How to Financially Survive COVID-19 by Warren Buffett

Let me borrow the word of Sterling Bank CEO, Abubakar Suleiman in his tweets, ''Rethink your business, move toward essentials, things people can’t live without and beware of the risk of currency volatility, don’t be caught exposed. Sourced locally''

He further advised employees to do more, rather than less as some of them work remotely, because the way to go if one is to be spared the axe as companies try to cut down costs, in order not to be jobless soon.

So, ears have been pricking up lately as Warren Buffett also shared some money wisdom about the coronavirus calamity and what to do in order for you to survive it.

Many of us know that, When Warren Buffett speaks, investors listen. This guy is a folksy financial guru, he is a billionaire and has a net worth of US$88.9 billion as of December 2019, making him the fourth-wealthiest person in the world. This make him to have enormous followers around the world and they get tips on how they can be wealthy, too.

Below is 5 points what the "Oracle of Omaha" has to say about the pandemic and credit card debt, investing in stocks and more.

The number one point is, Always be ready for the worst:

We don't call this man an oracle for nothing. The multibillionaire said during an interview in March: "I've always felt a pandemic would happen sometime."

If you recall, last year, he warned that we were due for a "megacatastrophe." It would be some kind of "total surprise" that would dwarf devastating hurricanes Katrina and Michael, Buffett warned his Berkshire Hathaway company shareholders, in a letter.

He said Berkshire, which is big in the insurance business (it owns Geico and other insurers), would suffer massive losses — but would be ready for business the next day.

A good way for you to prepare for whatever comes is by buying life insurance to protect your loved ones. In just 90 seconds, you can find multiple life insurance rates tailored to your family’s needs and costing as little as $1 a day for $1 million in coverage, depending on your age and where you live.

The second point is that, You should not carry credit card balances:

More than 36 million American workers has been layoffs and kept skyrocketing during this outbreak and lockdowns, Americans have been piling on more credit card debt: 47% now carry balances, up from 43% in March, and nearly a quarter say they've taken on more card debt amid the economic crisis, a survey found.

Turning to credit cards because of financial hardship is one thing, but Buffett says some people use them as "a piggy bank to be raided." He recently told his company's shareholders about a friend who asked what to do with a windfall. It turned out she also had credit card debt — at 18% interest.

"If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off," Buffett said he told her. "You can’t go through life borrowing money at those rates and be better off."

Whenever credit card debt seems overwhelming, a good first step toward getting rid of it is to scoop it all up into a debt consolidation loan — at a much lower interest rate than 18%.

Point number Three is, Be careful with stocks:

The coronavirus crisis is ravaging entire industries, including retail, restaurants and entertainment. Buffett has decided the damage to one particular industry is more than he can bear as an investor.

"The airline business — and I may be wrong, and I hope I’m wrong — changed in a major way," he said at Berkshire Hathaway's recent online shareholders meeting, to explain why the company sold off all the airline stocks it owned.

Buffett says people have been discouraged from flying, so "the world has changed for the airlines."

One of the carriers Berkshire dumped from its portfolio was Delta Air Lines, whose stock price has plunged by about two-thirds since the start of the year.

Buffett looks out his shareholders the way a robo-advisor can protect a Main Street investor like you. These automated investing services automatically adjust your portfolio to give you some cushioning whenever individual stocks or whole sectors tank.

The Fourth Point is to Stick to your long-term plan:

Warren Buffett says he's confident the U.S. economy will bounce back from the COVID-19 pandemic.

"Nothing can basically stop America," he said at the virtual shareholders meeting. "We haven’t really faced anything that quite resembles this problem, but we faced tougher problems. The American miracle, the American magic has always prevailed, and it will do so again."

But he also said no one knows what's going to happen, so investors should brace themselves for a potentially long recovery.

"You’re going to get a fine result if you own equities [stocks] over a long period of time," Buffett said.

Warren Buffett

In other words, you need to hold on tight during times like these. A financial planning service can help you stay focused with your investments. Today, you can connect with a certified financial planner online and inexpensively, to keep you on track with your long-term goals.

Point number five is to Take advantage of low interest rates:

Buffett became one of the wealthiest people on the planet by taking advantage of opportunities. He sees some fantastic opportunities right now, courtesy of the Federal Reserve.

"This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money," he told his shareholders.

The Fed "did the right thing" by cutting interest rates down to the bone, Buffett says.

For homebuyers and homeowners it's an excellent time to borrow: New and refinance mortgages are being offered at the lowest rates on record. Shop around and compare mortgage rates to land the best one you possibly can.

Abubakar final advice is that, Employers don’t want to shrink, if you can keep the business healthy, they will keep you. Think inside your isolation box, you may be surprised at what is possible.

Live below your means, save enough to last you 6 months in case of a job lose or Other emergency. Put at least 15 percent of your take home pay in a retirement account.

Our message is the kingdom of GOD. Our mission is to prepare you for it. 

Why not, If it's in your heart to help E. A Olatoye's blog, kindly visit here to support us. Remember none out-gives God. Thank you for spending your time on our site and improving your life.
How to Financially Survive COVID-19 by Warren Buffett How to Financially Survive COVID-19 by Warren Buffett Reviewed by E.A Olatoye on June 01, 2020 Rating: 5

No comments:

Your comments and recommendations will be appreciated

Powered by Blogger.