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Alan Weiss

I hope you've been practicing good financial hygiene, and if not, this crisis has taught you:

• Have cash on hand just in case banks or ATMs are inoperative. We keep ours in a fireproof safe along with our insurance policies, birth certificates, deeds, estate papers, and so forth.

• "Pay yourself" about 20% of all income in a separate account so that you have an emergency fund. Ideally, have at least six months of normal living expenses in there.

• Never have all your investments in securities. Keep liquid cash accounts appropriate for your circumstances.

• Always try to get paid in advance, or at least rapidly at the start of project.

• In advisory roles, do not be paid in installments monthly, but all least by quarter or larger time periods.

• For speaking, insist on full fee in advance to hold the date.

• Do not panic and sell stocks precipitously. What goes down will go back up. Be patient.

• Diversify your investment portfolio, preferably with a professional's advice.

• Even "non-refundable" tickets are refundable or transferable with modest fees. But I advise you do not purchase these.

• Don't pay estimated taxes in the US quarterly, simply put the money aside and pay what you need to in December, which you can do without penalty.

• If you've invested in emergency supplies, which we have ever since 9/11, be sure to include pet supplies.

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JeffreyScott

Wise words

Oil and bank stocks took a real beating in the last 10 days, especially with the hype of what OPEC and Russia are doing. If you were looking to "buy" stocks while others are selling, those would be some of the best stocks.

 

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Douglas Squirrel

Interested in your first and last items @Alan Weiss (we already do the other nine) - are you willing to say more? How much cash and what supplies? How did you decide on those two contingent actions?

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Alan Weiss

Cash: Keep at least six months of usual household and living expenses in my view. That will differ for each of us. I keep way more than that. It's not difficult since you're not receiving any interest if you keep the cash in a bank. Make sure the safe is fireproof. Include small bills. You may need your social security card, passports, etc.

Emergency supplies include: batteries, gloves, masks, non-perishable food, battery operated and windup radio, gasoline (I keep 20 gallons on hand which I change every six months), basic hygiene supplies (toothpaste, soap, etc.), medicines that aren't perishable and those that are otc, extra chargers, blankets, and so on. There are lists you can find on the internet, not the survivalist crap, but intelligent advice if you have to grab something quickly and jump in a car. Also consider children and pets.

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popky

This is from the CDC website on earthquake preparedness. Some of these things may not apply (I don't think you need an ax or tow ropes), but most of the other things are probably appropriate:

https://www.cdc.gov/disasters/earthquakes/supplies.html

Then, of course, add on things like gloves and masks that are relevant for a pandemic.

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Praveen

And toilet paper. Lots of toilet paper :D (just kidding of course)

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patrickdaly
3 hours ago, Praveen said:

And toilet paper. Lots of toilet paper :D (just kidding of course)

I’m confused about the toilet paper thing that is going on in all countries. If it came to it, we would run out of food long before we ran out of toilet paper. Then what would we need the toilet paper for? Maybe we could eat that!

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Praveen
51 minutes ago, patrickdaly said:

I’m confused about the toilet paper thing that is going on in all countries. If it came to it, we would run out of food long before we ran out of toilet paper. Then what would we need the toilet paper for? Maybe we could eat that!

I think people are worried that they might be stuck at home and the authorities will provide food and water, but not necessarily toilet paper.

As an aside, I once read in a financial book where the author riddled people who hoard gold in the case of emergencies.  He thought it better to hoard things like razor blades, toilet paper, and soap.  Then, you could trade it for its weight in gold...

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Alan Weiss

Hoarding is herd mentality. People hoard what's easy not what's necessarily smart. Most rioters steal things they can't possibly use. 

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popky

If you have sufficient food and water, I’d think the next most important thing would be Netflix/amazon accounts. 

If Comcast goes down, there will be rioting in the streets—regardless of the need for social distancing. 

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Stephen Wise

The biggest proactive change for us so far ... I activated our backup internet service. Added a cable service to the existing DSL service. I will throw the kid's laptops and phones onto the backup connection so they don't crowd me out during the day. 

I expect that both internet providers will fall short of their promised "speed" to the neighborhood. If you think airlines overbook - wait until every human on the street is netflixing, zooming, instagraming, tik toking, etc at 10am on Monday morning.

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Douglas Squirrel

Thanks all for describing your emergency preparations.

I find it interesting that @Alan Weiss is preparing for a circumstance where all or almost all banks and ATMs aren't functional, but cash is still valuable and important to fulfilling your immediate needs. What situation would meet those criteria? Are there historical examples? I'm having trouble thinking of them—every time I come up with a case where banks are dead, I see no value for rectangular portraits of Presidents—but perhaps I'm just not pessimistic enough.

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JeffreyScott

@Stephen Wise How does one set up a back up internet service?

I was thinking the same thing - my internet is spotty as is, and I am holding some virtual events?

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Alan Weiss

Civil unrest would close the banks and ATMs, as would massive illness or plague. We currently have 3,000 coronavirus cases (not deaths) which is approximately something less than one-one-thousandth of the population of the US. Picture some plague that affects a quarter of the population. An electromagnetic pulse bomb would also knock out all automated transactions, by and large.

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Douglas Squirrel

Yes thanks, but why would we expect cash to be useful in those situations? The "full faith and credit of the government" would take a severe knock, and I'd prefer something with clear usefulness over paper that might or might not be valuable in the future when and if that government got back to normal operation. I think devaluation and default often follows major catastrophes and financial dislocations, e g former Yugoslavia or 1980s Mexico (but I'm no historian so would welcome counterexamples).

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Sten Vesterli
On 3/15/2020 at 12:35 AM, patrickdaly said:

I’m confused about the toilet paper thing that is going on in all countries. If it came to it, we would run out of food long before we ran out of toilet paper. Then what would we need the toilet paper for? Maybe we could eat that!

toilet_paper_corona.jpg.3a340bb0289608094d4813b560241337.jpg

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Alan Weiss

Doug, stop thinking so hard. If banking is temporarily unavailable, you can use money to purchase locally so long as you're not facing a total breakdown. 

We clearly need Bernie for a centralized toilet paper strategy, which would make it disappear altogether. 

Crisis brings out the best and worst in people, intellect and imbecility. 

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Stephen Wise
16 hours ago, JeffreyScott said:

@Stephen Wise How does one set up a back up internet service?

I was thinking the same thing - my internet is spotty as is, and I am holding some virtual events?

Jeffrey:

There are 4 technologies available to me to receive internet in my home office. Here is some description of my situation. Hopefully this will help you to figure out your preferred options. Note the options shown are my options - you will need to figure out your area services and provider names.

1) Cable lines. 1 owner of the lines (Rogers) and multiple re-sellers. Biggest Advantage: Ubiquitous - most everyone has this in their area already. Note cable is more susceptible to overcrowding which causes slowness that can last for seconds to minutes to hours.

2) Phone lines also called Digital Subscriber Lines (DSL). 1 owner of the lines (Bell Canada) and multiple re-sellers. Biggest Advantage: Reliable High Speed.

3) Cellular. Multiple owners of broadcast towers. Big 3 are Rogers, Telus, Bell. Multiple smaller players and re-sellers. Biggest Advantage - You could probably get going in 24h.

4) Satellite. Multiple re-sellers. Low speed. Expensive monthly. Good for remote/country areas where there is no Tower coverage and no lines installed. Biggest Advantage - Remote areas with no infrastructure.

I had two options. Have my existing DSL increased from 50GB speed to 100 or 150. Or add a second service entirely. I chose to add a second service because this lowers the risk that I will lose 100% connectivity if one supplier has an outage. Outages or slow-downs are infrequent but they do happen and they can take hours, days, or weeks for the problem to be resolved in a normal situation. e.g. switch on the street fails could take days. Backhoe accident could take weeks.

I planned this out insofar as several years ago I ordered the cable internet and had it running at a low speed and cancelled the service after 12 months. So now, I know it is place and just need to request the account to be activated again. I did that on Thursday. They sent me a modem overnight and the service is supposed to be up by midnight today.

This also required some planning on how to consume and share the second service at home. It is possible to have two live feeds and use them simultaneously or be able to switch over by flipping a switch if one goes down. It certainly would be a "pro" step to get quote for someone to set-up the hardware to allow seamless switching. I chose not to make this investment as it added complexity and hardware.

If there is a an outage or slow-down that lasts more then a few minutes I can reach under my desk and move the LAN cable from one switch to another switch and my desktop, desk phone, wifi and server will all consume the "backup" service.

So the result is for about $50/month:

1) I have redundancy in place if there is a major outage from my cable or phone provider

2) I have increased available internet with a second wifi connection to absorb the high demand we now have in the house without burdening my work network

3) If service falls or goes out for more then a minute I can quickly reconnect to my call or whatever using the backup 

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Alan Weiss

Stephen, way, way too long. WAY too long. Comprende? 

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Stephen Wise
1 hour ago, Alan Weiss said:

Stephen, way, way too long. WAY too long. Comprende? 

Ja

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Alan Weiss

Okay!

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Diana
On 3/15/2020 at 2:27 AM, Alan Weiss said:

Have cash on hand just in case banks or ATMs are inoperative. We keep ours in a fireproof safe along with our insurance policies, birth certificates, deeds, estate papers, and so forth.

this post was a great prompt Alan. I am good to go on all of these apart from cash on hand. On Monday morning, I went into the bank and asked for $10,000 in cash. The teller put this in a plain white envelope, and three minutes later I walk out with $10,000 cash in my purse, off to my client meetings. This is the largest amount of cash I have had with me.

The next day, David picked up $10,000 in 50s, 20's, and 10's. I met him for coffee and he gave me four clear plastic envelopes with the cash. I did wonder if any one was watching us. All now in the safe. Round 2 is later this week.

 

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Alan Weiss

You're always great determining what advice you hear that is relevant for you. isn't it great that this community can operate here during crisis?

I have to say you do appear to be a drug dealer, though!

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Alan Weiss

Jeff asked about small business loans somewhere, I can never find the right thread. But some of you are qualified and may be in need, I've posted the forms below. There are from my accounting firm and attorney. You can qualify for SBA loans which will be forgiven if used for certain purposes (e.g., payroll). Business owners can apply April 3, independent contractors a few days later. Most of you are in the former category if you incorporated correctly.PPP -- Overview.pdf

PPP--Fact-Sheet.pdf PPP Lender Information Fact Sheet.pdf Paycheck-Protection-Program-Application-3-30-2020-v3.pdf

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