For many investors, Warren Buffett is a role model and cult figure. But how can his advice be implemented in times of the corona pandemic?
?? Corona pandemic puts people in financial straits
?? Warren Buffett has advice that will help
?? You don’t have to own stocks to follow Buffett’s tips
On August 30th, 2020 the legendary “Oracle of Omaha” celebrated his 90th birthday. A few weeks earlier, in July, Doug Whiteman, the editor-in-chief of “MoneyWise” published a compilation of various Buffett advice on dealing with money and how it can be implemented in the current Corona situation – even if one is not active in the stock market .
Take advantage of low interest rates
The stock market guru is known for grabbing good opportunities. However, even people who are not involved in the stock market can currently do this. Because to support the ailing economy, the Federal Reserve (Fed) – correctly in Buffett’s opinion – has its Base rate until further notice reduced to 0 to 0.25 percent. “Now is a good time to borrow money,” Buffett said in May at the general meeting of the investment company he led Berkshire Hathaway.
According to “MoneyWise”, the measures taken by the Fed have, among other things, lowered the interest rates for taking out or refinancing a mortgage to a record low. According to Doug Whiteman, this is an excellent time for property buyers or property owners who want to reschedule.
Be prepared for the worst
Berkshire Hathaway is also active in the insurance business. Last year, the “Oracle of Omaha” warned its shareholders that a “mega-catastrophe” could someday occur that would “completely surprise” the world. If it did, Berkshire would make massive losses, but would be ready to continue doing business the next day.
One way of following this approach of preparing for the worst, according to Doug Whiteman, is by taking out life insurance. In this way, the bereaved relatives are at least somewhat financially secure in the event that a tragic accident happens to you yourself.
Do not accumulate credit card debt
According to Buffett, there is nothing to prevent one Credit card to use, even if you have run into a financial bottleneck due to job loss. However, one should avoid accumulating credit card debt, as the interest rates for it are usually very high.
The stock market legend told of an incident with an acquaintance who was in financial need. He had the following advice for her: “If I had to pay 18 percent loan interest, then the first thing I would do would be to use all available funds to pay off this debt.”
According to Doug, other experts also recommend converting credit card debt into a fixed loan when the debt is barely manageable. This reduces the interest costs considerably and the debt can be repaid faster. Finanzen.net editors