Warren Buffett says this is how to financially survive COVID-19

Warren Buffett says this is how to financially survive COVID-19Warren Buffett says this is how to financially survive COVID-19
Warren Buffett says this is how to financially survive COVID-19
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="When Warren Buffett speaks, investors listen. The folksy financial guru who eats at McDonald's and still lives in his hometown of Omaha, Nebraska, is a billionaire many, many times over, so followers hang on his every word for tips on how they can be wealthy, too.” data-reactid=”23″>When Warren Buffett speaks, investors listen. The folksy financial guru who eats at McDonald’s and still lives in his hometown of Omaha, Nebraska, is a billionaire many, many times over, so followers hang on his every word for tips on how they can be wealthy, too.

Lately, ears have been pricking up as Buffett has shared some money wisdom about the coronavirus calamity.

See what the “Oracle of Omaha” has had to say about the pandemic and credit card debt, investing in stocks and more.

Always be ready for the worst

Idea of catastrophe and danger . Mixed mediaIdea of catastrophe and danger . Mixed media
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Buffett said a ‘megacatastrophe’ was coming.
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Sergey Nivens / Shutterstock
Buffett said a ‘megacatastrophe’ was coming.

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.”

Last year, he warned that we were due for a “megacatastrophe.” It would be some kind of “total surprise” that would dwarf devastating hurricanes Katrina and Michael, Buffett warned his Berkshire Hathaway company shareholders, in a letter.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="He said Berkshire, which is big in the insurance business (it owns Geico and other insurers), would suffer massive losses — but would be ready for business the next day.” data-reactid=”40″>He said Berkshire, which is big in the insurance business (it owns Geico and other insurers), would suffer massive losses — but would be ready for business the next day.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="A good way for you to prepare for whatever comes is by buying life insurance to protect your loved ones. In just 90 seconds, you can find multiple life insurance rates tailored to your family’s needs and costing as little as $1 a day for $1 million in coverage, depending on your age and where you live.” data-reactid=”41″>A good way for you to prepare for whatever comes is by buying life insurance to protect your loved ones. In just 90 seconds, you can find multiple life insurance rates tailored to your family’s needs and costing as little as $1 a day for $1 million in coverage, depending on your age and where you live.

Don’t carry credit card balances

Young man eating asian sushi from home delivery using credit card as payment with open hand doing stop sign with serious and confident expression, defense gestureYoung man eating asian sushi from home delivery using credit card as payment with open hand doing stop sign with serious and confident expression, defense gesture
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Buffett says if you’re carrying credit card debt, get rid of it
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Krakenimages.com / Shutterstock
Buffett says if you’re carrying credit card debt, get rid of it

With layoffs skyrocketing during the outbreak and lockdowns, 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 economic crisis, a CreditCards.com survey found.

Turning to credit cards because of financial hardship is one thing, but Buffett says some people use them as “a piggy bank to be raided.” He recently told his company’s shareholders about a friend who asked what to do with a windfall. It turned out she also had credit card debt — at 18% interest.

“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 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Whenever credit card debt seems overwhelming, a good first step toward getting rid of it is to scoop it all up into a debt consolidation loan — at a much lower interest rate than 18%.” data-reactid=”57″>Whenever credit card debt seems overwhelming, a good first step toward getting rid of it is to scoop it all up into a debt consolidation loan — at a much lower interest rate than 18%.

Be careful with stocks

Covid-19 disease prevention. Aircraft interior cabin deep cleaning for coronavirus.Covid-19 disease prevention. Aircraft interior cabin deep cleaning for coronavirus.
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Buffett has gotten out of airline stocks because of COVID-19.
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Pradpriew / Shutterstock
Buffett has gotten out of airline stocks because of COVID-19.

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.

“The airline business — and I may be wrong, and I hope I’m wrong — changed in a major way,” he said at Berkshire Hathaway’s recent online shareholders meeting, to explain why the company sold off all the airline stocks it owned.

Buffett says people have been discouraged from flying, so “the world has changed for the airlines.”

One of the carriers Berkshire dumped from its portfolio was Delta Air Lines, whose stock price has plunged by about two-thirds since the start of the year.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Buffett looks out his shareholders the way a robo-advisor can protect a Main Street investor like you. These automated investing services automatically adjust your portfolio to give you some cushioning whenever individual stocks or whole sectors tank.” data-reactid=”78″>Buffett looks out his shareholders the way a robo-advisor can protect a Main Street investor like you. These automated investing services automatically adjust your portfolio to give you some cushioning whenever individual stocks or whole sectors tank.

Stick to your long-term plan

Close up shot of the dart arrow hit on bulleyes of dartboard to represent that the business reached the target of company with dark tone picture style. Target and goal as concept.Close up shot of the dart arrow hit on bulleyes of dartboard to represent that the business reached the target of company with dark tone picture style. Target and goal as concept.
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Buffett says stay on target with your financial goals.
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Things / Shutterstock
Buffett says stay on target with your financial goals.

Warren Buffett says he’s confident the U.S. economy will bounce back from the COVID-19 pandemic.

“Nothing can basically stop America,” he said at the virtual shareholders 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.”

But he also said no one knows what’s going to happen, so investors should brace themselves for a potentially long recovery.

“You’re going to get a fine result if you own equities [stocks] over a long period of time,” Buffett said.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="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 connect with a certified financial planner online and inexpensively, to keep you on track with your long-term goals.” data-reactid=”95″>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 connect with a certified financial planner online and inexpensively, to keep you on track with your long-term goals.

Take advantage of low interest rates

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With interest rates falling, Buffett says it’s a great time to borrow.
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1599686sv / Shutterstock
With interest rates falling, Buffett says it’s a great time to borrow.

Buffett became one of the wealthiest people on the planet by taking advantage of opportunities. He sees some fantastic opportunities right now, courtesy of the Federal Reserve.

“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 told his shareholders.

The Fed “did the right thing” by cutting interest rates down to the bone, Buffett says.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For homebuyers and homeowners it's an excellent time to borrow: New and refinance mortgages are being offered at the lowest rates on record. Shop around and compare mortgage rates to land the best one you possibly can.” data-reactid=”111″>For homebuyers and homeowners it’s an excellent time to borrow: New and refinance mortgages are being offered at the lowest rates on record. Shop around and compare mortgage rates to land the best one you possibly can.

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