E88: Will Your Money Survive the Coronavirus Catastrophe

Nate: In this episode, we will discuss the impact that the coronavirus has had on the economy and the stock market, how you can shield yourself from economic collapses just like this and also how you can make a killing during market collapses instead of getting wiped out by the collapse. She’s Holly, and she helps people find financial freedom.

Holly: He is Nate. He makes sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.

Nate: All right, today, we’re going to talk about something that everyone has heard about, and, if you haven’t heard about it, you’re living under a rock somewhere because it’s probably the biggest economic collapse we’ve seen maybe since the last stock market collapse of ’08. All of you have probably heard of the coronavirus and its effect on the market, and, for those of you who have money in the market, you are seeing your accounts dwindle down and get whipsawed around like crazy. I mean, there’s many of us, Holly, if you… if… no, I shouldn’t say us because you and I don’t have any money in the market, but there’s many of the listeners that… Literally, the past two years of gains, we’ve had a great economy for two years really in the grand scheme of things. Most people would say we’ve had a great stock market. We’re back where we were two years ago for a lot of people. I mean, it’s crazy how much of an impact a virus has had on your financial well-being.

Holly: I think, Nate, too, even the fact that, like we talked about, that the Fed had lowered rates, they dropped the rates, and you saw a little increase, but then it dropped right back again just to try and help ease, I guess, the up and down stock market, coronavirus, what’s it going to do today, and I think the biggest thing with all of that though is even the Feds are realizing that they need to do something, but nobody seems to know what they need to do because we basically don’t even know. We haven’t done our research, or most people haven’t, and they believe everything that’s being published out there in regards to the coronavirus, so we are making decisions based on not what we actually know, but what we fear. Our biggest fear is what we don’t know, so, if you’re hoping that stock market is going to go back up, I think it’s going to get drastically worse before it gets better.

Nate: I think so, too. I mean, a week or two ago, whenever it was, when the stock market lost 15% in one week or more, I mean, that’s a huge loss, and some people were like, “Have we hit the bottom?” Of course, we haven’t hit the bottom because it just depends on what’s going to happen. I mean, the more fearful people become, the more likely that the stock market is going to continue to go down. It’s still always surprising, and we’re going to talk about this in a little bit, so I’m not going to jump too far ahead, but it always surprises me. Us, United States of Americans here, have trusted almost solely for the last 30 to 40 years in the stock market as our tool, and, yet, something as simple as a virus in China, I feel like it should be killing a lot more people than it is if it’s going to be this much of a news.

Holly, we were talking about this before we even got on. If it really starts to hit and spread in the United States, the government is going to try to come in and limit the spread of this virus, so there’s going to be cities that are going to be quarantined, all these sorts of rules and restrictions that people are going to have to follow, which is it’s going to… for us to libertarian folk, it’s going to grind our gears more than it would to anybody else because… I would hate for that to happen, but, either way, it’s going to happen just like it has in all these other countries. If it starts to spread here, there is no way that the stock market and businesses can go unscathed with all of that. There’s just no way. I mean, if people can’t go out and buy stuff, profits are going to drop dramatically. If people aren’t going to hop on planes, then airline stocks are going to plummet. If things like that do occur and there’s quarantines left and right, there’s going to be many bankruptcies. There’s going to be large corporations asking for bailouts.

I mean, I don’t want to be a fear-monger because I honestly don’t think the virus… I think everything is being overplayed anyway, but just to be… With the amount of fear that’s out there, you’ve got to really seriously be worried about what’s going to happen to your portfolios this year if the virus gains ground in any way here in America, because I know people right now who are not going to hop on planes, canceling trips right now. Even though there’s only, what, less than 50 cases as of this podcast in America, they’re not going to hop on an airplane. I mean, it’s causing the effects whether or not it’s rational or not.

Holly: Even, Nate, I’m going to take it a step further and say it’s not even just the businesses that it could drastically affect and things like that. Where we go to school, we already got a newsletter being prepared if it is quarantined, California is quarantined, that your kids aren’t going to be going to school, that all they’re learning basically is going to be done via video, or I’m going to say YouTube basically, electronically with devices. That means there’s parents that can’t go to work or kids that aren’t in school. What are you going to do with those kids and those students? Then buses aren’t driving, and then sports, athletics, so I think it’s a greater thing that we think about not just on a business level, but even as you personally. If your kids aren’t in school, attending school, are they staying at home by themselves? What does that look like, and then teachers aren’t teaching. They’re doing recordings, but I think it affects a greater thing because we actually are… don’t know what’s going to happen.

If it’s anything like China and even limit… They’ve limited how you can purchase food over there to go into stores and purchase food. Personally, I’ve seen Asian markets, food markets where people are not going to them. They’re not visiting them. They’re not going in. They’re like ghost towns almost, even places to eat that serves Asian food, short or fast food that people just don’t go in. It’s like they’re avoiding those places out of fear of, “What if I get this virus?”

Nate: People won’t even buy Corona beer. There is a lot of fear in this, whether it’s rational or not.

Holly: I think we do have to start saying what are you going to do and where is your money going to be at place, and, if you are only dependent on the stock market, I think you have to have a real wake up call and have a better solution other than just leaving it in that stock market.

Nate: Exactly. I mean, I guess that goes into the point I was alluding to that we wanted to make. It’s a shame to me that here and in almost all of Western civilization that the majority of people have been taught and herded into a place where the vast majority of your wealth is stored in assets that, literally, could get wiped out due to a virus that got started on the other side of the world. I mean, if you were planning on retiring this year, it just… It reminds me of so much of 2008, which we point back to to say, “You can’t lay your foundation, your financial foundation on something that is so volatile.” We say, “I mean, it tends to go up over time. I mean, it’s volatile, yes, but you’ve got a wait time.” You’re going to get to a stage in your life where you don’t have time for the averages to work out. You are at the time of reckoning where it is now do or die with this money.

You may have averaged a great rate of return for the last 20 years. You could have averaged something awesome, and then, this year, the coronavirus hits. We are still not to the end of what kind of impact that’s going to have, but, at least so far, 20% reduction from its peak, and suddenly you’ve lost 20% of your wealth. Now, how much time do you have to wait for that to come back? You’re out of time when it’s now the time, so that, I mean, to build your financial future around an asset class that literally can get practically wiped out or drastically reduced by something so far out of your control, that got started in a communist country on the other side of the world, and, suddenly, that’s impacting you dramatically and your financial wellbeing. It’s time to just wake up to that and to realize we’ve been bamboozled by Wall Street in cahoots with the government to trust this type of funds, and now the Federal Reserve is going to try to prop it up, but they’re running out of ammunition.

We can all talk about what kind of reckoning are we building for ourselves in the stock market by the fact that the only reason that we’ve even recovered from the last crisis is due to easy money from the Fed. We don’t know. People can pretend that that’s going to be fine. I don’t think that’s going to be fine. I mean, there’s a lot of money sitting around in all these different places that had just been printed, that haven’t even hit circulation yet, and so it’s just a great time to be talking about it.

This is the message we’ve been talking about, Holly and I have been talking about for… since we started this podcast. You can’t trust this stuff, so you’ve got to get to a place where you can emotionally be ready to hit this type of thing running, and we’ll talk about how you can actually insulate yourself and make a profit here in the moment, but, to me, it’s a shame that this is where we are as a people, that we’ve all really believed that the stock market is the best place for our money. It’s a scary place for your money is what it boils down to.

Announcer: Come meet Holly, Nate and the rest of the Living Wealth team in person. Visit livingwealth.com/events to sign up for our free workshop in your area. These beginner and advanced workshops are an excellent chance for you to understand better what it means to pay yourself first and the impact infinite banking can have on your life. They’re hosting workshops in Orlando, Florida, Juneau, Alaska, Lawrence, Kansas, and many more. Again, visit livingwealth.com/events and sign up for a free workshop in your area. Hope to see you there.

Holly: Nate, a question people need to be asking themselves is how long does it take you to recover a 15% loss in the stock market? Number one, how long did it take you to get that type of gain, but how quickly you lost it, and how long do you realistically think it’s going to take you to regain that when, in all honesty, we haven’t, and, like Nate said, that we haven’t hit the bottom, and, for me, the only clear option or the only clear choice if you really want to make sure your money is going to grow and it is protected to an extent and it’s not in something so volatile as the stock market is it’s got to be a dividend-paying whole life insurance policy with a mutual company. It just has to be.

Nate: Using a joke, you’re not even scared to get the coronavirus. You’re so heavily insured.

Holly: I’ve got on an airplane since then. I’m getting on one tomorrow, and I’m amazed at how many people tell me daily, “You’re flying somewhere? You’re going somewhere? You need the mask and you need this and you need that,” and I did joke. I say, “I guess if it’s my time to go, it’s my time to go.” I say that because I actually probably am worth more than [inaudible 00:11:41], but the reality is I’m not going to let fear control me, but I have such peace where the money is, where that money has been placed. I’m not worried about the stock market going down even more, this or that, because it’s not affecting where my money is.

The stock market has no effect on what my money is doing with the life insurance company, and I think that’s why it’s a lot easier to get on a plane or even if I contracted the coronavirus. To be honest, people have not even known they’ve had it, and then also I have the ability to use my life insurance should I get really sick. I can pay for if I get sick or have the benefit of that, but I also have the benefit of knowing that, no matter what is happening with this virus, my life insurance and where I’ve put… chosen to put my money in and keep it out of a volatile situation, it’s not having a negative effect on it.

Nate: Exactly. I mean, we could talk about the numbers, policies and how you can really make a lot of money using them and avoid a lot of the pitfalls, but it’s hard to put a price tag on emotional stability because, if you’re in the stock market and you just have this collapse, it just makes your stomach upset. I just lost a lot of money. I had some money. Now, I lost it, and it makes you get into this feeling that you can never count on the money that’s there.

I know a lot of people feel that way. It’s just like, “I’ve got this money, but who knows what it’s going to be in 10 years, and, hopefully, certain people don’t get elected,” and all sorts of things, and they’re actually… I mean, I wouldn’t even say that their fears are overdone by any stretch, but, just emotionally speaking, that’s what we love about these policies and the infinite banking concept itself with the guaranteed growth and everything is that you can emotionally be at peace no matter what’s happening out there in the world and the grand economic systems that are at play because we have guaranteed growth that every single year no matter what, even if it’s in the great depression, the great recession, anything.

My cash values grew last week, two weeks ago. I’m getting paid dividends. I got a policy that had anniversary was in late February. I got a nice dividend check for it. The truth of it is we can talk about the numbers and returns and what you can do with it and all sorts of things, but, at the end of the day, it comes down to emotional peace of mind, and it’s hard to buy that, and they’re just something simple. Whenever your… all of your money is growing tax-free with no risk and 100% accessible to you at any given point in time, where you have a large death benefit in case something was… were to happen to you and it seemed… You can just be at peace and at comfort with it.

Holly: I think, Nate, that’s really important in understanding. Even with all that has happened with a coronavirus, I’ve never once I thought about my money and it not growing or losing any money because of where I chose to put it in life insurance to where… I’ve seen people just frantic because of how the stock market has collapsed. I mean, just talking to me yesterday, an individual, that retirement is in the stock market. The reality is, in three years, you… He might not be retiring anymore. That’s what he actually said. “I’ve worked for this company for this many years, and I was planning on retiring in three years and, because of what’s happened and taking place, I don’t know if that’s a reality,” and, for me, I never even considered it, never even had been worried about what was going on in regards to my money with the life insurance policy.

I think the peace that it brings is way… outweighs that volatility of, okay, I hope it’s going up. Yay. It went up by five. Oh, it dropped by three. It’s just a roller coaster that people are on, and I’m just going to tell you to get off the roller coaster. Your life will be so much better by getting off the roller coaster.

Nate: Or at least don’t count on it for everything. Whenever you have the foundation outside of the market, then you can actually play with the market a little bit and actually make a lot of money in times like this, and the same thing goes whether it’s the stock market or the real estate market. There’s so many people who lost everything in 2008, 2006 to 2008. When the real estate bubble burst and the stock market burst, they lost everything, but then there’s so many people who made a ton of money especially in the real estate world. When everyone was filing bankruptcy and the home prices were just plummeting down and people went in and scooped them up, and, now, those prices are back up to where they should have been, they were able to rent them and they made a ton of money, and that same thing goes for the stock market.

The people who weren’t… didn’t have to experience all their money going down by 40% were able to ride this wave up and do well, and that’s what I say is… For me, personally, I am tempted just to wait it out and see how far the market drops, and I’ve got a lot of money sitting in policies just ready to go if I feel that an opportunity arises, and so it’s going to be tempting for me certainly to ride up once the dust settles to buy in and let it go for a little bit and then just pull it right back up, and then you can lock in your profits, move it back to a policy and not have to just sit there and hope the market continues to go up for forever, because it won’t. It’s going to have another… another virus is going to hit or another collapse is going to hit or Iran going to nuke somebody or something way… in another country somewhere very far away is going to happen and it’s going to drop the stock market like mad, and you’re going to lose a ton of money because that’s where all the money was, and my suggestion would be to take advantage of opportunities that come like that like stock market drops. Don’t fall prey to them and just get wiped out by them.

Holly: I would agree, Nate. This is one of the few times I actually… I’m like you. I’ve been tempted. I wonder how far it’s going to collapse really or drop, and then how much could I buy in and let it grow over time and then take my money right back out of the market and put it back in the policy?

Nate: Just a real quick turnaround, put it in for a week. After everything’s settled down, pull right back out. Make some quick money or see what happens. I don’t know, but it’s almost I’m sitting here rooting for the stock market to collapse. Yes, let’s keep dropping. Let’s keep going down. I love seeing the red on my iPhone stock market app or whatever. Let’s keep dropping it because I want it to keep… I want it to drop by 40%. Let’s keep it running. That way, where I buy in, it’s super cheap. It’s a totally different world. You have more confidence. You have less worry. Learn a lesson from this and say to yourself, “Do I really want to keep experiencing this with my entire life savings for the rest of my life?” If you’re 30 years old now, you may be like, “I’ve got time. No big deal.” You can’t always say that. You can’t always say, “I’ve got time,” because whenever you’re 65 and wanting to retire, you don’t have time to wait. You’ve got to pull income from it. You’ve got to take money from it, and if it’s losing money, you’re double dipping it, then you’re going to cause a lot of pain, and the money will probably not last, so you’ve got to be wise about it not just for what’s happening today or how young you are, how much time you have today, but think about what it’s going to be and plan around that, too.

Holly: Yeah, you might have… is younger, more time than somebody that’s 65, but the reality is is that, if it drops, keeps dropping, you might have zero left and you have to start right back over at zero, and whether you’re 30 or you’re 65, nobody wants to start at zero.

Nate: I know a lot of people are buying into company stock. If you work at a company and they have these stock options to buy and different things, and, sometimes, those are really great opportunities and different things, but it is true. Even then, you’re so… I know a lot of people who have a ton of money in just their own company stock, and if your company happens to be a company that would really get drastically hit by a quarantined city, many cities in the United States, and could end up filing for bankruptcy, then, suddenly, all that’s gone, so, as much as you can, I’d just encourage you to get on stable ground and you really won’t regret it. We can guarantee it.

Holly: I just want to say we fear what we don’t know, so, in regards to the coronavirus, don’t believe everything that’s being said. Do your own research. Nate and I say this a lot. Do your own research. Come to your own conclusions and make your own decisions, and we’re just telling you that, if you have done the stock market or that’s where all your eggs are, we would just encourage you to get some of it out and put it in something less volatile while this… while you ride the wave. I think you would be surprised at actually what is the truth and what is being shared via social media. I think we’ve let fear out-rule our mind and our thinking in regards to it, but you can have peace like Nate and I. We definitely know where our money is, and, right now, it’s not nearly as volatile than the stock market is so, and, in fact, it never has been.

Nate: I love it, and I can’t get over it. We love it here, but, with that being said, if you always remember, if you follow the herd, you will get slaughtered.

Holly: For free transcripts and resources, please visit livingwealth.com/e88.