The current world pandemic, COVID-19 and its tragic effects, has created different and challenging situations for nearly every business and individual. Every business sector is affected differently, depending on the nature of your place in the world, creating the most unique situation that most of us have ever and will ever experience in our lives. This also has carved out some special opportunities in the property market that savvy investors will recognise. A finance and property expert, I have pioneered the local industry in Australia for over 16 years; endured many challenges and hardship (including the global financial crisis) and come out the other end.
As the majority of us are glued to all the stories of terror and tragedy, searching for speculation of the Corona Virus and its path of destruction, I would rather put into place constructive strategies for this unprecedented time. This is exactly when we should be seeking out genuine experts in each field of interest and following them, instead of following news stories of more doom and gloom.
This is why I decided to take part. I hadn’t noticed any property investment, personal finance (lots of business finance though) or money experts giving effective advice and actionable solutions so I wanted to get involved. There is a lot to say about it, and of course a lot depends on your individual circumstances. For that, help is available right now and I really do encourage you to just book an appointment with me, since we are all struggling together. I am creating individualised and specific solutions for people just like you all day, so please just ask. For those who want a general overview of their situation and simply don’t have time, money or energy for any guesswork, I have provided the below.
First of all, for the purpose of creating these generic solutions, I decided to break it all down into three groups; those people who have the same income, those who have experienced a drop in income and those who are not earning anymore.
The Same Income
You are in a good position right now. However, things could change in an instant. Therefore, I would still suggest you review your expenses that you haven’t had the time to do so up until now, like unnecessary subscriptions and other things you don’t really need, in order to increase your savings. The current state of isolation presents a lot of opportunity to save because there are not many opportunities to spend, like eating out at restaurants, are no longer available. This change in lifestyle means you can save money or pay off loans a lot quicker. That should be your priority.
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Secondly, whilst others are struggling to make their repayments and interest rates are dropping as a result, why not take advantage of the situation? Contact your broker or investment property specialist so they can renegotiate a better deal for you. And finally, if you have already got savings and are in a strong, secure position with your source of income, then I would suggest you take advantage in the property market. There are a lot of distressed property sales and not many buyers on the market right now. With the right advice, you could purchase a great property opportunity with better conditions than normal.
Less Income
Now is not the time for luxury. Look at your Budget and trim down all non-essentials. After you have done this, its time to consider your current liabilities, loans, properties, and credit cards.
- Paying your “good” debts should be priority. A good debt is anything that is considered an asset, like a property.
- “Bad” debts which are for liabilities, such as a car, credit card or a speed boat, have higher interest so I would suggest you freeze or request interest free periods on these first, before your home loan. Request an interest only period, rather than a full freeze, if you can manage it. A full home loan freeze should be the absolute last option.
On another note, look at outsourcing your skills online at a lower rate than usual to increase your income.
No Income
You may have lost your job or been stood down. The Government is offering some relief packages and these are heading your way, but I wouldn’t rely on this for anything other than to put food on the table. This is when you adapt what we call ‘The Bare Bones Budget.’ In other words, absolute basic living, that accounts only for shelter and food. Unfortunately, you have to get real here or you will get into serious trouble. Don’t be too upset that your eyebrows and finger nails will be terrible from this day forth. This is not temporary; plus there is heaps of understanding and relief out there right now, so get onto it.
Don’t waste time crying, just take the action required right now.
- Apply for Centrelink (but don’t stand in a queue at the office!) Register your ‘intention to claim,’ and in the meantime, read up on what you are eligible for. If you aren’t sure, no worries, they will tell you.
- Consider whether you need to dip into your Superannuation if you absolutely have to. This is now allowed.
- Negotiate with your landlord and/or banks. Fee reductions and freeze payments are possible solutions.
- Put all other payments on hold. Yes, everything.
- Now plan your exit – how can you get work (during these COVID-19 times or beyond.) There are some other ways to generate an income that you may have considered, like renting out a room in your home.
Depending on which of the three areas above is appropriate, you also need to consider how your actions now will affect your goals and plans in the Immediate, Medium Term and Long Term. You need to still be at least be facing, perhaps not exactly heading, in the direction of your Goals. For example, this situation may mean you need to adjust your time frames a little. I absolutely do not believe that this COVID-19 situation indicates in an end to all your plans. Realistically, there is no need to put your goals on hold. Keep pushing forward, but be smart and realistic. I have helped literally hundreds of other families in various situations, and now is no different. I have been offering new and existing clients free reviews of their current financial situation with a view to helping them feel more in control, cut their costs and even collect savings to prepare them for living now and in their future. AlI it needs is 15 minutes to have a look at yours.
About The Author
Leading Finance and Property Expert, Successful Entrepreneur, Keynote Speaker, Professional Coach, Influencer Sydney Young Entrepreneur, Finance 2019. Having built a successful property and finance group with international reach, Grow Group, Ayda Shabanzadeh is an award-winning entrepreneur, sought-after as a motivational keynote speaker, professional development coach, financial coach and industry leader. What Ayda’s mastered in the first 16 years of her career, few achieve in a lifetime. She’s built multiple multi-million-dollar businesses and is redefining the property and finance sector through her straight-talking, practical and insightful seminars. She’s helped many investors at all stages to master the property market, and gain control of their financial future.
Through her company’s Grow Gives program, Ayda’s also having an impact. Combining support for key not-for-profit initiatives in the developing world, with helping many debt-burdened Gen Y’s locally to get smart with their money and maximise their future, Ayda is living her purpose. An experienced industry commentator, having appeared in the Australian Financial Review, Sydney Morning Herald and Sky News, Ayda provides articulate, engaging and up-to-date insights on property and finance trends.
