Warren Buffett is not allowing the pandemic to get in the way.
The 90-year-old investment legend had his two COVID photos, as did his longtime business partner Charlie Munger, according to a report by Bloomberg.
Although Buffett has failed to immunize his company against the coronavirus economy, Berkshire Hathaway Inc. has made a strong recovery. Profits fell 48% last year in the huge conglomerate, but profits during the last quarter of 2020 increased 23% over the previous year.
So, on the whole, the billionaire businessman seemed to be coping with the crisis very well. You can also follow their example.
Here are six lessons from Buffett on how to protect your money while the pandemic continues.
1. Take advantage of low interest rates
With interest rates falling, Buffett says it is a great time to borrow.
Buffett became one of the richest people on Earth, taking advantage of the opportunities. In the past year, he has been pointing out fantastic opportunities for borrowers, thanks to the Federal Reserve’s response to the COVID crisis.
The Fed “did the right thing” by cutting a near-zero interest rate in response to the virus, says Buffett. The central bank continues to keep rates low, which has helped to keep other lending rates low.
“This is a very good time to borrow money, which means that it may not be a good time to borrow money, but it is good for the country that it is a good time to borrow money,” he said during the last meeting of online shareholders of Berkshire Hathaway. May.
How can you be like Buffett: If you are a buyer or home owner and have a solid credit score, grab one of today’s historically low mortgage rates while you can.
Although rates have gone up in the past few weeks, you can find new mortgages and refinance mortgages of 3% or less – if you search and compare mortgage offers from multiple lenders.
2. Keep your guard up
Buffett said a ‘mega catastrophe’ was coming.
They don’t call the Nebraska Buffett native a Oracle of Omaha for nothing. The multi-billionaire told an interviewer in March last year, “I always thought a pandemic was going to happen someday.”
In 2019, he warned his Berkshire shareholders in a letter that the world was in for a “mega catastrophe”, some kind of “total surprise” that would lessen the devastation of hurricanes Katrina and Michael.
Buffett wrote that the monstrous disaster would lead to massive losses for his company, which is big on insurance (owns Geico and other operators) – but Berkshire would be ready for the deal. The next day, he said.
How can you be like Buffett: You can also be ready for whatever comes – by buying life insurance, to provide financial protection for your loved ones. Policy sales to household heads increased during the pandemic.
You can easily access the Internet and find various life insurance offers tailored to your family’s needs and costing as little as $ 1 per day for $ 1 million in coverage.
3. Don’t charge credit card balances
Buffett says if you have credit card debt, get rid of it
As the crisis has caused layoffs to skyrocket, some Americans have been forced to accumulate more credit card debt.
Using credit cards because of financial difficulties is one thing, but Buffett says some people use plastic as “a piggy bank to be hacked”.
During the virtual shareholders’ meeting, he spoke about a friend who was unexpectedly lucky and asked for advice on what to do with it. She also had credit card debt – at 18% interest.
“If I owed some 18% money, the first thing I would do with any money I have would be to pay,” Buffett told her. “You can’t spend your life borrowing money at these rates and be better off.”
How can you be like Buffett: When credit card debt becomes unbearable, a first step in getting rid of it is to turn it into a debt consolidation loan.
You will simplify your accounts and reduce your interest costs to help you pay off debt more quickly. Instead of 18%, you may end up paying only 5.95% APR.
4. Do your homework with actions
Buffett ran out of airline shares because of COVID-19.
Coronavirus devastated entire industries, including retail, restaurants and entertainment. Buffett decided that the damage to a particular sector was greater than he could bear as an investor.
“The airline business – and I may be wrong, and I hope it is wrong – has changed a lot,” he told his shareholders. That’s how he explained why Berkshire sold all the airline shares it owned.
Buffett says people were discouraged from flying, so “the world has changed for airlines”.
How can you be like Buffett: Investors doing their homework were rewarded during the pandemic as the stock market reached new highs. Today’s investment apps can help you make smart choices.
A popular application allows you to round your purchases and invest your change, in wallets that automatically rebalance to the ups and downs of the market.
5. Stick to your long-term plan
Buffett says to stay on target with your financial goals.
Warren Buffett says he is confident that the US economy will recover from the COVID recession.
“Despite some severe disruptions, our country’s economic progress has been impressive,” he writes in his annual letter to shareholders released last weekend. “Our unwavering conclusion: never bet against America.”
But Buffett also said that no one knows what will happen, so investors must prepare for a potentially long recovery. He says that they will have a good result if they keep the stocks in the long term.
How can you be like Buffett: Financial planning services are more affordable and convenient than you might think and can help you stay focused on your investments.
Today, you can connect with a low-cost, certified online financial planner to keep you on track for your long-term goals
6. Demand help if you need it
Buffett says the coronavirus has pushed the United States into an “economic war” and many small businesses have been victimized. He asked Congress to provide more help.
“We closed many people in this particular induced recession and others are thriving, and I think the country owes it to millions of small business owners,” said Buffett CNBC in December..
A COVID-19 rescue package approved in late December included $ 284 billion in new “paycheck protection” small business loans. President Joe Biden’s bailout plan, which is now in Congress, would provide $ 15 billion in donations to more than 1 million hard-hit companies.
How can you be like Buffett: If you are a business owner or the breadwinner of the family in financial distress, look for sources of relief – and take advantage of what’s out there.
This means, for example, if you have a federal student loan debt, do not make payments until October, when the government moratorium is scheduled to end. Private loans can be refinanced at much lower interest rates today.