Dr. Wendy Labat: “Investing During The Pandemic; What Should I Do With My Money Considering All of the Volatility and Uncertainty Today”

Most people have responded to the pandemic with panic. The higher the daily death toll and bigger the drop in the stock market, the more people panic.

When you’re in panic mode you can’t hear the voices of reason. You have to pray to hear the Ultimate Voice of reason for answers to your circumstance. More importantly you have to pause to listen to the answer. When you get the answer, you have to pivot in that direction to find and fulfill your purpose.

As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Dr. Wendy Labat, aka “The Financial Healer” who is an entrepreneur, financial strategist, speaker, and author. She has her Doctor of Business Administration (DBA) degree in Entrepreneurship and over 36 years of experience as an entrepreneur. Dr. Labat is the CEO of The Financial Cures LLC and Founder of The Ascend Foundation Inc., a 501(c)3 organization that empowers disadvantaged women to own and operate their own business.

Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

I have been in the tax preparation business for over 20 years. In 2014, when the Affordable Care Act mandated that individuals have healthcare coverage, I expanded my business to include insurance and financial services. I didn’t want to be a hypocrite and believed if I was going to sell my clients these products and services, I needed to have them for myself and my family. So I purchased the various insurance and financial service products I was trying to sell. I was thinking about it from a business perspective and never thought I would have to use any of it.

Three years ago I was diagnosed with breast cancer. I underwent 5 surgeries and chemotherapy infusions every three weeks for a year. The cost of my chemotherapy treatments was $67,000 every three weeks for a year. The cost of the surgeries, CAT scans, MRIs, ultrasounds, and lab work exceeded $300,000. Can you imagine having to pay those kinds of medical expenses in addition to your personal and business expenses?

Thank God I practiced what I preached. My health insurance covered all of my medical bills. In addition to that, I received a significant tax-free payout from my supplemental benefits because of my breast cancer diagnosis. I was able to focus on my health and not worry about my finances. I considered it “The Financial Cure” and have been on a crusade to empower people to acquire the proper protection to prevent financial ruin.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?

The most amusing story that occurred to me in my career so far was when I would talk with my mother during the early days of my business (36 years ago). She would ask me, “Are you making any money yet?” I would tell her, “Not much, but I’m really enjoying what I’m doing.” She would say, “You need to get a job.” I told her, “I have a job, running my business. Just because I’m not punching a time clock, I still report to work every day.”

A few years later, my company was being recognized as “Small Business of the Year” by a business organization that I was involved in. I flew my mother in from Chicago to Atlanta to attend the awards ceremony. I received the award and gave my acceptance speech. On the ride home, my mother said, “I guess you do have a real job running your business!” We laughed about that for years.

Can you share the lesson or take away you took out of that story?

My take-away from this story is, don’t be discouraged by how others view your situation. Be disciplined and encouraged by your mission to fulfil your vision.

Are you working on any exciting new projects now?

Yes. I’m writing a book, “Diagnosing Your Financial Health” which is the first of “The Financial Cures” series. I am coauthoring a book “The Lemonade Stand Book 2” with Michelle Faust, the creator of the anthology. I am launching a series of digital courses under “The Financial Cures SystemTM” brand. I’ve recently launched a daily Facebook Live segment entitled “The Financial Cures Prescription” which highlights financial tips for the current environment. I have gotten invitations to be featured in several magazine articles, such as yours, podcasts, virtual summits, radio, and virtual talk shows. This is a very exciting time for me.

How do you think that will help people?

This will help people to get through difficult financial situations such as the one we are in now. They will have access to information and tools that will empower them to develop strategies to prevent financial ruin by protecting their financial, physical, mental, and spiritual health. This will help people grow through the process of panic, pray, pause, pivot, and purpose to see that good things will come out of the devastation of the pandemic.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?

There isn’t any one person but a series of people throughout my journey that I am grateful to that have helped me get to where I am today. The list is quite long and is still growing, but I’d have to start with my mother.

Can you share a story about that?

She instilled in me as a child that I can be whoever and whatever I wanted to be in life. I can still hear her voice in my head saying things like, “Whatever you do, do it to the best of your ability”; If you tell someone you’re going to do something, do it. If you can’t do it let them know“; “Don’t complain about something if you’re not going to do something about it”; “Be grateful when someone gives you something or does something for you”; and the most important thing was “God will open doors for you that you didn’t even knock on, be ready to go through them.”

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious?

Panic, pray, pause, pivot and purpose.

Can you explain?

My mentor recently poured that wisdom into me. Her words inspired me so much that I share it with as many people as possible to give them a sense of comfort and direction during this pandemic. Most people have responded to the pandemic with panic. The higher the daily death toll and bigger the drop in the stock market, the more people panic.

When you’re in panic mode you can’t hear the voices of reason. You have to pray to hear the Ultimate Voice of reason for answers to your circumstance. More importantly you have to pause to listen to the answer. When you get the answer, you have to pivot in that direction to find and fulfill your purpose.

The pivot requires thinking outside the box and doing what you may not be used to doing. It requires sowing seeds and doing things you’ve wanted to do but didn’t find or take the time to do. Call people to check on them to see if they need anything. Provide provisions to people and families less fortunate. Give/buy gift cards for products and services that can be used now and when the quarantine is over. Have virtual gatherings with family, friends, and clients to encourage them.

Doing these things help you find your purpose. You may have always wanted to go into the ministry, become a teacher, become a caterer or go into business for yourself. Now is the time for new beginnings and establishing a positive new normal.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long-term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

I would tell them, yes. I would find out what they currently have; the value of their current investment vehicles; and what they are trying to achieve. I would develop a strategy to make their money work for them, reduce the risk of market losses, tax liability, and financial ruin. What I call “Optimizing their financial health to ascend from where they are to where they want to be.”

I usually recommend putting money in an Indexed Universal Life policy (IUL). This is the “smart phone” of insurance. It provides you with three investment vehicles in one. Living Benefits by providing a tax-free pay out (up to 90% of the death benefit) if you suffer a critical/chronic illness or injury.

Additionally, it has a no-risk investment vehicle that is indexed to the market to give you the gains of the market with no risk of market losses. You can put your investment in stocks, bonds, real estate, gold and/or a fixed account with a current fixed rate of 4.5%.

It still includes the traditional death benefit. This is a great vehicle for parents and grandparents to put those college fund dollars in for their children and grandchildren while they are young and healthy. These funds can be used to get tax-free income for retirement, college, home purchase, or during difficult times such as this.

There are also Fixed Indexed Annuities (FIA) where 401Ks, IRAs and other retirement funds can be rolled over with the same no-risk feature as the IUL. There is an FIA that gives a 5% bonus upfront on the initial investment and 5% for each contribution made for the following 8 years. The bonuses are in addition to whatever gains are made from the investment.

Let me emphasize, THERE IS NO RISK OF LOSS TO THE PRINCIPAL AND ANY EARNED INTEREST WITH THESE PRODUCTS.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

I would suggest that they diagnose their financial health to realistically find out how much can they afford to invest, how much they are willing to lose, what kind of gains they would like to see and the time frames for each category, then develop a strategy to achieve their goals.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

Disruptors like Uber, Lyft, AirBnB and others were born during volatile and uncertain times. Since everything is going virtual, investments in technology companies that produce bots, virtual platforms, and other technology related products, services, and apps would be good to consider. Putting your money in IULs allows to invest in the market without the risk of losing your money.

Are there alternative investments that you think more people should look more deeply at?

Yes. The indexed products I mentioned earlier. People need to look at insurance from a new perspective. My clients who invested their money in those vehicles didn’t panic when the stock market crashed. They know their retirement funds are safe. They might not make money right now, but more importantly they are not losing any of their principal or earned interest. They are not worried about being financially ruined if they become critically or chronically ill or injured. They know that they will not be a burden to their families but an asset to them in the unfortunate event of their death.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long-term investment what would you advise them to do with it?

I would advise them to diagnose their financial heath to answer the questions indicated in one of the previous questions. Apply the “Rule of 72” to develop the strategy to take them from where they are to where they want to be.

For those who are not familiar with the Rule of 72, it’s when you take the return on investment (ROI) and divide it into 72. Let’s say the ROI is 4%, divide it into 72, you get 18. It will take 18 years for that $10,000 to double to $20,000. If the ROI is 10%. It will take 7.2 years to double to $20,000 and so on.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

These are the 5 non-intuitive essentials for smart investing that I have actually advised my adult children about.

1. Mindset/Knowledge — Your mindset must match your goals. If you want to have big goals have to think big, but you also have to be realistic. Learn everything you can about investing, the Rule of 72, and how money works. Develop a strategy to achieve your goals. Understand that is takes patience, knowledge, and flexibility for smart investing. There is no get rich quick formula. What is profitable today may cause significant losses tomorrow.
2. Proper Protection — Your health is your biggest asset. Protect yourself against financial ruin. Smart investing starts with protecting your health, life, and income. My breast cancer diagnosis could have ruined me financially. Instead it was a “financial cure” that brought me a substantial tax-free income because I had proper protection.
3. Taxes/Market Risks — Understand how each of these factors will affect your investments. Calculate the impact taxes and the level of market risk will have the gains you make. Take advantage of “indexing” to the market versus investing in the market. Your get the gains of the market with no risk of loss of principal or any earned interest when the market declines or crashes.
4. Global Economic Impact — This is a global economy. What happens in other countries affects how the market responds. The Coronavirus pandemic revealed just how intertwined the world is economically.
5. Timing/Take Action — You must take action when the time is right. You can’t just strategize and plan without taking action. Timing is as important in smart investing. My clients who got their money out of the stock market before it crashed and put that money in an IUL, didn’t panic because they didn’t lose any principal or earned interest. They also have the peace of mind that if they become stricken with an illness, injury, or even death they a protected.

Can you please give us your favorite “Life Lesson Quote”?

My favorite “Life Lesson Quote” is “Trust in God’s plan. Leave room for God to send you on detours because the blessings may come on the paths that you didn’t expect to take.”

Can you share how that was relevant to you in your life?

I am living proof of this. I never planned to become an entrepreneur. My original plan was to become a medical doctor. I had everything mapped out. I graduated from high school in 3 years and college in 4 years. When I got rejected from the 5 medical schools I applied to, I was devastated. I didn’t have a “Plan B.” I went to graduate school and completed my MBA in less than 2 years. But God had other plans for me. I was still trying to follow my own plan with my self-directed detours. I made lots of money along the way but wasn’t happy or fulfilled by this journey. It wasn’t until I began to trust God’s plan and follow the detours He was directing me to take, that I found the blessings of happiness, fulfillment, and prosperity in every area of my life.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I would inspire a movement to mentor communities to empower people with knowledge, tools, and resources to be the best that they can be in all areas of their lives, so that they can in turn sow positive seeds into the lives of others. The world will reap a bountiful harvest.

Thank you for the interview. We wish you only continued success!