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Creating Wealth: A DIY Financial Plan

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What is wealth?  Defined differently by Americans, most can agree that it’s a conduit to alleviating stress and worry.  Most people want to pay bills on time and have some funds left over for leisure or investment.  

Creating a plan to organize personal finances could be the key to creating wealth.  At CNM, all students in the Introduction to Business class (BUSA 1101) are asked to monitor expenses, analyze spending, and develop an annual budget.  This exercise is a springboard to developing an investment strategy.

Below are some thoughtful steps that could be taken toward creating wealth. 

Step 1: Define your goals

Consider what you want your future to look like.  How and where do you want to live? Do you want to help your children or grandchildren with college expenses? When would you want to retire?  Do you want to travel?   Draft a timeline for your goals and estimate how much it will cost. 

Step 2: Organize your financial records

After pulling together all of your bank, credit card, and investment accounts, create an excel spreadsheet of all of this information.  How much is in each account, how much do you owe, how much goes into the accounts monthly.  Also, list life insurance and long-term care insurance if you have it.  (Note: these may be key items if you wish to have a secure future.)

Step 3:  Analyze your spending and income

Now is the hard part – looking at where your money comes from and where it goes.  Most people are alarmed at how much they spend eating out.   A home-cooked meal could cost up to 60 percent less than a dinner out.  A conversation with your spouse, partner, or other family members should take place, agreeing on some smart choices. 

Step 4:  Develop a budget

Next, create another excel spreadsheet (or hand-written plan) for how you will spend your income.  Make sure to leave room for “estimated” and “actual” so you can track your spending.  The goal here should be to have some “left-over” in order to invest and plan for your future life.  Those people who have been successful with financial plans have “saved” their way to a comfortable life.  Hoping to win the lottery or hit it big at the casino is not a viable option. 

Step 5:  Determine where to invest your money; how to invest for retirement

Once you see how much can be saved, transfer it automatically every month (before the spending begins) to a remote account that cannot be accessed easily.  This is the “pay yourself first” idea.  Watch the funds build!  Consider where you will place your funds in order to grow it.  A savings account at a bank or credit union doesn’t pay out much return.  Consider a mutual fund, bonds, or stocks, depending on your risk level.  Working with a financial planner (sometimes free at credible online website like Fidelity or Charles Schwab) could help educate you about your investments.  Free retirement plans are also available at some of these websites. 


Step 6:  Measure your results; make adjustments

While long-term investments don’t need much monitoring, others should be watched regularly.  Read and educate yourself about the economy, key economic indicators (i.e. the stock market, unemployment, etc.) as well as good investment options. “At Fidelity you can work with a dedicated advisor, who can help you build a flexible plan that’s designed to adapt to your changing needs and help grow and protect your wealth over time,” says Micah Henson, CFP, Financial Consultant for Fidelity Investments.

Moving Into Summer: Advice for Retailers

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As shops and offices start opening, there are a few hints to keep it sustainable:

  • Rethink your inventory.
    Non-essential item sales could continue to stall. Consider what customers will be purchasing.
  • If you’re not online, get there!
    There are a number of organizations that could help you set up or remodel your website. CNM and the Small Business Development Center can point you in the right direction.
  • Diversify your supply chain.
    Items from China may continue to dry up or take too long to arrive in the United States. Tariffs could play a part in increasing costs.
  • Curbside is King!
     45% of top 1000 retail chains figure to have an edge in offering a service like curbside pickup, which could be a significant factor if fear of the coronavirus continues to impact shopper behavior.”
  • Keep a cash cushion.
    Lending will be scarce. To keep a positive cash flow, stash the cash. Business owners should have a healthy contingency account. 

Source

Summer Time Restaurant Moves

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While the CDC considers any on-site dining a higher risk activity, experts agree that outdoor dining could be a great solution. During the day, outdoor dining is ideal because sunlight can shorten the lifespan of the virus. 

Cities are now planning to shut down restaurant corridors during certain hours on Friday, Saturday and Sundays for tables to be put out and spaced six feet apart. The streets that were once filled with cars would now be filled with tables. In other areas with coffee shops, breakfast and lunch places, there could be mid-day closings that extend through the week. Nearby parks and parking lots have also turned into dining plazas for struggling bars and restaurants. 

This dining model is common in most European cities. The wait staff remains outside and places orders to the kitchen electronically (all carry tablets for ordering and payments). A runner delivers food from the kitchen and bar.

If you do find yourself in an air-conditioned space, take the standard precautions: Wear a mask, maintain distance from others and wash your hands frequently.

Source

CDC on Restaurants

Air Travel Will Change – Are You Ready?

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There seems to be a lot in the media about travel in the near future. Many folks are opting for long drives instead of public transportation or flying. Even Sandia National Laboratories is allowing employees to forgo a 14-day quarantine if a private vehicle is used.

That doesn’t work for everyone. Flying on a commercial airline might be the only solution for some travelers. What can you expect? First of all, travelers will spend a lot of time in lines. Travelers will be waiting to check-in, at TSA screening, for food or drink, and to board. The lines will take more time than usual, and travelers will be asked to stay six feet from others. 

TSA published suggestions such as washing hands before and after the security screening process, and they ask travelers to place personal items such as wallets, keys or a phone in their carry-on property that will be screened through the X-ray system. Face masks are encouraged during the screening process, and a TSA officer may ask the traveler to adjust the face covering at any point during the screening process. Travelers may request a new pair of gloves for TSA workers examining their items. 

Once aboard the aircraft, travelers will be asked to keep masks on and to stay put.  Movement around the cabin will be limited, even when using the restroom. Some airlines are granting permission to get up.

The key to air travel for the foreseeable future will be patience and safety. Wear face masks, wash hands often and relax. Everyone is experiencing the same thing as you. Remain calm and helpful.

Source:
https://www.tsa.gov/coronavirus

Reopening with Caution

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Small businesses are chomping at the bit to reopen, but they know it must be done safely. McDonald’s Corporation said it best to their 14,000 US franchise owners in their 52-page dine-in reopening guide: “We ask that you remember – we only get one chance to do this the right way.”

When considering what is needed to welcome customers back, retail stores need to consult with local authorities. Planning in advance is critical. Not only will customers expect fully masked workers wearing gloves, but they also appreciate specially added touches to ensure customer comfort and safety.

Signage will be key. Telling customers that you are open and what you’ve done to make your business safe for them is critical. 

Touchless sinks, towel dispensers and foot-operated door openers will cost money, as will acrylic shields to separate customers if necessary.  

According to Mario Salazar, Starbucks store manager at the Juan Tabo and Montgomery location in Albuquerque, “We never closed, we only changed our business model from café/drive through to drive through only. Last week we changed our model to drive through and Grab and Go. We have opened our café for customers to come in and get their favorite drink.”

According to Salazar, Starbucks provided the tools needed to operate as safely as possible. “We have re-trained all partners on current and new processes to maintain a safe working environment. As a company we are doing things that go above the recommendation of our health department.”

At many businesses, including Sandia National Laboratories, employees must take their temperature and take a small survey to make sure they are healthy for work.

“We are doing our best to bring back some normalcy,” says Salazar. 

Employee and Customer Safety During COVID-19 – Part 3

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After reading Parts 1 and 2 of this series, you may ask, “what is really happening out there?” According to a current survey of CNM and UNM students working outside their homes, it’s evident that gloves, masks and sanitizers are being used. Customers are also being restricted from going inside businesses – retail or office. 

One student reported, however, that at a popular coffee shop, workers wear masks but not gloves. Employees of the establishment are required to wash their hands every 30 minutes, but most are washing every 15 minutes. 

According to Susan Davis, Franchisee Business Consultant for Dairy Queen, there are three things that all stores have added to their arsenal: new disinfecting practices, gloves/masks and separation of duties. 

“Traditionally restaurants have followed ‘cleaning and sanitation’ guidelines outlined by the local health departments, corporate offices and the National Restaurant Association.  Now, there is a new disinfecting plan that has been implemented to reduce any type of bacteria presence,” according to Ms. Davis. “In addition to gloves and masks, isolation of duties has been implemented. What this means is that a person handling the financial aspect of the transaction, money handling, has no involvement in the food component.  A separate person will now put the food order in the packaging to deliver to the customer, separate from who the customer dealt with for payment purposes.”  

Lastly, what is the best practice while using your credit card? Many establishments will take your payment at the time of the order removing the need to handle the card later (ask ahead of time). If they do not, it is best to insert your own credit card if a machine is available. If a business takes your card, whether they are wearing gloves or not, have a Clorox wipe ready to wipe it down.

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