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- Millions of Americans are out of work because of the coronavirus, but others still have plenty of cash on hand.
- As a financial planner, many of my clients are doing well financially and want to use their cash to support their communities and build wealth during this time.
- I've had clients donate protective equipment to a local United Way that needed it, pay a bakery to deliver treats to friends and family, and an investor wary of the volatile stock market who decided to put her money into bonds.
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It is a fact. All of us have been affected in some way by COVID-19 — from the healthcare workers who cannot hug their kids to the businesses that have had to close their doors to the rest of us who have relatives or friends who have contracted the virus.
However, we cannot wait for the storm to pass to reinvent ourselves, create new things, and find smart ways to put our money to work.
Even though many people have lost their income to COVID-19, others still have plenty of cash on hand. As a financial planner, I've seen several of my clients make thoughtful moves with their money over the last few weeks.
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If you are among the lucky ones, there are three smart things you can do with your money right now to support your community and build wealth.
Donate money
Last year was a great one for the economy, and one that benefited most professionals financially. I have one client who did especially well last year and wanted to use his extra cash this year to support those who are struggling.
When we talked through ways to donate, the key was to ensure he was giving his money to a cause that aligned with his values and passions, and where it could make the highest possible impact.
After going back and forth, we settled on United Way as his charity of choice. He wanted to donate to an organization that supports kids, and his local United Way was seeking donations of protective equipment for children still in its after-school programs. He was able to provide some equipment, fulfilling his desire to give to kids in need in a time of crisis.
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You too can donate your money or goods to a cause that aligns with your values: a kids' shelter; a food bank; an animal shelter; or even a hospital. There is a great need for resources in all sectors affected by the coronavirus.
Invest in bonds
The stock market has been unpredictable this season — when economic indicators have been negative, we've seen the major indices reach positive highs and vice versa.
Not being able to control the market's volatility and wanting to grow her financial independence fund, a client with extra cash did not want to put more of her hard-earned dollars in the stock market. She was looking for investments that were lower risk than her stocks but still allowed her to build wealth.
We looked at a few factors — her fixed income, time horizon, and expectations — and settled on investing in some bonds from solid corporations that are projected to grow in this economic crisis. We chose mostly blue-chip companies in the healthcare and technology sectors.
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If you're interested in investing in bonds, you can do so with as little as $500 in any online trading platform. Speak to a financial planner if you need help getting started.
Support local businesses
The local bakery in my community has seen better days. It specialized in baking cakes for birthdays and pastries and canapes for parties. With the economy at a standstill and no birthday parties on the horizon, it was forced to close.
A client called the owner and asked if she would consider baking a cake and canapes for her birthday, but the owner said the bakery had a minimum to operate. Since the client had extra cash on hand, she was able to pay the owner to reopen the bakery and deliver canapes and pastries to several of her friends for her virtual birthday party. Now, my client's friends are doing the same thing — using their extra cash to host virtual parties and getting food delivered from this bakery.
If you have a special occasion coming up, consider having treats from a local bakery or restaurant delivered to your friends and family before you get together on Zoom.
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Recognized as 2017 People Magazine’s 25 Most Powerful Women, Elaine King is a Family Business Advisor and a Certified Financial Planner professional who is considered an expert in international family financial planning and an ambassador for the CFP Board of Standards. She is also the founder of the Family and Money Matters Institute, whose mission is to empower the family’s human & financial capital making money a positive force. She has lived in Austria, Canada, Japan, Mexico, Peru and throughout the United States working with over 1,200 families creating actionable strategies focused on wealth planning, financial education, multigenerational succession, philanthropy and family governance. She has experience leading as partner, director and manager at Bessemer Trust $100 billion AUM, Royal Bank of Scotland’s Coutts Division, WE Family Offices and Citigroup in Asia, Europe and the Americas. Family & Money Expert, Bestselling author, Keynote Speaker and Social Catalyst, creator of P.E.F.F., an institutional financial education program helping thousands of families in Latin America. Elaine is a Florida Supreme Court Family Mediator, a Certified Coach from the University of Miami (ICF) and serves on the advisory board for the Family Firm Institute (FFI), Asociación de Empresas Familiares (AEF), The Estate Planning Council (EPC), Women in International Trade (OWIT) and VP Business Network International (BNI Elite Professionals). Her studies include an MBA from Thunderbird, a BBA in International Business from St. Mary’s University and a postgraduate in Family Therapy from the Bowen Center for the Study of the Family in Georgetown. She is the author of 6 published books, 2 award winning books; “Family and Money Matters – Rising Generation” and “La Familia y El Dinero – Hecho Facil”, she is often cited in global media outlets like CNN, WSJ and Forbes.
