Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people who fall sick with COVID-19 will experience mild to moderate symptoms and recover without special treatment. The outbreak was declared a Public Health Emergency of International Concern on 30 January 2020.
Covid-19 came like a thief in the night, hit the world badly, paused or cancelled so many events, disrupted economic plans of so many nations, world powers like China even abandoned her decades-old practice of setting a target for annual economic growth as the impact of the Covid-19 pandemic made it almost impossible to fix an expansion rate this year. In Nigeria, it’s safe to say the government and the citizens were not prepared, and this had a serious effect on the populace, being a country having about 40% of her population living below the poverty line. Millions of people were in lockdown, unable to visit one another, unable go to work, unable to attend school, unable to meet one another in public places. It is important to note that a huge number of Nigerians depend on going out daily to fend for themselves, meaning a long period of restriction of movement could not be achieved without adverse effects, within a week or 2 of lockdown some states across the country recorded increased crime rates.
As the world continues in the recovery process, we have highlighted a few financial lessons for businesses and individuals
1. Always have Emergency funds: Quite a number of businesses could not hold on to their staff base, and a lot of people lost their jobs, and it got serious because many weren’t expecting it, this is where emergency comes in. Typically, it is recommended that you save somewhere between three to six months of expenses in your emergency fund. Some experts recommend as little as a few hundred thousand to get you started with a beginner emergency fund, and some suggest as much as a year or more of your income.
2. Never underestimate the importance of multiple streams of income: The saying goes “an average millionaire has about seven streams of income” The term Multiple Streams of Income sort of speaks for itself. It’s the concept of earning income from more than one source at the same time, thus multiplying your earning power and creating a more secure income than if you only had one source of income. Diversifying your income through multiple streams is extremely valuable, because if one type of income dries up, you still have other sources of money coming in instead of losing your entire income altogether. Having multiple streams of income in most cases also means your income is more than expenditure
3. Don’t be a laulau (reckless) spender: Quite a number of people regretted their excessive spending during the lockdown as they had nothing to fall back on, you can’t acquire everything you admire, and so it is absolutely important to get your spending in order. Spend less, save more.
4. Savings is good, diligent investment is better: Savings and investment are building blocks of wealth, it is important to cultivate a good and sustainable habit of saving and investment, savings is good, it helps to gather up loose funds, but investment is key in maintaining wealth, investment means you get increased returns/interest on your loose funds. But investment must be done carefully and it’s usually better to go long term and in low risk opportunities.
5. Build profitable financial circles: Never underestimate the importance of a productive circle, while some people had friends who could help them during financial crisis, other couldn’t call on anyone. The saying goes, have 6 rich friends, you become the seventh, have 6 poor friends, you become the seventh poor. Build wealth, build productive friendships.
6. Your health, your wealth: If there’s anything the pandemic made us know, it’s that our health remains our most important asset. What good is wealth if you don’t have a strong and able body to enjoy it? The penetration of health insurance is very low in Nigeria. However, in such a pandemic-like situation, health insurance helps you to cover any medical cost without disturbing your investments. Protect and guard your health jealously.
In the beginning, we had a hyped year, we even learnt
that being alive in 2020 is special because this
is the only year you are
likely to live through wherein the first two digits will match the second two
digits, indeed what a special year it has been.
Many of us set goals at the beginning of the year, we were working hard and smart on smashing the goals when covid-19 happened, but we should not give up, we must keep pushing. It’s just a bump on the road.
And as the recovery period continues, staying financially secure is a crucial step in getting through your daily life, and this challenging time has once again instilled this lessons. Tough times do not last, but tough people do. In times such as these, let’s try our best to remain optimistic and positive.
This article was written by Folarin Adeboye.