Eighteen months later, the novel coronavirus must have hit your wallet hard. In one way or another, most of us have felt a financial dent. I agree with you, it’s been tough.
Like a thief, the pandemic caught most of us by surprise. The aftermath was job losses, salary cuts, profit reductions, and these led us to turn to savings, loans and loan restructuring to survive. Woe unto you if you had no savings or you have a negative credit report, not even mobile money lenders or shylocks next door would lend you a dollar!
However, all is not lost, the beauty is that you are still strong and breathing. That means you got more time to re-work your finance and investment plans. You can still redeem yourself because you got this! Below, find 5 finance and investment lessons that will help you deal when a crisis like Covid-19 re-occurs or you find yourself in the deep end.
- Invest Now
The onset of the pandemic was a reminder that the best time to invest is now. You probably have been waiting for something – say a rise in stock prices or a steady market but Covid has proven that while waiting can be good, it can also be you shooting yourself on the foot!
Therefore, as an investor, you need to be comfortable with volatility. Getting scared also keeps you away from participating in the potential of equities.
- Diversify your investment
Truth be told, putting all your eggs in one basket has never been the best option. When a crisis hits then you are likely to lose all. For instance, those who had invested only in shares at the Nairobi Stock Exchange felt the hit when Kenya’s first Covid-19 case was reported. Once the announcement was made, it pulled down the main market index to a 20-year low as investors dumped stocks. This emerged as the combined wealth of investors at the NSE grew Sh610 billion over the period. Today, Investors have become selective during the recovery and are putting money in companies that are viewed to be stable against the effects of coronavirus.
Besides, those who had invested in businesses that leveraged social gatherings to make profits also faced it rough as social distancing was introduced as a measure to contain the virus.
- Analyse your Risk Level
This is not only for businesses but for individuals too. How much risk can you manage? We saw in the press businessmen crying for making losses after investing so much that they had saved in a long period. The short of it is that, make investments that make you comfortable in good and bad times.
- Avoid debts!
If you don’t grasp anything else from this article, then don’t forget these two words – Avoid debts! If you want a financially healthy life then you ought to avoid debts at all costs, whether it’s during, pre or post Covid-19! I know you probably living pay-check to pay-check or you got a salary cut, but avoid taking debts to fill in that gap -it will drag you down. If you can’t afford it, don’t buy and don’t force yourself to buy. True story guys – live within your means and you’ll be super proud of yourself.
Before the pandemic, I would wonder why people write down shopping lists and go round in the supermarkets ticking the basket. Well, as fate had it, the pandemic caused tough economic times and I too found myself writing down shopping lists on my phone notebook. The secret here is to avoid impulse buying, especially when the economic times are hard. To this effect, budgeting helps you to operate within your means.
A common denominator in all the five tips above is planning. Without a plan, it is easier for you to flop. However, if you make a good plan, you can give yourself a second chance in getting back on track and ensure your financial plans become realities.