What a year this has been.
Whatever your expectations for 2020 might have been, it is safe to say that you probably didn’t think the world would be in this situation by now.
It’s a fact of life that we must all deal with certain levels of uncertainty. It’s just that sometimes that is more apparent than others.
And so, as it all comes to a close, it can be useful to look back at the year that has passed and understand what can be learned from it. Whether it’s about starting to invest, understanding how to spend less or finding ways to invest in yourself, 2020 can have its useful lessons and reminders:
1 - Fear Is The Enemy Of Growth
If there ever was a time it was normal to feel fear, a global pandemic surely checks all the boxes.
Not only has it spread worldwide, it also doesn’t have any visible markers to be on the lookout for.
If we account for the fact that investing is something that may bring its own set of fears attached (which you can overcome), it’s not hard to imagine it being a barrier that stands between you and higher interest.
This is not exclusive to first-time investors. Those already in the market may have experienced the temptation to constantly check the news and the performance of their investments. Pushed hard enough, they may have pulled out due to steep market drops.
The 24-hour news cycle does not help in this tendency. However, we should remain aware of the effects of fear:
“It influences our well-being, and it doesn’t necessarily lead to good decisions”.
2 - An Emergency Fund Is Not Optional
Not letting yourself be conquered by fear does not mean ignoring your surroundings.
When conditions change, behaviour should be adapted accordingly.
And it should be kept in mind that condition changes will surely happen - it is a matter of “when” rather than “if”.
Which is why being prepared for them is a staple of any solid financial plan.
In 2020 we have witnessed what many thought impossible: an international wave of lockdowns that is still leaving its imprint in the global economy.
Making sure you are able to navigate through severe hardship for a considerable amount of time has become an undeniably visible necessity.
3 - Remember What Really Matters
What do you mostly miss from pre-pandemic times?
We would bet it’s not shopping sprees or other ways you can spend money because you feel bored.
This whole situation highlighted what is actually necessary and what is not.
All you have to do is look at the bank statements from the last few months. Can you imagine what would be there in a different situation?
It’s no wonder, then, that the European Central Bank reports an unprecedented level in household savings propensity. Most likely, you too have witnessed a tendency to spend less.
It’s actually the simpler things we miss, from being able to move around freely to simply enjoying one another’s company, unrestricted.
Here’s To a Better 2021
The challenges were many, but here we are!
Moving forward, it is important to keep our focus on one thing: improving. Because no matter how good or bad something may be, there is no situation that cannot be improved upon.
Here’s to another year of growth.
Share this article and spread growth this 2021. Happy New Year!