Why_Youve_Got_To_Push_Yourself_Before_Lockdowns_End
00:00:00.000 | Hello, everybody.
00:00:01.040 | It's Sam from Financial Samurai.
00:00:03.320 | And we're in May, May 2020.
00:00:06.360 | And the good news is that I think
00:00:08.360 | the lockdowns are almost over.
00:00:11.240 | I've got to believe that the lockdowns for most of us
00:00:14.200 | will be over by June 2020.
00:00:17.000 | And life will kind of go back to the way
00:00:19.480 | it was with a lot of precautions.
00:00:22.240 | Things are faring pretty well on the financial front.
00:00:25.040 | The S&P 500 is rallying because in April,
00:00:29.220 | we only lost 20.5 million jobs when the expectations were
00:00:33.800 | more like 22 to 23 million.
00:00:36.800 | Now, obviously, the numbers are crazy high.
00:00:39.840 | But everything is about expectations
00:00:41.360 | as we've been talking time and time again.
00:00:43.400 | So the market continues to rally and hold up.
00:00:46.400 | And the expectations are that there will be more stimulus,
00:00:50.480 | more stimulus for the month of May and maybe June,
00:00:54.040 | maybe another stimulus check for all of you
00:00:56.460 | folks who make under $75,000 per person and $150,000 per couple.
00:01:02.480 | Maybe more PPP money.
00:01:04.860 | After all, there's something like, I think, 30 million
00:01:08.000 | small businesses, and only half of them applied.
00:01:11.680 | And I think there's about a 30% to 40% chance
00:01:14.400 | that the enhanced unemployment benefits gets extended
00:01:18.240 | from July 31 till maybe the end of the year.
00:01:20.920 | Why not?
00:01:21.520 | I mean, give me a break.
00:01:23.080 | There are tens and tens of millions of people unemployed.
00:01:26.120 | So this is much worse than in 2008 and 2009
00:01:28.720 | in terms of the unemployment front.
00:01:31.360 | Yet in 2008 and 2009, unemployment benefits
00:01:34.600 | were extended to 99 weeks.
00:01:36.840 | So come on, government.
00:01:38.040 | Let's at least match that 99 weeks.
00:01:40.640 | And things will probably feel much more secure for those
00:01:44.240 | who rely on those benefits.
00:01:46.600 | Now, it's important for all of us to continue
00:01:48.600 | to try to forecast the future.
00:01:51.040 | And since lockdowns are going to end,
00:01:53.200 | I think, within the next 30 days to 45 days,
00:01:56.480 | it's important for us to step it up.
00:02:00.000 | Step it up these remaining 35, 45 days,
00:02:03.320 | because a lot is at stake.
00:02:05.320 | When I ran track in high school, my most hated relay
00:02:08.380 | was the 4 by 400 meter.
00:02:10.880 | I was a sprinter.
00:02:11.680 | I did the 100 meter dash and the 200 meter dash.
00:02:15.320 | And the 400 meters, which is one lap around the track,
00:02:18.080 | was about 200 meters beyond what I could sustainably
00:02:21.200 | run at max speed.
00:02:22.960 | And generally, I'm always trying to go max, max, max.
00:02:25.400 | But 400 meters, man, it's killer.
00:02:28.520 | Anybody who's run track before knows it's a killer.
00:02:31.880 | So I always heavily faded towards the end,
00:02:34.560 | thereby letting my teammates down.
00:02:36.800 | But our team was thin.
00:02:37.720 | This is high school track.
00:02:39.360 | And Sam can run the 100 to 200 pretty quickly.
00:02:43.220 | We can train him to get better.
00:02:46.040 | So I had to pace myself and train in a different way.
00:02:49.520 | I had to accept the fact that I would fall behind early
00:02:52.480 | to conserve energy.
00:02:54.400 | And it was only after I fired up the afterburners
00:02:56.960 | at the halfway mark that we started
00:02:58.600 | getting more competitive.
00:02:59.920 | We still didn't crush our opponents,
00:03:02.600 | but we were always in the race.
00:03:03.960 | And you always want to be in the race,
00:03:06.160 | whether it's in a real track race
00:03:08.520 | or whether it's in a competitive tennis match or a basketball
00:03:12.200 | game or at work or at life in your relationship.
00:03:15.640 | You always want to give yourself a chance to win.
00:03:18.560 | Because if you're not in the race,
00:03:20.060 | you're never going to win.
00:03:21.920 | So given we're in May 2020, I feel
00:03:24.560 | like we're at the 300 meter mark.
00:03:27.240 | By early June, the vast majority of us will be free again.
00:03:31.160 | The politicians will figure out a way--
00:03:33.840 | different way-- a different way to control us,
00:03:36.320 | to control our livelihoods.
00:03:38.280 | However, for the most part, we're going to be free again.
00:03:41.720 | And although some of us, probably most of us,
00:03:44.280 | are tired, we're kind of exhausted,
00:03:46.560 | or maybe we started off the blocks too quick,
00:03:49.680 | we've got to muster up our remaining energy
00:03:52.320 | to finish strong.
00:03:53.880 | I encourage you to use this month and any time left
00:03:57.600 | before the lockdowns are lifted to step it up.
00:04:01.680 | If you do not, there will be consequences.
00:04:04.680 | And let's just think about the consequences for a second.
00:04:08.240 | If you are an employee, this is a very, very precarious time
00:04:12.720 | for you right now.
00:04:13.760 | Your manager will decide who to demote, promote, and lay off
00:04:17.880 | partly based on how productive you were during the lockdown.
00:04:21.240 | The lockdown period is one big productivity experiment.
00:04:25.360 | Why on earth is the NASDAQ up for the year?
00:04:29.600 | Why?
00:04:30.760 | Well, one of the reasons why is because investors
00:04:33.720 | believe technology companies can continue
00:04:36.720 | to be productive with less.
00:04:38.800 | So with less employees, with less office overhead,
00:04:43.480 | and less expenses in general.
00:04:45.520 | So when you can do the same with less,
00:04:48.360 | your operating profit margins expand,
00:04:50.920 | your profitability expands, and therefore,
00:04:53.800 | your valuation multiple either stays or expands as well.
00:04:58.000 | So as an employee, is your valuation multiple
00:05:01.840 | staying the same?
00:05:03.120 | If it is, that's pretty good because other employees
00:05:06.360 | are seeing their multiples decline.
00:05:08.320 | Or better yet, is your personal valuation multiple
00:05:11.400 | expanding so that you can get paid and promoted?
00:05:14.100 | I hope it's the latter because you really
00:05:17.040 | need to figure out a way to provide value and make yourself
00:05:20.480 | indispensable during this lockdown period.
00:05:23.520 | You will be evaluated when you get back.
00:05:25.280 | Trust me, every single manager, the CEOs that I talk to,
00:05:29.000 | I talk to these folks because I know these folks.
00:05:32.400 | And they are figuring out ways to cut costs, lay people off
00:05:37.520 | permanently.
00:05:38.600 | This is like a permanent structural change.
00:05:40.960 | And they are also seeing their stock prices
00:05:43.280 | do relatively well, at least here in tech land.
00:05:46.080 | So they're thinking, well, if this is what investors want,
00:05:48.840 | well, hey, I guess we're going to continue to give them
00:05:51.120 | what they want by being lean, as lean as possible.
00:05:54.440 | So we're seeing a leaning of companies listed publicly
00:05:58.680 | and also a leaning of companies that are private.
00:06:02.480 | The lean companies are going to do better.
00:06:04.320 | That's just the way it is right now.
00:06:06.040 | Let's say you're an entrepreneur.
00:06:08.160 | You may see massive, massive pent-up demand
00:06:11.200 | for your products or services once the lockdown ends.
00:06:13.960 | Are you going to be able to handle that without tremendous
00:06:16.280 | amount of preparation?
00:06:18.080 | You better prepare.
00:06:19.200 | Otherwise, you're not going to be
00:06:20.760 | able to benefit from that uptick in demand surge.
00:06:24.040 | You need to find ways to capture that demand
00:06:27.200 | and also make sure that if we go back to lockdowns,
00:06:30.320 | if this thing relapses, you're going
00:06:32.640 | to be more diversified and better prepared.
00:06:36.160 | In sports, you're either going to come out physically
00:06:39.100 | and mentally fitter due to all the time you've set aside
00:06:41.640 | to train, or you're not.
00:06:43.200 | You cannot depend on your opponent to slack off.
00:06:46.800 | You just can't do it.
00:06:48.280 | You know, when I play tennis, I'm always training.
00:06:50.480 | I'm working on my backhand, my serve, my volleys, my footwork.
00:06:55.320 | And I'm trying not to gain too much weight
00:06:58.560 | as a father of two now due to the lockdowns.
00:07:02.200 | There is no way I can compete effectively
00:07:05.520 | by just hoping my opponents just slack off and chill out.
00:07:09.000 | No, I've just got to control what I can control,
00:07:11.040 | which is to stay in shape and work on my skill shots,
00:07:14.480 | my power, my speed, and so forth.
00:07:16.600 | And you've got to do the same thing.
00:07:18.400 | You've got to train right now, because if you can't train
00:07:21.200 | right now and you're back to work,
00:07:23.400 | and it's just back to go, go, go,
00:07:24.760 | then you're never going to have the time.
00:07:25.960 | So you've got to figure out how to make time.
00:07:28.040 | And it's the same thing with your finances.
00:07:30.160 | We've been talking about this for years now,
00:07:33.360 | preparing for a downturn, taking advantage of an upturn,
00:07:37.440 | taking advantage of situations that don't seem
00:07:39.880 | like they're going to last for a long time.
00:07:41.960 | That's an arbitrage, whether it's in the stock market,
00:07:45.120 | in the real estate market, in business, and so forth.
00:07:48.340 | We cannot let quarantine time go to waste.
00:07:51.960 | So in the spirit of doing what I say,
00:07:54.800 | I plan to go from three posts a week to four posts a week
00:07:57.440 | for the next three weeks.
00:07:59.440 | And I plan to record at least one podcast a week,
00:08:02.200 | if not two a week, maybe even more.
00:08:05.240 | Because from my standpoint, there's just so much
00:08:08.000 | to talk about and so much to write about.
00:08:10.720 | And it's funny, because I know once the lockdown ends
00:08:13.600 | and when people can go back to work,
00:08:15.720 | to go back to their office jobs,
00:08:16.880 | it's not going to be obviously 100%,
00:08:18.720 | maybe it's 25% in the first three months
00:08:20.940 | and 50% in the next six months and so forth.
00:08:23.780 | I know that demand and interest for listening to podcasts
00:08:28.700 | and for reading about personal finance is going to tick up.
00:08:32.320 | And so during this time, I'm going to try to write
00:08:35.040 | and talk about the most pertinent things that are helpful,
00:08:38.880 | that are going to help people get ahead financially.
00:08:41.640 | I don't want people to look at my podcast episodes
00:08:44.720 | and my writing during the two to three month lockdown
00:08:47.320 | and say, "Well, what did you write about, Sam?
00:08:49.680 | "Did you just not write at all?
00:08:50.920 | "Did you just give up?"
00:08:52.160 | No, I'm not going to be the one giving up.
00:08:54.420 | I'm going to step on the gas, just like in high school.
00:08:56.720 | I'm going to accelerate and do more.
00:08:59.440 | Because when we all come back,
00:09:01.840 | we're going to determine who are the ones who tried harder
00:09:05.920 | and who are the ones who didn't try as hard.
00:09:09.240 | And I think there's going to be a divergence.
00:09:11.120 | There's going to be a divergence of performance
00:09:13.620 | once the lockdown ends.
00:09:15.080 | And I want you guys to be on the right side
00:09:17.400 | of that divergence.
00:09:19.080 | Finally, I just want to remind everyone
00:09:21.000 | that being smart is completely overrated.
00:09:25.120 | Instead of being smart, you want to be consistent,
00:09:28.660 | you want to learn from your mistakes,
00:09:30.520 | you want to keep on trying, and you want to keep on going.
00:09:33.080 | That's the name of the game, folks.
00:09:34.800 | If you want to get ahead financially
00:09:36.520 | or whatever it is that you're doing,
00:09:38.200 | you've just got to keep on going no matter what.
00:09:42.880 | Thanks so much, everyone.
00:09:43.840 | And I'll speak to you guys soon
00:09:45.720 | because I'm going to be recording a lot of episodes
00:09:48.440 | over the next several weeks.