As more and more people become vaccinated and America “reopens”, I’m hearing a lot of economists speak optimistically, painting a rosy picture of the growth we’re likely to see as the recovery unfolds. I can’t help but want to take pause and ask one simple question.
What happened to all the people whose businesses were closed down due to the pandemic?
As a financial advisor and entrepreneur, myself, I can’t help but feel an incredible sense of sympathy for the retail businesses who were the casualties of this grim time in our country’s history. It seems like the plight of these individuals is so quickly forgotten as we become enticed by the rosy picture of the good times to come.
Does anybody care about what has happened to our local small retail businesses?
The restaurants, dance studios, car dealerships, personal trainers?
I have a local hardware store in my town but this is becoming the exception to the norm as Home Depot, Lowes and online retailers take over. People who start businesses don’t do so because it’s the easiest thing in the world, or because they want to get rich in a hurry. It takes years of hard work, commitment, and sacrifice, forgoing the benefits of today in exchange for the ability to make life better for other people, and reap even greater rewards.
That’s capitalism. You can’t switch it on and off. The system doesn’t work that way. The government’s extreme interventionist stance, to me, does not bode well for the future. I would not be surprised if we were to see this type of artificial manipulation of the system happen again, unfortunately, in our lifetimes.
There are a few key points here.
· Even for those who run businesses, you just can’t invest all your eggs in one basket. Your business can’t be the only place where you invest your capital. Save and invest outside of your business as much as you can, even if it’s just a little bit each year.
· Although we apparently are headed for better times, there is likely to be some market volatility as the switch gets turned back on. As always, a long term stance focused on your life goals and objectives, as well as the level of risk that you are willing and able to take, is one that works best.
· Shocks like this underscore the need for a well-stocked emergency fund. Always maintain three to six months of cash to readily access in case your income were to become compromised.
And lasty, when it is safe to do so, please consider supporting your local businesses. Small businesses are the lifeblood of this country, and yet look at what the shutdown has done financially to these folks. They’ll either have to be on some form of governmental assistance program, or have to deplete their entire asset base, destroying the fruits of their hard work for decades.
Does anybody care about them?
If so, show them you do, when it is safe and proper to do so.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.