Investing and Earning During a Crisis

Investing and Earning During a Crisis

Everyone, in one way or another has been affected by COVID-19.

Healthcare, Economy, Social life, will never be the same.

They say a big crisis like this is a rearrangement of order, where old giants fall and new giants rise.

Because of the pandemic, a good majority have probably lost their old incomes, and have replaced it with new incomes. Before all this mess, my business is in manufacturing (printing), events, and travel–all of which are considered ‘non-essential’ by the mandate.

As the two-week lockdown has turned into a four-month ordeal, I had to come up with ways to retain cash inflow, and at the same time, get into good investment opportunities for growing your wealth. How do you continue investing and earning during a crisis

STEP 1: You only need the basics!

Financial intelligence only requires mastery in math basics. Screw calculus. You only need to know addition, subtraction, multiplication, division, and percentages. If you finished third-grade math, and you are good to go.

2 – To Earning, Learn Skills that Monetize

Hopefully, we have pivoted our skillsets to be more relevant in the online space, so we can continue to be relevant and productive even during the lockdown.

One of the things I DON’T miss right now is the traffic. We don’t have to deal with commute anymore, and all the other time-wasting activities that come with daily life. With the gift of extra time, it is now up to us to use it to grow and learn, or otherwise. Stay curious. Take up new skills that monetize.

Throughout the lockdown, I have tinkered with a lot of online tools–from podcasting to website development. Some of my friends have launched several online businesses especially in cooking, baking, or supplying PPEs.

What skills should we learn? The obvious answer is skills that you can take online, skills that you can monetize while in your bedroom in pajamas. Here are some skills to learn right now to stay relevant.

SEO and Digital Marketing
Languages (foreign languages, coding)
Sales and Storytelling
e-Commerce
Financial education, Personal Finance, and Wealth Management
Niche skills e.g. Chatbot Development (AI)

Thankfully, a lot of the skills now can be learned via self-education and online earning–and many of them for free! Check out classes at edX and udemy, which offer some great classes offered by Harvard, MIT and other Ivy League schools.

Read more: 8 Skills You can Monetize

3 – Buy or Sell?

Buy or sell? For an investor, it makes absolutely no sense to sell.

Now is the best time to invest. Assets are sold at a major discount. We are able to buy stocks at their value ten years ago! When I bought some stocks around mid-March to April, I was seeing stocks at prices at grand discounts. In the words of the famous Warren Buffett:

*“Be fearful when others are greedy and greedy when others are fearful.*” – Warren Buffett

Stocks lose their value drastically during an economic downturn, but they always pick up and grow as soon as the economy recovers.

I can show you the stock exchange’s 30-year charts, 50-year charts, and 100-year charts to show you that yup, we’ll be alright.

4 – Safeguard your Portfolio First

Now is the perfect time to focus your energies on potential opportunities; to review your finances: look into your investments, insurance, and protection.

It would be impossible to unlock these amazing investment opportunities if you did not protect yourselves and put all defenses on all sides in place. To have a solid financial foundation you’ll need to have the following:

As you’ll see, investment and growth is the last part of the pyramid. Before investing, you need to build your runway and prioritize these areas: savings (emergency fund), debt management (completely eliminate debt) and protection (life and non-life insurance, healthcare).

Read: 5 Types of Savings Every Filipino Should Have–and Where to Keep Them

A paper loss is only a loss when it’s realized. It makes absolutely no sense for investors to sell right now, to sell stocks that are way below their deserved value.

Unfortunately, if one did not have enough reserves to protect themselves from many months of no income, some are forced to sell. This is why investing has to be done after you’ve worked on the other priorities:

Have you set up your emergency fund? Do you have healthcare and insurance? Have you secured your cash flows? These should all come before making investments towards growth.

4 – Set Up Opportunity funds

Thank your financial planner friends who told you to set up emergency funds, insurance, and healthcare protection. If you listened to them, you are probably more set up than a good majority of the Filipino population right now in the COVID-19 pandemic crisis. However, you can do one step further and set up opportunity funds.

While the emergency fund helps you and your family keep afloat in your living expenses in times of emergency or crisis, the opportunity fund is reserved for investment opportunities. The opportunity fund should be separate from your emergency fund.

When investing during a crisis, cash is king. Now is not the time to take a loan or second mortgage your home to invest in an ‘opportunity of a lifetime’. This is why an opportunity fund is important, so you can funnel it into opportune investments during these times.

If you have enough runway to provide you three or more years, you can afford to be risky. There are plenty of opportunities you can get one’s hands on. Undervalued businesses that are forced to sell because of depleted cash flows, foreclosed properties or discounted real estate, shares of stocks, and more.

5 – Continue Cautiously

Continue buying, but do so cautiously. Continue doing cost averaging. Pick low-risk investments. Focus on index funds. Invest in blue-chip companies and pick consumer staples. Get some passive income through dividend stocks.

Now is the time to review your portfolio. What are your weak points? What are areas you should double down on? Lack of defense protocols could wipe out your entire savings.

Continue learning from the masters. Attend webinars, talk to friends, watch and study experts.

If you haven’t started investing yet, the best way to start is in stocks or mutual funds. (Read: Newbie’s Guide: Stocks vs. Mutual Funds)

In the Philippines, you can start by looking at bit.ly/investing-ph for investing resources on getting you started.