GMR 115: Being Prepared for Economic Uncertainty
Economic uncertainty is sure to occur from time to time. This is the reality we are facing today as the COVID 19 virus is having physical as well as economic impact throughout the world. In this episode of Getting Money Right, we talk about the steps you can take to ensure you can weather this and future economic storms.
Show Notes
Were you ready for something like this?
Were you caught off guard?
How are your finances today?
How do you want to have your finances set up to be ready for the next time this happens?
What do you need to be prepared for an economic downturn?
Saving
Margin
Budget to spend wisely
Extra cash to take advantage of investment opportunities (Warren Buffett - 128 Billion in cash)
“Investors should be fearful when others are greedy and greedy when others are fearful.”
Statistics about financial well being of companies
1 in 6 companies cannot pay the interest on the money they have borrowed.
Corporate debt around 10 Trillion dollars - No margin
Interest payments don’t stop.
Costs of running a business don’t stop just because you send all the employees home and close up shop.
Rent, utilities, insurance, they need to be paid regardless of whether you’re open or closed.
Who will step in to help in a crisis like this?
Stimulus packages are becoming the norm in economic uncertainty.
The US and other nations are willing to step in and prop up the sectors in trouble to prevent the economy from collapsing.
“Germany is repeating today that the fiscal shackles are being taken off and they will spend what they need to spend in order to cushion their economy and that ’Germany will put no limit on credit program to help companies’” according to their Finance Minister,”
The US will take a similar measure, as will other nations.
But, who will step in to prop up these nations who are not able to provide this indefinitely?
Cascading effect
If you’re not prepared, then the burden goes to the employers when the companies can’t afford the burden, then the burden goes to the government. But at the end of the day, the government is so in debt.
Personal
Companies
Governments
Joseph Principle - Around 1400 BCE
Saved Egypt, but also caused them to become a worldwide super power. Every other nation became indebted to them and Egypt grew massively in land, human capital, and influence; all because of one man’s wisdom to save.
4 FINANCIAL STEPS TO PURPOSEFUL LIVING
Spend on purpose“spend on purpose...so that you know where you are.”
Save before you spend“Save before you spend...so you experience stability today and in the future.”
Increase your financial margin“Increase your financial margin...to pursue your true life’s purpose.”
Invest wisely“Invest wisely...to increase your impact.”
Resources
Budget Forms and Tools
David’s New Book - Jesus on Money
David’s New Website - www.stewardshippastors.com