BOTTOM LINE
Money-management options for tough times
Someone once told me that as an asset manager, you get paid to do one thing: have an opinion. You must provide your clients with a strategy that will ultimately benefit them in the long run. In times like these, it’s easy to throw in the towel or become a pessimist, but let’s take a look at some positive actions you can take for your investments.
RETIREMENT OPTIONS
If you currently have a 401(k) or other retirement plan, now is a great time to move money into some good companies that may have been previously too expensive. The markets moved up so fast, many investors missed the big run, so now is a great time to take advantage of the downturn. Look at companies with strong cash flow, or quality mutual funds that have had huge drops in their price. Also, if you need access to your funds during these times, there is something called a hardship provision that allows you to withdraw or borrow up to $100,000 without the 10 percent early withdrawal penalty if you are under the age of 59½. Consult your tax adviser or financial adviser for details.
BUY OR REFINANCE YOUR HOME
If you are looking to purchase a home, now is a good time to do so. Today’s rates are some of the lowest we’ve ever seen. Personally, I am in the midst of refinancing my home. I called my local mortgage specialist; we discussed what I was looking for in a loan and the options that are currently available. Not everyone will have the same objectives— some will want to stay in their home forever and others will have a time frame. I saved 20 percent on my monthly payment, which I find to be substantial. Now is the time to call your local banker and have a discussion.
For small-business owners, the government is providing support through the Small Business Administration program. The details of this program are as follows: If you have fewer than 500 employees, you can apply for the Payroll Protection Plan. This plan will provide business owners
with a forgivable loan amounting to two-and-a-half times the monthly payroll as long as the business owner adheres to the program requirements and uses the funds to pay his employees, utilities, rent and other viable expenses to keep the business operating. Failure to do so will auto-convert it to a loan that will have to be paid back in the amount that was not used for business expenses. If you want more information, contact your local community bank; they appear to have a good understanding of the program.
BOAT OWNERSHIP
For boat owners, now is the time to take advantage of this downturn. Crude oil is down over 50 percent; and it’s the lowest it’s been in years. Fuel prices are also at unprecedented lows, so fill up the boat and take your family fishing. I can’t think of a better way to spend the day.
Now is a great time to head to the boatyard and get some work done, if you can get in. One of our local yards has a two-month waiting list, which is an indication that the marine industry is still in good shape.
Maybe it’s time to step up and prioritize what’s important to us. I’d like to mention the five F’s—faith, family, friends, fishing and finances—not necessarily in that order. We are all in the same boat, and all are affected in some way.