I may go back to my childhood roots when it comes to protecting my financial nest egg.
With the stock market in free fall due to an aggressive tariff plan the current administration has imposed on foreign countries, I’ve had to rethink how to safeguard my savings.
Over the years I’ve invested in certificates of deposit, mutual funds, money markets and contributed regularly to a company 401k plan, all in the name of having a sizeable sum. When I retired recently, I figured I’d have enough dough to get by, especially since my wife is still working. Now, I’m not so sure.
On April 2, President Donald Trump signed an executive order imposing a minimum 10 percent tariff on all foreign goods. His reasoning? To boost manufacturing in the United States and to protect jobs. The result was immediate but not in the intended way. The Dow Jones Industrial Average plummeted nearly 4,000 points in the following two days forcing the president to impose a 90-day moratorium on higher tariffs except for China, which the administration raised to a staggering 145 percent. In retaliation, China simply raised tariffs on American goods to 125 percent.
I’ve never been really good at math but the tariff, or extra tax, on Chinese goods would raise the price of a $10 product to $24.50. In return, an American product exported to China would rise from $10 to $22.50.
That means shoppers could be paying more for commodities ranging from cars to clothes. The biggest hit felt so far has been the recent loss most Americans have seen in their various investments, causing panic among many retirees. Financial advisors are cautioning against any knee-jerk reactions and are advising their clients to sit tight and weather the stormy financial tide. Cashing out savings accounts would almost certainly mean a sudden loss of capital, but is that a bad decision if the stock market continues its downward trend?
I have a hard decision to make. Do I hang in there or do I cash out and adopt the savings plan that I instituted when I was just a kid living in Brookfield. Back then I had a secret cache of cash—not much, but when you’re 10 years old money is hard to come by, especially when you have a sister across the hallway who knows where you’re stashing those precious dollar bills and rolls of quarters.
So one day I decided I’d hide my money in the backyard in a metal cash box when no one was looking. I dug a deep hole in the nearby woods and placed the metal box, wrapped in plastic, in it for safe keeping. That way I’d be the only one to know where my hard-earned loot—gained from a weekly allowance—was stored.
There were drawbacks. For instance, it wasn’t always easy on short notice to grab a dollar or two when my parents took my sister and me to the grocery store and where, of course, I had to buy a pack of baseball cards. Unfortunately, my groundbreaking banking system foundered when my father cleared the woods one day. Gone were all the natural landmarks I relied on to find my precious savings.
Despite those early losses I’m still considering a return to my early savings plan. I’ll need a much bigger metal box this time—maybe two. I’ve even picked out the perfect spot to bury my money but obviously I can’t disclose that here.
I know some people may look upon my plan as lunacy. But is it? I remember my grandmother telling me about the Great Depression in the 1920s and early 1930s with the near collapse of the banking industry. Back then, approximately 600 banks failed each year during the 1920s and between 1930 to 1933 nearly 10,000 banks either failed or suspended operations.
My grandmother, who grew up in the Depression, was smart. She discreetly kept much of her cash in a hanging shoe rack on the inside of her closet door. And of course there were also a few envelopes stuffed with cash under her mattress. Brillant! My mother, who also grew up during hard times, kept a cash box deep inside her bedroom closet.
Perhaps my choice of banking is hereditary, handed down genetically through the ages, although I have no proof of this. But if the financial markets show signs of another nosedive, I’ll be ready with a shovel in hand.
Dave Dunleavy was a longtime reporter and columnist for The News-Times in Danbury. He lives in Kent.
