Personal Financial Stuff - Printable Version
+- The CardBoard (https://thecardboard.org/board)
+-- Forum: Emergency (https://thecardboard.org/board/forum-11.html)
+--- Forum: Covid-19 (https://thecardboard.org/board/forum-12.html)
+--- Thread: Personal Financial Stuff (/thread-19106.html)
+- The CardBoard (https://thecardboard.org/board)
+-- Forum: Emergency (https://thecardboard.org/board/forum-11.html)
+--- Forum: Covid-19 (https://thecardboard.org/board/forum-12.html)
+--- Thread: Personal Financial Stuff (/thread-19106.html)
Pages:
1
2
Personal Financial Stuff - Langdude - 03-16-2020
Hello all.
I asked this question in the big thread, but it got buried, or people lost interest, but I thought I'd raise it again.
I am concerned not only about the effect of the coronavirus pandemic on the economy as a whole, but, selfishly, on the effects of the market on my family's meager savings, including our IRA. We are not wealthy; I am a college professor (think regional median household income), and my wife is a hospital chaplain (which makes next to nothing; quite a taxing job at the moment). So I am concerned.
I know that many of you either work in the financial sector, or just know a lot about it. I'd love it if you could address one or more of the following:
- Is there anything ultra-urgent that I should know or be doing with our money in light of the situation in which we find ourselves?
- Is there anything important, but perhaps not as urgent, that I should know or do in light of the current situation?
- Are there any good and basic resources to help me learn about the market, finance, etc. I think I am coming to see that these are good things for me to know more about, and perhaps on the other side of this, I can be more intentional about our investments.
Thanks, friends.
-m.
RE: Financial Stuff - Snorlax94 - 03-16-2020
I'm editing my response.
You question seems to be of two parts:
1) You seem particularly concerned now.
My general advice is that I am not aware of Something Big that people should be aware of. There are some horrific possibilities out there, but there are always horrific possibilities out there, though, there are some more now. While I have some funds on the sidelines waiting for a good price, I do not recommend newcomers to try to time markets, unless there was some special circumstance. If you had some special insight due to your expertise (like medically, you knew things were far better or worse than appeared, or geopolitically, you thought this could lead to war), then you might have some special insight into the situation that has not been factored into the prices.
But otherwise, assume the current prices factor in the current possible upside and downside surprises. Personally, I think they could factor in some more downsides, but not enough that I'd recommend a newcomer to actually try to time things, especially if you don't pay attention to markets.
2) You are new to investing / financial planning.
One piece of advice is to form a network of co-workers/lunch buddies and to talk personal finance with them. For example, if you live in a college town with very low costs, maybe some friends buy properties and rent them to students. Your peers may have some ideas for ppl in your situation/geographic location/opportunities. If there is a pension there, one of your peers may know how it works. unless all of your peers are French Literature professors, in which case definitely don’t do what they’re doing (just kidding)
RE: Financial Stuff - cardcrimson - 03-16-2020
(03-16-2020, 08:58 PM)Langdude Wrote: my wife is a hospital chaplain (which makes next to nothing; quite a taxing job at the moment). So I am concerned.
Thank her for her work. My mom recently had an extended stay in a hospital, and eventually passed. The clergy at the hospital were fantastic and of tremendous support for her and me, especially as I was by her side for much of her stay. The visiting sister was great too. I will forever have them in my heart.
May God keep your wife safe during these times!
RE: Financial Stuff - akiddoc - 03-16-2020
I put almost all of my retirement money into cash in early February. I left some in a medical mutual fund. I think those stocks will be relatively stable through the year. I knew what was probably going to happen. I told some close friends to do the same but they were unconvinced. I'll buy back in at some point this year. Whether I come out 20% ahead or 40% ahead it'll be worth it. In 15 years it will make a pretty big difference. It was probably difficult to see what was coming if you are not in the medical field. My friends are in the medical field and they still didn't see it. Add to that the ridiculous exuberance in the market recently and I was convinced to pull out. I guess if I was really smart I would have put some of that money into gold or a bond fund.
RE: Financial Stuff - fullmetal - 03-17-2020
akiddoc, the bond market is actually suffering too. Cash is king, and you did well.
RE: Financial Stuff - magnus - 03-17-2020
With the caveat that I did not sleep at a Holiday Inn last night so anything I say should be taken with a grain of salt, there seems to be a correlation between each "step" that the government takes and the market dropping. So I guess I'm wondering...how many more steps do we have? By steps, I mean desperate actions to counteract the spread of the virus. Is lockdown the last step? Or are there other ones that could happen before that or after that?
RE: Financial Stuff - stupac2 - 03-17-2020
(03-17-2020, 09:44 AM)magnus Wrote: With the caveat that I did not sleep at a Holiday Inn last night so anything I say should be taken with a grain of salt, there seems to be a correlation between each "step" that the government takes and the market dropping. So I guess I'm wondering...how many more steps do we have? By steps, I mean desperate actions to counteract the spread of the virus. Is lockdown the last step? Or are there other ones that could happen before that or after that?
Lockdown is the last step, though there are various types. The bay area's current one is more porous that Italy's, which I believe is more porous than Wuhan's was. But what we're doing now is basically the last resort.
The caveat there is that the federal government can't order this (although I suppose they might try), it's up to states/counties/cities to do it. Hence why Seattle and the Bay Area are under lockdown, but I'm not sure anyone else is (although I may have missed it).
Of course, it being the last step doesn't mean it will work. The markets will really go haywire if we do end up hitting 70% of population infected and millions dead.
RE: Financial Stuff - BostonCard - 03-17-2020
I guess the final step is martial law, soldiers in the streets and enforced house arrest for virtually the entire population.
BC
RE: Financial Stuff - Mick - 03-17-2020
(03-17-2020, 02:48 PM)stupac2 Wrote: Of course, it being the last step doesn't mean it will work. The markets will really go haywire if we do end up hitting 70% of population infected and millions dead.
94% to 96% of deaths happen post-age 65. If 70% of the 330 million US residents are infected, that's 231 million. If the mortality rate is 1%, that's 2.31 million dead, with about 2.24 million over the age of 65.
RE: Financial Stuff - chrisk - 03-17-2020
(03-17-2020, 02:48 PM)stupac2 Wrote:(03-17-2020, 09:44 AM)magnus Wrote: With the caveat that I did not sleep at a Holiday Inn last night so anything I say should be taken with a grain of salt, there seems to be a correlation between each "step" that the government takes and the market dropping. So I guess I'm wondering...how many more steps do we have? By steps, I mean desperate actions to counteract the spread of the virus. Is lockdown the last step? Or are there other ones that could happen before that or after that?
Lockdown is the last step, though there are various types. The bay area's current one is more porous that Italy's, which I believe is more porous than Wuhan's was. But what we're doing now is basically the last resort.
The caveat there is that the federal government can't order this (although I suppose they might try), it's up to states/counties/cities to do it. Hence why Seattle and the Bay Area are under lockdown, but I'm not sure anyone else is (although I may have missed it).
Of course, it being the last step doesn't mean it will work. The markets will really go haywire if we do end up hitting 70% of population infected and millions dead.
Bay Area is not under lockdown. It is shelter-in-Place, a significant difference. Many activities are still allowed that would not be under a lockdown. More areas are rolling out the shelter-in-Place.
It will take a few weeks to see if the curve has been flattened. The governor is indicating that schools may not reopen until fall.
RE: Financial Stuff - magnus - 03-17-2020
Can't imagine schools will open physically before fall. Even if the curve changes, opening schools reopens the potential vectors.
In other news, Canada and US are about to close borders with each other for non essential travel. Dow futures were already falling. Guessing tomorrow will be another drop in the market. (Though I'm usually wrong about the market so...)
RE: Financial Stuff - fullmetal - 03-18-2020
I really wish the markets would suspend trading for a little bit and let all the finance ppl go isolate themselves at home. (I'm assuming they're not? Maybe they are?)
RE: Financial Stuff - Mick - 03-18-2020
(03-17-2020, 07:19 PM)chrisk Wrote:(03-17-2020, 02:48 PM)stupac2 Wrote:(03-17-2020, 09:44 AM)magnus Wrote: With the caveat that I did not sleep at a Holiday Inn last night so anything I say should be taken with a grain of salt, there seems to be a correlation between each "step" that the government takes and the market dropping. So I guess I'm wondering...how many more steps do we have? By steps, I mean desperate actions to counteract the spread of the virus. Is lockdown the last step? Or are there other ones that could happen before that or after that?
Lockdown is the last step, though there are various types. The bay area's current one is more porous that Italy's, which I believe is more porous than Wuhan's was. But what we're doing now is basically the last resort.
The caveat there is that the federal government can't order this (although I suppose they might try), it's up to states/counties/cities to do it. Hence why Seattle and the Bay Area are under lockdown, but I'm not sure anyone else is (although I may have missed it).
Of course, it being the last step doesn't mean it will work. The markets will really go haywire if we do end up hitting 70% of population infected and millions dead.
Bay Area is not under lockdown. It is shelter-in-Place, a significant difference. Many activities are still allowed that would not be under a lockdown. More areas are rolling out the shelter-in-Place.
It will take a few weeks to see if the curve has been flattened. The governor is indicating that schools may not reopen until fall.
I don't know how schools would reopen in the fall. Will we have reached herd immunity by then? I doubt it. And schools are petri dishes. My wife used to catch something every September when she was teaching and the students returned.
RE: Financial Stuff - oldalum - 03-18-2020
(03-16-2020, 08:58 PM)Langdude Wrote:I strongly commend your desire to learn more about personal investing, especially retirement investing. No one cares as much about your money as you. But be careful who you get that advice from.
- Is there anything ultra-urgent that I should know or be doing with our money in light of the situation in which we find ourselves?
- Is there anything important, but perhaps not as urgent, that I should know or do in light of the current situation?
- Are there any good and basic resources to help me learn about the market, finance, etc. I think I am coming to see that these are good things for me to know more about, and perhaps on the other side of this, I can be more intentional about our investments.
Addressing just what to do now with your retirement savings in your IRA: you should have previously decided on an asset allocation between stocks, bonds, and cash, that reflects your anticipated years until retirement and your tolerance for risk/volatility (which to me depends on your understanding of the relationship of time vs. volatility--if your time horizon is long, many years, then volatility is actually your friend). Tolerance for risk/volatility is important because the absolute worst thing you can do is decide on an asset allocation and then when the market goes down, get scared and sell stocks. This is why you have to learn about retirement investing, so you can resist the temptation to do that. So if you have had an intentional asset allocation, your stock allocation is now well below where it should be. At some point now or soon you should rebalance to restore it (which means buy more stock, which is advantageous in the long run because it is currently on sale). You would naturally want to wait until stocks hit absolute bottom to buy, but that is impossible to know. So the safest thing is to do it in portions over time. No best method that I know of: you could do a third of the way now, a third in a month, and a final third in another month. Or substitute week for month in that sentence. And don't worry if the market goes down another 20-30% after you buy some: if your time horizon is >20 years, it won't matter in the long run. But if you don't think you would be able to resist the temptation to sell if that happens, then don't buy any now--just spend some time learning more about all this.
For me, when the market dip hit 30%, I started buying stock to rebalance. I'm not doing much yet because I think it's going to get worse before it gets better, but if it doesn't I would be upset that I didn't take any advantage of the 30% sale. When I say " stock" or "stocks" I mean either an S&P 500 or total market index fund (mutual fund or ETF--exchange traded fund) with an expense ratio less than 0.05%. If one is not available to you in your IRA, at some point you should move your IRA to a company such as Vanguard or Schwab that has them.
For an investing resource, I'd suggest starting with Jonathan Clements' "How to Think About Money." Cheap paperback. Not much investing guidance per se, but a good overview; summarizes things that have taken me decades to learn on my own. Then look for books on longterm investing in broad-market index funds. A good first choice is John Bogle's "The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns." Another option for the time being is using one of the relatively low cost online "robot" investing services such as at Schwab or Vanguard: you answer some questions about your situation, risk tolerance, etc., and the computer derives an investment allocation in index funds and over time it rebalances automatically for you. It is important in longterm investing to keep the cost of investing to a minimum. That includes the expense ratios of the funds you invest in and the cost of investment advice and management.
RE: Personal Financial Stuff - WBB fan - 03-18-2020
On the personal financial front. we all need to think about our own situation and pay attention to that. But at the same time, be aware of others. Depending on your own situation, you may well be better off than many others are going to be. I'm not really rich, but I am comfortable financially, and I'm trying to act accordingly in the current situation. I'm starting with the following. I have a weekly cleaning service and I've just decided that I don't want to them coming into my home for the time being. But these are people who really depend on their paycheck. So although I've told them not to come, I'm going ahead and paying them as if they were coming. It doesn't cost me anything that I wouldn't have been spending normally. All it means is that I have to do my own cleaning. I'll be looking for other things I can do.
RE: Personal Financial Stuff - BostonCard - 03-18-2020
(03-18-2020, 10:23 AM)WBB fan Wrote: On the personal financial front. we all need to think about our own situation and pay attention to that. But at the same time, be aware of others. Depending on your own situation, you may well be better off than many others are going to be. I'm not really rich, but I am comfortable financially, and I'm trying to act accordingly in the current situation. I'm starting with the following. I have a weekly cleaning service and I've just decided that I don't want to them coming into my home for the time being. But these are people who really depend on their paycheck. So although I've told them not to come, I'm going ahead and paying them as if they were coming. It doesn't cost me anything that I wouldn't have been spending normally. All it means is that I have to do my own cleaning. I'll be looking for other things I can do.
We came to the same conclusion about our cleaners. We also own a rental property and are in discussions about what to do should our tenants not be able to afford to pay the rent for a period of time.
BC
RE: Personal Financial Stuff - oldalum - 03-18-2020
We are getting take-out frequently from the restaurants we like, that are open. And tipping more generously than usual.
Our neighborhood also is organizing to help the very elderly who live in our neighborhood, so that they don't have to leave their homes for anything.
RE: Personal Financial Stuff - BostonCard - 03-18-2020
(03-18-2020, 12:39 PM)oldalum Wrote: We are getting take-out frequently from the restaurants we like, that are open. And tipping more generously than usual.
Our neighborhood also is organizing to help the very elderly who live in our neighborhood, so that they don't have to leave their homes for anything.
We are drawing down our perishables but will then switch to getting take out or delivery (something we don't typically do) for the same reason (and because it is lower risk to have food delivered than to go to a supermarket.
BC
RE: Personal Financial Stuff - BostonCard - 03-19-2020
(03-16-2020, 08:58 PM)Langdude Wrote: Hello all.
I asked this question in the big thread, but it got buried, or people lost interest, but I thought I'd raise it again.
I am concerned not only about the effect of the coronavirus pandemic on the economy as a whole, but, selfishly, on the effects of the market on my family's meager savings, including our IRA. We are not wealthy; I am a college professor (think regional median household income), and my wife is a hospital chaplain (which makes next to nothing; quite a taxing job at the moment). So I am concerned.
I know that many of you either work in the financial sector, or just know a lot about it. I'd love it if you could address one or more of the following:
Feel free to PM me if that would be better than the thread.
- Is there anything ultra-urgent that I should know or be doing with our money in light of the situation in which we find ourselves?
- Is there anything important, but perhaps not as urgent, that I should know or do in light of the current situation?
- Are there any good and basic resources to help me learn about the market, finance, etc. I think I am coming to see that these are good things for me to know more about, and perhaps on the other side of this, I can be more intentional about our investments.
Thanks, friends.
-m.
My advice... become a senator.
BC
RE: Personal Financial Stuff - akiddoc - 03-19-2020
(03-19-2020, 09:06 PM)BostonCard Wrote:(03-16-2020, 08:58 PM)Langdude Wrote: Hello all.
I asked this question in the big thread, but it got buried, or people lost interest, but I thought I'd raise it again.
I am concerned not only about the effect of the coronavirus pandemic on the economy as a whole, but, selfishly, on the effects of the market on my family's meager savings, including our IRA. We are not wealthy; I am a college professor (think regional median household income), and my wife is a hospital chaplain (which makes next to nothing; quite a taxing job at the moment). So I am concerned.
I know that many of you either work in the financial sector, or just know a lot about it. I'd love it if you could address one or more of the following:
Feel free to PM me if that would be better than the thread.
- Is there anything ultra-urgent that I should know or be doing with our money in light of the situation in which we find ourselves?
- Is there anything important, but perhaps not as urgent, that I should know or do in light of the current situation?
- Are there any good and basic resources to help me learn about the market, finance, etc. I think I am coming to see that these are good things for me to know more about, and perhaps on the other side of this, I can be more intentional about our investments.
Thanks, friends.
-m.
My advice... become a senator.
BC
Good one!