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By all accounts, the pandemic is far from over, and if you are lucky enough to be employed right now, you probably shouldn’t be too financially complacent. Last quarter, U.S. GDP, dropped 32%, the biggest quarterly decline in American history. While some people think the economy will miraculously bounce back when we have a vaccine and the pandemic is over, I’m not so sure. There are millions of businesses that will close for good in the coming months and there will be a lot of people unemployed. I think the worst of our recession may still be in front of us. I’m not trying to spread doom and gloom, but trying to encourage caution. I would advise everyone to reduce their long-term financial obligations and remain as liquid as possible. Real estate is almost always a good investment, but it is not the most liquid, so make sure if you invest in real estate, you have plenty of liquid assets that you can tap into if you need them. Small landlords are getting hurt right now because a lot of people are not paying rent. Cash is king, so it doesn’t hurt to keep some money in cash, and if you invest in a business, invest in something with a relatively low-cost structure, especially if you are closer to retirement than you are to getting started. Low cost, high-margin businesses are always the best for smaller entrepreneurs – especially in times like now. Stay liquid, my friends…
Regardless of political persuasion, most people think the rhetoric of politics has gotten out of control. If you believe that, as I do, there IS something you can do about it. You can ask yourself whether you are helping or hurting the situation. I like to say that there are two types of people in the world: people who add stress and people who relieve stress. I think similarly, some people are adding to the political spectacle in the country, and others are at least trying for something better.
Gary's Blog will return next week.
This past week, the National Association of Realtors invited me to participate in a meeting with the NAR leadership and Jonathan Kanter, the Assistant Attorney General of the United States.