Conserve, save, invest

One is lucky to have some savings stashed away at this time when everything seems so uncertain, more than ever before. VUCA – volatility, uncertainty, complexity and ambiguity – has never been more relevant than today.

As individuals, we are always guided to keep a “safety account”—a nest egg for the retirement years. Enough funds in the bank or enough investments to keep the cash flow coming even after we have stopped working. But what if retirement comes sooner? Are we ready? In the Philippines, one’s pension fund hardly gives one a comfortable life, with increasing inflation and a decreasing value of our “future wallet”.

So, individuals facing retirement are better served when they think of ”passive income“ and something to fall back on when an emergency strikes. Passive income can mean real estate for rent, any business investment that has regular dividends, and the like. It can also be an allowance from a consultancy or something you need not think of or stress about, yet still pays you a modest amount regularly.

So, in times of COVID-19, and in these times of super VUCA, what must we do to ensure that we will not stress about retirement?

1. DO NOT INVEST savings in something difficult to dispose of, should the need arise. This includes luxury items, whims, and caprices that are “spur of the moment” and is not in your nest egg plan.

2. KEEP ENOUGH CASH for your children’s education, and then some. That should set them up for life. I wrote about this a few weeks ago…education is the best legacy you can leave them.

3. CURB THE DESIRE to keep up with the Joneses or Manila’s 400. They, too, have been hit by COVID and will write this year off, next year off and future years are also uncertain even for the Joneses.

4. KNOW HOW TO LIVE SIMPLY. Treat yourself to good food, and enjoy life’s simple pleasures. But stop the excess.

5. INVEST in SAFE areas. Blue Chip companies. Biotech. Fintech. But remember to invest only money you can afford to lose. And of course, invest in what you believe in. Sustainable companies. Companies with a heart. Find out who runs such companies. Check their moral values. Google them and research as much as you can about them.

I write this as many friends approach retirement and often ask what they should do to stay liquid, not have to beg, borrow, or steal, and simply enjoy their golden years without stress.

It may be helpful to ask yourself a few questions:

1. Do I need another career? Or should I just check what I can do online? Is there a digital version of my skill or talent?

2. Do I need to get stressed while thinking about my business and when it will be back to normal? Or do I already need to pivot to a new business?

3. Is diversifying my income stream the right thing to do and think about?

4. Is my next move a wise one or just a whim or caprice that I can forget about?

5. What safe investment can I make with my life savings?

Everyone is in a state of “WHAT IFs”. But it is better to think about it now and do something about it than worry later. While we want to talk about mental health, sometimes financial security is the key so we stop our stress and be more stable physically and mentally.

And there is no other advice as good as spiritual advice. Pray about it and answers will come.  Because in the end, it is not up to us or our financial counsellor, it is up to Him. Even in business, there is a “Hail Mary” solution. And that means, leaving it up to prayer and Him.

But invest safely and wisely if you must.