by JR Valrey, Black New World Media
Health has been a big topic during the COVID-19 pandemic quarantine, but few are talking about our financial health. With the stock market stunted and the government doling out trillions of dollars to stabilize citizens, small businesses and corporations, it’s time for us to realize that the economy is in free fall. Black people especially need to understand and be strategic about what is happening with our finances.
The billionaire class in the U.S. benefits economically from the pandemic (also called the “plandemic”), but the working class is drowning financially, suffering from a lack of experience/knowledge about helpful financial tools and techniques that can improve their lives.
Financial advisor Kendra Willis is a licensed financial educator, team builder, author and speaker. She is the owner of Willis Insurance & Financial Services, and the Marketing Director of TEAM BOM, a Transamerica Affiliate.
Kendra has been in the game for many years and is someone I regularly talk to about money matters, so I expanded one of our recent conversations into an article. This type of information is not reaching the average Black household wading through the pandemic, trying to get their feet on sturdier financial terrain.
JR Valrey: People’s 401(k) accounts have taken a beating since the COVID pandemic, can you explain why? What should people do with their 401(k) now?
Kendra Willis: Many people don’t realize that their 401(k) plans are company-sponsored plans that are directly linked to stock market performance. Your 401(k) plan is generally a mutual fund, and that mutual fund’s performance is based on market performance. When the stock market doesn’t do well, neither does your 401(k). In a down market, you lose money from your plan.
The coronavirus pandemic caused market volatility, and when the market crashed, many people lost a good portion of their retirement funds. During a down market, many advisors may tell people to ride it out or to hang tight, keep contributing and just hope for the best. What people aren’t often told is that you don’t have to hang tight and just watch your money tank or get flushed down the toilet. There are other things that a person can do.
One thing I constantly stress as a financial educator, is financial literacy education. You must understand where you are putting your funds in the first place. You have to know how that 401(k) plan works. You must also know that there are other plans in the market that aren’t directly linked to the stock market and offer the gains of the stock market without the losses.
You need to do your research and take control over your money, because your money is tied to your financial future and no one is going to be more concerned about your finances than you are.
Another good thing is that although the pandemic has caused market volatility, the CARES Act was put in place allowing Americans the opportunity to withdraw from their traditional retirement plans penalty-free for the remainder of the year. Typically, if you were to withdraw or take a loan against these plans, and you were under the age of 59 ½, you would be penalized.
The CARES Act gives the opportunity to take a tax deffered loan without penalty, regardless of age. This is possibly a good time to withdraw some of that money and sit down with a financial educator or advisor to discuss what the best options are.
Many people don’t realize that their 401(k) plans are company-sponsored plans that are directly linked to stock market performance. Your 401(k) plan is generally a mutual fund, and that mutual fund’s performance is based on market performance.
JR Valrey: What are some other ways that people can protect their money?
Kendra Willis: Again, as stated before, you can protect your money by learning what your options for growth are. People, especially younger people who still have ten, twenty, thirty more years before approaching retirement age, must take the time to seek a sound financial literacy education.
My company and my team; Team BOM (The Black Owned Money Movement) offers FREE financial literacy workshops, online webinars, seminars and one-on-one sessions to help people understand how to master their money and to be their own money managers.
Most of us only know what we know, and because many of us didn’t grow up in households or environments where financial literacy was taught, we rely on what we already know and put too much trust in our employers and in the government when it comes to our finances.
If the pandemic has taught us anything, I’m hoping it taught people to really take control over their finances and to start being more aware of what’s happening with their money. For those who want to learn how to save, grow and protect their money, there are resources available. Myself and my team of licensed and dedicated educators are one of those resources. We want to help people to take control of their money for the remainder of their lives, and we want to give people the tools to create generational wealth.
JR Valrey: Trump recently announced that he would cut payroll taxes if he won re-election. What does this mean for the aging population? What can be done?
Kendra Willis: As of right now, Trump signed an executive order to defer payroll taxes throughout the remainder of the year. Many people aren’t aware that all employees and employers pay a 6.2% payroll tax on wages, which is capped at $137,700. The money paid into payroll taxes is used to fund programs such as Social Security and Medicare.
If Trump is re-elected and eliminates the payroll tax, then he is single-handedly going to bankrupt and defund the Social Security program. That act could completely shake up America because as of right now, 64 million Americans receive Social Security benefits. Let’s not mention the hundreds of millions of Americans who will rely on the benefit in years to come.
Cutting the Social Security program is a way to rob Americans of retirement funds that are due to them. People have worked hard and put into the pot for years, just to have the government steal it from them, for what reason?
One of the things that we as American citizens can do is we can band together to get Trump out of office. We need a President who is going to look out for us all, old and young alike, and Trump is showing signs that he isn’t that President now and never will be.
JR Valrey: What financial advice have people been coming to you for the most, lately?
Kendra Willis: Recently, people have been asking me to help them come up with a solid financial plan to move forward in life. People want to learn how to master their money, and sitting down with me and my team, even once, can help them understand how to have at least a strong financial foundation.
We’ve also seen an influx of people wanting to move their money from a spiraling 401(k) plan into a more solid and stable retirement plan that will give them steady growth. When I introduce these types of plans, people are often shocked because they didn’t know they existed. They didn’t know that there was such a thing as a no-loss guaranteed plan. And I am happy to educate.
All of our consultations are free of charge, and we help whoever needs the help, no matter where they are from or what their level of financial expertise is. We pride ourselves on being able to bring Wall Street to Main Street.
JR Valrey: How can people get in touch with you?
Kendra Willis: I can be reached on Facebook under “Motivate Your Money With Kendra Willis” or via email at firstname.lastname@example.org.
People can also leave a message or text me on my company phone line at (209) 740-9970.