Countdown to Financial Fitness: Get off the Interest Train

Countdown to Financial Fitness: Get off the Interest Train:   My husband's VISA account required an intervention last week. When his statement arrived, we noticed an interest charge of 97 cents ha...

Get off the Interest Train

 

My husband's VISA account required an intervention last week. When his statement arrived, we noticed an interest charge of 97 cents had been applied. He has set up automatic payments of the full statement balance on the due date, so there shouldn't be any interest charges. 

However, this VISA card, issued by his credit union, doubles as an ATM card to make withdrawals from his checking account. Last month, on a trip to Frankfurt, he withdrew euros from an ATM, and instead of a debit to his checking account, the transaction was processed as a cash advance. He was immediately on the interest train. 

The interest train is like a snowball rolling down a hill. It's the magic of compound interest working against you. As long as any part of your loan balance remains unpaid, interest accrues. Paying the statement balance won't stop it because interest continues to accrue between the date the statement is prepared and the date the payment is posted. And that interest carries through to the following month's balance, accumulating more interest. Once you're on the interest train, all your subsequent purchases accrue interest. 

Unlike purchases, cash advances begin accruing interest as soon as they are posted; there is no grace period. And once you owe interest, there is no more grace period for anything. The only way to get off the train is to pay the account down to zero. As soon as possible. 

Fortunately, it's easy to do online now. Payment can be instantaneous, so interest will stop. Although my husband's statement reflected only 97 cents in interest, that amount had grown to $2.27 by the time we noticed it and paid the account down to zero. 

These are small amounts, because we nipped it in the bud. But this scenario illustrates why so many financial gurus counsel against using credit cards. An item can end up costing you twice its purchase price if you finance it, use your credit card heavily, and then make only minimum payments, especially if you get behind and incur penalties as well. 

I believe credit cards are a convenient, safe form of payment. But only if managed properly. And that means paying your balance in full, on time, every month. And avoid cash advances. 

What are your thoughts on using credit cards? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Reversal of Fortune

Countdown to Financial Fitness: Reversal of Fortune: Even though stock market indexes have almost returned to pre-pandemic levels and unemployment rates are declining again, all is not well. Wh...

Reversal of Fortune

Even though stock market indexes have almost returned to pre-pandemic levels and unemployment rates are declining again, all is not well. While some industries are thriving, others are a long way from recovery.

Only time will tell if they'll go the way of buggy-whip manufacturers after the invention of the automobile.

Event planners and owners of conference halls and theatres are still hurting. With so many free Zoom webinars now available, can organizers really charge as much for a virtual experience? All the businesses that supported large events are now scrambling for customers, and the smart ones are reinventing themselves. Could we see the return of drive-in movies?

My husband works in the airline industry, which has been hit particularly hard. In February, employees received record-breaking profit-sharing checks. In March, the airline cut its schedule by 90% and was burning through $50 million a day. Thousands of employees were encouraged—or forced—to take voluntary leaves or exit packages. Government assistance was the only reason the airline didn't immediately furlough most of its workforce and demand pay cuts from those who remained. We all know that's coming once the assistance runs out. 

We used to take a lot of cruise vacations; in 2019, we took four. This year, none. We'd scheduled a cruise for April, but then the cruise line suspended its voyages ahead of the no-sail order. I still receive weekly emails from travel agencies touting enticing sailings—first for fall and winter of 2020, now for spring and summer of 2021—but I'm not biting. It took us over 60 days to get our refund from our April cruise that got canceled, and the no-sail order keeps being extended. I feel sorry for owners of travel agencies and people who work in the tour industry. I believe demand will return one day, but how long can they hang on until that happens? 

Stocks in these industries have suffered accordingly. Investors have made money through short-term speculation, but if you purchased these stocks before March, you're still in the red. 

No one can predict the future, determine tomorrow's winners and losers, so how do you prepare? 

If you're an investor, diversify. Tech stocks are hot now but don't put all your money there. Remember the tech bubble at the turn of the century? If your nest egg is spread out among different baskets, you're unlikely to lose it all if one sector tanks. As I mentioned, the Dow is soaring again, but a different mix is driving the averages. 

If you're an employee or a business owner, build expertise that will transfer across industries. Take advantage of downtime to learn new skills or update proficiency. Never stop networking and don't burn bridges.

Having emergency cash is essential. I've done several posts about the value of accumulating and maintaining an emergency fund—at least three to six months' living expenses in a liquid, low-risk account. The only reason most of the airlines are still in business was that they had billions of dollars in cash on hand, accumulated when business was booming. Even so, only government assistance saved them from burning through all that cash before revenues could return. Such a reversal of fortune!

Look for ways to shrink your financial footprint. Cut unnecessary spending, reduce debt. The less money it takes to sustain your lifestyle, the longer your emergency funds will last, and the less likely you are to suffer a reversal of fortune. 

What are your thoughts about preparing for the unexpected? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Working with a Financial Planner

Countdown to Financial Fitness: Working with a Financial Planner: A friend of mine just took an early retirement package and immediately turned all his savings over to a financial planner. He's ecstat...

Working with a Financial Planner

A friend of mine just took an early retirement package and immediately turned all his savings over to a financial planner. He's ecstatic. I'm worried for him.

I'm not saying he shouldn't work with a financial planner. Unlike me, he has no interest in managing his investments. He can rebuild a car's engine; I don't even change my own oil.

But whether you do the work yourself or hire someone to handle it, you still need to know what you're getting, and how much you're paying.

For Christmas, I gave him and his wife a copy of my personal finance book, Live Well, Grow Wealth. They have yet to read it. (The problem with writing about personal finance is, the people who could really use the advice aren't interested, and the people who are interested already know about most of it.)

Before my friend visited the financial planner, I suggested he ask some questions. The most important one: how does the adviser get paid? I reminded him that in Chapter Six of my book, I cover working with a financial planner/adviser/broker/whatever and provide a list of questions/points to consider. If he and his wife didn't want to read the whole book, they should at least skim those few relevant pages before their meeting.

Right. He barely wanted to talk about what questions to ask, much less read about them.

The adviser came highly recommended. His parents and all their friends have been using the guy for years. He's a vice president at a major financial firm.

"Did you find out how he gets paid?" I asked, after my friends had signed over their nest egg.

"Oh, he doesn't charge us. We didn't pay him a cent."

Really? Is he a relative, doing them a favor? How does he stay in business if he doesn't charge his clients for his services? "Are you sure he doesn't charge anything? Maybe his fee comes out of the investments?"

"Yeah, it just comes out of the investments. We don't pay anything."

"Do you know what percentage he takes for managing your investments? One percent? One and a half?"

"I have no idea. I don't pay attention to any of that stuff. He's a genius, so whatever he charges, it will be worth it."

"Do you know what he's having you invest in? Mutual funds? Individual stocks? Bonds?"

My friend shrugged. "He had us move everything out of Fidelity over to his firm. I guess it's a mutual fund. My parents have been in it for years." (I couldn't help thinking about Bernie Madoff.)

"He sold everything?" I suspect the broker earned some hefty commissions from all those transactions.

"Yeah, he said it's better to sell everything and start fresh."

"Does he use publicly traded mutual funds? Or something proprietary to his firm?" (With publicly traded products, you can track performance independently. And if you ever decide to change brokerages, you can transfer the securities in kind, rather than having to sell everything at once, when it might be an inopportune time for some of them.)

Another shrug. "I don't care about that. He said we're on track to retire at 65 and we don't have to worry. He said we've done pretty well with Fidelity, but it's good we came to him when we did, because now we have the right mix going forward."

My friend is happy, and I hope he's right about being on track. He'll never know whether he could have saved money… or how much.

What are your thoughts about working with a financial planner? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Savings During the Pandemic

Countdown to Financial Fitness: Savings During the Pandemic: It's been four months since our lives were turned upside down by the coronavirus pandemic. Dream vacations have been canceled. Wedding...

Savings During the Pandemic

It's been four months since our lives were turned upside down by the coronavirus pandemic. Dream vacations have been canceled. Weddings, commencement ceremonies, and reunions didn't happen. People have lost jobs, opportunities, businesses, loved ones, and even their lives.

The impact of lockdown, hiding from an invisible but deadly virus, has varied from total devastation to mere inconvenience. I'm fortunate—privileged—that my suffering leans much closer to inconvenience.

The Fourth of July wasn't the same in our town without its annual parade and fireworks display. My latest mystery was published in December, and I missed conferences, book signings, and author events where I would have had the opportunity to connect with readers and promote my work. We were booked on a cruise for April that didn't sail. Trivial disappointments compared to the real problems many others are experiencing.

On the bright side, I'm saving money. Lots of money on travel, as we normally take several cruises or other international trips a year. And I usually attend a couple of writers' conferences, where my expenses exceed what I earn back in book sales.

We've spent no money this year on movies in the theater, plays, concerts, or sporting events. My husband travels for work, so we don't eat out that much when he's home, but with many restaurants still closed to dining in, we're eating out even less.

Gasoline is cheaper these days, and I'm buying less of it. I'm not driving my car as much as I used to—my meetings that still take place are now on Zoom—so I can probably wait longer until the next oil change.

I haven't purchased new clothes or make-up since before the pandemic. I don't get out much, and make-up soils my mask, so why even put on lipstick and foundation when I go to Costco? And the Zoom camera feature is optional.

Hair salons have reopened, and I should really go get a haircut, but I'm hesitant. On one hand, I feel I should support the economy, help out those businesses that were forced to close, those employees who had to give up their livelihoods. On the other hand, I've been cooped up so long that I'm leery of nonessential public contact. I feel I should do my part to stop the spread of the virus so life can one day return to "normal"—if that's even possible anymore.

How has your life been affected financially by the pandemic? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Should You Take an Early-Out Package?

Countdown to Financial Fitness: Should You Take an Early-Out Package?: Many businesses, particularly those in the travel industry, have been hit hard by the coronavirus pandemic. Thanks to government assistanc...

Should You Take an Early-Out Package?

Many businesses, particularly those in the travel industry, have been hit hard by the coronavirus pandemic. Thanks to government assistance, companies accepting aid have postponed massive layoffs and pay cuts. But some are now trying to reduce their payrolls by offering early-out incentive packages.

I spent my career in the airline industry and witnessed many ups and downs. Every few years, the company offered early-retirement and voluntary-departure packages. Sometimes, they're very tempting.

In 2008, I took an early retirement package. It was right for me, and most of the time, I haven't regretted my decision. I did get chilly feet when the financial markets crashed after the ink was dry on my signed severance papers, and my retirement accounts were suddenly worth a lot less than before. Fortunately, my company invited me back to work as a contractor several times over the years, which enabled me to bring in extra income to rebuild and increase my investments instead of drawing them down.

My husband is now faced with a similar decision. To stay for an uncertain future? Or take a lucrative package now and go?

Here are some considerations if you're faced with the decision about an early-departure package:

·       What are you leaving behind? We spend so much time at work that it's hard to separate our professional life (camaraderie with colleagues, the vocabulary of the trade, inside information, perks of the job) from who we are outside of our careers. Of course, some of your work friends may leave, but some will stay, and relationships will change when you're no longer an insider. Do you enjoy your job? Will you miss it? If you stay, there might be some great promotional opportunities resulting from vacancies left by senior employees and grass-is-always-greener go-getters. On the other side of the coin, things may get worse and you might get laid off—without an incentive package. What is the company's prognosis?

·       What comes after? Will you feel lost without a workplace to go to every day? Or do you have plenty of hobbies and social activities to fill your days? If you're too young for Social Security and don't have a pension—and even if you can draw both—you might need to get another job. Have you researched the job market? At the beginning of 2020, unemployment was historically low and jobs were plentiful. That changed overnight. Even though recovery is looking better than expected, there's a lot of competition out there, and you might end up settling for a position much less attractive than the job you're leaving. Have you fine-tuned your resume and honed your marketable skills? Have you built your network?

·       What are they offering? Regular retirement benefits most likely won't change if you decide to wait, unless certain perks are being discontinued. In the "enhanced retirement" package my husband is considering, a severance check equal to six months' salary is included. A severance payment can be a great jumpstart for an emergency fund if you don't have one. But keep in mind, payroll taxes will be deducted, so the actual amount will seem much smaller than promised. My husband's package also comes with some positive-space passes, which are like gold for airline employees used to traveling space available on crowded airplanes, and not looking forward to being demoted to a lower standby priority after retirement. However, there is a finite number of confirmed tickets; it's not an annual allotment.

·       How will you manage without your major source of income? Can you afford to live without a paycheck? In my case, we were debt-free and had recently paid off our mortgage. We didn't have any children to educate. If you have a lot of bills, think twice about leaving unless you have a new job lined up. If you're lucky enough to have a pension and are ready to start taking Social Security, will that income cover your expenses and maintain the lifestyle you desire? If not, how will you make up the difference? Can you work part-time, or provide contract services? Do you have investments you can tap?

·       What will you do about health care? In our country, this can be a deal-breaker for many would-be early retirees, where health insurance coverage is still mainly tied to employment. When I retired, my husband was still working, and I was eligible to be covered under his plan. Now we're both eligible for Medicare. Nevertheless, premiums must be paid, and Medicare doesn't cover everything. Most retirees purchase supplemental insurance or a Medicare Advantage plan to bridge the gap. And the array of choices will give you a headache. My husband's enhanced retirement package includes a generous Retiree Medical Account (RMA). Similar to a Health Savings Account (HSA), it can be used to pay qualified medical, dental, prescription drug, and vision expenses, including Medicare premiums. Unlike the HSA, which the insured person controls, the RMA is controlled by the company. The account owner pays for the services upfront and then submits a claim for reimbursement. Still, an excellent incentive, provided the company continues to follow through with the obligation.

If you're faced with a decision about whether to take an early out/retirement/severance package, take your time to read all the fine print. Weigh the pros and cons. Write them down.

Talk to your colleagues. Keep in mind, everyone's situation is different. But they may uncover some concerns or benefits you've overlooked.

Discuss the situation with your family and make sure they are comfortable with the potential lifestyle changes ahead. If you don't already work with a financial planner, now might be the time to talk to one. Evaluate carefully so you don't regret giving up a valuable career before you’re ready, or passing up the opportunity of a lifetime.

What are your thoughts about leaving a job at this time? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: What to do with Your Stimulus Check

Countdown to Financial Fitness: What to do with Your Stimulus Check: Many Americans will be getting, or have already received, a check—or direct deposit—from the U.S. government this month. These Economic I...

What to do with Your Stimulus Check

Many Americans will be getting, or have already received, a check—or direct deposit—from the U.S. government this month. These Economic Impact Payments were authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in an effort to mitigate the fallout from the shutdown of our economy in response to a global pandemic.

For some workers, unfortunately, it won't be enough. Some businesses were just too fragile to hang on, to continue to pay overhead when their income stream halted, and the jobs they'd generated won't come back. Unemployment, once you can push through the crowds and jammed phone lines to file, only replaces a portion of your salary. Thousands of workers and entrepreneurs who were overextended and lived paycheck to paycheck are in trouble.

But for others, the stimulus check represents a windfall. I've written several posts with suggestions about what to do with a windfall. In my book Live Well, Grow Wealth, I devote an entire chapter to the importance of maintaining an emergency fund (three to six months' living expenses in a low-risk, liquid investment like a savings account or money market fund) and I advocate using a windfall to jumpstart your emergency fund if you don't already have one.

Other uses for a windfall I've recommended include paying down debt or contributing to your retirement fund. This year, the deadline for making 2019 contributions to an IRA (Individual Retirement Arrangement) or HSA (Health Savings Account, available to policyholders of certain high-deductible health insurance plans) has been extended to July 15.

However, I'm not going to make those recommendations for your stimulus check. Its purpose was to breathe life into our dying economy. So, if you don't need the money to cover basic living expenses, spend it!

Get started on your Christmas shopping. Buy some books from your local bookstore. Eat at your favorite local restaurants; if they're not open yet, order take-out or have your meal delivered. Get your hair done once it's safe to do so. Purchase that new appliance or outfit or toy you've been dreaming about. Buy some plants from your local nursery to spruce up your yard.

Nonprofit organizations are hurting. Fundraising events have been canceled, and charitable giving dries up faster than discretionary spending when people are struggling to feed their families. So, if you feel uncomfortable spending the stimulus money on yourself, donate to your favorite local charity.

If everyone puts what they can back into the economy, perhaps we'll avoid another Great Depression-like scenario once we finally come out of this pandemic.

What are your plans for spending your stimulus check? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Should You Refinance?

Countdown to Financial Fitness: Should You Refinance?: We keep expecting interest rates to rise, but then they get cut again. If you're carrying a mortgage, maybe it's time to refinance...

Countdown to Financial Fitness: Retiring During a Crisis

Countdown to Financial Fitness: Retiring During a Crisis: This was going to be the year. Your 401k was robust, you'd put in your time, and a leisurely retirement was on the horizon. Maybe you ...

Retiring During a Crisis

This was going to be the year. Your 401k was robust, you'd put in your time, and a leisurely retirement was on the horizon. Maybe you even had an exit date and celebratory travel plans.

And then the coronavirus invaded. Words like "social distancing," "shelter in place," and "flatten the curve" entered our vocabulary. Masks and gloves became part of our wardrobes. Thriving businesses closed their doors. Jobs disappeared. The stock market tanked. Suddenly, your nest egg doesn't look so secure.

I faced a similar situation in 2008, on the cusp of the Great Recession. After years of working in the beleaguered airline industry—where we suffered pay cuts while employees in other industries earned raises, where I dodged the ax time and time again amid multiple reorganizations—I decided I was going to accept a retirement-incentive package as soon as I was eligible. And in early 2008, I had the right combination of age and years of service to take advantage of a buy-out.

Years of frugal living had enabled us to pay off our mortgage. We were debt-free and had no children to educate. Our investments were doing great. My husband's job was safer than mine, and I could be added to his health insurance plan. So, I signed the papers.

And then the housing market collapsed, taking the stock and bond markets along with it. Suddenly my retirement accounts didn't look as hardy.

I knew better than to yank my money out and cement my losses, but going off the payroll took away my ability to keep contributing to my 401k and dollar-cost average, taking advantage of fire-sale prices.

Reneging on my commitment to accept the early-retirement package wasn't an option nor did I want it to be. But, luckily, my company offered me the opportunity to work short-term as a contractor in one of my old departments while still drawing my pension. Contract jobs off and on for the next few years enabled me to shore up my portfolio and participate more in the market's recovery.

But what can you do now if you're in that predicament—planning to retire and suddenly not as prepared as you'd thought? In a few short weeks, we went from almost full employment to record unemployment claims, so postponing your decision to leave or picking up part-time work might not be possible.

Hopefully, you've already planned for survival without your salary. You've paid off or greatly reduced your debts. You've anticipated expenses, decided on the lifestyle you want in retirement, and figured out how to finance it. You've moved your investments to a more conservative allocation, so you don't have to sell volatile assets at a depressed price to cover living expenses. 

But still, if most of your retirement income was set to come from your investments, you might need to make adjustments. Here are some suggestions:   

• Review your asset allocations. After the drastic drop in the stock market and interest rate cuts, your investment distributions might be out of balance. Ensure that you've adjusted to a mix suitable for someone drawing down assets instead of accumulating them.

• Make your withdrawals from cash accounts, or mutual funds with the most stable values. This will give your more aggressive holdings time to rebuild their worth.

• Tighten your belt; comb through your budget and look for areas where you can reduce spending without compromising your values.

• Postpone major trips and events. (The pandemic might have already wreaked havoc with your plans for a big retirement bash or a family cruise.)

• Clean out your garage, your attic, your spare bedroom, and have a yard sale. (If it's allowed in your community and you practice social distancing!) Or sell some possessions you don't need anymore on e-Bay.

• Consider taking Social Security earlier. But be careful; be sure you really need the money now. If you're under full retirement age, you'll be permanently sacrificing some of your future earnings. The longer you wait to file (up until age 70), the bigger your checks will be when they finally come.  

Life is full of surprises, and the best-laid plans can sometimes fall by the wayside. But the more flexible, patient, and prepared you are, the better your ability to adapt.

What are your thoughts about planning for retirement? I’d love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.
Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Conserving Resources During a Pandemic

Countdown to Financial Fitness: Conserving Resources During a Pandemic: Financial experts preach about the need for an emergency fund. If your income stream suddenly ended because of lock-downs forced by the co...

Conserving Resources During a Pandemic

Financial experts preach about the need for an emergency fund. If your income stream suddenly ended because of lock-downs forced by the coronavirus pandemic—with no assurance of when it will restart—and your expenses continue, you’re probably dipping into that emergency fund now. The more robust, the better.

As a reminder, an emergency fund is three to six months’ living expenses tucked away in a liquid, low-risk asset like a savings account or money market fund. Not the stock market.

Unfortunately, nearly a third of Americans have no emergency fund and many more live paycheck to paycheck. When the paycheck abruptly stops, they’re in real trouble.

Unemployment, some debt forgiveness or deferment, and the $1200 relief check from the federal government will help many, but for others, it won’t be nearly enough.

Depending on how long this pandemic and resulting economic fallout last, there will be businesses that fail. Not every job will come back.

If you’ve lost your job or business and you don’t have an emergency fund, it’s too late to start one now. But there are a few things you can do to conserve resources and stay afloat:

·        Refrain from unnecessary purchases. With malls and many retail stores closed, this is easier than ever before. But if you’re addicted to online shopping, step away from the computer.

·        Don’t be a hoarder. Buy only the supplies you and your family will need for the next few weeks, and perhaps a little extra if you anticipate problems getting back to the store for reinforcements. You won’t tie up so much cash, and you’ll be a better citizen.

·        Conserve energy. With fewer places to go now, it’s easy to save money on gasoline for your vehicle. At home, turn off unnecessary lights and appliances, keep the temperature inside as close to the outside temperature as you can stand. (Luckily, it’s spring in most places, so we don’t have to spend a lot heating or cooling our homes right now.)

·        Conserve water. Turn off the faucet while you’re brushing your teeth or sudsing your hands for 20 seconds. In the shower, turn off the water while you shampoo or condition your hair. If you have some downtime at home, fix leaks and cracks.

·        Don’t waste food and paper products. You may have already figured out how to ration toilet paper!

·        Cook more from scratch. There are plenty of free online videos that teach you how to prepare easy, nutritious, and economical dishes for your family. Take advantage of seasonal fresh produce that is still on sale. Store leftovers promptly, label, and use.

·        Negotiate with creditors about waiving late fees, lowering interest rates, and/or relaxing repayment terms. They know everyone is hurting and most should be willing to work with you if you’re sincere about your obligations.

·        Defer discretionary expenditures. Some of these decisions may have already been made for you: large social events, vacation travel, visits to amusement parks, etc.

·        Leverage credit. Normally, I don’t advocate taking on more debt, except as a last resort. These are desperate times, and debt may be your last resort. Make sure it’s for a “must-have” rather than a “want-to-have.” And pledge to start paying it off as soon as you’re back on your feet.

Life may look bleak for the moment, but one day—hopefully sooner rather than later—this pandemic will be over and the economy will begin its recovery. As soon as you’re able, start an emergency fund, so you’ll be better prepared next time!

What are your thoughts about emergency funds? I’d love to hear your comments.
Sharon Marchisello is the author of Live Well, Grow Wealth.
Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Investing in the Age of Coronavirus

Countdown to Financial Fitness: Investing in the Age of Coronavirus: The stock market continues its roller-coaster ride, previously solid industries disintegrate, and small businesses collapse like a row domin...

Investing in the Age of Coronavirus

The stock market continues its roller-coaster ride, previously solid industries disintegrate, and small businesses collapse like a row of dominoes. Have we hit bottom yet, or will the freefall persist as more bad news unfolds?

Is it time to buy, or wait for a further decline? Or sell while equities still have value?

Will the aid package be enough to keep the economy on life support until we can get the COVID-19 pandemic under control?

As with any crisis, any huge upheaval, the survivors will be those who can adapt quickly to the new normal. Companies that already have a robust remote workforce—with secure networks, portable tools, and efficient communication systems—face less disruption than those starting from scratch. Companies that sell online training, conferencing software, security packages, and other work-at-home tools have seen a surge in commerce.

Those in the food supply chain and makers of personal hygiene products are in little danger of failing. The consumer staples sector weathers most storms.

Medical provisions are in high demand. But depending on how long the pandemic lasts, companies just ramping up to make ventilators, masks, and other needed hospital products risk being late to the party and stuck with surplus inventory. We could see a rush to invest in companies that are working on drugs to treat this disease or a vaccine to prevent it. If successful, their stock could soar. Otherwise, not.

Restaurants with a take-out and/or delivery system in place are faring better than those that offer a dine-in experience only. They can move staff from waiting tables to taking phone and online orders or making deliveries.

Creative adjustments and reinvention may be called for. I read a story recently about an event caterer whose business dried up with the pandemic. Instead of folding and wringing her hands over the unfairness of it all, she started advertising a new service around town: cooking for and delivering food to individual families.

Some businesses, by their very nature, don’t lend themselves well to social distancing. While you can prepare tax returns or legal documents without face-to-face contact, it’s hard to cut hair or paint nails and stay six feet away from your customer. If you own a movie theater, you’re closed until further notice.

The travel industry is eroding as airlines are forced to cancel flights, reduce capacity, and stop flying to many international destinations. Cruise ships have become floating Petri dishes, and most voyages for the near future have been canceled. No one wants to book a vacation because we don’t know how long this will last. Airline and cruise stocks have plunged in the past weeks. If you buy their stock now at these depressed prices, how long can you wait for it to recover? Maybe airlines will focus on moving cargo instead of passengers, at least for the time being in order to stay aloft. Perhaps idle cruise ships and empty hotels can be re-purposed as quarantine centers or supplemental hospitals.

Widespread job loss has far-reaching effects. The person who can no longer work in his customer-facing position now has to defer discretionary expenditures. That doesn’t bode well for the contractor who was going to handle his remodeling project. The ban on large gatherings means that a wedding is postponed, which takes away work from the florist, the caterer, the bridal shop owner. When the shop owner has to shut down and lose his revenue stream, he can’t pay his rent, which will leave his landlord in a financial bind.

Spending more time at home these past weeks, I’ve noticed neighbors out walking their dogs, playing with their children, doing things as a family. (With schools out, companies that sell homeschooling materials should see some opportunities.) Gyms are closed, so people are walking or riding bicycles. Perhaps there will be increased demand for home exercise equipment. Maybe there will be a surge in sales of board games, home theaters, and other types of home entertainment.

Animal shelters and rescue groups are suffering because they’re unable to hold public adoption events. But with so many people quarantined at home, some are stepping up to foster homeless animals. Maybe the pet food and supply industry will see a surge as temporary foster parents become attached to their animal companions and decide to adopt.

Those who know how to cook are eating better than those who are used to consuming most meals out. Especially those cooks who are flexible enough to experiment with substitutions when the usual ingredients for their favorite recipes are out of stock. Perhaps there will be a burgeoning interest in cooking classes, and cookbook sales will increase.

As an author, I hope people will rediscover reading during this period of social isolation. That’s a bit of a challenge with libraries and bookstores closed, and Amazon.com classifying book orders as “nonessential,” but there are still audio and e-books available. And while most bookstores aren’t open for browsing right now, many will take orders online or over the phone and ship books to waiting readers.

Whether the stock market is up or down, there are always investment opportunities. Look around you and observe what is trending, what needs must be filled. And try to ignore the hysteria of the crowd. Eventually, this will pass.

What are your thoughts about investing now? I’d love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.
Sign up for her newsletter at sharonmarchisello.com

Countdown to Financial Fitness: A New Car Rental Scam

Countdown to Financial Fitness: A New Car Rental Scam: I'm convinced that employees at car rental agencies must earn a commission on selling supplemental insurance. They work too hard to tr...

Countdown to Financial Fitness: New Thoughts on Recycling

Countdown to Financial Fitness: New Thoughts on Recycling: The spread of the coronavirus has forced us to change the way we live and the way we think about what’s economical or good for the environ...

New Thoughts on Recycling

The spread of the coronavirus has forced us to change the way we live and the way we think about what’s economical or good for the environment.

I’ve always been in favor of “recycle, repurpose, reuse.” Try not to waste anything. Avoiding waste saves money; saving money is the first step to building wealth.

Only weeks ago, there was a movement to eliminate single-use plastic items: straws, water bottles, utensils. Bring your own bag to the grocery store. But now, in these times of extreme caution to avoid contamination, how smart is it to wash and refill a water bottle? Or to keep dragging around and handling that cloth grocery bag? I’d even think twice about picking up a gently-used paper napkin to wipe up a spill instead of cracking open a fresh roll of paper towels.

I’m the person who will return a stray shopping cart from the parking lot on my way into a store. In the past, my aim was to prevent said shopping cart from dinging someone’s vehicle. Yesterday, I did this at Costco and then realized with horror that I might have exposed myself to the coronavirus. There were no wipes at the entrance; the staff advised customers they’d already wiped down carts prior to giving them out. But because I had picked up my cart from the parking lot, I’d skipped the sanitation process. Luckily, my husband had some hand sanitizer in his pocket.

Being an avid reader, I love and support libraries. The other day, I mentioned to a friend that I had to rush to the library to pick up a book before municipal and county buildings went on lockdown for the rest of the month. “I wouldn’t touch a library book,” my friend said. “If I want to read a book, I buy it new from Amazon.” She wrinkled her nose, cringing at the thought of handling such filth.

Yes, library books have been touched by many other people. So have new items on the shelves of stores, unless they’re kept behind a glass case. Am I getting paranoid now?

Probably the filthiest item in our lives these days is cash. Think about how many hands have touched that bill or coin in your wallet right now. We’ve been progressing toward a cashless society for a while; will the coronavirus pandemic push us closer?

It’s a new reality, and it’s hard to balance saving money, saving the environment, and saving lives.

How have your habits changed as a result of the pandemic? I’d love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.

Sign up for her newsletter at sharonmarchisello.com

A New Car Rental Scam

I'm convinced that employees at car rental agencies must earn a commission on selling supplemental insurance. They work too hard to trick customers into accepting it.

For example, there's the assumptive technique. Last month, we rented a car in Albuquerque and the agent asked us, "Will you be taking the full coverage, or just the basic?" She became less friendly when I told her, "No coverage, thank you." Especially after I'd just declined her upgrade offer. "It's supposed to snow today, and we're almost out of four-wheel-drive vehicles. But you're in luck; I still have one available. Or will you be comfortable with the all-wheel-drive?" Both, we discovered, came with a hefty surcharge, almost doubling the price of the standard rental we had reserved.

On another trip, we had to reroute to Baltimore at the last minute and didn't have time to shop for a rental car in advance. The quote we received from the agent at the desk did not provide a breakdown of charges. When I looked at my paperwork, I saw that all the supplementary insurance coverages had been added to the basic rental fee. No wonder the total seemed so expensive! The agent had just handed me my contract without asking me to initial anything, or even sign my name. When I went back to the desk and questioned him, he told me, "The airline discount rate you're using requires you to accept full coverage." I didn't remember any such requirement but had no way to check at the time.

When we got home, I checked. Employees had been advised to decline the supplemental insurance since the American Express card we're supposed to use provides the coverage. I wrote to National and explained the situation; they refunded all my excess charges.

Last weekend, we rented a car in San Diego and faced a new challenge to resisting the extra insurance. When the agent asked us, "Will you be taking the full coverage, or just the basic?" and I replied, "No coverage," he said, "Then I'll need proof of your auto insurance. What's your policy number?"

My policy number? My insurance card was in the glove box of my personal car, parked at the airport in Atlanta.

"I'm sorry," he said. "Unless you can provide me with your policy number and deductibles, I'll have to charge you for full coverage." The CDW provided by my credit card company didn't count, he told me, because "it's just secondary."

After googling our insurance company, calling the toll-free number for the national office (where we were told we'd have to contact our local agent to get our policy number), we finally got connected to our local agent, who was just walking out the door on a Friday afternoon. Fortunately, he was able to find our policy number and reluctantly, the rental car agent allowed us to decline the supplemental coverage.

Now I keep a copy of my insurance card in my wallet.

What experiences do you have with car rental surcharges? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth

Sign up for my newsletter at sharonmarchisello.com

Countdown to Financial Fitness: Coronavirus and Your Money

Countdown to Financial Fitness: Coronavirus and Your Money: According to the media, we’re on the verge of a global pandemic. Last week, the stock market returned its worst week in over a decade. Is ...