Tag: Pandemic

Use This Time Wisely

Gentle Reader, I’ve been working on staying COVID-free. I’ve been staying home, washing my hands, wearing my mask, and trying not to go down the What-If rabbit hole. While I wait for a vaccine/innoculation/nasal spray, I’ve chosen to use this time wisely. The pandemic will end – we will all be able to breathe around each other like the Before Times. Until then, I’m going to use my time to learn things that will save me some money.

Towards that end, I’ve decided to use YouTube to save money.

Whatever do you mean, Blue Lobster?

It’s this simple, Gentle Reader. Like the public library, YouTube is chock-full of free stuff just waiting to be learned by people such as ourselves. This summer, I learned about gardening – both flowers and vegetables – from the very sweet couple who host Garden Answer. Just this week, I stumbled upon a wonderfully soothing channel called Savor Easy, where I’ve watched videos that consist of two hands baking bread or buns. I find this channel to be the antithesis of most social media. It’s very therapeutic because there are no visual distractions. And you can practically taste the final product through the screen!

Flattening the curve and stemming the spread of COVID-19 requires us to stay home more than usual. Since you’re going to be at home anyway, why not use the time more profitably than binge-watching your favourite show?

Use this time wisely by learning how to do things that will help your finances. Baking your own bread (or cookies, muffins, cakes, pies, tortes, etc…) will save you some money. You’ll probably enjoy the results a lot more than the store-bought stuff too. The same goes for starting your own flower gardens, or growing your own herbs. Up until this year, I was a huge fan of annuals. However, spending so much time in my own backyard has forced me to re-evaluate my stance. Perennials suited for my climate will come back year after year so long as I learn how to properly care for them. And YouTube has multiple videos that will show me how to do just that.

Maybe you’d prefer to channel your energies into something that will last a little bit longer than a sheet of cookies, or a season of sunflowers. Why don’t you learn a craft? There are a ton of videos about learning to crochet or how to knit. For the record, I’m a fan of crochet simply because I never stuck with knitting long enough for my index fingers to stop being sensitive to the pointy ends of knitting needles. The only reason I stopped crocheting is because I’d run out of people to give my blankets too. That said, one of my most challenging patterns was calling my name today… so I might have a new project to tackle this winter. (I’ll figure out who to give it to later.) I’ll be home anyway and having a cozy blanket to snuggle under never gets old.

Perhaps you’d like to get into something even more long lasting. Real estate investing, anyone? You’ve heard me talk about Bigger Pockets before. I still watch the new videos posted on this channel and I learn something new each week. Even though the laws are different between Canada and the US, the math doesn’t change when it crosses the border. You might want to consider whether you can implement the principles discussed on this particular channel. Do you have the interest, desire, and finances to build your own little cadre of real estate properties?

Use this time wisely to learn something that will add a little jingle to your pocket.

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Weekly Tip: When renewing your mortgage, shop the market and ask for a lower rate. If you’re about to renew, you know that 5-year rates are under 2%. I make no predictions about how much lower a bank is willing to go, but you owe it to yourself to ask for a lower rate. Trust me – the bank won’t just give you one so you have nothing to lose by asking!

Take a Break

I don’t know about you but sometimes I need to take a break. The world is currently caught up in a pandemic – a very bad thing. The news outlets are constantly issuing new articles – another very bad thing. It’s impossible to know who to believe, who to disbelieve, what’s true, and what’s not so true. Part of me suspects that the drive for ratings is still deeply driving the amount of pandemic “information” that is being spewed at us from all directions all day long.

Following the media from sun-up to sun-down is a recipe for anxiety and stress, so I’m going to tell you that it’s okay to take a break. Put down your phone or turn off your TV. Trust me when I say that your mind will appreciate a few hours or days of not being forced to think about the pandemic. Sadly, the bad news will be around for a little while longer.

Do something very different with your mental energy. Think about how you want your life to be structured when the pandemic is over.

Over?

Yes, over. This pandemic is not like the rising sun, which will always be there tomorrow morning. Nope – this pandemic is a global yet temporary circumstance. It won’t last forever. And every new day brings the world that much closer to a vaccine or a shot that will turn COVID19 from something to be feared into something that can be tamed.

So, again, what do you want your life to be once this pandemic is over?

And since this is a blog about personal finance, I suggest that you reflect on how this pandemic has changed your perspective on money.

  • If you had an emergency fund, was it enough? Do you want a bigger one for the next unexpected emergency?
  • Did a reduced paycheque forced you to re-assess your needs vs. your wants? Will you go back to how you spent before once if your paycheque goes back to its former size?
  • Are you as risk-tolerant as you thought you were? Or has the recent & extreme volatility of the stock market caused you to lose sleep at the same rate that your portfolio has lost money?
  • When the pandemic is over, what will you do to repair or bolster your financial buffers?
  • Will you seek out employment in “essential” industries? Or will you stay where you are because it’s what makes you happy?

Now’s the time to think about these kinds of questions because we’re staying at home to flatten the curve. That should give many of us Singletons plenty of time to make some tentative money plans for our future.

At the very least, figuring out the answers for these questions should take our minds off of COVID19 for a little while at least. The pandemic is going to cause a lot of sorrow for a lot of people. It’s impact will be deep, widespread and long-lasting.

That said, it shouldn’t force you to stop dreaming and planning for your future. The game isn’t over until it’s over.

Never forget that this too shall pass.

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Weekly Tip: Read books – as many as you can. Libraries are a treasure trove of information and entertainment. And in today’s digital world, you can download books to your e-reader.

Some People Always Make Money

As I write this post, the world is facing the pandemic known as COVID-19. I’m not a scientist, nor am I a doctor. This post is going to be about how some people always make money, no matter what is going on in the world.

This pandemic is a prime example. Unless you’ve been living under a rock, you cannot help but have heard that the global stock markets have been a wee bit volatile as of late. Investors are losing money as the value of the equities in their portfolio drop in tune with the stock market drops.

Yet, some people will be making money right now. Why?

It’s simple, Gentle Reader. The stock market is on sale right now. Much like buying clothing in the off-season, or winter boots at the start of spring, people with money are buying stocks while the stock market is down. Stocks are on sale. This is the time to buy.

Stock Market is Drastically Down

If you have the money, then buy now. One of my favourite exchange traded funds – XDV by BlackRock – was down to $19.93/unit when I checked it at the time of writing this post. It had been near $30/unit a mere two weeks before this article was posted. The portion of my portfolio invested in XDV has dropped significantly, but guess what?

I’m a long-term investor who believes that the market will recover. Now is the time to buy more XDV shares because they’re on sale. Over time, this ETF’s value will go back up and, if I buy now, I will benefit from having bought additional shares when the price was lower than normal due to market turmoil. Do I like seeing the value of my portfolio go down? NO!!! Do I like buying dividend-paying investments when they’re on sale? YES!!!

Do you own research. Check out MorningStar. Visit the Motley Fool website and other websites that teach investors how to invest. Figure out which industries are hurting right now due to the pandemic, and determine if you believe that they will recover once a vaccine is found for COVID-19. When the panic has passed and life gets back to normal, which companies and industries will have the most ground to regain?

Keep Your Powder Dry

In the personal finance world, this phrase means having savings set aside for stock market circumstances like the ones we’re currently facing. It means having money available to invest when the stock market dips. This money is separate and apart from your emergency fund and the money you spend on the necessities of life. The reason you’ve set this money aside is so that you can take advantage of those times when the stock market goes on sale.

Full disclosure – I’m a buy-and-hold investor who believes in dollar-cost averaging. Money is skimmed off my paycheque and into my investment account so that I can buy units in my exchange-traded funds every month. I am not one of the people who has buckets of cash sitting around and waiting for buying opportunities like the ones that are on offer right now.

The people who are deploying their powder right now are, very likely, setting themselves up for some phenomenal returns over the next few years. They’re buying low because the stock market is down. So long as they hang on to their purchases through the recovery, they then have the option of selling high in a few years from now.

Successful Investors Do Not Panic

This is not the time to sell your investments! Even though they may be down, the stock market will not go to zero. The stock market will recover.

Selling now means locking in your losses. You will foreclose your ability to participate in the recovery, since your crystal ball will not tell you exactly when to buy back in.

Turn off your stock market notifications. Don’t look at your portfolio every day. Trust that the stock market will recover. The pandemic is going to cause turmoil, but the stock market has survived turmoil before. This time is not any different – the stock market will recover. You will want to be part of that recovery.

Buy low (which is right now) – hang on during the recovery (which could take a few years) – sell high (which is a few years from now).

Again, some people always make money. They do so because they invest in equities. They don’t panic when things turn volatile. They keep their powder dry. They’re around to participate in the recovery because they never sell. Be like those people.

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Weekly Tip: Wash your hands. Don’t hoard toilet paper and wipes. Stay informed and don’t panic. Don’t sell your portfolio.