Hello Everyone... Let’s shift gears to start this week off right. We want to talk about all things finances! As people in the healthcare world most of us were never taught the basics so we decided to bring on Rachel Richards (our financial guru) back on the podcast to talk about financial stability during this pandemic. We discuss hacks on saving money, what to do with your money or how to make money during this time!
If you haven't listened to the podcast episode yet CLICK HERE. Come back after for these show notes:
Rachel Richards is a best selling author of not one but two books on personal finance.
"Money Honey" and "Passive Income Aggressive Retirement". She is also a real estate investor with over 35 real estate units in Kentucky, a professional speaker, a former financial advisor, and by age 27 she retired by living off of over $10,000 of passive income per month!
UMMMM... YESSSSS GOALS
What should everyone be doing right now?
First things first Apply For Unemployment
If you haven't yet you may want to do that now. Most states have expanded it to include unemployment and PUA. If you apply later you can get money back from when your unemployment period originally started.
Figure out your Rental and Mortgage Payments
Call your landlord or mortgage company and see what you can do. Some mortgage companies are offering forbearance plans. Others may let you delay the entire loan whereas, some will defer your mortgage payment for a few months but when you do start paying them again you may have to pay all of it at once or all the payments you have missed. Make sure you confirm what your mortgage company is offering.
Call your Credit Card Company
If you're still accruing interest make sure you try as hard as possible to pay your credit cards as usual. If not, you can call your credit card company to defer payments. Just make sure you find out about the accrued interest first.
Get a Part time or a Temporary Job
If this is something that will help you get by financially it's a great idea. Also there are ways to do this safely (social distancing and all) during this time.
For example, in some businesses you have the option to avoid any direct person to person contact. Many food delivery services allow you to leave the food outside somebody's door.
How do you think the Coronavirus will impact all of us?
Income loss is probably the biggest thing for most people during the next few months. Followed by getting back on your feet. This is why people always stress the importance of an emergency fun. You always want to have three to six months of financial security to prepare you for times like these. Now that this is happening, it is a great opportunity to learn from this experience and change your ways moving forward if this ever happens again. HOPEFULLY NOT but history tends to repeat itself.
What to focus on if you do have some extra cash?
Get invested in the stock market. Why? because when the stock market is down that is the time to invest and of course keep in mind to invest for the long term only. One thing is for certain, the stock market seems to always go up in the long run.
Any investing suggestions?
It is important to know the difference between active and passive investing. Active investing is literally day trading or mutual funds (where professionals make investment decisions). Passive investing is something like an index fund or ETF. These are automated, passive options which also happen to costs less money and typically carry less risk. Studies have shown that passive investments do as well, if not better than active investments!
Recommended Investing Apps?
Robinhood, Acorns, Betterment are all a good place to get started if you're a beginner. Others may want to use a discount brokerage like Fidelity, Vanguard or E-trade.
What is the benefit of Index Funds?
Diversification! You're invested in many different companies instead of an individual stock. The logic is if one goes bad others may be doing good.
What about Real estate during the Pandemic?
There has been mixed feedback about how the real estate market has been impacted. It is likely location dependent and the real estate market may continue to be impacted for the worst over the next few months. Regardless, Rachel believes it's a good time to invest in real estate properties. The reason why is it is a great way to build long term wealth! She loves investing in multi-family properties in particular, for a few reasons. A triplex (three unit buildings) for example involves 3 tenants. One may not be able to pay rent during this pandemic but the other two can pay for it which helps you continue to cover the mortgage or any other fees you may incur. These type of properties (multifamily) are typically, less volatile and less sensitive to some of these cyclical events in the world that may affect the real estate market.
Don't predict the market!
If anyone tells you that they know what will happen do yourself a favor and don't listen to them. Why? Because we don't know how the stock market will look like moving forward and it has been interesting to see how good the current stock market has been doing all things considered. The best and easiest way to invest may be via dollar cost averaging which is basically sticking to a specific amount of money you put in on a specified interval whether it be monthly, quarterly, etc.
We know all of this is very hard to try and do because we are always looking for the best deal and trying to lose the least amount of money as possible.
What should businesses be doing? Which business subtype do you believe will come out ahead?
Those who pivot their businesses will come out ahead! How can you do that with your business? Serve your customers right now! For example, there are many companies making masks to serve the community which may not be a part of their original business model. Another example, are delivery businesses doing no contact deliveries or switching your typical in person courses or lectures to an online one.
Opinions on the SBA loan
So basically you get a $10,000 advance which is a grant for your business and a loan! If you're a small business owner submit your application right away. It takes 10 minutes to do this and there is really no down side. If it works you may actually come out ahead or maybe get sucked in by taxes instead. Who knows.
What may the economy look like Post-Corona?
The economy will likely rebound completely just like the stock market. Like we alluded to earlier it is a great time to reflect financially and be better prepared for the next time this happens! This can happen again in 3, 5 or even 10 years however, it's not a matter of if this will happen again but a matter of when! People say the best security is a salaried full time position but Rachel disagrees with that statement because if that one job gets pulled from under you than what do you do? Rachel believes in income diversification and anytime you can add that in your life or in your financial security, that's a good thing. The point is, to create multiple income streams so if any of them are affected you have other ones to rely on.
The bottomline is: Whether it is a side hustle, passive income or another job make sure you do it, get on it and get that passive income stream going.
What should you do if you are struggling right now?
Your golden number is the number you're saving each month. Easy calculation is your monthly income subtracted from your monthly expenses. The goal is to increase your golden number. How do you do that? Well, there are two ways.
First, everyone always focuses on decreasing expenses which is great but there is a limit to how much you can decrease this number (i.e.: you can stop eating out but you can't stop paying your bills).
The second option, is to increase your income. For example, Poshmark is a great outlet to get rid of your clothes while simultaneously earning some CASH MONEY.
Secret Tip
Use Rakuten now!
Previously, known as E-bates it's a browser extension and app where you can get money back for basically everything you buy on any website. You get different percentages of cash back depending on the company/website. Every quarter you get back what is called a BIG FAT CHECK usually attached to a PayPal account.
Rachel's Recs
Her books obviously, as linked in the first paragraph!
Paula Pant, the podcast host of Afford Anything
The book, I Will Teach You To Be Rich by Ramit Sethi
Get your financial shit together
A 9 week online course by Rachel Richards
Note: Enrollment opens again in July and you can find it on her social media.
Where can we find Rachel Richards?
Instagram: @MoneyHoneyRachel
Website: MoneyHoneyRachel
NOWWW Let's talk about something really fun. So in November, Rachel released her second book about the journey to early retirement. The book, Passive Income, Aggressive Retirement lists 28 different passive income models and allows you to learn about all these income streams as well as, how to become financially independent!
With that said, we are doing a giveaway to give this book to ONE lucky WINNER. Head to @TheSecretScope for details about entry. GOOD LUCK!
That's all for this week, don't forget to leave us feedback, rate, review, subscribe and send in your questions so we can continue to improve as well as, provide you high quality content.
Disclaimer: The Content on our podcast/website is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website.