. We, nor our parents, have ever seen anything like this before.
First, we need to stop worrying about ourselves and do what is best for our communities and our countries. We live in Eagle County, Colorado, one of the first hit locations due to the ski resorts and tourists coming here from all over the world. This community has been crushed by both the infections and closure of the ski areas which is the local economic engine, like gambling is to Las Vegas. However, because citizens here have listened to authorities on staying at home, practicing social distancing, and minimizing activities, our hospital systems are not overwhelmed. We are also fortunate to have some very intelligent people working in our Eagle County community hospitals who saw the danger and began ordering protective equipment in January, well before most other places and at the time when the President was telling us not to worry.
It is painful to see our country so underprepared, and that is likely the greatest lesson we can take away from this event. We need to listen to the professionals, not the professional politicians. While Governor Polis has done an excellent job of being honest and applying the right tools at the right time, had our country and our communities listened to the professionals and dedicated the necessary resources before this became a crisis, we would be in a much better position to fight, instead of simply react. Alas, we cannot change the past. I hope everyone understands the severity of this disease and does their part to slow down the transmission so our medical facilities can meet the needs of everyone who needs care. We are about to be in a terrible position of forcing people to decide who gets care and who does not. That was supposed to be an exercise in Ethics classes, not a real-world dilemma. Blessings to those who must make these impossible choices.
Another lesson we are all getting is to find out how prepared we are for a true emergency. While toilet paper panic buying can be rationalized as people just trying to do something to feel in control, there are a lot of people who are going to be financially destroyed as a result of this outbreak of disease. There is too much shaming and self-righteousness going on by people who have planned, when what we need is more compassion and understanding for one another. It makes it hard to be on social media when most posts are either people trying to make money or criticizing people for not having enough in savings. Locally, it is great to see the support to neighbors and small businesses.
So now what? We are all going to be on lock down for at least another two weeks, hoping to flatten this curve so we can reduce unnecessary early deaths. I don’t believe in using the words, “saving lives” as the one guarantee we all have is that we will die, but we can extend the lives of many by just staying in our homes to help reduce the speed of the spread.
Next, Financially what now? As always from Keep Yours, trying to help people navigate financial life.
It’s time to help people regardless of their situation. Regardless of how the stock market jumps up and down, the long-term economic impacts of this is going to be very deep and very drawn out. Unfortunately, as I discussed in great detail in December of last year, we were at the very top of a very long increase in debt and we were due for a debt correction before COVID-19 showed up. Americans were at the peak of debt for homes, cars, student loans and credit cards and business debt was equally bad. So, there is going to be a lot of collateral damage.
What can you do to protect yourself, your family and prepare to try to take advantage of this opportunity or just try to minimize the damage depends on your starting point. For some people, this is going to mean preparing to declare bankruptcy. Many small businesses will close, especially those in the hospitality industry.
If you have a specific situation, let us know and I’d be happy to discuss it. We are going to be releasing some new episodes focused on different situations, look at the macroeconomic and microeconomic impact of this situation and try to help as many people as we can. We also want people to use this time they have at home to take another look at their finances and make sure you have your family financial plan in place. Most of us put off writing our will, living will, medical power of attorney, and many of us don’t understand why we may need some estate planning. Stay tuned and let us know what questions you have, besides when the market will hit bottom.
I’m also open to answering your questions via email! Hit me up at dave@keepyours.org.
Watch our video on this here: