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COVID-19

ETFs Can Help You Recession-Proof Your Retirement Savings – Here’s How

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Recession-proof your retirement

Amid the COVID-19 pandemic and what seems like a million other things, we are entering the beginning of what is likely to be an ugly recession. Thankfully, there are a few things you can do to safeguard your finances in the event of another economic collapse. Here is a look at how to recession-proof your retirement savings.

Yes, A Recession is Coming

Personal finance expert Suze Orman has warned that the financial situation in America is about to get significantly worse. Although the coronavirus pandemic is still a large issue in the United States, many of the relief programs put in place to help individuals impacted are coming to an end. The expiring programs include:

  • Eviction and foreclosure protection
  • $600 unemployment checks
  • Student loan forbearance

These things together add up to be more harmful than The Great Recession of 2008. “We have a perfect storm coming right now,” said Orman. “You have all these things happening at once.”

Orman’s biggest piece of advice at this point in time is to stack away as much cash as you can into an emergency fund. However, many Americans are left wondering about what they should do when it comes to investing in and protecting their retirement savings.

How Index ETFs Recession-Proof Your Retirement

Three words: Exchanged Traded Funds (ETFs for short).

ETFs are one of the best ways to help you recession-proof your retirement portfolio. Index ETFs specifically allow you to track indexes like Dow Jones or the S&P. While you cannot invest in an index directly, you can invest in an index ETF. This means you are investing in all the companies within the Dow Jones (or your chosen index).

You can also invest in ETFs that focus solely on one type of business. For instance, there are tech ETFs that allow you to invest in a variety of tech companies at once. There are ETFs for beauty, pet-care brand, energy, retail, you name it!

Because ETFs are typically a good gauge of the market as a whole, your investments will follow the market trends. You may be thinking, “Well, if we are about to go into a recession, why would I want that?”

Well, the truth is, the stock market will likely bounce back and, with it, so will your retirement savings. Even if your ETF investments take a hit at first, they will also grow exponentially when the market starts to climb again. And, unlike investing in specific companies, it isn’t likely it will ever completely tank and you won’t lose everything.

Top-Performing ETFs Last Week

ETFs are good investments for most people because, as mentioned above, they typically bounce back with the market. They also provide diversification in your investment portfolio without any additional effort. This year, due to the pandemic, the types of ETFs that are performing well have been altered slightly.

Tech stocks and ETFs have been the standout star performers on the market in 2020. This is because many people are practicing social distancing and staying at home, which means more online shopping and technology use. Other ETFs that seem to be performing well are…

  • Biotech ETFs (specifically those looking in COVID treatments and testing)
  • Cannabis ETFs
  • Energy ETFs
  • Healthcare ETFs

If you are interested in learning more about ETFs and how index ETFs can help recession-proof your retirement, consider signing up for The Motley Fool Stock Advisor. 

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A Tidal Wave of COVID-19 Bankruptcies Are Coming

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COVID-19 bankruptcies

There have been more than 120 companies that declared bankruptcy in 2020 and blame COVID-19 for their downfall. Although many of these businesses were in financial trouble prior to the pandemic, the loss in revenue made those issues more evident. With many other companies holding billions of dollars in debt, it is likely we will see even more COVID-19 bankruptcies before the end of the year.

Which Companies Are Filing?


Some pretty big names are already among those filing for bankruptcy and closing doors. Here are some of the most recognizable names on the list.

  • 24 Hour Fitness
  • Brooks Brothers
  • Chesapeake Energy
  • Frontier Communications
  • GNC
  • Gold’s Gym
  • Hertz
  • J Crew
  • J.C. Penny
  • Latam Airlines
  • Neiman Marcus
  • New York & Co.
  • Sur La Table
  • True Religion Apparel

More than 100 other businesses have filed or announced they will be filing for bankruptcy due to COVID-19. This includes American Addiction Centers, a Tennesse-based addiction recovery organization, who started suffering financially when patients simply weren’t coming in after the pandemic. Even the Catholic Church for the Archdiocese of New Orleans filed for bankruptcy due to a lack of collections as many mass gatherings have been canceled.

How COVID-19 Bankruptcies Will Impact The Economy

Over 6,800 businesses filed for bankruptcy in the U.S. last year. This year will undoubtedly have many more. Companies that have filed, or plan to file, are huge players in the American economy. Some, like Hertz, even have billions in assets to sell-off. Others simply saw no way to continue in the COVID-19 social distancing era.

“We’ve survived through wars, recessions, terrorist attacks, political upheaval, hurricanes, tornadoes, blizzards and more,” Sugarloaf Craft Festivals wrote on its website. “With no cash flow coming in, even a well-managed company cannot survive indefinitely.”

The good news is many medium-to-large size companies declaring bankruptcy will likely be able to work out a payment plan to manage their debts moving forward. If they cannot, then the company is liquidated and the assets are sold to pay off those debts. Small businesses may never recover though.

“We anticipate that a significant fraction of viable small businesses will be forced to liquidate, causing high and irreversible economic losses,” a group of academics wrote to Congress. “Workers will lose jobs even in otherwise viable businesses.”

In many cases, however, COVID-19 bankruptcies are revealing already troubled business models and staggering debt. Many of these companies were struggling before disaster struck. Hertz, for instance, has debt accrued from over 10 years ago.

So, it is safe to say that, in many cases, a complete business reform will be the only thing to prevent this from happening again. It is also easy to assume there are still many other businesses who will file before the year is out. The overall economic impact is likely to be seen for decades to come.

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10 Smart Podcast Episodes to Help You Understand Money During Coronavirus

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Smart Podcast Episodes

If you aren’t following financial podcasts, then you’re really missing out on a lot of terrific information. Here are 50 of the best money podcasts to get you started. In the past few months there have been some really smart podcast episodes for people who are interested in the way that the coronavirus pandemic intersects with finance. Even podcasts that aren’t solely focused on money have addressed this important topic.

Here are my top ten recommendations for smart podcast episodes related to COVID-19 and money:

1. Money and Coronavirus: Sam Sanders and Jill Schlesinger

This is the May 20, 2020 episode of It’s Been a Minute with Sam Sanders on NPR.

The episode begins by saying, “we are going to talk about the economy – but trust me, dear listener, it’s gonna be a chat that is ultimately uplifting in spite of all the numbers we’re all seeing.”

Sam goes on to note that:

  • One in four workers have lost their jobs since coronavirus began
  • More than 40 million Americans have filed for unemployment
  • People want to know whether young, middle-aged, or older people are most impacted

That last point is what the podcast is about. Sam speaks with Jill Schlesinger about the economic impact on different generations. She doesn’t hesitate to say that this is the worst economic recession she has ever seen. Then they discuss the intersection of age and class with the economic impact of COVID-19.

(Fun fact: the second half of the episode is about a Judge Mathis newsletter. If you like something light following your coronavirus financial news, this is a good option.)

2. Coronavirus: Financial Priorities

Speaking of Jill Schlesinger, the Jill on Money show has a lot of smart podcast episodes on this topic. These are short (10-20 minute) that answer questions you might have. My favorite is the May 20th episode on reassessing your Financial Priorities. But other recent episodes address key things including how coronavirus has impacted:

  • Negative interest rates
  • Needing a trust
  • Whether or not to buy Bitcoin
  • The Future of Work
  • Where to invest
  • Maxing out a Roth IRA early

3. Rent in the Time of Coronavirus

This is the May 26, 2020 episode of The Indicator from Planet Money on NPR. It’s a short episodes, less than nine minutes. Nevertheless, I think it’s one of the smart podcast episodes out there addressing a key issue affecting many of us today.

Individuals are struggling to pay rent. Some states have eviction moratoriums, some don’t. Even if you have one, how will you pay the back rent when things return to “normal”?

And if you’re a landlord, how do you cover mortgage payments if your tenants can’t pay rent? This podcast begins with a personal individual story that highlights this important aspect of money concerns during COVID-19. Then it goes on to discuss the issue at a national level.

If you want to get more information about the impact of coronavirus on personal finance, I definitely recommend this podcast. The April 20th episodes is about “coronavirus and the digital divide” and the April 2nd episode is about how businesses are pivoting to adapt to the “new normal.”

4. Falling Interest Rates and Real Estate Investing in the COVID Era

The How to Money Podcast is a smart podcast that is well worth tuning in to if you’re interested in financial matters. In particular, the show’s Friday episodes are specifically about the intersection of current news and personal finance. As a result, many recent episodes have looked at how COVID impacts our money.

The June 5, 2020 episode covers four key topics:

  • The increase in financial scams since COVID-19 began including stimulus check scams but also more unusual scams including pet adoption scams!
  • The pros and cons of falling interest rates for student loans, mortgages and other loans
  • Pay cuts at work for people who are still employed
  • Whether or not it’s a good idea to invest in real estate during this precarious time

5. Being Sold A Better You During COVID-19 with Amanda Montell

Some people love listening to really short podcasts. Other people like lengthy podcasts. I appreciate the former but tend to prefer the latter. I’ve just always loved long-format media. So I’m a particular fan of smart podcast episodes that are around an hour long. If you feel the same way, then be sure to check out this podcast. It is Season 6, Episode 7 of the Bad With Money Podcast.

This one is all about how people are taking advantage of the fear of coronavirus to sell you things that you don’t need. It’s about scams. However, it’s also just about smart – but sketchy – marketing. It discusses linguistics, the change in marketing language, and how we are “being sold a better you.” You’ll learn to look for keywords such as “contactless delivery.” You’ll learn to pay attention to companies pushing anti-anxiety or anti-virus products that might not actually help you out. It’s fascinating and I highly recommend this one.

6. Coronavirus: Is It Time to Give Up on Financial Independence?

The BiggerPockets Money Podcast is another one that has longer (hour plus) episodes. If you’re interested in FIRE information then it’s a good one to check out. Not all of the recent episodes directly relate to the impact of coronavirus. However, several of them do.

In particular, I liked the April 5th episode. They brought together four guests that retired from traditional employment and live the FIRE lifestyle. They come together to discuss how this pandemic is shaping and changing their lives as well as current and future finances.

7. Saving Money During Coronavirus: Some Not-So-Obvious Tips

Even though I love those long episodes, I do also think it’s helpful to listen to some “quick hit” tips. The WSJ Your Money Briefing podcast has episodes that are typically ten minutes or less. The May 27, 2020 episode is seven minutes rich with some great relevant-right-now money-saving tips. They emphasize “little hacks” that save just a tiny bit at a time. For example, there’s a reminder (and how to guide) to rank your expenses not determine what spending. Then you can cut that thing out and use the money as part of your weekly savings plan.

Other recent episode topics include:

  • How to Help Your Parents with Finances in a Pandemic
  • Unemployment Fraud Rises as Claims Hit Record Levels
  • Should You Withdraw From Your 401(k) During the Economic Crisis

8. Quarantine Life: What to Do Abut Kids, Celebrations, and “Free” Money

At thirteen minutes, this is one of the shortest episodes of The Rachel Cruze Show. She has some longer ones that address interesting topics including “what to do with your money during the coronavirus” and “how to bulletproof your emergency fund.” This one is a little lighter but I think it’s also really important for all of the people out there who have kids, especially kids who have birthdays, graduations, and other celebrations during coronavirus.

She talks about how the nice thing is she doesn’t have the pressure of “doing too much” for these celebrations because COVID-19 means that they’re just going to be at home. Nevertheless, you can do some fun memory-making things without spending much money. She also offers half a dozen suggestions for free entertainment at home for kids (that aren’t necessarily for parties or celebrations.)

9. Coronavirus, Oil, and Kansas

Have you ever wondered about the price of oil? Do you understand how it’s determined and what role global economics plays in that? If not (or even if you would just like a recap), this is one of those great smart podcast episodes that provides a succinct explanation. And it does so through the lens of coronavirus.

As they say at the top of the podcast, they “follow the plunge in oil prices from a viral outbreak in China to a meeting in Vienna to a little mom and pop oil business in Kansas.” They explain the history of OPEC. Then they delve into the geopolitics of oil prices. This episode came out early in the coronavirus pandemic, on March 11, 2020. It’s a Planet Money podcast episode.

10.The Emotions of Money with Suze Ormon

Suze Orman’s Women & Money podcast has several episodes that directly address the impact of coronavirus on personal finance. For example, March 22nd was about Getting Real With Your Money During the COVID-19 Crisis and March 29th addressed the stimulus.

However, my favorite recent episode doesn’t have COVID in the name or podcast description, and yet it seems highly relevant right now. It’s about The Emotions of Money. She talks about how desperate, and even suicidal, people feel because they are financially desperate. She shares that her own cousin took his own life in this situation last year.

Suze talks about how important it is not to let emotions dictate our financial decisions, including if/how we choose to deal with the stock market. In the face of not just coronavirus but also the BLM movement and the larger political landscape, emotions are running high. We can cope with those emotions in many ways, but she suggests we don’t let fear and anxiety make our financial decisions for us.

Am I missing any of your favorite recent podcast episodes about how coronavirus has impacted finances? Educate me by sharing in the comments!

Why Has the Price of Groceries Increased During COVID-19?

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Price of Groceries Increased During Covid-19

Many Americans are struggling to stay on budget. Widespread unemployment means many households are having trouble making ends meet, for one. However, there are other financial impacts of COVID-19, including rapidly rising grocery prices.

How Much Grocery Prices Have Changed

Prices on many food staples have increased dramatically in recent months. In fact, the one-month price increase was the largest in 46 years, leading consumers to pay an average of 2.6 percent more at the register. The last one that outdid it was in February 1974.

Categories that saw the biggest increases included meat, fish, poultry, and eggs. When it came to eggs, the average price hike was over 16 percent.

However, other food categories aren’t unaffected. The price of apples went up by 4.9 percent, while bread and cookies rose 3.7 percent and 5.1 percent, respectively.

Beyond food, items like toilet paper and certain cleaning and medical supplies also saw rising prices. In some cases, price gouging was an issue, leading to toilet paper being sold for $10 a roll, for example.

The massive spike in demand and fast-dwindling supply created an opportunity to take advantage of desperate consumers. While many areas have laws against such activity, that doesn’t prevent it from occurring, at least in spurts. Consumers who needed those items may have had little choice but to deal with being overcharged.

Why Grocery Prices Are Increasing

In many cases, price increases are the result of a simple principle: supply and demand. Once shelter-in-place orders became the norm, and people began spending nearly all of their time in their houses, meals at home became increasingly common.

This put additional pressure on grocery stores as consumers began buying more items or in larger quantities. Inventory in some categories disappeared fast, a fact that can trigger price increases that serve as an attempt to stabilize product availability.

Additionally, grocers had to compete with each other to get products to replenish their shelves. In some cases, this leads to a bidding war, where the highest offer gets the goods. Then, the grocer raises its price on the product to recoup their investment and still turn a profit.

Shifting Workforce Needs

Price adjustments can also be attributed to shifting workforce needs. Many stores had to hire new customer service workers, shelf stockers, and cashiers in droves, leading them to offer higher pay rates to entice people to apply. In some cases, they also had to have more employees work overtime, which usually involves paying wages at time-and-a-half or more. This led to growing personnel costs, something that commonly is balanced by pricing products higher.

Then, as mentioned above, there’s the issue of price gouging. While not as rampant as it may have been initially, instances of the activity may continue until the situation calms.

Finally, there have been some mild to moderate disruptions in the supply chain. At times, producers had to shut their doors in response to the pandemic. Usually, this had nothing to do with shelter-in-place orders, as these companies easily qualify as essential businesses. The issue actually involved the virus sweeping through production facilities, causing widespread illness in the producers’ workforces and a need to disinfect contaminated surfaces.

For example, two Tyson Foods pork processing plants had to shutter in April. Plant employees tested positive for the virus, and many others feared getting sick, creating issues with maintaining a suitably sized staff to support operations.

Even production facilities that didn’t close, at times, had to operate at reduced capacity. Shipping companies felt the strain as well, delaying the arrival of replacement inventory. When the supply chain is disrupted, price hikes are almost guaranteed.

Are Grocery Price Increases Permanent?

In most cases, the grocery price increases won’t be permanent. Though, it’s important to note that falling prices are dependent on market stabilization or supply outpacing demand.

There have already been signs of this occurring for some products. For example, while eggs saw a massive price increase in April, as of mid-May, prices are moving down. In part, this is due to regulatory changes that allowed some egg producers to send product that would usually go to restaurants to grocers instead. Whether the cost will fall to pre-COVID-19 levels isn’t known, but any decrease is likely welcomed by cash-strapped consumers.

But not all categories are seeing a recovery currently. Pork prices may remain higher for a period, mainly due to the supply chain disruption. The plant closures and production level changes led some farmers to euthanize their animals since they had no place to send them. This decreased the available supply. Additionally, demand for pork exports rose, partially due to African swine fever impacting China’s supply before the coronavirus pandemic began.

Are All Prices Rising During COVID-19?

No, not all prices are increasing in response to the pandemic. Certain categories have even seen dramatic declines as people began to change their plans and habits.

For instance, gas prices tumbled as stay-at-home orders meant fewer people were on the road, significantly lowering demand. Transportation and apparel also had notable declines.

Some prices have also been relatively stable. For example, electricity rose a modest 0.1 percent, while new vehicle prices didn’t shift at all.

How to Keep Your Grocery Budget Under Control

The same techniques for controlling your grocery budget that worked pre-COVID-19 also work today. Stores are still holding sales to entice customers to choose them over competitors, so shopping around is beneficial. Using sales flyers to plan meals can also work.

Additionally, being part of a loyalty program and coupons can help you keep your costs down. In both cases, you may be able to secure discounts or deals on items you need.

It’s also important to be open-minded. Unless you have a specific requirement that makes sticking with one brand a must, consider exploring every option available in a product category, including name-brands and store-brands.

By making a change, you might be able to lower the cost of your groceries. Plus, when you factor in sales and coupons, the cheapest option may change from week-to-week, which is why you should always look before you buy.

 

Are changing prices straining your budget? Do you have any tips that can help people keep their grocery costs down? Share your thoughts in the comments below.

 

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Here Are the Upcoming Changes for Student Loan Borrowers

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Student loan borrowers

There has been a lot of talk surrounding the United States student loan debt over the past few years. Given the additional financial struggles that came along with COVID-19, many lawmakers are looking for a way to help student loan borrowers manage their debt. Here is what that may look like in the months to come.

What Changes Are Coming?

Since the coronavirus outbreak, it has become increasingly clear that there is something fundamentally wrong with the way the U.S. finances higher education for students. Not to mention, 2020 college graduates are entering one of the worst job markets in recent history. The pandemic gave lawmakers a basis for introducing relief programs to the Senate floor.

They have already passed temporary assistance that will waive all interest on student loans until at least October 2020. However, many politicians think more is needed. House Democrats have proposed the zero-interest period should extend through October 2021.

Additionally, the new HEROES Act would give up to $10,000 in loan forgiveness to private borrowers who are struggling financially. Democratic presidential candidate Joe Biden has even gone as far as to say he would forgive student loan debt for any borrowers who attended public college.

The country’s leaders will be meeting to discuss possible changes for student loan borrowers in the coming months. For now, it is hard to say what will happen.

Student Loan Borrowers, Keep This In Mind

No matter what happens with student debt in America, student loan borrowers need to maintain payments up until a decision is made. Putting off payments until a decision is made in Washington regarding a relief program can seriously hurt your finances.

Don’t forget, there are also a number of payment arrangements you can make as well as forbearance options if you are having trouble paying. Call your loan provider to discuss your options if you need help.

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5 Ways Artists Are Making Money During Quarantine

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making money during quarantine

Artists have always been innovators. While there are certainly established paths for making a living as an artist, more often that not, artists have to work hard to cobble together a solid income. Therefore, it’s no surprise that many artists are making money during quarantine by getting creative.

In particular, many artists are pushing the boundaries of the online digital platform as a means of earning money while stuck at home during shelter-in-place orders. It is fascinating to see the direction art is taking right now, particularly where it intersects with small business and commerce. We could all learn by watching how artists are making money during quarantine.

Here are five key approaches I’ve seen so far:

1. Patreon

Patreon is one of the key platforms that artists use to earn money directly from their fan base. It’s been popular for several years now. I have an account, and although I only earn a little bit from it each month, it really helps my bottom line. I’ve noticed that more and more artists are taking advantage of Patreon as a means of making money during quarantine.

Of course, Patreon isn’t the only way that people drum up financial support from the people who know and love them. Some artists have turned to Go Fund Me or Kickstarter. The difference between the two is that supporters on Patreon commit to continued, ongoing monthly support whereas the other platforms are one-off means of generating a sum of money.

2. Online Performance Art

The means of making money during quarantine that I’m most fascinated by is the growing art of performing online for pay. Many of us have been more active on our screens lately, participating in meetings and celebrations via Zoom, House Party, Facebook Live, and Facetime. While we used these tools in the past, use exploded now that people are stuck at home. The way that artists are innovating in this digital space is fascinating to watch.

Increasingly, performers who can’t do their work in person are figuring out ways of making money during quarantine by performing online for ticket sales and/or tips. I’ve personally bought tickets to several online events and “attended” others that were offered free. For example, I recently went to a multi-room performance art event hosted by Vau de Vire Society, a group that puts on circus, burlesque, steampunk-inspired interactive performance art events in San Francisco. They took their skills online, and I was happy to pay for a ticket to check out the performances.

I also just watched a digital symposium hosted by SOMArts in which a number of different performers spoke about how they are taking their work online. For example, The Stud (a bar and artist collective in San Francisco that typically hosts in-person nightlife events) has begun hosting digital performance art through Twitch. Digital Drag also uses Twitch to create curated “live” streaming drag shows. Attendees pay for tickets, the performers get paid, and it’s also possible to tip any of the performers through their Venmo, Zelle, and other direct-pay accounts.

Seeing a performance on a screen is different from seeing one in person. Performing via screen is certainly different than performing for a live audience. But different doesn’t mean one is better and the other worse. Artists are innovating in very creative ways, making use of the digital space and the tools available for it to do new things that they couldn’t do on stage with their art. It’s not just a way of making money during quarantine; it’s a way to push creative boundaries that might extend into new forms of art in the future, even when COVID restrictions are completely lifted.

3. Hustling Up New Work

Working artists are good at the hustle. In other words, they are driven to create and in order to make enough money to create, they also work hard. Artists continue to do that today. Sometimes it’s in the same way as before, sometimes it’s in new ways. Some of the ways that artists I know are hustling up new work online include:

  • Opening up new online stores and/or refreshing stock in existing online stores
  • Refreshing blog content and working on getting ad revenue from their artist websites
  • Refreshing their resumes and coming up with new material to showcase on their websites as they look for new online freelance art opportunities
  • Freelance writing about their experiences as artists trying to make money during quarantine
  • Developing classes (or applying for existing work as art teachers) to teach others their skills
  • Self-publishing art and writing materials

4. Artist Grants/ Emergency Funding

Despite the fact that artists are innovating and hustling, many do find themselves without enough income right now. Luckily there are a lot of artist grants and emergency funding sources that people can apply for. Low-income artists, artists facing immediate emergencies, and artists in minority groups often get first priority. However, many of these grants are open to any working artist in need.

A few examples of some of the emergency grants and COVID-era funds for artists include:

5. Street Art and Mural-Making

While many of the ways that artists are making money during quarantine do take place in the digital sphere, I wanted to emphasize that there are still other options. For example, I live on a busy street in San Francisco. All of the retail stores have been boarded up for about two months since the shelter-in-place orders went into effect. Graffiti / street art cover many of those storefronts. While that doesn’t pay the artist’s bills, they do include their Instagram handles on the art images so that they can generate a following online which can translate to money down the line.

Moreover, some stores hired independent artists to professional paint the boarded-up windows. I particularly love seeing these pieces. They are big and bold. They add beauty to the street. More than anything, they are a nice collaboration between small businesses, local artists, and the community. Plus people pay the artists to do the work, which they can do while maintaining proper social distancing protocols. It’s a win-win way that artists are making money during quarantine.

What do you see as the most innovative ways for artists to make money during quarantine?