What Would You Do Differently?

What Would You Do Differently?

Photo by Wyron A on Unsplash

Imagine it’s January 2017 and you have just discovered that three years from now a global pandemic caused by a new strain of virus, for which no treatment exists, will sweep the globe, leaving hundreds of thousands dead in its wake.

The global economy will be shut down as governments order their citizens to ‘lockdown’ and stay at home to try and contain the spread of the virus. In the space of just one month, 22 million US citizens will file for unemployment benefits. Thousands of small businesses will go into administration as demand for their services dries up virtually overnight. Oil prices will drop into negative territory as global demand is so low that there is nowhere to store the oil still being produced. Life for many is effectively put on hold.

What would you have done in January 2017 to prepare for such an event? Here are a few things that spring to mind.

Get fit and healthy 

This virus is indiscriminate in whom it attacks.  You recognise that your best chance of survival, beyond following the terms of lockdown, will be to be as fit and healthy as possible, so you’re going to make sure that from here on in you’re eating healthily and exercising regularly.

Build up a cash reserve 

Depending on what occupation you’re in, you’d be thinking about how safe your employment situation is going to be.  With no clear idea as to how long it might take for things to return to anything like normal, you’d probably be planning to build up a cash reserve of at least six months expenditure, but more likely 12 months.

Review expenditure 

If at this point, you hadn’t already built up a cash reserve, it’s either because you felt you couldn’t or just didn’t need to. Maybe you were of the ‘Live life for today’ mindset. Would you be of the same mindset if you knew what was coming?

Most people, if they were to review where their money goes each month, would find expenses which could be reduced or cut out altogether. If you were planning for this event, it would make sense to categorise your expenditure into three ‘buckets’: ‘Must have’; ‘Should have’; ‘Nice to have’.

‘Must haves’ would include items such as food & toiletries, rent/mortgage, debt repayments, insurances, taxes, travel costs (for work). ‘Should haves’ are items that are not absolutely essential, but not far off. Items falling into this category might include clothes (yes, we all need clothes but most of us buy far more than we ‘need’. Would you really suffer if you bought no new clothes for a year?), any existing savings plans (you’d ideally want to keep these going, but if push came to shove, they could be put on hold).

‘Nice to haves’ would include items such as gym membership, eating out, cable subscriptions, social activities such as going to the theatre or cinema.

It might be that you don’t have to bin everything in the ‘nice to have’ category. It’s important to get the balance right otherwise it will be harder to stick to a reduced budget. But I think most people would find they could make some savings in all three categories if they looked at what they currently spend.

Once you’d identified what you could reduce/cut out, you’d arrange for that amount to be automatically deducted from your bank account each month as soon as you get paid and transferred to a savings account which will become your cash reserve three years from now.

If you have built up expensive debt such as credit card balances, then you’d consider allocating the savings you’ve made to paying off that before you started building up your cash reserve. Clearing debt on which you’re paying 20+% interest will ultimately free up more to be allocated to your savings account.

Review your skillset 

The pandemic is coming in three years. What does your employment situation look like? Would your employer be able to keep their business going with minimal disruption if everyone was working from home? If you’re self-employed, would your business be able to keep going?

If you’re not in the fortunate position of being able to transition to working from home, you’d maybe take this opportunity to think about how you could acquire the skills that would enable you to find work that would. If you run your own business, what could you change now that would enable you to stay open during the lockdown?

You have three years to plan – plenty of time to enrol in night school classes or online training courses that are going to give you the skills you need. If there is simply no way your business is going to be able to continue, you’d be planning for that too. Becoming a wage slave again might not be that appealing, but this crisis is going to be like no other and difficult choices might have to be made.

Have a robust process for managing your investment portfolio 

You recognise that three years from now global stock markets are going to be hard hit by the effects of this pandemic. They are likely to be extremely volatile as they try to digest each day’s news and what that might mean for the global economy and the future outlook for companies’ earnings. You are therefore going to decide NOW on the rules by which you will make changes to your portfolio. You will write this process down so that you give yourself the best chance of avoiding the ‘herd mentality’ that you know is going to break out and which could be destructive to your wealth.

Back to the present 

Ok, we’re back in the present. It’s April 2020. After varying lengths of lockdown in different countries, governments are starting to talk about easing up on some of the restrictions. But it’s going to be a long time until we get back to anything like ‘normal’ life.

Of course, you didn’t know three years ago that this pandemic was coming, so you didn’t prepare for it.  Maybe this time round you are one of the fortunate ones who has kept their job or business, so you didn’t need that cash reserve, didn’t need to budget, didn’t need to upskill or re-engineer your business. Maybe this time around you dodged a bullet.

The future 

It’s late January 2021.  Life is pretty much getting back to normal. After a summer where the restrictions started to be eased, little by little things have improved. Restrictions on large gatherings have been lifted. We have our live sports back; we can meet up with family and friends. The New Year celebrations across the globe were amazing – hundreds of thousands of people gathering to celebrate having their freedom again. We haven’t eradicated the virus altogether, but the numbers of new cases have been very low for more than six months now.

You turn on the evening news. World leaders are all starting to report a sharp increase in new cases of COVID-19. Lockdown is suddenly on the cards again.



I have no way of knowing whether this is how things will play out. But they might. If you knew today that they would, what would you do differently?