7 Lessons Learned During The Coronavirus Pandemic

7 Lessons Learned During The Coronavirus Pandemic

I can still remember that night like it was yesterday. My son and I were watching his favorite NBA team play on TV, the Dallas Mavericks. That Wednesday was only 3 days away from his birthday trip/gift – (near)court side seats to watch his favorite player, Luka Doncic play.

Then the announcement came, the NBA season was cancelled until further notice due to the COVID-19 Coronavirus.

I honestly don’t remember when I’ve seen him more upset as he kept asking, “How could this happen? How can they cancel the ENTIRE NBA over a virus?”

Unfortunately, I didn’t have an answer.

At that time, we didn’t realize just how serious this pandemic was going to get and how much it was going to affect everyone’s lives, both personally and financially.

Heck, I sure didn’t see it coming. I thought I had it all under control with a plan taking me to financial independence focused on saving, investing and retiring early (using passive income).

But now you know plans can change in the blink of an eye.

The COVID-19 pandemic has had broad impacts on both the medical world and the economy.

I told my wife early on that this virus was going to “kill many more people financially than anything else.”

I’m a firm believer that EVERYTHING happens for a reason. It took me years to realize why I lost out on a job opportunity straight out of residency but now I know why. It’s put us in a MUCH better place. Maybe this pandemic will do the same.

So recently, during one of our family walks (yes, we actually started taking walks together), I posed the question to all of us, “What has COVID-19 taught us?”

Here’s the lessons learned we came up with….

7 Lessons Learned During The Coronavirus Pandemic

#1 Always be prepared for an emergency

One of the first lessons learned that the COVID-19 pandemic taught all of us was actually not a health lesson but one about money.

It taught us what an emergency fund was actually for – emergencies.

You see, I hear about too many people that supposedly have an emergency fund that use it for “emergency” vacations or an “emergency” outfit for an upcoming surprise party.

Unfortunately, many financial advisors consider emergency funds to be wasted assets with today’s low interest rates and thus a bad idea. Their reasoning behind this is that the emergency fund is supposed to be in an account that is liquid and easily accessible such as a savings or money market account.

Because of this, they state that these types of accounts don’t keep pace with inflation and that the emergency fund is set up to be a money-losing proposition over the long term.

As someone that followed Dave Ramsey’s 7 Baby Steps, Step #1 is to establish an emergency fund for emergencies!

Financially speaking, I understand that these low interest accounts aren’t going to make the investor money over the long term. But I think they’re missing the big picture.

4 purposes of the emergency fund is to:

#1 Bridge the gap in time periods when unemployment strikes.

#2 Help to supply income during a disability as most disability policies don’t kick in for 60-90 days after you become disabled.

#3 Kick in during desperate times (such as a pandemic) to purchase essential items that are needed to stock up on (not 3 cases of toilet paper!) or if an emergency expense such as an AC unit goes out.

#4 Act as a form of financial insurance, not an investment.

The book of Proverbs 21:20 states, “there is desirable treasure and oil in the dwelling of the wise” or in other words, the wise have an emergency fund.

Would the stress caused by an uncertain job situation be decreased if you had three to six months of basic living expenses readily available in your savings account?

#2 When a crisis strikes, we’re all in it together

I’ve had more time to reflect on life during the COVID-19 pandemic. One of the things I was reminded of was the 1984 movie, Red Dawn starring Patrick Swayze.

If you don’t remember it or haven’t seen it, here’s the trailer:

In the movie, the U.S. was invaded by the Russians. The adults were placed in concentration-type camps set up in the downtown areas. A handful of teens escaped the initial invasion and learned to survive living on the basics in the wilderness.

They banned together and decided to take on “the enemy” themselves calling their group the “Wolverines” after their high school mascot.

Just like in Red Dawn, for us during the COVID-19 crisis, the entire world fought an enemy, an invisible one.

At first we heard and saw stories of people panicking and buying up essential items in stores such as bottled water and toilet paper.

This is an example of loss aversion. It reflects the negative emotions of fear and anxiety. Humans react more strongly to the fear of losing something versus the benefit of gaining.

Remember what Lance Armstrong said years ago during his doping scandal?

“I like to win, but more than anything, I can’t stand this idea of losing. Because to me, losing means death.” – Lance Armstrong

So when the public saw toilet paper flying off of the shelves on the news then it was only natural to react…even if they didn’t really need to.

But as the crisis continued to loom, we started to see a shift in the public even though the news didn’t talk about it much. That shift was towards selflessness.

Deep down, humans really want to do good. And we started to see and realize that we were all in this thing together as the Coronavirus affected rich, poor, black, white, middle, upper and lower class. The virus did NOT discriminate.

Occasionally I noticed a story about specific ways that Republicans and Democrats were putting down their boxing gloves and actually trying to work together for the good of our nation.

We also saw this during the 9/11 crisis.

Sometimes it takes something bad happening to all of us to make us stronger and work together.

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#3 Debt is stressful

This crisis has shown me just how stressful debt has made people feel.

Dave Ramsey answered a question of whether or not someone should borrow money at 0% to buy furniture.

He stated that in his book, Everyday Millionaires, they surveyed over 10,000 millionaires and none of them claimed that they obtained wealth from buying furniture at 0%.

Just because something is 0% doesn’t mean it’s free. When a crisis strikes, guess what? These loans still require regular monthly payments. And if you can’t make a payment on time then your interest rate sky rockets.

One of the main reasons I’m a big advocate for being consumer debt-free is that the need to make debt payments can add to your financial stress during times of income uncertainty.

#4 Invest in relationships

One of the biggest things the Coronavirus pandemic has taught me is what’s really important in life.

It’s also made me see a glimpse of what retirement life might be like without the day to day grind of going to work and everything that goes along with running a practice.

It seems that most of us don’t realize that when we’re in the rat race, we focus on making money to buy stuff. Yes, it’s nice to have things such as a nice home, cars, clothes and take great vacations.

However, there is a difference between enjoying these non-essential things and putting value into them. THINGS are not valuable.

Honestly, I like all of the above but the pandemic made me take a step back and realize what I really value – relationships.

Money isn’t the most important thing…people are (yes, even my in-laws 🙂 ).

During the crisis downtime I realized what was most important to me:

• Spending time with my wife and kids
• Exercising outdoors and eating healthy (I’ve lost 8 lbs)
• Helping others during a time of need
• Empathizing more with patients that are in pain
• Enjoying pursuing entrepreneurial pursuits

#5 Additional sources of income is a must

Let’s face it. We’re all busy working professionals so who has time to develop a side gig/hustle or something that’s going to provide additional income?

For the longest time, this was my thinking too. After becoming consumer debt-free when I reached 40 and meeting some other financial goals, I realized that I only had ONE source of income at that time, my practice.

Unfortunately, most of us only have active/earned income which is the highest taxed income of them all. Don’t believe me? Check out what Robert Kiyosaki has to say about it when he explains his CashFlow Quadrant.

When the Coronavirus took a hold of our country and many of us lost some or all of our income sources (from our active income), we began to feel its effects very quickly.

But for those that had additional income sources, they were able to keep their heads above water during the worst of it.

The passive income from our real estate investments certainly helped supplement our income but I sure I wish I’d started investing earlier in my career.

Yes, developing these additional sources of income does take time and work (want doesn’t?). But as soon as our paychecks are threatened, it sure makes it all seem worthwhile that we put in the extra time for extra income.

#6 Take time to smell the roses and be appreciative to all workers

I admit, during the normal day to day activities that I partake in (pre-pandemic) such as: taking the boys to school (Waffle House on Fridays 🙂 ), going to work, lifting weights, playing tennis, eating out with my lovely wife, etc, I tend to not appreciate all of the workers that I come in contact with.

Not that they aren’t important but I just didn’t ever think about them much…until now! Jobs that we may have once considered as “lower-skilled” are the ones that are MOST crucial during the pandemic.

Think about all those that continue working when we MOST need them during the COVID-19 crisis such as:

• custodians
• cashiers
• restaurant servers
• mail carriers
• UPS, FED-EX workers
• grocery store employees

They are putting their lives and their families’ lives in danger as their sacrifice prevents our community from shutting down completely.

I’m going to make sure that I appreciate them now and in the future for all they do.

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#7 Don’t make short-term decisions that hurt you long-term

You may have heard the phrase, “Don’t just stand there, do something!” I think I remember one of my old football coaches yelling that at me during a 100+ degree practice in August.

But something that you may not have heard is from Vanguard’s late founder, Jack Bogle, who suggested, “Don’t do something. Just stand there.” I think this is perfect advice when we’re faced with a situation, such as the COVID-19 pandemic, that causes a sharp decline in the market or even a bear market.

One of the earlier lessons learned in #2 above was that it’s human nature to avoid pain. So when we’re faced with a situation that causes both job losses and falling markets, then it’s understandable that we want to make some short-term decisions rather quickly to ease the pain.

But during these times, we shouldn’t lose sight of the long-term impact of those decisions, especially on our finances.

It may feel good to sell your stocks to stop the bleeding, but doing so means you’ll miss some of the upside when the markets begin to rise again.

Don’t believe me?

Check out what the Physician On Fire thinks about:

How To Get Wealthy Investing In A Bear Market

Pay special attention to the Market #2 scenario.

I get it. Long-term investing is tough, especially when a pandemic causes your 401k to decline. But if you have an investment plan/policy then you should have known what to do during a market decline long before the COVID-19 pandemic.

If not, then chalk it up as lessons learned.

Take Home

The Covid-19 have given us many lessons learned. To sum it all up in a few sentences:

Money is not that important. Relationships are. The financial freedom from having money provides more time that can be used for the greater good for others.

What lessons learned has the COVID-19 pandemic taught you?

Leave a comment below.