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Warren Buffett says this is how your finances can survive COVID-19

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Warren Buffett says this is how your finances can survive COVID-19

Warren Buffett says this is how your finances can survive COVID-19

The coronavirus pandemic and resulting recession have been hitting everyone — including billionaire businessman Warren Buffett.

Most of the companies making up his massive conglomerate, Berkshire Hathaway Inc., felt “relatively minor to severe” effects from the COVID-19 outbreak during the spring and early summer, Berkshire’s most recent earnings report reveals.

One of Buffett’s businesses, aircraft parts maker Precision Castparts, cut 10,000 jobs and dropped in value by $9.8 billion, because people are flying less, the report indicates.

Even so, Berkshire reported an 87% jump in quarterly profits — so Buffett would seem to be weathering the crisis just fine. See what the folksy financial guru has said in public comments about how to protect your money and keep debt under control as the virus rages.

Take advantage of low interest rates

<cite>1599686sv / Shutterstock</cite> <br />With interest rates falling, Buffett says it’s a great time to borrow.<br />” data-src=”https://s.yimg.com/ny/api/res/1.2/QqBFjTzZJf.XpZnUyFfXpA–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/db61023503ef723a20fe35423d1aba5e” src=””></img></p> </div><figcaption><cite>1599686sv / Shutterstock</cite> <br /></br>With interest rates falling, Buffett says it’s a great time to borrow.<br /></br></figcaption></figure> <p>Buffett became one of the wealthiest people on the planet by capitalizing on opportunities. He sees some fantastic opportunities these days, courtesy of the Federal Reserve.</p> <p>“This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money,” he said during Berkshire Hathaway’s online shareholders meeting earlier this year.</p> <p>To help the economy recover from the coronavirus, the Fed “did the right thing” by cutting a key interest rate almost to zero, Buffett says.</p> <p>For homebuyers and homeowners, it’s an excellent time to borrow. Thanks in part to the Fed, rates on new and refinance mortgages have been lower than ever — and it’s still possible to find 30-year loans with rates under 3%, if you <a data-ylk=shop around and compare mortgage offers from several lenders.

Always be ready for the worst

<cite>Sergey Nivens / Shutterstock</cite> <br />Buffett said a ‘megacatastrophe’ was coming.<br />” data-src=”https://s.yimg.com/ny/api/res/1.2/zWcID6HgCgIBtOKZ3t489Q–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/b24fc58e99eaffd3bb159857d0079731″ src=””></img></p> </div><figcaption><cite>Sergey Nivens / Shutterstock</cite> <br /></br>Buffett said a ‘megacatastrophe’ was coming.<br /></br></figcaption></figure> <p>They don’t call him an oracle for nothing. The multibillionaire said during an interview in March: “I’ve always felt a pandemic would happen sometime.”</p> <p>In 2019, he warned that the world was due for a “megacatastrophe.” It would be some kind of “total surprise” that would dwarf devastating hurricanes Katrina and Michael, Buffett told his Berkshire shareholders in a letter.</p> <p>He said his company, which is big in the insurance business (it owns Geico and other insurers), would suffer massive losses — but would be ready for business <em>the next day</em>.</p> <p>Like Buffett, you can be prepared for whatever comes — by buying life insurance, which provides financial protection for your loved ones. In just 90 seconds online, you can <a data-ylk=find multiple life insurance rates tailored to your family’s needs and costing as little as $1 a day for $1 million in coverage.

Don’t carry credit card balances

<cite>Krakenimages.com / Shutterstock</cite> <br />Buffett says if you’re carrying credit card debt, get rid of it<br />” data-src=”https://s.yimg.com/ny/api/res/1.2/7bON7vN0GJeTcj9mH4G58g–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/8266da36d63ae1151cbbdc2cafdca06a” src=””></img></p> </div><figcaption><cite>Krakenimages.com / Shutterstock</cite> <br /></br>Buffett says if you’re carrying credit card debt, get rid of it<br /></br></figcaption></figure> <p>As layoffs have skyrocketed during the pandemic, Americans have been piling on more credit card debt: 47% now carry balances, up from 43% in March, and nearly a quarter say they’ve taken on more card debt amid the coronavirus downturn, a CreditCards.com survey found.</p> <p>Turning to credit cards because of financial hardship is one thing, but Buffett says some people use plastic as “a piggy bank to be raided.”</p> <p>During the virtual shareholders meeting, he talked about a friend who came into a windfall and asked for advice on what to do with it. She also had credit card debt — at 18% interest.</p> <p>“If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off,” Buffett said he told her. “You can’t go through life borrowing money at those rates and be better off.”</p> <p>When credit card debt becomes overwhelming, experts say a good first step toward getting rid of it is to scoop it <a data-ylk=into a debt consolidation loan — at a much lower interest rate than 18%.

Be careful with stocks

<cite>Pradpriew / Shutterstock</cite> <br />Buffett has gotten out of airline stocks because of COVID-19.<br />” data-src=”https://s.yimg.com/ny/api/res/1.2/36tlPy9qHM6DQ1g7WtsYHQ–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/f062cf27053c7092cf373bffbfd21b88″ src=””></img></p> </div><figcaption><cite>Pradpriew / Shutterstock</cite> <br /></br>Buffett has gotten out of airline stocks because of COVID-19.<br /></br></figcaption></figure> <p>The coronavirus crisis is ravaging entire industries, including retail, restaurants and entertainment. Buffett has decided the damage to one particular industry is more than he can bear as an investor.</p> <p>“The airline business — and I may be wrong, and I hope I’m wrong — changed in a major way,” he told his shareholders. That was how he explained why Berkshire sold off all the airline stocks it owned.</p> <p>Buffett says people have been discouraged from flying, so “the world has changed for the airlines.”</p> <p>One of the carriers his company dumped from its portfolio was Delta Air Lines, whose stock price has lost half its value since the start of the year.</p> <p>Buffett looks out for his shareholders the way a robo-advisor can protect an everyday investor. These <a data-ylk=automated investing services automatically adjust your portfolio to give you some cushioning whenever individual stocks or whole sectors go off a cliff.

Stick to your long-term plan

<cite>Things / Shutterstock</cite> <br />Buffett says stay on target with your financial goals.<br />” data-src=”https://s.yimg.com/ny/api/res/1.2/8gRBWh3autqMifjXb5o4_g–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MA–/https://media.zenfs.com/en/moneywise_327/f346ca6b0b687caf6301128bcc9553e6″ src=””></img></p> </div><figcaption><cite>Things / Shutterstock</cite> <br /></br>Buffett says stay on target with your financial goals.<br /></br></figcaption></figure> <p>Warren Buffett says he’s confident the U.S. economy will bounce back from the COVID-19 crisis.</p> <p>“Nothing can basically stop America,” he said at the online meeting. “We haven’t really faced anything that quite resembles this problem, but we faced tougher problems. The American miracle, the American magic has always prevailed, and it will do so again.”</p> <p>But he also said no one knows what’s going to happen, so investors should brace themselves for a potentially long recovery.</p> <p>“You’re going to get a fine result if you own equities [stocks] over a long period of time,” Buffett said.</p> <p>In other words, you need to hold on tight during times like these. A financial planning service can help you stay focused with your investments. Today, you can <a data-ylk=connect with a certified financial planner online and inexpensively, to keep you on track toward your long-term goals.

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