I have always been a firm believer in sitting down after a bad experience or period in my life to work out what I have learned from the experience and what I will do differently moving forward.
Like many of you, I found the Covid lockdowns to be a very trying time.
I learned some things about myself that I didn’t realise. I learned that I actually place a high value on being able to go places and see new things. I found it very difficult to be stuck in one place. I enjoyed the slower place of life a lot – not having to rush off to meetings and sporting things with Cam every day. I had the space to finish some long standing projects, like “the 100 year quilt” (maybe it was more like 3 years but it felt eternal!)
1. The importance of having money that we could use in an emergency as this was an emergency.
Suddenly most people couldn’t work! They were stuck at home, helpless, and having to live on the Covid wage subsidy. For many people, this was considerably less than what they would normally earn. There were still mortgages/rent and bills to be paid! For those of us that had a buffer emergency account, at least we had the relief of knowing that we could financially survive the lockdown, not knowing what was ahead. I was doubly grateful that I had an emergency account for the business as well, so I knew that I could pay everyone full wages for at least 3 months if the business had no income.
2. Looking at what you actually spent your money on.
A common Lockdown story was that people found that they had more money, as their only discretionary spending – other than their regular financial commitments – was on groceries. I think that this time was a good financial reset for a lot of people, as it gave them an opportunity to look at what other things they were spending money on. It is a really good idea to stop at least once a year and check where your money is being spent, and then once you are aware of this, decide if this is what you would like to spend your money on.
3. Even in a time of unprecedented global stress, investment theory played out.
You may not recall – but I will never forget – that global share markets fell an average of 35% in 7 weeks starting mid February. This was the fastest 10% fall, 20% fall and then 30% fall in world history. HOWEVER, in line with event vs trend theory, it was highly likely that the markets would right themselves when the event played through. This is exactly what happened. By June, the markets were pretty much fully recovered. However, the monetary policy adopted by several large western economy central banks had flow through effects with high inflation and this is what we have been dealing with for the last 3 years. Once again, this has mainly played out as expected although it has taken longer than initially anticipated. It is good to be reminded that, to quote Sir John Templeton, “the four most dangerous words in investing are – this time its different”.
4. What did we decide was important and what have we done about it?
I spent a lot of my “spare Lockdown time” being creative. I finished the quilt, I made cyanotype prints and lino cut prints, I finished my cross stitch. Weirdly, I took no photographs! For me, it reinforced that I really enjoy creating things, and I have kept that going. I also did a massive spring clean of the house – I even handwashed the curtains in the bath – but I already knew that having order in things is important to me! I have tried to keep that going as well.
My question to you is what did you enjoy during lockdown or decide what was important during lockdown and have you let that slide? What would you like to bring into your life again that you enjoyed during lockdown? What would you do differently if (when?) there is a “next time”?
Janet Natta is a financial adviser and director of Smart Money Advice, offering investment portfolio construction and management services to clients throughout NZ, as well as comprehensive financial planning advice to assist clients to build and protect wealth to achieve their dreams.
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