2020 is nothing less than a nightmare. The COVID-19 pandemic has forced the world into a health crisis and an economic crisis simultaneously. Job losses, pay cuts, and the decline in business income have hurt almost every section our society and the economy. 

Tough times teach us hard lessons that stick with us for a long-time. And the pandemic is one of the toughest times we have faced in decades.


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Here are a few lessons I have learned from the COVID-19 pandemic. 

1. Postponing good things again and again creates a hole that will soon be filled with sorrow

I don’t need to convince a fellow human that:

  • An emergency fund
  • Proper health and life insurance cover
  • Having more than one sources of income
  • Staying in touch with your friends
  • Calling your parents every day
  • Telling your spouse/kids/parents how to access your insurance, banking, and investment details in case of an emergency

ARE ALL GOOD THINGS!

But all of us (including me) have been guilty of postponing at least one of them again and again. And we didn’t act on them until it was too late or until we were shaken to the core. 

Here’s the interesting part: When doling out advice to others, we objectively and rationally tell them what to do and what not do. 

But when it comes to applying the same good advice in our own lives, we don’t do what needs to be done. 

Let’s stop postponing what we know is important. 

2. Humans have far more humanity than we assume in normal times

Many moons ago in the pre-COVID era, we would often come across news reports, incidents, and experiences that reinforced the belief that humans are losing humanity. 

But faced with a catastrophe, the community has come together to support the poor and downtrodden. We have stepped up in every way we can to lend a helping hand to our friends, neighbors, and local businesses. 

If your paycheck hasn’t stopped, I guarantee you now feel more inclined to help when you see someone who needs help.

You are more inclined to buy from local businesses and small sellers. 

Sometimes you buy inexpensive stuff not because you needed it but because you wanted to help the seller, who was probably a physically-challenged person in torn clothes. 

I know because I have done the same thing again and again.

My wife and I went to our favorite restaurant recently. The waiter was a man in his 60s (or maybe 70s). I had never seen him before. He didn’t work there before COVID. 

We had a nice meal. When it came time to pay the bill, I felt more generous than usual. I asked my wife how much tip I should leave for the waiter. She suggested a good number. 

Then my eyes glanced at the old man. I tried to imagine what he would have gone through that made him work as a waiter in his 60s or 70s. And I pulled out an amount that surprised me and my wife both. 

I am sure you too have helped the community in whatever way you could. And you did it because you wanted to help, not because you expected a favor in return.

When faced with the worst health crisis of our times, we stand together and are doing everything we can to move forward. 

Humans have far more humanity than we assume in normal times. 

3. Social admiration is not worth it…not at all

Consumption is growing. And consumption for the sake of impressing others is skyrocketing! For most people it has risen faster than their income. 

People take loans to buy an expensive car, a giant 8K TV, the latest iPhone, a house they can’t afford, the latest gaming console. Heck, they even take loans to fund their honeymoon!

Our craving for social admiration is a bigger driver of our spending than the necessities. 

Needs have a limited room for growth. Desires can inflate faster than our capacity to fulfill them.

People have committed more than 50% of their monthly paychecks to EMIs. The Reserve Bank of India’s loan moratorium could give you a temporary relief. But it’s not going to fix the problem you have created for yourself. 

Yeah, your Insta feed looks awesome. Your Apple Watch has the wow factor. I envy you. Your friends admire (and want to borrow) your flashy car. 

But when the paycheck stops hitting the bank account, nobody except you is going to pay your EMIs. 

You don’t have to take a loan just because the banks and online portals told you that you are eligible for it. 

4. Internet is highly under-leveraged

The Internet has changed the way we work, entertain, and connect. But only a tiny percentage of us use it to learn and grow. 

The lockdown gave us a wonderful opportunity to take new courses and upgrade our skills. Or start an online business. 

Some of the world’s best universities and educators provide valuable education content for free or at ridiculously low costs over the Internet. 

But we chose Netflix and Insta Reels over life-changing courses and business opportunities. 

Most of us spent the lockdown scrolling through social media feeds or binge-watching Netflix, Hotstar, and funny YouTube videos. 

Your income may stop. Your bills won’t. Leverage the Internet to make yourself anti-fragile.

5. Short-term pessimism is a blessing in disguise

Optimists take the world forward in the long-run. But they need to be short-term pessimists to survive tough times first.

Having a pessimistic view of the near term prepares us — both mentally and financially — to survive the setbacks. Not being wiped out by a surprise event gives us a better chance at thriving in the long run.

One important thing to note here: An investor turning pessimistic when the markets have already crashed is not short-term pessimism. It’s panic.

Bill Gates is a fine example of a short-term pessimist, long-term optimist. Decades ago when the technology industry was still in its infancy, he vowed to put a computer in every home on the planet. A highly optimistic and ambitious goal. 

But he also prioritized to maintain enough cash in the bank at all times to keep Microsoft operational and pay salaries for 12 months if the revenue dropped to zero. He was prepared for a setback.

6. Recency bias could blind us to bigger risks in the future

This is one of my biggest fears. Recent events tend to occupy a bigger portion of our brain than they deserve because they are fresh in our memory. 

After the pandemic is over, recency bias would ensure that the COVID-19 keeps influencing our decisions and lifestyle choices.

We would look at almost everything through the lens of COVID-19. 

And I fear we would be so obsessed with it that we won’t see a different and probably bigger risk hitting us in the face. 

Technology stocks were going up in smokes when the Dot-Com bubble burst in 2000. The US economy was still in turmoil when terrorists carried out the 9/11 attack that shocked the world. 

In the aftermath of the Dot-Com crash and 9/11, Americans became so obsessed with reviving the economy and tackling terrorism that they didn’t see the housing market turn into a bubble until it was too late. It led to the biggest economic crisis since the 1929 Great Depression. 

They say never let a crisis go waste. What lessons have you learned from the COVID-19 pandemic? Let me know on Twitter or via email: vik@vikshukla.com

Signing off. But do subscribe to my newsletter.

– Vik