ST. CROIX INSIGHTS

Change is inevitable, but this year was different. 2020 was off to such a great start! Wrapping up the holiday season with friends and family, winter vacation travel in full force, snowbirds enjoying life outside of this cold tundra, the economy roaring—how could it get any better? As we know now, everything went south fast (and not in a good way). 

We’ve seen winners and losers during this coronavirus, although I’m not sure that’s the right terminology; maybe it’s slightly inconvenienced vs. dramatically impacted. If you had told me on January 1, 2020, that by August 1, 2020, face masks would be common, international air travel would have come to a halt (and I read last week that it is not expected to return for another three years), RV dealers would hit record sales (up 90%), and businesses would no longer want cash as payment for goods and services, I would have bet my net worth that you were wrong. You could have cleaned me out!

These changes haven’t been easy for any of us.

(OK, maybe the introverts have been enjoying this “social distancing,” but for the extraverts among us, I suspect this hasn’t been easy.) Technology companies have become clear winners, as their services play an even greater role in our ability to see our grandkids, work, and even socialize with friends and family. How many of you are tired of Zoom meetings by now?

I’ve been in business for nineteen years, and I can tell you that owning your own business isn’t as glamorous as you might think. You are the first to turn the light on in the morning and the last to get paid. So many businesses and employees have been impacted in this new reality of decreased sales, revenue, and customers. Businesses can’t survive long without revenue or customers, and workers have been laid off; I suspect we haven’t yet seen how many small businesses will end up closing their doors. It’s not an easy time or journey. Fourth quarter 2020 will be very telling as far as where our economy is heading.

It’s enough to make you pause and reflect on where you’ve been and where you want to go.

Use them if you got them… Each December, I purchase gift cards to our favorite restaurants because of the Christmas specials they offer. I usually buy enough so we can live off them throughout the year. I like saving money when I can, but this one might backfire on me. Early on, we decided to continue to support our favorite restaurants but hold off on using our gift cards until this July: businesses needed revenue, and using our gift cards right away truly wouldn’t have helped them. But today, so many places have experienced financial hardship, and I’ve talked to so many individuals who haven’t been in a restaurant since March and don’t expect to return any time soon. You may want to use up your gift cards ASAP.

The stock market has experienced record highs and lows and huge daily swings.

Yet to even my surprise, the markets have come close to recovering more rapidly than I would have expected. Throughout this year, I’ve been traveling by air, car, and boat. Hotels are sold out wherever I’ve stayed, restaurants are full (due to fewer tables), and air travel has been almost enjoyable, as airports have been ghost towns and flights have been less than half full. I suspect air travel has changed for years to come, and higher prices will be the new norm. I’m OK paying a little more not to be packed in like sardines on my next flight.

I never thought we’d see interest rates so low in our lifetimes again, but here we are. If your interest rate is over 3%, now’s the time to do something about it. For those who enjoy the open road, I suspect in two years, you’ll be able to pick up an RV at a great price. Amazon now has RV parks where employees can live for free in their own rigs! I’m a big fan of credit card reward points (I pay them off each month), and cash is no longer the preferred payment method. It’s time to get the rewards you deserve (if you can keep that balance down!).

Delivery will continue to play a major role in our lives.

From groceries to dog food, your UPS delivery professional is really getting to know you and your purchasing habits, along with Amazon and Google. I still enjoy walking down the aisles at my local Costco in search of pricing ending in .97 to find the best deals. Though I must confess, I’m on a first-name basis with the UPS guy now.

All day long, I observe what’s happening around me and how the coming changes could impact my clients, friends, and family.

Working our life plan isn’t always easy. As I close this letter out while finishing breakfast at the local diner, I thought you’d enjoy this observation of someone working their plan: I’m watching this guy finish breakfast, and as he’s leaving the restaurant—at 9 a.m.—he’s carrying a dish of ice cream and a spoon out with him (and no, it wasn’t me)! Being that it’s 85 degrees outside already, he’s going to have to eat it fast. He’s working his plan: breakfast followed by desert. That’s staying the course!

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Ask yourself- can my portfolio support my lifestyle in my retirement?