Thoughts From the Finance Factory

Running Your Business During COVID-19: A Step by Step Guide

In the age of a pandemic, when we are cooped up in our homes feeling powerless, challenges can take on epic proportions. It feels like we’re locked in a fight for our survival, partly as humans but also as business owners in a world economy. The decisions we make as leaders right now are truly a matter of life or death.

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Faith over Fear

Over the past week, I’ve had conversations with many of you about the “new normal” we find ourselves in.  This past week was weird for us all: It felt shapeless. Without the routine of going to work or dropping the kids at school, I felt unmoored. What day is it? How am I supposed to feel? Do I freak out? Go about as if this is business as usual? Is it somewhere in the middle? 

To answer those questions, I started by summarizing the problem. We are waiting on the news to turn and the virus to reach its peak.  

COVID-19  is like a video that goes viral on Facebook. One person sees it and shares it with their network, who then shares it with their network, and the next thing you know 5 million people have seen a cat video. Only this time, it’s a virus. It is frightening to think about what this virus has done to the global economy.  We don’t know what the final tally will be, but we know it is going to be big.  Big from the perspective of the impact on unemployment, corporate revenues, GDP, and stock prices.  

As we begin to digest what life will look like after this virus passes, I am certain of two things: 1) The virus will pass, and we will develop a vaccine and treatment to deal with future outbreaks of COVID-19.  2) Our economy will come back, the question is when.  We are a resilient nation.  We have come back from two world wars, a Depression, dozens of recessions, terrorist attacks, and even global pandemics.  

Knowing these two things, I realized there is a choice we must make today. When things are out of control, people tend to forget they still have choices.  Even with working at home, distance learning, and job loss: We still have a choice. That choice is between faith and fear.  

Today is the day to choose Faith!

So how do you choose faith? You can start by not listening to the negative news programs or watching the rolling death tolls. Instead, look for the positive. I’m not saying to ignore the risk associated with Covid-19.  Quite the opposite. 

As weird as it may sound, I find the atomic bomb to be a useful analogy to our current state. 

When the world was worried about the next bomb being dropped, they didn’t cower in fear.  If we were going to be destroyed by a nuclear weapon, we would be destroyed doing sensible human things: reading, writing, working, praying.  It would not find us huddled together like frightened sheep.

So it goes with this virus. If contracted, the virus may destroy our bodies. But for those at risk, and for the rest of us in isolation,  it does not have to dominate our hearts and minds. COVID-19 test results are only one part of our health and well-being.  

Ask yourself if what you are watching and reading. Is it feeding your fear or your faith? To get you started with positivity, here is the great C.S. Lewis discussing how he transitioned to life in the nuclear age:

In one way, we think a great deal too much of the atomic bomb. “How are we to live in an atomic age?” I am tempted to reply: “Why, as you would have lived in the 16th century when the plague visited London almost every year, or as you would have lived in a Viking age when raiders from Scandinavia might land and cut your throat any night; or indeed, as you are already living in an age of cancer, an age of syphilis, an age of paralysis, an age of air raids, an age of railway accidents, an age of motor accidents.

No one could have predicted this virus or its impact on the global economy.  And there are still many unanswered questions. But this is a moment that humanity has faced many times before, and every time we have come through them stronger because we choose Faith and not Fear! 

If you need anything we are here to help. 

Dream Big and Learn Fast!

In the latest episode of the Business Owners Blueprint Podcast I talk with Billy Prim, Chairman of Primo Water. Billy Prim is a very rare breed. He is from a rural tobacco farming town but his entrepreneurial spirit runs deep.

He founded two companies that he took public, Blue Rhino and Primo Water. Listen as you learn some of his lessons on business, leadership, success, and overcoming difficulties. We also talk a little baseball.

What Do Top Gun and Yield Curves Have In Common?

Let’s talk about recessions!

All bull markets die! It’s a fact of life that eventually this epic run for stocks will come to an end and the economy will go into a recession.  By the time you read this you will have no doubt have heard that the yield curve has inverted, and this indicator has correctly indicated the last 7 recessions. 

What does an inverted yield curve really mean?

Every time I hear the term I think of the famous scene in Top Gun where Maverick discusses his foreign relations with the Russian MiG pilot.


Charlie: Well, if you were directly above him, how could you see him?

Maverick: Because I was inverted.

Iceman: [coughs whilst saying] Bullshit.

Goose: No, he was, man, it was a really great move.

Charlie: You were in a 4G inverted dive with a Mig 28?

Maverick: Yes, ma’am.

Every time I hear Inverted Yield Curve, I think of 4G dives with Russian fighter planes.  But an Inverted Yield Curve isn’t a fancy flying maneuver it happens when the amount you get paid for owning a longer-term bond is less than the amount you get paid for owning a shorter-term bond.  In this case the 2-year treasury is inverted compared to the 10-year treasury. When the 2/10 yield curve has inverted it has successfully indicated the last 5 recessions.  But this inversion is not a good indication of when the recession is going to occur.  As my friend Ryan Detrick at LPL shows in this chart

As you can see from the chart this is not good for telling us when the recession will start.  It also is not good at telling us the severity of the recession.  What I tell all clients is to keep things in perspective and not panic.  Data shows the U.S. economy is on solid footing, and corporate debt spreads have remain contained in this latest bout of volatility. Financial conditions are still historically loose, yet there are few signs of excess in the financial system. U.S. stocks have also been resilient against yield curve inversions in the past: Historically, the S&P 500 Index has rallied an average of 22% from the first inversion to the eventual economic peak. Recessions are not the end of the world.  They are part of normal markets and if you stick to your plan you will reach your goals.  I am not a great pilot, so I won’t be doing 4G inversions with Russian MiGs and I don’t suggest you do them either.  Stay the course, know your plan and don’t overact to miscellaneous market events.

5 Years Down, 95 to go

5 Years In

It is hard to believe that I opened the doors to Thorium Wealth 5 years ago on May 24, 2014.  Looking back, it was the scariest and most exciting thing I have ever done.  Starting a business is not for the faint of heart.

Thorium Wealth was a logical next step for my professional career even though my timing was probably too early. I had spent the entire first part of my career working with business owners and Thorium Wealth has been built as a firm designed for business owners.

In honor of reaching our 5 year anniversary I am going to share some lessons I have learned the hard way related to being a business owner with a little help from some of my favorite rappers. (more…)

Episode 26: The Journey From The CIA To Hydrating Humanity

In 2005 after spending time in the CIA and becoming a Pastor Matt Peterson founded a non-profit called Hydrating Humanity. Hydrating Humanities mission is to see the poorest areas of the world realize REAL and lasting transformation at every level: economically, socially, spiritually and in physical health. They believe the most impactful spearhead into these communities is clean, safe water projects and hygiene education. Their mission is to eradicate the water-borne disease crisis, save lives, love people, build relationships and reveal Christ. (more…)

Legends and Legacy

Last month investors everywhere lost a legend. Jack Bogle the founder of Vanguard died at the age of 89.  I never had the chance to meet him, so I am not going to attempt to write some forced memorial.  But I am going to write about is legacy.

Jack Bogle made it his life and career to serve the best interest of investors.  He believed in creating a low cost investment vehicle for the general public to put their savings into.  He popularized the idea of low cost index funds and made investing accessible to millions while sacrificing 100s of millions if not billions in personal wealth.

Don’t get me wrong he died a wealthy man by most people’s standards but in the investment community where there are tons of billionaire investment and hedge fund managers he was not anywhere near as wealthy.  What he has is a legacy of service.  He served investors around the globe.  He drove down fees to a point where investors can create a fully diversified investment portfolio for just a few basis points not several percent.  This allows people to keep their money.

His legacy is not creating the $4 trillion dollar investment giant Vanguard his legacy is being a selfless servant.  So as we celebrate a life that has affected the lives of almost every one of us take a moment and think about what you want your legacy to be and begin doing that if you aren’t already and if you are do more.