Blessings all pon mi life and
Me thank God for di journey, di earnings a jus fi di plus (yeah)
Gratitude is a must, yeah
Me see blessings fall by mi right hand
Buss a toast fi di friends weh tek off heavy load
One time did sit down inna class and we bored
Den Oli say do road and mi gwan wid di road
Lyrics by Koffee --- "Toast"
Gratitude is a must, well said Koffee and a beautiful and fun song. A reminder life is short, thank God for the journey and the earnings that we have. I know many of us are following along and trying to position our family, friends, and colleagues in a position where we can come out of this COVID-19 pandemic crisis as as unscathed as possible. It is not easy but I remind people recessions are built into our economic model and life is uncertain --- so we must always stay ready for what life has in store for us. And yes Koffee me thank God for the journey, the earnings are just a plus..they cannot replace family, friends, memories, or life itself. So this article is to stop and recognize the hard work of friends, family and readers. I think about all those hours I used to spend in the gym, on the football field, and on the baseball diamond. Practice helped me during the most difficult moments of a game. I relied on the skills I had practiced day after day. So "we" must all do the same in life --- keep your head down during adversity and keep your eye on the greater prize. Here is how we are surviving and thriving through the Covid-19 pandemic:
Liquidity is Key
Remember during a crisis, cash is king and debt is debt is not your friend because the people that provided you with that debt are afraid you won't pay. So rule #1 is to get your hands on cash.
Rainy Day Funds - Me personally I have a rainy day account that is just for these times. Pandemic, loss of job, emergencies.
Stock Funds - I got liquid here as well. It's easy to sell like I did in my 401K account and go to cash. But in my brokerage account I sold a few winners and reinvested in losers. I also bought some new stocks and I hope to ride them on the way up
Assets - Another popular way to get liquid is to tap your home equity. Also called "Cash-Out Refinance", you can borrow equity from your home. Readers and friends have contacted me about how they were able to successfully tap equity and are sitting on a war chest as small backstop through this crisis or to fund their next investment. But if you weren't in the gym with us, you'll find now that banks are reducing their risk and that means they are closing off this popular source of getting cash.
Debt is Not Your Friend
The most difficult thing during a crisis is paying debt when your primary source of funds dries up -- reduction in hours, loss of job, furlough. Hence why liquidity is key to hold you over.
Refinance - If you were in the gym with us. You used this time to refinance as much of your debt that you have. You can have good debt and bad debt but all must be evaluated. As mentioned above, I know of readers that refinanced, I just refinanced and dropped over 1 full percentage point off of my mortgage rate. Got the great news today the loan is closed.
Cutting Costs - I recommend reviewing all of your costs. You choose what is necessary and what is a nice to have. But don't be scurred, all of your debt or costs need to be revisited. This is the fun part --- where you prove you are the boss of your life/household/path. Make a list and reach out to every vendor and see how you can renegotiate terms. First, they should value and covet your business. The biggest risk to a vendor is losing a good customer. Second, the next big risk is a customer who can't pay. So work out better terms or leave for a new vendor. If you cannot pay, talk to them about your hardship --- credit cards, student loans, and many utility companies will work with you on payment plans or temporary forbearance. Over 7% of all mortgages (needs fact checking) are in forbearance so there is no stigma if you lost your job or have fallen on hard times. Many business people I know even go a step further and reorganize their corporation --- this is a fancy term for bankruptcy. Nothing to be ashamed of...you never want to get into debt so deep that you'll never really be able to pay it off.
I'm having fun with it and call it board meetings -- I just called Comcast and didn't like their answer so we are switching to a new vendor. For insurance, I reached out to a consultant who is calling a number of providers to find me the best insurance plan for my family. If you don't meet my demands in my board room, we jump ship. See ya Geico. But read the fine print and avoid long-term contracts unless they are truly in your favor.
Go on the Offense - My favorite thing is when the world is pulling back to find those pockets to begin investing. When things are at there darkest hours, I think of myself as an explorer looking for those rare gems. Again, my friends and family are already pouncing. Toast to my little brother purchased his first home and I know of friends who have offers on the table. If you look back, during the last major crisis is when I bought my home --- I did the math and prices in the city of Chicago had dropped roughly 40% since the peak. Remember my candy bar analogy, I only remember when Reese's Cups were 50c. So you're gonna have a hard time talking me into paying anything more.
Now that I've refinance my home, I'm going to have a board meeting on my rental property...if my bank is smart they will come to the table with a good deal. After that, I plan to begin search on my 3rd property. This will take lots of research because my next investment has to earn the right to use my hard earned money. Hopefully this next property can be the stepping stone to fund an empire of diversified property. I guess you can say I have dreams like Lucious and Cookie in the TV show Empire.
Moment of Prayer --- No matter how successful you are, there are variables that are out of your control. I saw the disgusting murder of a black man in Minnesota and I got emotional. Once again, the snuffing out of an innocent life was on full display for the world. It reminded me recently of the time, I was returning from the hospital to go to work and got pulled over. I was checking in on my critically ill father and the police pulled me over for speeding at 8AM in the morning (even though I was not given a ticket). I had recently watched the movie "The Hate U Give" --- and rolled my window down quickly and put my hands on the dashboard. The cop recognized how serious I was taking this event and commented that this is not the way to start you day huh. I stayed quiet because at that moment all I could think of was my critically ill father, my youngest daughter, and my pregnant wife. I have a family to come home too. And if someone took that away from me ---- they don't deserve that right. I tell everyone to please be safe from the Covid-19 virus but to my people of color I also have to tell you to please be safe AT ALL TIMES. God bless you all
