PATIENCE, PRUDENCE, AND TRY NOT TO PANIC: Advice from a Financial Advisor During the Pandemic
As part of our continuing coverage of Coronavirus Disease 2019 (COVID-19), Sarina Fazan talks with David Duquette, a local financial advisor with Park Avenue Securities, a financial representative with Guardian, and the founder of Impact Medical Advisors, about the financial impacts of the pandemic.
The COVID-19 crisis has affected us on many levels, from our health to our financial stability. So, should people be panicking at this point? David says, “To be honest, it’s perfectly normal to panic and to be nervous when situations like this occur. This is not only affecting your financial life but your health… Keeping in mind, however, we tend not to make great financial decisions, or decisions in general, when we are nervous or when we’re emotional. So, when you are managing the decisions that you’re making at this time, you want somebody hopefully there to help you out to remove emotion from the decision-making process.”
Before making any changes or decisions regarding your finances, David urges that you first consult with your financial planner, tax professional, or attorneys. He stresses the importance of being proactive with your financial situation, instead of reactive, and building the appropriate emergency funds for your family and business.
David’s role as a financial planner is to guide his clients through the decisions and unique circumstances that they face. As a general rule, he recommends that his clients develop an emergency fund, holding at least six months of expenses per person in the household. Business owners should save six months of personal expenses and six months of business expenses.
But what if you do not have an emergency funds? David says that this is the time that you should save any money coming in, putting the repayment of debt on the back burner. David also advises that you contact the financial institutions that manage your mortgage, credit cards, and/or student loans to see if they have any offers to help you.
If you do not have a financial planner or accountant, he suggests that you talk with friends and family for recommendations. David explains, “You want to make sure that, first off, you like the person that you’re working with. I think that’s a very important consideration. Somebody that’s working with your finances throughout your life should be in your life numerous times a year for countless years, right? So, working with somebody that you don’t enjoy their company, or you are dreading their phone call, really it’s too short of a life to deal with people we don’t enjoy working with.”
As we look towards the future, David says that it is important that your financial planning is not just based on growing wealth, but that it protects your income from loss and that you are saving adequately. In fact, the vast majority of Americans save less than five percent of their income. His advice is to save 20 percent of your income and maintain liquidity of the majority of that savings.
David explains, “Everyone’s situation is different, so the level of panic will be different depending upon if you’re just starting out in your career, somewhere in the middle of it, or towards the end of it. Those levels of panic will be unique and different to your situation. I think what this is shedding light on is that we need to be proactive. We have been in a society where we’re always so busy, so it’s difficult to take the time to work on your financial situation, to make sure it’s the best situation for you. So hopefully this is waking some people up and saying, ‘Okay, I need to make sure I’m well-prepared for events like this in the future’ and starting to be more proactive. Hopefully, we come out of this better a society, spending more time with family and realizing the important of our work-life relationship and balance. I’m at least trying to come out of this with that positive outlook on it.”
Here are links to additional financial resources from David:
· Impact Medical Advisors’ Resource Center: www.ImpactMedicalAdvisors.com/resource-center
· Florida Small Business Emergency Bridge Loan: www.FloridaDisasterLoan.org