Financial Security in Troubled Times: What You Need to Do Now

INTRODUCTION

N OT LONG AGO, America was going about its business. The fall TV shows were being launched, as was the new football season. People were fretting over their tech stocks and wondering if the stock market was poised for a recovery. Kids were back in the classroom, fresh from the summer off. Life was normal.

Then came September 11 and the horrible attack on this country by cowards.

In the aftermath of that terrible day, people have begun to wonder about the safety and security of their families and homes, their jobs, and their investments. The attacks disrupted every facet of our society. We wonder when life will return to normal, and if it ever will.

And yet, through all this, Americans have come together like never before, with a patriotic unity that has surprised our enemies and instilled fear in them. The entire civilized world shares our sorrow, and our resolve.

As our nation moves toward the eradication of this evil throughout the world, we Americans also need to act individually to protect and secure our own lives, those of our families, and those within our communities. The rules have changed, and we must reevaluate what we’ve been doing and how we’ve been doing it.

Change is unsettling, but in these times unavoidable. And feeling unsettled is the least of the emotions we’ve all felt in the weeks since September 11.

I mention that because this is a book about emotions. That might seem strange to say; after all, you’re reading this book for its financial advice, and it is written by a financial advisor. But the truth is that personal finance is entirely about emotion, because how you feel determines how you behave. And because the horrific events of September 11 raised such powerful emotions in all of us, they are where we must begin.

We must understand what we’re feeling and realize that our emotions could hurt us—or help us.

So, yes, this book is about emotions. But it’s also a focused conversation on money. I’ll show you what to do now to maximize your family’s financial security in these troubled times and to help you prepare for the prosperity that is coming. Those who position themselves today for that prosperity will be the ones to enjoy it, and you can be among them.

This is not the time for worry. It’s the time for positive action. This book will show you what to do right now, so read it quickly and act immediately—for the benefit of yourself, your family, your community, and our nation.

Some readers may be wondering how I could have written this book so quickly.

How could I not have? My life is devoted to providing people with financial advice, and today people need that kind of advice more than ever. Our world has been turned upside down, and we’re all wondering what the new rules are, and which strategies to adopt to provide our families with security, safety, and prosperity.

It’s clear that people can’t wait months or years for this information. They need it now. So, on September 24, less than two weeks after the attack on America, HarperCollins agreed to publish a book that gives people the advice they now need. Recognizing the urgency, HarperCollins agreed to speed the book into stores as quickly as possible, and I decided to give all my profits from the sale of this book to relief efforts and other charities.

Now, all I had to do was write it. I started that Friday night, and by 1:00 A.M. Monday, it was done.

The book tells you how to handle your cash, your mortgage, your job, and your investments. It explains how to protect yourself, your family, your home, your car, and your company. It reminds us of our need to help each other and shows you how to do that. Writing quickly (and late into the night), I may not have expressed everything perfectly or covered every topic as completely as a long, leisurely schedule would have allowed. Nonetheless, the information you’ll find in these pages will help you protect yourself and your family right now. I hope you’ll read it as quickly as I wrote it, because just as America as a nation needs to act immediately and decisively, so do you. This book is intended to return you to the basics, to help you put into today’s context all the aspects of your personal finances that you’ve ignored, avoided, or failed to know about. That’s because now more than ever, you must tend to these fundamentals, because the best way to succeed in troubled times is to make sure you have all the basics covered, and this book will help you do that.

Like all Americans, I’ve wanted to do something to help. I can’t help the firefighters search through the rubble. But I can offer financial advice, and I can raise money to help the cause, so that’s what I’ve done.

CHAPTER 1

You’re Not Alone

T HE SEPTEMBER 11 ATTACK ON AMERICA remains incomprehensible.

Disbelief and shock have given way to horror, sadness, fear, and anger. In the days after the hijackings and attacks on the World Trade Center and Pentagon that were made by hate-filled cowards—I refuse to call them terrorists—many Americans began to feel inept. We didn’t know how to help, where to send money, who to assist. The realization that we face an anonymous enemy intensified our frustration at our apparent inability to do something constructive.

That’s a lot of emotions to pack into a short period. Tell me, did you feel any of these emotions:

disbelief,

shock,

horror,

sadness,

fear,

anger?

I’ve been presenting lots of seminars since the attack, teaching people what to do now about their finances, and I’ve asked every audience about their emotions. Just about all the people I’ve met have said they’ve been feeling all of the above. Furthermore, many people have told me that they didn’t realize others were feeling the same way. I share all this with you because it may comfort you to know you’re not alone in this tragedy.

Let’s take this a step further. Since the events of September 11,

Have your sleep habits changed? Many people have had insomnia, while others have talked of exhaustion that has caused them to sleep more than usual. Many also report unusually active dreaming, including nightmares.

Has your appetite changed? Many people now have little desire for food, while others are bingeing—they can’t get enough chocolate!

It’s also quite possible that you are feeling nothing at all. Many have told me that since the attack, they have felt numb. This, too, is remarkably common and quite understandable: Trying to process all the information can lead to sensory overload, and for many, it has been so overwhelming that we don’t know what to feel. Many people have felt simply dazed.

One of my staff entered a grocery store a few days after the attack. The store wasn’t crowded, and she noticed that no one offered eye contact. The mood was sullen. No one was talking. When she got to the checkout counter, the clerk told her to be sure to take her packages home. To her confused expression, he responded, We’ve noticed that people are coming through the line, paying for their purchases, putting their bags into their cart and taking their cart out to the curb. Then they get into their cars and drive away—leaving their bags here.

This absentmindedness is all too easy to understand.

Perhaps the most common feeling is profound loss. Many people who didn’t know one of the victims personally know someone who did. We all have stories to tell. One of my firm’s clients perished in the attack; he was in the plane that hit the Pentagon. My wife’s cousin was in the World Trade Center during the attack; we are thankful that she was able to escape. And I was in the WTC just a few days before September 11. Because so many of us can relate to stories like this, and because we will be hearing these stories forever, it is natural for us to believe that our lives have changed forever.

Psychologists, therapists, and grief counselors will tell you that all of the emotions we are experiencing are natural stages of grief. What’s most important is that you understand that it’s okay to have these feelings and that you’re not alone. Indeed, we are all feeling this same way.

I mention all this—this is a book on personal finance, remember?—because there is one particular emotion we haven’t considered that requires your immediate consideration.

That emotion?

Guilt.

I’m not saying that you should feel guilty about the attack or that you have any responsibility for or involvement in the tragic loss of life. No, when I refer to guilt, I mean the following. Since September 11, have you:

Gone shopping?

Been to the movies?

Eaten in a restaurant?

Traveled to another city?

Attended routine events, such as PTA or civic meetings?

As we all know, airports, shopping malls, schools, museums, and sports complexes—every public building—closed immediately after the attack. Even after the stores reopened, they remained empty of customers. One common reason for this: Many people feel guilty shopping. After all, how can I do something as mundane and selfish as buying a sweater or seeing a movie, while others around me are struggling to cope with the horrible loss of life?

It is easy to understand why people would feel self-conscious, if not downright guilty, about carrying on their normal lives in this most abnormal of times. But it’s essential that you do exactly that.

Your community needs you to do so. We all know that millions of American workers live paycheck to paycheck. In the aftermath of the attacks, many of those paychecks have stopped. I’m not talking only about the financial problems now facing the airline, travel and hospitality, and insurance industries.

I’m talking about commissioned-based workers. Most people think of car salesmen when they hear that phrase, but it goes much deeper than that: A huge portion of American workers earn commission-based compensation.

Cab drivers, for instance. Cabbies in New York went more than a week without a fare—and no fares means no paycheck.

Restaurant workers are struggling: If you don’t go into a restaurant, the waiter makes no money. Ditto for the busboy, chefs, and the young lady who takes reservations and greets you at the door.

Hotel staffs are in economic jeopardy. Thousands of meetings, conferences, and conventions were canceled after the attack. Now, in hotels across the country, housekeeping staffs have no rooms that need cleaning, caterers have no meals that need serving, bellboys have no luggage that needs toting, and doormen have no cabs that need hailing.