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Know the four uses of cash

05 N1704P44001CIt’s important to have cash available for your everyday spending and the inevitable rainy day. However, you also need to develop a cash strategy that can contribute to your long-term financial success. But just how much cash do you need? And in what form?

To answer these questions, it’s useful to look at the four main uses of cash:

• Everyday spending — Your everyday spending includes the cash you use for your mortgage, utilities, groceries and so on. As a general guideline, you should have one to two months of living expenses available during your working years, and perhaps a year’s worth of living expenses when you’re retired. The latter can be adjusted higher or lower based on your income from Social Security or a pension. You’ll need instant access to this money — and you need to know your principal is protected — so it may be a good idea to keep the funds in a checking or cash management account.

• Unexpected expenses and emergencies — If you needed a major car repair or a new furnace, or if you incurred a big bill from a doctor or dentist, would you be able to handle the cost? You could — if you’ve set up an emergency fund. During your working years, this fund should be big enough to cover three to six months of living expenses; when you’re retired, you may be able to get by with one to three months’ worth of expenses, assuming you have additional sources of available cash. You’ll want your emergency fund to be held in liquid vehicles that protect your principal, such as savings or money market accounts or short-term certificates of deposit.

• Specific short-term savings goal(s) — At various points in your life, you may have a specific goal — a new car, vacation, wedding, etc. — that you’d like to reach within a year or two. Your first step is to identify how much money you’ll need, so think about all the factors affecting the final cost. Next, you’ll need to choose an appropriate savings vehicle. You could simply put more money in the accounts you use for everyday cash, or even in your emergency fund, but you would run the risk of dipping into either of these pools. Instead, consider opening a separate account — and tell yourself this money is for one purpose only.

• Source of investment — You can use cash in two ways as part of your overall investment strategy. First, cash can be considered part of the fixed-income allocation of your portfolio (i.e., bonds and CDs). Because cash behaves differently from other asset classes — such as stocks and bonds — it can help diversify your holdings, and the more diversified you are, the less impact market volatility may have on your portfolio. However, diversification can’t guarantee a profit or protect against all losses. The second benefit of cash, in terms of investing, is it’s there for you to purchase a new investment or to add more shares in an existing investment. In any case, you probably don’t want to be too cash heavy, so you might want to keep no more than 10% of your fixed-income assets in cash.

As you can see, cash can be valuable in several ways — so use it wisely.

Circe and the man-pigs

 04 N05A7570Are you bored yet in the brave new world of quarantine? The more important question is, are you still alive? There is about a 10-day lag between the writing of this piece of gossamer trash and its appearance in print. Who knows what has happened in the interim?

Back in the days of March 2020 B.C. (Before Corona), lots of stuff was happening. Stuff that didn’t involve the talking heads on television telling us to be calm despite all the awful things they were telling us to be afraid of. It was kinder, gentler time. A time when the Tar Heels basketball team began a mini comeback. A time when Harvey Weinstein had been sentenced to 23 years in the pokey for his history of bad acts toward women. Hope like spring was about to spring eternal. Then, oops. Along comes Corona.
Return with us now to those thrilling days of yesteryear B.C. Out of the past came the thundering hoofbeats of the great horse — Silver. I digress, wrong canyon of thought. Let us ponder Weinstein’s woes. What Harvey said at his sentencing hearing got me thinking about Circe, the Greek enchantress. Yep, you are going to have to endure yet another column about Greek mythology if you keep reading. Harvey told the Judge: “I really feel remorse for this situation. It is just that I am totally confused, and I think men are confused about all of these issues.”

In his brain, it wasn’t his fault. The women had led him on by their mere existence. He had been enchanted by them. They had turned him into a pig. Which takes us to the story of Circe.

Jeremiah was a bullfrog, and Circe was an enchantress. She lived in a palace in the woods on her island. When sailors would land on her island, she would sing enchantingly. Her singing had the power to cloud men’s minds. Odysseus, like Popeye, was a sailor man. Ody, as his friends called him, put ashore on Circe’s island for some R&R from the toils of the sea. Ody remained on his ship and sent out a scouting party to learn the lay of the land. His crew heard Circe singing and ended up at her crib. This part of the plot is similar to the story of King Kong when the director Carl Denham sent out a scouting party to find out what was doing on Skull Island before landing his whole motion picture crew.

Circe invites Ody’s crew for a big feast of cheese and meat pottage, honey and a secret potion. All but one of the boys chow down, drink wine, and then magically turn into pigs. One sailor, smelling a rat, escapes and high tails it back to the ship to warn Ody. Ody naturally wants to save his crew of man-pigs to avoid a huge workers’ compensation claim. The goddess Athena sends her messenger Hermes to tell Ody how to free his crew from the evil womanly wiles of Circe.

Hermes gives Ody a powerful herb called Moly, which will protect him from Circe’s ability to enchant him. The plan is for Ody to wave his sword at Circe and pretend to attack her. He has to get Circe to agree not to harm him by swearing to the gods that she won’t hurt him. This is the first recorded instance of a nondisclosure agreement. Ody does as instructed. Naturally, Circe invites him to join her in bed.

It turns out that Harvey Weinstein must have been a scholar of Greek mythology. As all this had worked for Ody, it was only natural that Harvey could wave his sword, get his victims into bed, and then magically make them disappear with a nondisclosure agreement.

Under the Circe theory of male/female relationships, it is always the woman’s fault for turning men into pigs. Not the man’s fault at all. The feminine allure of merely existing is enough to pigify men. Harvey wasn’t responsible for his crimes. It was all Circe’s fault and that of her sisters. That was why he was “so confused about all of these issues.” This theory is an insult to pigs as well as women.

Pigs are noted to be among the most intelligent of creatures — although the priorities of pigs can be puzzling to mere humans. Many years ago, in the 1960s B.C., there were some curious television commercials starring pigs. Consider the Frosty Morn ham commercial, which featured a classroom of singing pigs looking at Fred the Frosty Morn Ham on a shelf. The pigs sing: “It’s the height of a piggy’s ambition/ From the day he is born/ Is hope that he’ll be good enough/ To be a Frosty Morn/ For meat that’s wonderfully different/ They tenderize each ham/ They sugar cure and hickory smoke/ That’s Frosty Morn, yes Ma’am.”

The commercial ends with the pigs cheerfully holding up their cousin Fred, who is now a perfectly wrapped Frosty Morn ham. They dance around. Fade to black.

Today’s Zen: If you are not wrapped up like Fred the Frosty Morn ham, or in the Big House like Weinstein, it’s gonna be a good day. 
 
 

Offering help in troubled times

02 N1705P26001CFriends,

By now, we’ve all become familiar with the term social distancing. I know many of you are sitting at home scared and frustrated, as restaurants, gyms and other businesses came grinding to a halt last week due to coronavirus. I share your concerns. That’s why I’m working every day listening to folks on the ground and finalizing legislation to boost our response efforts. Thankfully, there is good news. While coronavirus continues to impact our state and country, the U.S. Small Business Administration delivered some needed relief to small businesses last week by approving a disaster declaration for North Carolina.

This declaration means small businesses in every county in our state may now apply for low-interest economic injury disaster loans (EIDLs) as a result of the ongoing effects of COVID-19 (coronavirus). To apply, you can visit my website at Hudson.house.gov or Disasterloan.sba.gov.

In addition to my office, the N.C. Small Business & Technology Development Center can help small businesses through this process free of charge. The closest physical locations to our district are on the campuses of Fayetteville State University and UNC Charlotte. However, staff is available to assist over the phone at 919-715-7272.
Small businesses are the backbone of our economy and I’ll continue to fight to make sure they, and all workers, have the assistance they need.

That’s why I joined with Senator Thom Tillis and Representative David Price on a bipartisan effort to urge swift approval of Governor Cooper’s request for this declaration. I also led a bipartisan effort with Representative G.K. Butterfield to request more aid for small businesses struggling with cash flow while they must pay bills, payroll and other expenses.

In addition to our small businesses, I’ve been leading efforts to ensure our agriculture industry has access to the temporary workforce it needs to protect our domestic food supply, as well as to increase funding for the Department of Veterans Affairs and the Department of Defense to handle an influx of patients and strain due to coronavirus. I am happy to report the Families First Coronavirus Response Act that became law last week included $82 million for the Department of Defense and $60 million for the VA to cover the costs of testing for veterans. Following my request for increased funding, I was glad to see President Trump’s latest coronavirus aid proposal includes an additional $8 billion for the Department of Defense.

As we now continue negotiations on a third coronavirus bill, I’ll continue advocating for any and all resources that our health care providers, workers, small businesses, farmers and schools need at this time. My priorities have been shaped directly from feedback from people on the ground. Just last week, I led calls with school superintendents in our region, VA medical center directors in Fayetteville and Salisbury, and small business owners. As always, my offices are also open to take phone calls and emails and hear directly from you about any questions you might have.

As I remain focused on legislation in Congress to address this unprecedented public health challenge, President Trump has also taken action to move the tax filing deadline to July 15, suspend student loan payments, give states flexibility on K-12 testing and remove red tape for the FDA to approve new treatments for coronavirus. By working together across local, state and federal governments, I am confident we can overcome this challenge and come out stronger than ever. Please stay tuned for rapidly changing updates and guidelines and never hesitate to let me know anything I can do to serve you and your family.

Love in the time of COVID-19

03 matt collamer 8UG90AYPDW4 unsplashIf you are unaware of regular and thorough handwashing, personal disinfecting and social distancing, then you must not be on planet Earth. In what feels like only days, lives of Americans have gone from our own normals to self-quarantine and worry, more intense in some places but present everywhere. Will our families and those we love get sick? Will we get sick? Will our jobs continue? Will we ever be “normal” again?

Most of us are going to use best practices faithfully, both for ourselves and for others. Still, for many of us, anxiety now hovers at all times and requires management, and a cottage industry has sprung up to address our fears. Included in strategies offered from various quarters are reaching out to others not in person but by phone, text, email to make sure people we know and love are managing. Gratitude journals are springing up to remind us of the good times in our lives and looking ahead with hope. Experts remind us to control what we can — to eat well, to exercise even if it is in our own homes during self-quarantine, to meditate as a way of easing stress and to remind ourselves that we are doing the best we can.

It is hard to know what to say about people, both young and mature, who behave as if there were no worldwide pandemic or that they are invincible. At some point, they will have to come to terms with having hastened community spread to other human beings, sickening some and possibly killing some. That is a burden no one should seek, especially when health-care workers and other service providers are risking their lives for the rest of us — literally.

Most of this is beyond our individual control, but we can take and implement the advice given by those on the front lines. Each of us has a choice to make as a human being. Are we part of problem or part of the solution? Are we helping to stop the pandemic or are we promoting it? These are profound and private decisions for each of us.
The following comes from the Interfaith Hospitality Network of Cincinnati, and it speaks to people of all faiths or no faith at all.

“May we who are merely inconvenienced remember those whose lives are at stake.

May we who have no risk factors remember those most vulnerable.

May we who have the luxury of working from home remember those who must choose between preserving their health or making
their rent.

May we who have the flexibility to care for our children when their schools close remember those who have no options.

May we who have to cancel our trips remember those that have no place to go.

May we who are losing our margin money in the tumult of the economic market remember those who have no margin at all.

May we who settle for quarantine at home remember those who have no home.

During this time when we cannot physically wrap our arms around each other, let us yet find ways to be the loving embrace of God to our neighbors.”

Amen.

Starting a small business

06 N2003P37001CAccording to the Small Business Administration, nearly 98% of businesses in North Carolina are small businesses, and 46% of North Carolina employees work at small businesses. According to the North Carolina Department of Commerce, North Carolina has routinely ranked as one of the best states in the nation in    which to start a business.

One essential professional new entrepreneurs can have on hand is a business attorney. Unfortunately, many new business owners only contact an attorney after a legal problem arises. Below is a look at how new businesses can benefit from the counsel of an experienced business lawyer. As the saying goes, “An ounce of prevention can be worth a pound of cure.”


Choosing a business structure

This is one of the most critical business decisions any entrepreneur will have to make. Different business structures have different liability and tax implications, which could have a drastic impact on the potential of a business to grow in the future. A sole proprietorship, for example, is very easy to set up, but comes with a large amount of liability risk, meaning that if a claim is made against the business, then the business owner’s personal assets could be at risk. A corporate structure, on the other hand, exposes the owners (or directors) to very little personal liability.


Drafting agreements and contractsMany business owners only talk to a business attorney once a dispute has arisen, usually with a fellow business partner, employee or client. Such disputes, especially if they end up in court, can be costly. Many of these disputes are the result of poorly written or nonexistent business contracts and agreements. An attorney can help new business owners draft business start-up agreements, including employment contracts, buy-sell agreements, partnership agreements, shareholder agreements, and so forth, to provide greater peace of mind. An attorney can also help draft and review any business contract. 


Complying with the lawBusinesses must comply with a maze of laws and regulations, including environmental, work safety, tax and employment laws. These laws and regulations can be notoriously complex, and most business owners may not be aware of all of their legal and regulatory obligations. However, ignorance of the law is no protection from the fines and penalties that can result from violating it. That is why business owners need a business attorney on hand to ensure they are compliant with all the rules and regulations that may affect their businesses.Entrepreneurs should focus on growing their business and protecting that business by getting good legal guidance upfront. By talking to an attorney first, new business owners will have the advice they need to set up a business for success.

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