What is Private Equity?
Private equity is an investment approach where funds are collected from wealthy individuals and institutions to purchase shares in non-publicly traded companies. The goal is to enhance the value of the acquired companies over a period of 3-7 years by implementing operational and strategic improvements. Eventually, the private equity firm aims to sell the companies for a higher price than they purchased them.
Private equity firms usually have a team of experienced professionals, including trained executives, who work closely with the management teams of the companies they acquire to implement operational and strategic improvements. These improvements may include cost-cutting measures, expansion into new markets, product development, or mergers and acquisitions.
Post-Covid-19 the economy has been weakened all over the world and the Ukraine war aggravated the situation.
Tariffs imposed on Russia by other countries can disrupt the existing supply chain, which refers to the network of businesses and organizations involved in the production and distribution of goods and services. The supply chain typically involves multiple stages, such as raw material acquisition, production, transportation, and distribution.
This disrupted the existing supply chain and created shortages of certain goods that were previously imported from Russia.
As a result of the supply chain disruptions, the inventories of certain goods became depleted, creating scarcity and increasing demand. This led to an increase in prices for those goods as suppliers were able to charge more due to the limited supply and high demand.
Furthermore, the disruption in the supply chain also increased the cost of production and transportation, which further contributed to the rise in prices.
Overall, the Russian invasion of Ukraine and the resulting sanctions and tariffs disrupted the supply chain and created shortages, which led to a rise in prices.
What factors led to this situation?
Due to a combination of factors such as the Ukrainian conflict, trade tariffs, and the COVID-19 pandemic, there have been significant disruptions in global supply chains, causing shortages and price increases for various goods and services. These disruptions have led to a rise in the cost of materials, and some suppliers may be taking advantage of the situation to increase their prices.
Overall, these events have had a significant impact on the global economy and have led to a number of challenges for businesses and consumers alike.
In a recent conversation with a writer, an executive reportedly expressed the belief that “the world’s recovery from the COVID-19 pandemic could take another year or two. He also revealed that he had moved his family and assets from the United States to the Czech Republic, citing his firsthand experience working at a major bank during the real estate crisis in the early 2000s. During that time, many families lost everything due to the impact of floating rate mortgages and financing agendas that were dependent on interest rates remaining stable.”
Breaking the Paycheck-to-Paycheck Cycle: The Power of Consistent Saving
For many Americans, living paycheck to paycheck is a reality, with little to no savings or bank accounts. However, even a small amount of savings can be a necessary start towards financial stability. To create a habit of saving, it’s important to start small and make it a regular part of your routine. By putting away even $50 per week, you can begin to see progress and build momentum towards a more secure financial future. Once you start to see the benefits of saving, it can become a contagious habit that leads to greater peace of mind and a more stable financial foundation.
Your children will learn to create that habit and hopefully stop asking you for money.
You will realize there are some niceties that you can do without or find alternatives that work just as well if not better.
The COVID-19 pandemic brought with it a time of uncertainty and fear. People were unsure of what was to come and how long it would last, which led to widespread panic buying. There was a rush for essential items such as food and household supplies, including toilet paper. This caused shortages and empty shelves, creating further anxiety for those who were unable to secure necessary goods.
It is important to remember that panic buying can lead to severe consequences. While it may provide some temporary relief, it can have negative consequences that extend far beyond an individual’s immediate needs.
Unfortunately, the panic buying had an even more significant impact on the economy as a whole. The high demand for products led to an increase in pricing, as suppliers struggled to keep up with demand. This has resulted in many people paying higher prices for essential goods, which has had a ripple effect on the economy.
The writer suggests that being prepared for unexpected economic downturns is crucial, and having a savings account is a necessary step towards achieving financial stability. It’s easy to panic and rush to the stores during a crisis, but this only exacerbates the situation by depleting inventories and driving up prices. The writer recommends making saving a habit and suggests having money taken directly from paychecks and deposited into a savings account. This will ensure that savings are steadily being built without requiring much effort or thought.
It will grow while you are sleeping. The more you add to it the more it grows. Now granted banking interest on savings accounts are barely 1 – 2% but it’s still free money.
There are other tools for saving your hard-earned money. These require a little more education on how they work such as Money Market accounts, mutual funds, 401k, IRAs. Before you venture into these, you must be comfortable in the practice of saving first, you must be comfortable living slightly below your comfort level to achieve this necessary life skill.
A recommendation for building financial resilience is to save at least $50 per paycheck for a year. By developing this habit, individuals can gain the confidence to progress towards building wealth and generational wealth.
Life insurance:
This feels like a bad word for many people but is very important. We experienced so many untimely deaths during Covid-19. We all have lost family, friends, and co-workers because of the pandemic. This painful time brought on financial grief.
Bread winners of many families were taken from us. No one wants to think about losing a loved one but “death becomes us all” and we have to plan for this.
According to Forbes, these are the statistics for 2022 insurance trends:
- According to results from a Forbes Advisor survey on life insurance, at least three in four American adults have some form of life insurance.
- Women (22%) are twice as likely as men (11%) to lack life insurance.
- Forbes Advisor survey respondents were commonly unaware that certain aspects of personal history—unrelated to health—are considered by insurers when determining an individual’s life insurance quote:
- Only 35% of respondents knew that driving records are usually considered.
- 33% knew criminal history could be considered.
- 29% knew credit history could be considered.
- 23% knew a current bankruptcy is often considered.
- Almost 60% of respondents to a Forbes Advisor survey on marijuana and life insurance indicated they’d have reservations about applying for life insurance if they legally used marijuana.
- More than half (56%) of respondents indicated they would not respond honestly to questions about marijuana use in order to sidestep higher life insurance quotes.]
- Many Americans view life insurance as a means of protecting their families from unpaid debt. White respondents (64%) to a Forbes Advisor survey were much more likely to indicate this view than Black respondents (37%).
- A small number of Americans view life insurance as a means of passing down generational wealth. Black respondents (22%) were nearly three times as likely as white respondents (8%) to indicate this view.
- Fewer than half of people without life insurance surveyed in this study say they feel financially secure. The same survey found that 68% of life insurance owners say they do feel financially secure.
- This feeling of financial security rises to 78% when a consumer has both employer-based and individual life insurance policies, according to the Insurance Information Institute.
- The number of Americans who believe they don’t have enough life insurance has more than doubled since 2010.
- 44% of American households would encounter significant financial difficulties within half a year if they lost the primary wage earner in the family, and 28% would reach this point in only a month.
According to this study, we can see men are more likely to get covered because men have traditionally been the breadwinners in the family, but that trend has been changing since more women are getting married and having children later. More women are running single family households than before.
Most see life insurance to provide a security blanket but those surveyed also feel they do not have enough coverage.
The more confident have employer based as well as privately purchased plans. The financial difficulties of losing a breadwinner will take effect within a year of your loss and this means someone has to pick up the baton and continue the race. This means getting a second job to support your family which can bring other difficulties and costs when you have children or someone at home that needs supervision.
Conclusion: The COVID-19 pandemic has caused financial strain for many, highlighting the importance of saving and preparing for economic crises. Life insurance is also crucial for protecting families from debt and providing financial security. However, many are unaware of factors that insurers consider when determining life insurance quotes. Being proactive and informed about finances can help individuals navigate economic challenges and ensure financial security.
At Blackmore we can help executives and private equity firms reach the financial levels they want to, for more information, look into our websites:
https://blackmorepartnersinc.com/
https://www.blackmoreconnects.com
Written by Byron Cowan
