<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



The monumental failure of Silicon Valley Bank and Signature Bank earlier this month have raised concerns of system-wide contagion that could spread to other regional and local banks, and though experts say Americans’ money in those banks is safe, they also suggest people should diversify their assets and cash to help mitigate the risk.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



Americans with less than $250,000 in the bank are guaranteed their money is safe by the Federal Deposit Insurance Corporation (FDIC), which also&nbsp;<a href="https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley-faq.html" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;it would make SVB customers whole, even if they had more than $250,000 in the bank.



For customers with more than $250,000 in a bank, Haydar Haba, managing partner of venture capital firm Andra Capital, advises diversifying money into two or three other banks or to put some of that money in federal bonds, which earn interest.



Matthew Goldberg, an analyst at Bankrate, called the collapse of SVB and Signature Bank a “wake-up call” for Americans to make sure their money is at an&nbsp;<a href="https://banks.data.fdic.gov/bankfind-suite/bankfind" target="_blank" rel="noreferrer noopener">FDIC-insured bank</a>, saying: “Even during times when there are no bank failures or few bank failures, you always have to make sure your money is safe and within FDIC limits and rules.”



Preferably, Haba said to choose a bank with a “Prime-1” rating from Moody’s Analytics, which considers a bank to be Prime-1 if it “reflects a superior ability to repay short-term obligations.”



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



“There is a feeling of a contagion going on, and the only thing the Fed can do in that case is what they did with SVB and Signature Bank, which is making customers whole,” Haba said. “The key is diversification. You can’t put all your eggs in one basket. It doesn’t make sense.”



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



Santa Clara, California-based Silicon Valley Bank’s&nbsp;<a href="https://www.forbes.com/sites/conormurray/2023/03/13/what-to-know-about-silicon-valley-banks-collapse-the-biggest-bank-failure-since-2008/?sh=27737df4c279">abrupt collapse</a>&nbsp;earlier this month sparked fears that banks had not been prepared for the effects of rising inflation and the Federal Reserve’s interest rate hikes designed to curb inflation. The bank’s collapse has been linked to multiple rounds of interest rate hikes over the past year, which caused customers’ assets to lose value, prompting depositors at SVB, which catered to&nbsp;<a href="https://www.forbes.com/sites/anthonytellez/2023/03/13/coinbase-circle-paxos-here-are-the-major-firms-with-funds-tied-up-in-svb-and-signature-bank/?sh=707957d84574">large tech companies</a>&nbsp;like Circle, Roblox and Roku, to withdraw their money in a swift bank run. Even though the&nbsp;<a href="https://www.forbes.com/sites/marisadellatto/2023/03/12/fdic-will-protect-all-silicon-valley-bank-deposits-after-sudden-collapse-treasury-says/?sh=388abdf5216c">FDIC announced</a>&nbsp;last week it would make all SVB customers whole regardless of how much they had deposited in the bank, the bank’s failure alarmed Americans that their money might not be safe in other regional banks if those banks are jeopardized in a phenomenon called&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2023/03/17/these-regional-banks-stocks-are-falling-as-contagion-fears-loom-following-svb-collapse/?sh=29bae1e23814">contagion</a>, in which the turmoil of one bank spreads to others. The same day the FDIC announced it would make SVB customers whole, New York’s state regulatory body took over&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2023/03/13/what-happened-to-signature-bank-the-latest-bank-failure-marks-third-largest-in-history/?sh=716970c090ff">Signature Bank</a>, after a similar bank run and a sharp drop in its stock (the FDIC announced Sunday that banking giant Bancorp had&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2023/03/19/signature-bank-deposits-bought-by-new-york-community-bancorp-after-sudden-collapse/?sh=405940e75d34">taken over</a>&nbsp;Signature Bank and assumed its deposits).



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



Shares of multiple regional banks fell over the past week, including San Francisco-based First Republic Bank, which&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2023/03/17/these-regional-banks-stocks-are-falling-as-contagion-fears-loom-following-svb-collapse/?sh=5aa8653814bd">sank by 36%</a>&nbsp;Thursday morning. Its shares later rebounded following the announcement of a $30 billion&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/03/16/first-republic-stock-crashes-but-bounces-back-as-big-banks-unveil-30-billion-rescue-plan/?sh=111a57ac21ce">rescue plan</a>&nbsp;through uninsured deposits from 11 of the country’s biggest banks. Some investors, however, criticized the move, including billionaire Bill Ackman, who&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/03/17/billionaire-ackman-extremely-concerned-30-billion-bank-rescue-plan-risks-financial-contagion-spiraling-out-of-control/?sh=3fe11176e899">warned</a>&nbsp;the rescue plan creates a “false sense of confidence.” Other economists, including&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/03/15/dow-drops-nearly-300-points-as-blackrock-chief-warns-svb-collapse-merely-first-domino-to-drop/?sh=2d3a40c459ba">Blackrock CEO Larry Fink</a>, caution the collapse of SVB could be just the “first domino to drop” before a “cascade throughout the U.S. regional banking sector.”



<h2 class="wp-block-heading" id="h-what-we-don-t-know">WHAT WE DON’T KNOW</h2>



Whether a&nbsp;<a href="https://www.forbes.com/sites/brianbushard/2023/03/14/warren-drafts-bill-to-reverse-trump-era-bank-deregulations-after-svb-collapse-report-says/?sh=20e749266926">bill proposed</a>&nbsp;in the wake of SVB’s collapse by Democratic lawmakers to enhance regulations on small and medium banks will pass the Republican-controlled House. The bill, introduced by Sen. Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) would reintroduce provisions of the Dodd-Frank Act that had been limited in 2018, including stress tests and enhanced risk-management practices. It faces&nbsp;<a href="https://www.forbes.com/sites/saradorn/2023/03/13/democrats-blame-svb-collapse-on-trump-era-regulatory-rollbacks-but-gop-opposes-stricter-rules/">opposition</a>&nbsp;from a group of Senate Democrats who said they had&nbsp;<a href="https://www.forbes.com/sites/saradorn/2023/03/15/senate-democrats-who-voted-for-2018-bank-deregulations-say-they-have-no-regrets/?sh=1a772253797e">no regrets</a>&nbsp;about supporting the 2018 deregulations, as well as congressional Republicans, including Sen. Tim Scott (R-S.C.), who argued the bill would not prevent banks from relying on the federal government to cover “excessive risks.”



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



Swiss banking giant Credit Suisse’s stock&nbsp;<a href="https://www.forbes.com/sites/roberthart/2023/03/20/credit-suisse-shares-plunge-60-and-european-bank-stocks-slide-after-ubs-rescue/?sh=681913de245d">plummeted by more than 60%</a>&nbsp;Monday morning, hitting a record low of 91 cents, one day after its rival&nbsp;<a href="https://www.forbes.com/sites/marisadellatto/2023/03/19/ubs-agrees-to-buy-embattled-bank-credit-suisse-central-bank-says/?sh=405d7baa3e66">UBS announced</a>&nbsp;plans to buy all of its shares in a $3.2 billion rescue plan. Shares of Credit Suisse, which had been&nbsp;<a href="https://www.forbes.com/sites/isabeltogoh/2021/11/04/credit-suisse-burned-by-archegos-and-greensill-scandals-shifts-focus-to-wealth-management-in-overhaul/?sh=42f371f42488">mired by controversies</a>&nbsp;over charges of money laundering, tax evasion and links to collapsed hedge fund Archegos and financial services firm Greensill Capital, fell after the bank&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2023/03/14/credit-suisse-finds-material-weaknesses-in-its-financial-reporting-process/?sh=33633463419e">admitted</a>&nbsp;last week to “material weaknesses” in its financial reporting, becoming the latest bank to be affected by recent turmoil in the banking system.



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/roberthart/2023/03/20/credit-suisse-shares-plunge-60-and-european-bank-stocks-slide-after-ubs-rescue/?sh=681913de245d">Credit Suisse Shares Plunge 60% And European Bank Stocks Slide After UBS Rescue</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/marisadellatto/2023/03/19/ubs-agrees-to-buy-embattled-bank-credit-suisse-central-bank-says/?sh=f01225a3e662">UBS Buying Rival Credit Suisse In $3.2 Billion Rescue Deal</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/brianbushard/2023/03/17/these-regional-banks-stocks-are-falling-as-contagion-fears-loom-following-svb-collapse/?sh=29bae1e23814">These Regional Banks’ Stocks Are Falling As Contagion Fears Loom Following SVB Collapse</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/petercohan/2023/03/20/why-186-other-banks-could-go-the-way-of-silicon-valley-bank/?sh=7e89cdf158ee">Why 186 Other Banks Could Go The Way Of Silicon Valley Bank</a> (Forbes)



By Brian Bushard, Forbes Staff<a href="https://www.forbes.com/sites/brianbushard/"></a>

South African Reserve Bank Governor Lesetja Kganyago Interview

Is Your Cash Safe In The Bank? Experts Offer Advice Amid Concerns Of Systemic Market Risk

Navigating the murky waters of financial planning in your 20s is no easy task. With the economy perennially in a state of flux and debt on the rise, maintaining a healthy financial life has proven to be even more challenging. We spoke to some finance gurus and experts to glean from them the following that could throw ideas and provide some relief:



<ol type="1"><li>Save. This money is not for immediate use, it isn’t even for foreseeable use. This money is for the long-term, and can be diversified through a number of different investments and unit trusts. These banking faculties ensure that the money you’re putting away is reaching its maximum potential and will serve you well, when the need for it arises. The amount being saved will depend on monthly income and expenses. Increasing this as you progress to each stage of life is recommended and will serve you well when the time comes to reap these rewards.</li><li>Budget. Keep track of your monthly expenses and reduce frivolous spending. A detailed review of your expenses in a month can help determine the money you need to cover it. After all essential expenses such as rent or loan repayments, the cost for essential items such as food and toiletries should be calculated next. The last to follow is optional expenses such as eating out or luxury spend. In doing this, it ensures all the important factors are covered while leaving room for the occasional splurge.</li><li>Emergency funds. Life can be unpredictable. With this come unforeseen costs. To prepare for this, experts recommend creating an emergency fund. This fund is an accumulation of money that is put away to access should the need arise. It can be used on an unexpected medical emergency or sudden job loss. The creation of this ensures that debt is not incurred and long-term savings are spared. It should be placed in a bank account that is quick and easy to access so the funds are available immediately should you need it.</li><li>Assets. Acquiring assets such as vehicles or property is an important investment into the future. Using the finance options available also has its benefits. Creating a positive credit score is important for anyone especially later on in life when business loans may be needed or when opening accounts. While vehicles depreciate quicker, these are assets that can be kept for years at a time and can be used as collateral for a better model when the opportunity arises. Property is also an investment and does not depreciate.</li><li>Retirement funds. Time waits for no man and age catches up with us all. This is why saving for retirement is something that should be started as early as possible. Everyone wants to age comfortably. To do this, it means taking the initiative while you’re young. Over and above the pension or preservation fund being accumulated through your job, setting up a retirement annuity is also highly recommended. This ensures that either a lump sum or monthly stipend is received ensuring that you age in style.</li></ol>



Being in your 20s can be exhilarating and terrifying all at once. The events of your 20s are a significant factor in how you approach the rest of your life. The one thing you want to make sure is that your finances are in order. Debt globally is the highest that it has ever been, and the economy is in recession. Preparing now makes sure that you weather the storm. With calmer seas, you’ll reap the rewards instead of being stranded with no lifeline. Let your finances be one of the things you do well in your 20s.

Millennials & New Ways of Investing

5 Ways To Plan Your Finances In Your 20s

Eventually, the economy and the stock market will recover and COVID-19, the disease caused by the novel coronavirus, will be contained. Yet the current pandemic and its economic consequences could devastate the retirement prospects of some Baby Boomers, while permanently changing the attitudes of many more.



&nbsp;“This is going to leave a real imprint on the minds of people who are near or in retirement,’’ says&nbsp;<a href="https://www.forbes.com/sites/josephcoughlin/#30f979a8398a">Joseph Coughlin</a>, director of the Massachusetts Institute of Technology&nbsp;<a href="https://agelab.mit.edu/" target="_blank" rel="noreferrer noopener">AgeLab</a>.&nbsp;“It’s a personal health 9/11 for much of the country.”



Consider this:  After years of hearing how 60 is the new 40, boomers are now being told that those as “young” as 60 have weaker immune systems and face greater risk from the novel coronavirus, particular if they have certain other health problems that increase with age. In China, those 80 and older with COVID-19 <a rel="noreferrer noopener" href="https://jamanetwork.com/journals/jama/fullarticle/2762130?guestAccessKey=bdcca6fa-a48c-4028-8406-7f3d04a3e932&amp;utm_source=For_The_Media&amp;utm_medium=referral&amp;utm_campaign=ftm_links&amp;utm_content=tfl&amp;utm_term=022420." target="_blank">suffered a 14.8% death rate</a>, while those 70 to 79 had an 8% death rate, compared to a 2.3% mortality rate for all age groups.



Of course the Baby Boomers—the&nbsp;<a href="https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/" target="_blank" rel="noreferrer noopener">72 million still living Americans born between 1946 and 1964</a>—are a diverse group. The majority&nbsp;<a href="https://www.pewresearch.org/fact-tank/2019/07/24/baby-boomers-us-labor-force/" target="_blank" rel="noreferrer noopener">are still working</a>&nbsp;and plan to stay in the labor force longer, assuming the tanking economy permits it. About a&nbsp;<a href="https://www.bls.gov/news.release/elcare.t01.htm" target="_blank" rel="noreferrer noopener">fifth of boomers provide eldercare</a>, either in person or remotely, to a parent or other family member. That means that even if they themselves are relatively healthy, they’re on&nbsp;the front lines worrying about the high vulnerability of the very old and frail. Some have no choice but to worry helplessly from afar. With the largest cluster of COVID-19 deaths in the U.S. so far occurring at a nursing home in Kirkland, Washington, the Trump Administration has directed nursing homes to&nbsp;<a href="https://www.cms.gov/newsroom/press-releases/cms-announces-new-measures-protect-nursing-home-residents-covid-19" target="_blank" rel="noreferrer noopener">keep all non-medical visitors out, except in “end of life” situations</a>, and even in those cases clergy and relatives (after passing a respiratory infection screening) must<a href="https://www.cms.gov/files/document/3-13-2020-nursing-home-guidance-covid-19.pdf" target="_blank" rel="noreferrer noopener">&nbsp;wear face masks</a>. &nbsp;Some assisted living facilities&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2020/03/16/coronavirus-is-changing-the-way-we-care-for-frail-older-adults/#3a3c870f5136">are barring visitors too</a>.&nbsp;(Read more on how coronavirus is changing care for the frail elderly&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2020/03/16/coronavirus-is-changing-the-way-we-care-for-frail-older-adults/#3a3c870f5136">here</a>.)



Much will depend, of course, on how severe and prolonged the pandemic is; how long <a href="https://www.forbes.com/sites/simonmoore/2020/03/14/what-to-expect-from-this-bear-market/#6cb4dc5261ff">the bear market that began March 11th lasts</a>; and how deep a recession is caused by the shutdowns and social isolation steps needed to slow the virus’ spread. Here are eight likely longer term effects on Boomers’ retirements. (For current survival advice, read<a href="https://www.forbes.com/sites/baldwin/2020/03/12/rational-panic-coronavirus-plan-for-retirees/#20c1773149dd">Rational Panic: Coronavirus Plan For Retirees</a>.)



1. Younger Boomers Will Fall Farther Behind



A new&nbsp;<a href="https://crr.bc.edu/briefs/why-do-late-boomers-have-so-little-retirement-wealth/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;from the Center for Retirement Research (CRR) at Boston College shows that as of 2016, even after seven years of a bull market, late boomers (those born in 1960 or later) had accumulated a lot less in 401(k) and IRA wealth than older boomers had at the same age. That’s despite the fact that fewer late boomers are covered by traditional defined benefit pensions, meaning they need to accumulate more, not less, to achieve the same level of retirement security. Late Boomers were on track to save more, the study found, but got slammed by the Great Recession and layoffs in their 40s. Some dropped out of the labor force. Others settled for lower paying jobs without 401(k)s. Alarmingly, for late Boomers in the middle wealth quartile, 401(k) participation was actually&nbsp;lower&nbsp;in 2016 than before the Great Recession.



The CRR researchers noted they were waiting for results from the Federal Reserve’s 2019 Survey of Consumer Finances to see how lasting the damage to late Boomers, and members of Gen X behind them, had been. Now, even if the news from that&nbsp;<a href="https://www.federalreserve.gov/newsevents/pressreleases/other20190213a.htm" target="_blank" rel="noreferrer noopener">triennial survey</a>&nbsp;is good, it might be just a bittersweet historical footnote—-particularly for any late Boomers who lose their jobs in a coronavirus recession.



2. Working Longer Will Get Harder



You’ve probably heard this factoid: an average of 10,000 boomers turn 65—the traditional retirement age—each day. But the Pew Research Center calculated last July that the Baby Boomer labor&nbsp;<a href="https://www.pewresearch.org/fact-tank/2019/07/24/baby-boomers-us-labor-force/" target="_blank" rel="noreferrer noopener">force has been shrinking by an average of only 5,900 per day since 2010</a>. That’s because while some chose to retire early or were forced out of the labor force early, on average, the Boomers are working longer than the previous two generations did. In 2018, 29% of folks aged 65 to 72 (that is, the oldest Boomers) were working or looking for work. When the Silent Generation and the Greatest Generation were that age, Pew figures, only 21% and 19%, respectively, were in the labor force.&nbsp;&nbsp;



Even more dramatic has been the growth in older workers who say they expect to work past 65—even though they don’t all end up doing so. In a 2016 Employee Benefit Research Institute survey, 54% of workers aged 55 and older&nbsp;<a href="https://www.ebri.org/docs/default-source/rcs/4_rcs_16-fs-4_age.pdf?sfvrsn=56e8302f_2" target="_blank" rel="noreferrer noopener">said they expected to retire&nbsp;at&nbsp;66 or older or&nbsp;never</a>.&nbsp;Twenty years earlier, only 19% of older workers answered that way.



Yet while lots of Boomers want (or need) to keep working, this harsh fact hasn’t changed in recent decades: when those 50 and older do lose their jobs (say, in the Great Recession or the coronavirus recession), it takes them longer to find new jobs than it does younger workers. Moreover,&nbsp;<a href="https://www.urban.org/sites/default/files/publication/99570/how_secure_is_employment_at_older_ages_2.pdf" target="_blank" rel="noreferrer noopener">just one in 10 match their old pay</a>. Some give up and&nbsp;<a href="https://crr.bc.edu/wp-content/uploads/2019/01/IB_19-3.pdf" target="_blank" rel="noreferrer noopener">retire earlier than they planned</a>. Those who claim Social Security early to make ends meet&nbsp;<a href="https://www.forbes.com/sites/ashleaebeling/2019/06/28/only-4-of-retirees-claim-social-security-at-optimal-time-leaving-3-4-trillion-on-table/#7d94843041fd">end up with lower monthly benefits&nbsp;</a>and less overall from Social Security than those who claim later.



3. Panic Will Doom Some Boomers’ Wealth



The current market dive is scary, for sure.&nbsp;<a href="https://www.forbes.com/sites/simonmoore/2020/03/14/what-to-expect-from-this-bear-market/#29828f1461ff">The stomach churning volatility that’s typical of a bear market</a>&nbsp;has been so severe this time that the drops have triggered multiple automatic trading halts. Eventually, the bear market will end, but not all Boomers will be there to ride the recovery. During the 2008 market crash, about 5% of those 55 or&nbsp;<a href="https://www.forbes.com/sites/janetnovack/2011/09/26/study-boomers-making-more-401k-investing-mistakes-than-younger-folks/">older dumped all the stock in their 401(k)s and then missed the 2009 rebound</a>, a 2011 study of 425,000 workers’ 401(ks) showed.



The problem with “going to cash” in a crash is that you lock in your losses. Maybe your plan is to jump right back in after the market bottoms? Good luck with that. When markets do turn back up, they do so quickly. &nbsp;As financial planner Kristin McKenna explains&nbsp;<a href="https://www.forbes.com/sites/kristinmckenna/2020/03/11/should-you-go-to-cash-until-the-market-recovers-or-ride-it-out/#593e22a0be8f">here</a>, six of the 10 best daily gains in the S&amp;P 500 between January 2000 and December 2019 occurred within two weeks of the worst 10 days. Had you missed all of those 10 best days, your average annualized total return on the S&amp;P 500 for those two decades would have been 2.44% compared to 6.06% had you stayed fully invested and ridden the roller coaster down and back up.



4. The Cash Bucket Strategy Will Gain New Fans



The current bear market should give a permanent boost to a&nbsp;strategy that was already gaining favor—one designed to allow retirees to&nbsp;<a href="https://www.forbes.com/sites/baldwin/2018/02/09/live-well-while-the-market-tanks/#4947e7c212d1">live well while the market tanks</a>&nbsp;and to conquer the “sequence of return” risk in retirement. The problem is this: even if the stock market&nbsp;averages&nbsp;a healthy return over the 30 or so years you spend in retirement, you’re&nbsp;<a href="https://www.forbes.com/sites/robertpagliarini/2020/01/22/the-stunning-problem-with-the-4-retirement-income-rule-in-one-chart/#7c041a0221cb">more likely to run out of money</a>&nbsp;if it has its bad years early in your retirement. (That’s assuming you’re planning to draw 4% out of your portfolio each year, a common rule of thumb.)&nbsp;



There are multiple ways to deal with&nbsp;<a href="https://www.forbes.com/sites/jamiehopkins/2019/10/30/4-ways-to-manage-sequence-of-returns-risk/#57acf5c827eb">sequence of return risk</a>, but arguably the simplest way is with a cash bucket.&nbsp;For example, someone nearing or in retirement could keep&nbsp;<a href="https://www.forbes.com/sites/financialfinesse/2020/03/10/what-should-you-do-if-you-retire-in-a-bear-market/#295e95391f18">three to five years’ worth of money for necessary expenses</a>&nbsp;(over and above what Social Security and any pensions provide)&nbsp;in cash or cash equivalents—say,&nbsp;<a href="https://www.forbes.com/sites/chriscarosa/2019/06/19/this-one-easy-strategy-can-save-your-retirement-from-disaster/#4b7edba7603c">laddered CDs, or Treasury Bonds</a>.&nbsp;The idea is to have enough cash that you won’t panic and can wait for the market to recover before you sell stocks to refill you cash bucket.



5. Cruises Will Fall Off Boomers’ Bucket Lists



In January, AARP released a&nbsp;<a href="https://www.aarp.org/content/dam/aarp/research/surveys_statistics/life-leisure/2019/2020-travel-trends.doi.10.26419-2Fres.00359.001.pdf" target="_blank" rel="noreferrer noopener">survey of Boomers’ 2020 travel plans</a>&nbsp;showing they expected to spend an average of $7,800 on four to five trips this year, with 51%&nbsp;planning at least one international adventure, and 23% calling their planned foreign travel a “bucket list” trip. Moreover, a full third of Boomers’ planned international trips involved staying on a cruise ship; 61% of those who chose a cruise said they did so because it was “hassle-free”.&nbsp;&nbsp;



Assuming their portfolios recover while they’re still in the travelling mood (travel declines past 75 or 80) it’s hard to believe that retirees will permanently forsake bucket list trips. But it’s easy to imagine that the image of passengers trapped on a ship for weeks as the coronavirus spreads among them, might permanently reduce the number planning to hit the high seas. Yes, the cruise industry,&nbsp;<a href="https://cruising.org/news-and-research/press-room/2020/march/clia-covid-19-toolkit" target="_blank" rel="noreferrer noopener">which has suspended operation from U.S. ports until at least mid-April</a>— has recovered from previous health scares. (The World Health Organization&nbsp;<a href="https://www.who.int/ith/mode_of_travel/sea_travel/en/" target="_blank" rel="noreferrer noopener">notes there have been more than 100 reported disease outbreaks</a>&nbsp;on cruises over the past 30 years, including recent norovirus and influenza outbreaks.) This time could be different.



6. Time With Family Will Be Even More Important



One item that pops up at the top of many retirement wish lists is spending more time with family and friends; it’s&nbsp;<a href="https://www.forbes.com/sites/janetnovack/2016/02/18/some-surprisingly-good-news-about-retirement-sort-of/#2ba1b347128d">the leading reason people say they were “pulled” into retirement</a>&nbsp;rather than being pushed there by ill health, layoffs or age discrimination. In the AARP travel survey, multi-generational family trips and family reunions, combined, were the top reason Boomers were planning either domestic or international travel.



Being closer to family also turns up in surveys&nbsp;<a href="https://www.forbes.com/sites/nextavenue/2015/02/25/homes-of-retirees-i-want-it-my-way/#67009c632025">as the leading reason people move in retirement</a>. It’s not hard to imagine the pandemic and related air travel fears will motivate even more Boomers to move nearer to adult children.



7. Aging At Home Will Be Even More Compelling



Even more than cruise ship horrors, the spread of coronavirus through that Washington nursing home and the nursing home visitor ban is likely to be imprinted on Boomers’ minds—and the minds’ of their own now adult children. The vast majority of Boomers already say they want to age in place “where their marriage and mortgage and memories are,’’ notes the AgeLab’s Coughlin. But, he observes, that determination hasn’t been tested yet, since the oldest of them turn 74 this year, while the average age for entering assisted living facilities is 83 or 84.



The desire to age in place—and the reality that not everyone can—predates the Boomers. &nbsp;A&nbsp;<a href="https://crr.bc.edu/working-papers/are-homeownership-patterns-stable-enough-to-tap-home-equity/" target="_blank" rel="noreferrer noopener">new CRR study</a>, using data from the University of&nbsp;<a href="https://www.src.isr.umich.edu/projects/health-and-retirement-study-hrs/" target="_blank" rel="noreferrer noopener">Michigan Health &amp; Retirement Study</a>&nbsp;which has tracked about 20,000 Americans 50 and older since 1992, finds 53% of homeowners stay in the house they owned at 50 for the rest of their lives. Another 17% move once, around the time of their retirement, and then stay put. The other 30%? According to the CCR analysis, 14% move frequently after 50 because of job problems and 16% move in their 80s when health problems force them into a rental, assisted living or a nursing home.



A new generation of connected health technology could help even more people stay in their own homes—or at least delay the age at which they move, Coughlin figures. He sees everything from internet-linked pill reminder systems that dispense medication to sensors that allow remote caregivers to check whether an elder is up and moving about. As Coughlin, a&nbsp;Forbes&nbsp;contributor,&nbsp;<a href="https://www.forbes.com/sites/josephcoughlin/2019/12/17/you-are-a-cyber-threat-to-your-mother-in-retirement-heres-how/#7fb3be4511a8">writes</a>, the internet-of-things will be not only around us, but in us, as Mom has a smart glucose sensor under her skin transmitting and adjusting her insulin levels. &nbsp;



8. Care Facilities And Senior Housing Will Change



Over the past four years&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2020/03/02/why-are-so-many-nursing-homes-shutting-down/#38e2ddc61712">more than 550 nursing homes have closed</a>, bowing to rising costs, reimbursement pressures—and crucially, shrinking demand from older folks, who as noted above, want to age at home. Nursing homes aren’t likely to disappear as a last resort. But they will need to change, Coughlin predicts—for example, employing contagious disease experts and using antimicrobial surfaces.



Meanwhile, senior housing and assisted living developments, now designed to encourage congregation and socialization, might be built in the future with more spread out units and an eye towards limiting contagions.&nbsp;



“Until two weeks ago, every article was <a href="https://www.forbes.com/sites/josephcoughlin/2019/11/26/this-retirement-risk-can-kill-you--heres-how-to-plan-for-it/#77b922d0490d">about the perils of social isolation</a> (for the elderly). Now we’re changing it to (promoting) self-isolation,’’ Coughlin observes. “This is an inflection point in our medical model of how to age well.”



&#8211;<a href="https://www.forbes.com/sites/janetnovack/">Janet Novack, </a>Forbes Staff, <a href="https://www.forbes.com/personal-finance">Personal Finance</a>

Senior couple paying bills at home

8 Ways Coronavirus Will Drastically Alter Boomer Retirements

Thomas Schaefer, the 49-year-old CEO of Volkswagen Group South Africa, loves golf, running and wine, and says he would put his money into waste-to-energy projects, and horses. 



What has your focus been for business recently? 



Volkswagen in South Africa started over 65 years ago and has
been a part of South African history with iconic models like the Beetle, Citi
Golf and Kombi. Volkswagen has been the passenger car market leader for the
past eight years and had 23% market share in 2019. The factory in Uitenhage
will produce 162,000 Polos and Polo Vivos as well as 97,000 engines. 



In the rest of sub-Saharan Africa, we have unfortunately not
been as successful. But then again, no other manufacturer was really
successful, as 95% of all vehicles sold are used vehicles and not new. 



In 2016, Volkswagen decided to change that by reaching out
to those African countries that have the political will to make the required
changes that will bring industrialization and jobs. We have started assembly
operations in Rwanda, Kenya and Nigeria. Ghana is next and then hopefully,
Ethiopia. 



Those are small beginnings, but when Volkswagen started in
China in 1984, nobody expected it would be producing more than four million
vehicles per year in 22 factories today. 



If you had to invest capital into any venture, what would it be and why? 



I would invest in waste-to-energy projects. Apart from being
feasible, they tick some more boxes like job creation, conserving the
environment, reducing the need to dump waste in landfills and providing a
source of carbon neutral energy. 



Your biggest investment blunder yet? 



It My biggest was buying German Telekom shares after
privatization. 



What is your most prized investment, and why?



My house in Stuttgart [Germany]. It is rented out to an
American couple. 



When we were about to move to Hannover with my change over
to Volkswagen, the American Army decided to increase its presence in the
Stuttgart region and build up the Africa Corps. Since then, rental has gone
through the roof. 



What do you spend your money on mostly? 



My wife’s passion is horses. We own a smallholding and I can
say without a doubt that this has taken number one spending position. Other
than that, mainly food and wine. I can’t really spend much on cars. 



Your most recent expensive acquisition?



Our smallholding for the horses, plus all the equipment that
one needs such as quad bikes for the riding arena.&nbsp; 



What is your dream car? 



A Porsche 356.



Which is your favorite Volkswagen vehicle, and why? 



The Polo GTI. It is an unbelievable car that ticks all the
boxes – looks, feel, finish, power, handling and of course, value for money.



You cannot travel without your…? 



German wax earplugs. I need them to sleep on the plane. The
normal earplugs you get are all useless and hurt your ears.&nbsp; 



– Interviewed by Gypseenia Lion

VWSA Chairman & MD Thomas Schaefer

‘I Can’t Really Spend Much On Cars’

Thembani Biyam was appointed Head of Strategy &amp; Monetisation for OLX South Africa when he was only 28. Now, as the Head of Growth at Orderin, one of the top three online food delivery companies in South Africa, he is responsible for strategic projects, product, design and growth marketing. He speaks about his best and worst investment experience. 



What do you splurge on?



Definitely
food; it’s the way to my heart. Then travel. Then tech toys, mostly photography
and videography stuff like drones and stabilizer sticks for shooting vlogs. I
love vlogging and editing for fun.



What has your worst investment blunder
been?



My
best and worst experience was investing in cryptocurrency. I got in late but
bought some Bitcoin and Ethereum, and my investment grew about 350% in six
months. Problem is, it crashed real quickly too. I got a lot of it out in time
but lost a lot of it as well.



If you had to work but didn’t need the
money, what would you choose to do?



Develop
high school, university and professional basketball in South Africa to, at
least, the European level. It’s the one thing I want to do before I die. I was
an aspiring basketball player in high school but there were no proper
structures in place to fully develop and the options for me to play professionally
didn’t exist. I want that for my kids.



Where do you not mind waiting?



At
home. If I am out in the world, I hate waiting for anything. 



Fast food or home cooking?



Home
cooking anytime. But fast food delivery every now and then doesn’t hurt (especially
if it’s from Orderin).



Do you own anything you consider
priceless?



Nothing
material. More memories and perspectives.



Should people work for money or
fulfilment?



Both.
We all have to eat and do nice things, right? Those things cost hard-earned [money].
I would say, if you can continually optimize your career towards work that
provides a combination of both, but increasingly nearing fulfilment versus
money, that would be a win.



READ MORE | &#8216;<a href="https://www.forbesafrica.com/entrepreneurs/2019/05/01/worth-millions-and-billions/">Worth Billions and Millions</a>&#8216;



What kind of debt is okay?



The
type that is income generating is the ‘most’ okay. Robert Kiyosaki talks about
debt that generates income like property loans, business loans, and even credit
card used for positive income-generating activities. Then, there are scenarios
where you may really need debt to bail you out, but hopefully, you have savings
and liquid investments for that. Then, there is a grey area around things like
cars, phones etc. For this category, I would say, just make sure you can afford
it from your income.



Do you follow a strict budget?



I
do my absolute best to. There are some ‘treat yourself’ months sprinkled in
there.



Would you rather never be able to
express yourself accurately or always have to say the exact truth?



I
always have to say the exact truth. A world of never being able to be a little
colorful and fun in expressing myself would be a dark world.

‘The One Thing I Want To Do Before I Die’

Vinny Lingham, the co-founder of Newtown Partners and CEO of
Civic, on investing in bitcoins and putting yourself first.



<hr class="wp-block-separator"/>



What  is the most interesting investment you have ever made?



I think bitcoin has to be the most interesting. I was an
early investor in bitcoin and it is interesting because of the way the whole
industry has gone nuts, up and down, and on roller-coasters.



What was your most regrettable financial blunder?



I have got many. I think it was buying fancy cars when I was
younger. You go and buy a car that you can barely afford and then you live in a
small place. 



And then you realize that you may be spending a lot of money
on a vehicle instead of either saving or paying off debt. It’s okay to buy cars
when you can afford them.



Do you have any particular investment philosophy?



I have lots but you have to build your own investment
philosophy that works for you. Everyone has different risk tolerance. Some want
lots of risk and others want no risk. 



I think the mistake is to take no risk but you shouldn’t
risk it [too much] either – so find the right balance.



How does one build this balance and financial discipline?



Have a budget and stick to it. If you have a fixed income,
you need to have a fixed income budget.



What do you understand about being financially free?



Financial freedom is an illusion. Because if you really are
financially free, it would mean that you are literally sitting on cash and
living off interest for the rest of your life.



When you’re young and&nbsp;
you make money, you’re free for a while and then you get yourself into
the next big project and you are not really free. So, financial freedom can
come and go. [Being financially] free forever is very hard to get to.



The only time you are free forever is when you put all your
money in the bank and take no risk and if you can live off that income, then
you are really free. 



But if you keep investing and growing your wealth, you are
not always free because you always have to&nbsp;
look after your investments. So financial freedom is really hard to
achieve if you’re always investing. 



Even now when I have a lot of wealth and investments, I am
free but I still have to make sure that my investments don’t fail. So, you are
still a slave to your investments in a sense. 



What are some of the business goals on your bucket list?



It would be interesting to go into an IPO company, I haven’t
done that yet.



What are some of the financial lessons you have carried with you since your youth?



Pay yourself first. It is all good saving money, but you
have to take care of yourself as well. Don’t live too close to the edge, and be
balanced. 



–  Interviewed by Karen Mwendera

Vinny

‘Financial Freedom Is An Illusion’

Raizcorp CEO Allon Raiz helps develop entrepreneurs and businesses but shies away from an extravagant lifestyle and has a simple investment philosophy.



1.Your most regrettable financial blunder since becoming an entrepreneur?



One of our divisions, Partner Elite, does venture capital.
We invested in a business based on personality and a relationship. Due to this,
we did not do the due diligence we should have, and ended up paying the price.
A big lesson indeed!



2.To what do you attribute success?



I do not believe I am successful. I believe I am in the process of succeeding, because I am obsessed with what I do, and have managed to congregate a bunch of equally passionate and obsessed people on this journey to serve entrepreneurs. I have, as a result, a very strong work ethic. I am extremely competitive, and drive people mad until I achieve the various milestones of the picture in my mind.



READ MORE | <a href="https://www.forbesafrica.com/investment/2019/03/12/the-top-7-investment-trends-that-have-been-identified-in-2019/" target="_blank" rel="noreferrer noopener" aria-label="The Top 7 Investment Trends That Have Been Identified In 2019 (opens in a new tab)">The Top 7 Investment Trends That Have Been Identified In 2019</a>



3.How do you define financial discipline?



I am lucky because I certainly don’t lead a flashy lifestyle.
I do not have a flashy car; in fact, it is nine years old. I also don’t own a
flashy watch, I do not wear flashy clothes, and I often wear jeans and my
Raizcorp regalia. I do not eat out at flashy restaurants all the time. So my
personal finances are rather simple. I focus on pumping all excess cash into
bonds. Financial discipline, for me, is keeping overheads low, overpaying on
your bond repayments, and saving. I do not invest in the stock market. 



4.How have you diversified your investments?



Personally, I am not well-diversified. I have really two
asset classes which are my Raizcorp shares and property. My life is in the
business and most of my wealth and meaning come from it. 



However, the company is well-diversified. It has six
divisions and each one contributes to the bottomline. 



5.Which is your favorite travel destination and why?



I travel so much for work that I actually loathe travel. I spent my December holiday in my garden reading, braai-ing, entertaining and swimming. But if I were to have to choose, it’s anywhere with a beach I can swim in.



READ MORE | <a rel="noreferrer noopener" aria-label="Three Big Ideas In Warren Buffett’s 2018 Letter To Berkshire Investors (opens in a new tab)" href="https://www.forbesafrica.com/investment/2019/02/26/three-big-ideas-in-warren-buffetts-2018-letter-to-berkshire-investors/" target="_blank">Three Big Ideas In Warren Buffett’s 2018 Letter To Berkshire Investors</a>



6.If there was one financial or business goal you must accomplish before you retire, what would that be?



I do not plan on retiring! Well, perhaps at 90 to get my
things in order before I die at 93. Seriously, I do not have the concept of
retirement in my head. 



My business goal is to serve 100,000 entrepreneurs at a
single point in time through our various divisions. Entrepreneurial development
is my life mission and my love and my passion. As long as I’m doing it, I’m at
my goal point. 



7.What was the last item you regretted purchasing?



It has to be my tablet. I thought I would use it but I am a
person who prefers to write in a notebook and create boxes that I can tick. I
think I used it for two weeks and have never used it again.&nbsp;

Nov-Fairlawns-HR-19

7 Tips From Owner Of  Successful Business Incubator

From rock ‘n’ roll roadie to corporate speaker and entrepreneur, Richard Mulholland has run Missing Link, a presentation firm in South Africa, for 21 years. The self-described hobbyist talks finance, investments and expensive tattoos.

How does your company generate profit?
Different entities do it in different ways; Missing Link is a service organization where we basically sell our brain for the pound, whereas TalkDrawer and The Sales Department have a subscription and retainer model respectively. Exploring different business models intrigues me; it’s something I believe all entrepreneurs should embark on. You won’t be killed off by a better business; you’ll be killed off by a better business model.
&nbsp;
What is your investment philosophy? 
I know my weaknesses and this is one. As such I have a set-it-and-forget-it mentality. I find smart people that I like with diversified philosophies and leave them to it. The obvious exception to that is when we invest in starting new businesses.
&nbsp;
What is your most prized investment? 
I hate to be a cliché, but I timed crypto pretty well and have been pretty lucky there. My most prized investment would have to be starting a business though, that has certainly reaped the biggest dividend.
&nbsp;
What advice would you give someone interested in investing? 
In spite of what you’re told, unless you are super rich and have money to blow, investing isn’t a hobby. Find someone smarter than you to do it. Or, if you’re like me, find diverse, smart people and share the investment love.
<a href="http://www.forbesafrica.com/investment/2018/10/02/investing-in-memories-not-material/" target="_blank" rel="noopener">READ MORE: Investing In Memories, Not Material</a>
Legacy or innovation? Which would you invest in and why? 
Again, diversity is key. All that is old is not bad, and all that is new isn’t great.
&nbsp;
Your biggest investment blunder? 
I’ve invested in businesses as a complete outsider, and not given the love and support that they needed at the beginning to get traction. That has never worked… and I never seem to learn.
&nbsp;
What do you spend most of your money on? 
Of late, board games and electric skateboards.
&nbsp;
What is the most expensive item in your wardrobe? 
A motorcycle riding jacket.
&nbsp;
How much were you earning as a rock n’ roll roadie? 
R400 ($27) per week, or R600 ($40) per week while on tour.
&nbsp;
What is the most you spent on a tattoo? 
About R15,000 ($1,000) for a tattoo on my back.
&nbsp;
Would you invest in longevity (prolonging your life) and why/not? 
Only in so far as staying healthy.
 
What is the most interesting thing you have invested in? 
Other people’s businesses. Troop Travel is one I’m quite enamoured with at the moment.

Meandmymoney2

From Rock ‘n’ Roll To Corporate Speaker and Entrepreneur

Cézanne Britain is the founder and CEO of Britain Renecke, a 100% black, female-owned commercial law firm in South Africa. Her tips for a debt-free life and why she counts memories, not money.

What is your investment philosophy?
I tend to have a conservative investment philosophy that is long-term orientated rather than short-term focussed. While I believe in doing research, I am also guided by my gut feel when making investment decisions.
What advice you would give anyone who wants to invest?
I take a very conservative and long-term view on investments. From a very young age, my focus has been to save as much as you possibly can of your salary and to try and be debt-free as soon as you can. And if you can steer away from short-term credit like credit cards and short-term loans from the get go in your career, that’s probably a good thing. You are going to need to build up your credit but make sure that, for example, if you spend money on your credit card, settle the full amount at the end of the month. Don’t let it draw interest.
What is the most interesting investment decision you ever made?
When my husband and I got married, we didn’t buy wedding rings. We didn’t buy bedroom suites. We spent our money on travel. After the first financial year of business, I wanted to give my husband something to show him and thank him for all his support and I bought him a wedding band and that was two and a half years ago. And it was quality but it didn’t cost a fortune.
<a href="http://www.forbesafrica.com/investment-guide/2018/08/03/fashion-fame-and-finances-with-sa-designer-david-tlale/" target="_blank" rel="noopener">READ MORE: Fashion, Fame and Finances With SA Designer, David Tlale</a>
What was your first big investment?
Buying my first apartment. I have generally invested in immovable property and shares and my education. Of the three, I paid for my own education and worked five jobs a year. Because I didn’t want to have debt when I started this [company] when I was 18 years old. It meant five jobs a year but it meant I graduated without a loan. There were lots of bruises along the way. But I was debt-free. The second thing I had on my list was to buy property. I then bought a bachelors apartment when I finished my articles…I was going on 23.
What lessons have you carried with you since your childhood?
I was fortunate to have parents who taught me the value of discipline, responsibility and hard work from a young age. I think most important of all, have a dream and vision and a fierceness, fearlessness and resilience to succeed.
What is the most expensive item you have?
I don’t tend to collect material things. I tend to spend money on traveling and making memories. Four years ago, I took my mom to Mauritius for the first time. I wanted her to experience what I experience. We spend our money on giving people experiences and giving ourselves experiences because memories last a lifetime. When I talk about long-term investment, I also talk about memories lasting a lifetime. You can’t get those back.
The most expensive trip you have ever taken?
A trip around the world seven years ago.
How do you describe your leadership style?
I learned a long time ago we have to use our power responsibly. I don’t have one type of leadership style, but rather a combination of autocratic, transformational, coaching and visionary leadership.

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