No one saw this coming. Nobody was prepared for this magnitude of problems. The human race is learning as it goes. When a crisis hits be it at home or the world people tend to do anything to feel secure. At times like this where pay cuts and unemployment are at a rise, we can see many withdrawing from their deposits from banks and mutual funds. The collapse of the Templeton fund happened because many withdrew their money very fast. When there is so much shortage of everything how do we even think about investing during a pandemic crisis?
There is always good in bad
Once I heard a saying. “There is always good in bad”. This was reassured with an investment expert said “There is always a bull run somewhere. You just need to look for it“. It means that during this crisis the automobiles and aviation sector took a huge hit. But this crisis has also proved a good for pharmaceuticals and FMCG sector. Similarly, although our income has reduced so is our expense.
During this COVID-19 pandemic, most of the non-essentials are closed. For the first time in our generation’s lifetime, we understood that living only with needs is not so expensive. Because the malls, cinema halls, restaurants and travel are closed we were able to learn this valuable lesson.
Ok so I know I can live a life with less money. But what about investment? It usually requires me to save some lumpsum amount and then invest right? Wrong. Little drops of water form an entire ocean. You can save starting from as low as Rs.100/-. What is important here is that you take the first step to save. You can start investing during a pandemic.
If you have a will there will be a way
Unlike recurring deposits where a fixed amount has to be saved every month, many mutual funds gives flexible options to save. For eg: Say I am saving Rs.1000/- every month using a recurring deposit. Suddenly one month if I have less cash flow or more cash flow, then I cannot change the amount of investment. I still have to invest the same Rs.1000/-. But in mutual funds, I can increase or decrease the amount as I go. I can even invest twice a month if I have a sudden surge of cash flow. Choose what’s best for you. Don’t have to follow the heard.
I have two banking accounts. One for the expenses and the other for savings. Moving my savings from expense account to savings serves me as a visual reference that I cannot touch my savings. I remember that I want to become Financially Independent. And for that, I have to save extensively. Saving even small amounts count.
Savings what’s not necessary.
During this pandemic, I stuck to my budget. When I went shopping for my essentials I bought only what I need. I did not buy that extra can of cola, chocolates, chips, snacks and so on. I just bought what I needed. When I came back home I bought some stocks in an Index fund. If you don’t understand what is index stock then please read here. Yes, I buy stocks even for such small amounts. And I buy it almost every day because it only costs Rs.100/- (today). Even if I just buy one per day still I would have saved Rs.2200/- (excluding weekends because the market is shut) per month. If you are not comfortable with stocks then start a flexible mutual fund.
This is just a simple example to show that if you have set your mind to save, then you can find ways to do it. At the end of April when I looked back at my savings I was surprised to see that I was able to save up to Rs.30K. This is just in a month when we are living off of single salary. I also did not default on my EMI payments. Read here on how I plan to convert my debt into savings. I will look for more places where I can save. I aim to increase my saving by Rs.5000/- this month. Investing during a pandemic is possible.
I can hear some say “Well this was just a fluke. He cannot save so much every month“. And I hear you. I know I cannot save so much every month. Even if it is less than the previous month it is still saving. And it adds up. The math never lies. So while I try to be best than my previous day I am willing to accept if I fall short. Because ultimately ‘You don’t get rich my earning. You get rich by saving’.