A lot of us learned this past month that our lives are not as financially secure as we believed. Today’s news and emails are buzzing with fears of individuals facing strongly worded government demands to pay back money that they never received. Small business farmers in our South Jersey region had spring contract payments cancelled, relatives arrested, and employees missing. Other businesses in the poorest regions of Cumberland County, Salem County, and Camden County, NJ had contracts cancelled and wonder if they need to worry about their own business closing ahead. Government employees and employees of agencies serving small businesses in our metropolitan Philadelphia region have been fired with no immediate job prospects. One small business owner is facing foreclosure on their home from an unscrupulous lender in another state and can’t find help to investigate the interstate crime. I handle these calls with a three-step approach:
Listen, acknowledge, empathize
The first thing for a financial adviser is to acknowledge the fear and offer empathy. In my case, that is easy. It is a natural part of my professional coaching training and an integral part of my own business journey. Simply being available at the moment of panic, showing unlimited patience, and a calm confident voice makes the difference. I remind them of my personal story that I faced eight years in recovery with no income after an attack instigated by a government officer. I’ve also prevailed through multiple government lawsuits, cancellation of financing, investigations, forced business closure, and fines. I notice that when clients are suddenly confronted with fallacy of “I’m from the government and I am here to help” for the first time, they find comfort in knowing that their adviser has been there before. I remind them that thousands of their neighbors shafted by government following natural disasters and the pandemic managed to survive with community support. Not too many small business CPAs have helped so many clients and neighbors deal with as many cases of government corruption and incompetence, and so I use my decades of experience to an advantage now.
Re-evaluate and act decisively
The next step is to reassess goals, address cash flow risks, and make immediate necessary corrections. They already know this in the back of their minds, but appreciate having it confirmed in a structured coaching session. Hearing me endorse the plan reduces stress between spouses and business partners. Many are tempted to believe that government relief will come eventually, but I push to avoid a dependence on that thinking.
Make a safer plan to rebuild
The third step, as a long term strategy, is to rebuild their businesses and financial lives considering this risk of lack of government functionality ahead. Tax advisers are just beginning to come to grips with the massive shift in policy and enforcement, and will advise clients accordingly. I focus on cash-generating businesses that can resist government disfunction and stand to gain by the intrusion of Artificial General Intelligence (AGI) into the working sector. I remind clients how I (prematurely) shifted away from residential real estate sector investments in anticipation of this risk. Now they are more likely to see the wisdom in alternate investment sectors, even those that avoid dependence on cash transactions. I notice that the introduction of a long term strategy – even though we are completely overwhelmed with the financial crisis of today – helps adjust clients’ mental attitude to a position where they can move forward in a positive direction.
While I am not an economic forecaster, in fact have a dismal record at that, I can predict that these government-caused financial crisis will hit poor rural communities first, followed by urban white-collar business sector in the years ahead. I have long believed, as Musk and others do, that some form of universal income will be necessary to avoid total violent economic collapse. But the change will not be calm or easy. The role of independent CPA advisers has never been more important to the lives of our clients.