What 3 Financial Experts Would Do With Your Last $1,000
NEW YORK ( MainStreet) No one plans for emergencies to happen, and perhaps that's the first problem. Living paycheck-to-paycheck on the least desirable seems to be more and more the New American Way, if trends are any indication. Some believe the culprit to be the frenzied American consumer, yet others like CNBC's Leslie Kramer evenly lay blame on the banks , the government and the overall culture of the U.S.:
"We are, in fact, encouraged to spend as much as we are encouraged to save, sometimes by different businesses within the same financial services company. A company can have an investment management arm working to educate American workers on the benefits of saving, while it also has a large consumer credit card and mortgage business."
Whomever you blame, the message is clear: the average citizen is still struggling with finances in this sorry excuse for a post-recession recovery. Therefore, in order to tackle this multifaceted idea of emergency money management, MainStreet gathered some fresh financial perspectives from pros in the sector. Each were interviewed separately and presented with a dire proposition: If one of your clients were in a jam with only $1000 left, how would you advise them?
The Experts and What They Do
- Personal Financial Planning, Kevin Cimring, CEO Jemstep, an online investment advisory focused on helping people lock in more money for retirement.
- Business Financial Support, David Ehrenberg, CEO Early Growth Financial Services, a firm that provides finance and accounting support to early stage companies that are not large enough to have their own accounting staff.
- Investing, Anthony Grisanti, President GRZ Energy and CNBC 'Futures Now' Contributor who keeps track of the whole gamut from hedge funds to users and producers of energy.
Now, the questions...
What emergency situations do you find your clients dealing with?
Cimring: Unemployment, long-term unemployment, someone suddenly gets laid off, and they haven't planned for that. So they don't have an emergency fund, for example, which we recommend. And so ending up in a situation of unexpected unemployment is difficult for folks to deal with.
The other main one is an unforeseen, kind of health situation, an inability to cover health costs is the other main one. So from our perspective, these are two kind of areas that have a big impact on folks which kind of land them in a financial emergency.
Grisanti: I would say it's when a client is late for the game, meaning that the market has already made a move and now the client is starting to think that that's what they want to do, but the move is kind of over with already.
It's hard to anticipate when there's going to be an issue. You know, the financial crash of 2007. A few people could see that coming, but most did not. And I remember when it all started. I had clients, you know after the market was down say 10%, 15% say, 'Well, now is probably a good time to get in.' And my advice was to wait, so it flushed out even more and that's exactly what happened.