3 Takeaways for ODs from this past week

March 15, 2020
Last Saturday bumping elbows with attendees at SECO fees like it was a lifetime ago. So much has happened in the past week all over the country. Here in Atlanta, I have the pleasure of having a least one of my children at home until April 6th. Grocery stores, restaurants and public places have closed. All business travel for both me and my husband has been cancelled. I've stopped going on Facebook because of the amount of emotion and mixed messaging being disseminated. The two words that seem to sum things up are "fear" and "uncertainty".

In situations in which we have no control, one thing we CAN do is learn from them. Here are 3 thoughts on what ODs (and really anyone) can take away from the current Coronavirus crisis:

1- Liquidity is really important. When I talk with clients, we discuss keeping 3 months of practice expenses on hand in their business accounts and 6-12 months of personal expenses available based on their household income situation. Frankly, I think having a both a personal and business line of credit available (but not overused) "just in case" is never a bad idea. If only 50% of your patients don't show up for their appointments, you have enough stress without knowing how to pay your bills. Same goes for your personal expenses in the event you have to defer paying yourself.

2- Take the long view. The stock market certainly has had an opinion on President Trump's approach to COVID-19 (both bad and good) but there's one thing he said that is really important to remember: this is a moment in time. It will pass. You know as well as me that those of us good health who are smart about keeping any fragile family safe should be okay. Keep this in mind when you log into your investment accounts: unless you need to liquidate your investments to actually pay your bills, think really hard about whether this is the right time to sell anything. The stock market has never not recovered, although I'm legally required to note that past performance is not a guarantee of future results. Selling low and buying high is not a good investment strategy. And if you're too squeamish about how your portfolio is performing, it's time to think about a new asset mix that is less volatile in conditions like these. In short, make sure any financial decisions today and always take into account not just the next few months, but your time frame all the way through retirement.

3- Plan for the 5 Ds. I've written about this before: divorce, death, disability, disagreement and disaster. Depending on where you live, you might be in or on the brink of disaster. Practical ways to address this in your personal life are keeping cushion in your cash flow by either saving regularly (which you should be doing anyway) and having some level of expenses you can reduce easily without having serious ramifications. This means not overextending on housing, car and high maintenance/high debt expenses, and is smart financial management whether you face the 5 Ds or not.

Having these 3 things in place can considerably reduce the stress and anxiety uncertainty causes. If you're quarantined with some time on your hands, it's a great time to do a personal financial inventory with simple things like a balance sheet, cash flow statement (otherwise known as a budget) and retirement savings plan. Do this with the specific lens of how your situation holds up in the event of divorce, death, disability, disagreement or whatever your worst case scenario could be with the current disaster. And wash your hands!

The views expressed here are as of the date of publication and are subject to change. This information should not be construed as investment advice. It is presented for information purposes only and is not intended to be either a specific offer (or recommendation) Hayes Wealth Advisors to sell or provide, or a specific invitation for any investor. Information herein may have been obtained from sources believed to be reliable, Hayes Wealth Advisors is unable to warrant its accuracy.
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