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Money expert: Make moves now to improve finances amid COVID pandemic

Rob Sabo

Special to the NNBW

Among other endeavors, Loral Langemeier is owner CEO of Integrated Wealth Systems in Carson City.
Courtesy photo

CARSON CITY, Nev. — To say the COVID-19 pandemic sweeping the nation has led to financial uncertainty is a bit like saying Lake Tahoe is kind of deep.

Just as Lake Tahoe could entirely swallow the Empire State Building (with plenty of room to spare), the freefalling financial markets have swallowed trillions of dollars of shareholder equity.

Despite the troubled financial outlook, it’s not time to hunker down and wait for the wave to pass, says a noted money expert with deep roots in Northern Nevada.

Loral Langemeier, who has had five books on the New York Times bestseller list, says the financial uncertainty caused by COVID-19 creates time for business owners and residents of Northern Nevada alike to assess their financial situations and make moves that positively impact their financial futures.

Gov. Steve Sisolak’s mandate for Nevadans to either work from home or halt business activity entirely for 30 days doesn’t mean time stands still. Bills will still come due despite the ability to generate capital — and most people aren’t handling their current cash bleed correctly, Langemeier says.

Protecting capital while resetting and repositioning your financial foundation is the first priority, she says.

“Nevadans need to very purposefully handle their expenses, payments and preserve cash,” says Langemeier, who has served as a leading money expert on the Dr. Phil show. “You have got to know more than how much money you will make going forward because that’s a variable still to be decided. Income is not the first thing to think about – it’s managing and controlling expenses.”

Langemeier suggests business owners and residents follow these steps to better control and protect precious cash resources during these difficult times:

  • Create a detailed spreadsheet that outlines total expenditures so you are fully aware of your bottom line for cash outlay per entity.
  • Cut unnecessary credit card expenses for the next 30, 60 or 90 days. Weigh the need for recurring subscriptions such as tech support and other costs since every bit of savings helps.
  • Request delays in payments. “Credit card and mortgage companies are extremely forgiving right now,” Langemeier says. “It could give you some breathing room – and even if you can afford to pay, it’s about capturing cash right now. It’s a huge safety mechanism.”
  • Consider alternative ways to deploy the cash you’ve captured, such as hard money lending, real estate, or expanding product offerings.

Another big mistake business owners are making, she says, is reducing human capital before completing the steps above. Even if employees are the largest line item expense, that’s not where business owners should be making the deepest cuts because the impacts of lost human capital and costs for re-training new employees can outweigh those expenses, Langemeier says.

“Human capital is very difficult to replace,” she says.

The plummeting value of company-sponsored 401(k)s, coupled with restrictions on how that money is invested, has many people pondering whether to cash out their retirement plans entirely while there’s still something there or roll them into self-directed IRAs so they can pursue alternative investments.

Langemeier notes that people can only roll over 401(k)s into self-directed IRAs if they have completely separated from their former employers. Furloughed and laid off workers don’t qualify.

Lastly, business owners and Northern Nevadans should take stock of their skills and try to find innovative ways they can create additional revenue streams by monetizing those skills.

“There are many 21st century lemonade stands that could fill gaps for a lot of people,” Langemeier says. “Instead of sitting at home watching Netflix, spend this time focusing on creating income. There are so many cash machine ideas for people who want to use this time to learn and grow rather than act like it is the worst of times.

“It’s breathing room you’ve never had before – you don’t have to run kids to camp, sports or school. You don’t get to do anything but stay home and think and create.”