'You Could Literally Cost Yourself Millions': Finance Expert Warns Against 'Panic Decision' On Trump Tariffs

Tariff announcements and pauses have led to high volatility within the stock market and have investors trying to decide what to do with investments and personal savings.

A personal finance expert recently offered up some advice and commentary on President Donald Trump's potential tariffs.

Author Ramit Sethi is best known for the book "I Will Teach You To Be Rich," hosting the "Money For Couples" podcast and hosting "How To Get Rich" on Netflix.

Sethi offered some expert advice on how to survive these uncertain times due to Trump's tariffs.

Here are three of the key pieces of advice and commentary shared by Sethi, as reported by Buzzfeed.

Middle Class Hit Harder: Sethi said that tariffs will likely hit the middle class and poor Americans harder than wealthy people, something investors of all wealth levels should be aware of.

"There is good data showing that on an annual basis, these tariffs will hit the median American household, costing them over $2,500 per year. Trump's tariffs are directly a tax on the poor and middle class," Sethi said.

Sethi said tariffs could be instituted only to help provide a "big fat tax cut" for the wealthy.

Don't Panic On Retirement Accounts: While there are increased levels of uncertainty due to tariffs, the author cautions against making drastic moves and changing investment strategies.

"If you are in your 20s, 30s – even 40s – you can reasonably expect that the market will go up some years and it will go down some years," Sethi said.

The personal finance expert said young investors have a luxury that their investments will compound over time.

"What this means is, stop looking at your investment accounts and in general, keep investing consistently."

Sethi said there is a concern that seeing stocks go down and too many red days will lead to panic selling.

"I saw it happen in 2001, I saw it happen in 2008, I saw it happen in 2020. You can literally cost yourself millions of dollars if you make a panic decision."

Selling during a high volatile time could be one of the "worst financial decisions you can possibly make in your entire life," the expert warns.

Sethi said the stock market has recovered after world wars, during pandemics and other crises.

"I plan to be continuing to invest, and if you do the same, it will give you a very good shot at living at a very rich life."

Beef Up Emergency Fund: The personal finance expert said, instead of panic selling and worrying about retirement accounts, the number one focus should be on savings.

"I have an aggressive recommendation that I'm making, and that is to focus on assembling a 12-month emergency fund," Sethi said.

The expert said an emergency fund is typically recommended to be three to six months worth of funds.

"The only other time that I have recommended a 12-month emergency fund was when COVID hit, which should suggest the seriousness of the situation that we are in."

Sethi said that the tariff war likely isn't over and many other countries now see America as "an unstable partner."

"I see a lot of uncertainty ahead of us."

Sethi cautioned that companies may lay off employees in the future. Having an emergency fund could provide a cushion from a job cut or other hardships.

"You do not want to get into a situation where your back is against the financial wall, and you have to make really bad decisions."

Read Next:

• Mark Cuban Reveals 4 Rules To Becoming A Millionaire: ‘Find Something You Can Be Good At. Then…’

Photo: Ground Picture/Shutterstock.com