By Leroy Ferrao
” By failing to prepare, you are preparing to fail”. It’s a famous quote. How can you prepare for the economic pandemic caused by the Covid-19 lock down? Here are 5 ways you can successfully navigate the impending crisis.
1.Protect yourself by attacking debt
Experts state that there are good and bad debts and the rich use other people’s money to accumulate riches. While I do not accept or deny it, the Covid-19 pandemic proved beyond doubt that a person in debt carries a huge load on his head. Most importantly, it becomes difficult to carry it, if one is having to climb a mountain of crisis. My recommendation to protect yourself, is to get rid of all debt in your life immediately even if it means selling your assets. Learn to be live a debt free life, and it will give you an edge to cope with the economic disaster caused by the lockdown.Â
2.Protect yourself by launching your online business
Start any economic activity by going online. If you own a brick-and-mortar store or an office take it online immediately. How much do you pay for rent on something that you do not own? Why not buy a website or build an e-commerce store which will cost you a fraction of the cost of your rent and give you a digital asset? Firstly, the customers you are targeting are online. Secondly, if you continue offline, you run the risk of going out of the game. Launch online and protect yourself from the economic ruin that will hit the society sooner than they can even imagine.Â
3.Protect yourself by working in pandemic proof industries.
The industries that will survive and thrive are handful in this pandemic era. I predictt that healthcare, artificial intelligence, agriculture and education will stand. However, I am not stating that the other industries apart from the above will fall, but it will be extremely difficult to grow in the new situation we find ourselves in. Therefore, I personally recommend that you get your job or start your business in the above industries. Finally, when the economic storm hits, only few industries are assured of beating the storm and growing even bigger.
4.Protect yourself by building cash reserves & cash flows
Over the years I heard experts state that cash is trash. Moreover, it is just currency with an artificial value. While I respect these views, the lockdown has proved beyond doubt that saving for the rainy day pays because the people whose cash flows and cash reserves got depleted, faced enormous hardships. As a result, some lost their lives during the unprecedented migration that happened in India. Ideally you need to keep a minimum of 12 months of emergency expenses handy with you to weather the storm. However, if it is a depression, it could last for years and you will require a larger reserve. So, keep adding funds to your reserves so that it gives you a longer runway for a maximum of 5 years. Cash flows coming in each month like rent, salary, interest etc. will keep the oil flowing to the engine in hard times. Even if these dry, you can dip into your reserves and remain afloat during the storm.Â
5.Protect yourself by acquiring shelter
A debate goes on whether to buy or rent shelter. Shelter is one of the fundamental need of humans. Firstly,given the current scenario, it would therefore be prudent to buy shelter because it keeps a roof over your head in these tough times. The migration that happened was because people found it difficult to spend on rent and food at the same time. Secondly, the real estate prices according to experts are set to crash to about 50% in three years. It would therefore be smart to buy at those rates if you can afford it; cash down. Finally, for those who cannot afford, it would be a smart move to start remotely working online or doing business online at their native places and save on rent.
In Conclusion,
always prepare for the worst-case scenario in life because only those that are prepared will eventually escape the consequences of the economic pandemic that followed the Covid -19 virus due to lockdown.
I would appreciate you reaching out to me by your comments and until next time, be safe.
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