Be defensive, be smart and spend wisely ”“ that”™s the advice Don Karlewicz, a partner at Goldstein, Karlewicz and Goldstein L.L.P. in Chestnut Ridge is giving the accounting firm”™s business and personal clients.
It”™s also a good time for companies with strong financial backing that are well-positioned to grow. “Today”™s marketplace also presents opportunity,” he said. “Weaker companies have gone out of business, so the opportunity for acquisitions is out there … just be sure those acquisitions will be a boon and not a bust.”
Gerald Kestenbaum, a partner in the White Plains accounting firm of Kestenbaum & Gershenoff, would like to see Americans “go back to the tried and true method of living within their means ”“ a philosophy ingrained in me by my Depression-era parents.”
Kestenbaum, whose firm focuses on exporting and real estate partnerships, said many clients have seen a substantial decline in distributions, resulting in less cash flow. “Every business is dealing with some bad debts and needs to have money flowing. Some have a sufficient cushion. Others do not.
“In today”™s economy, many people have just stopped purchasing because they don”™t know what”™s around the corner. Even those who live comfortably and within their means seem to be holding back when it comes to making purchases. But business is cyclical and always has been. With or without fraud, individuals and businesses need to put something away for a rainy day. Unfortunately, most working people are living paycheck to paycheck. It”™s very difficult for them to save.”
When the U.S. dollar became weak in previous recessions, said Kestenbaum, “We”™d draw tourists from other countries and that would help prop up our economy. Since retail and hotels cater to this group, this sector kept growing. But now the recession is global, and other countries are in worse shape than we are. Most working people today are living paycheck to paycheck and those that have saved for that ”˜rainy day”™ typically have between $2,500 and $4,000 put away. It doesn”™t go very far in this economy.”
Marion Loiola, a certified public accountant in Highland Mills, focuses her business on individual tax returns. She said the media has “exaggerated the situation, at least here in the Hudson Valley.”
“Yes, people are struggling but they are doing much better than what is being reported. Some have lost their jobs, but most people are still working and remaining, for the most part, status quo.”
One thing Loiola has found with her clients ”“ as have her peers ”“ is “many are holding back on spending. They don”™t know what”™s around the corner, and they are being careful about making purchases.”
Loiola says clients are seeking loans to either modify their existing mortgages or re-finance, but “what we”™re hearing is not really what”™s happening out there. I don”™t think anyone wants to roll all their outstanding debt into a mortgage … they”™d just like to refinance their old one and get the rates that we”™re hearing are available.”
For Westchester and other Hudson Valley counties that will be impacted by the new MTA payroll tax, “It”™s going to be very hard for employers to create new jobs,” said Loiola. “We can only hope things will get better … I”™m hearing that people are hiring again, and there are jobs out there. But putting the extra strain on employers north of New York City just doesn”™t seem equitable.”
Karlewicz hopes to see consumers start spending and banks that have tightened lending restrictions to swing back to a more even keel. “First. we had the ”˜no-doc”™ era, where anyone and everyone could get money. Now, businesses and individuals who are financially stable are having trouble getting loans. Hopefully, the banking industry will level off, continue to be vigilant but make it possible for good borrowers to obtain the credit they need and help get the economy moving again.”
