What will life after Covid look like?

Depending on where you live in the country, Covid-19, a universal phrase already in its short existence, may appear a living nightmare or a distraction on the news completely removed from your reality. 

The fact is however, whether you are currently locked down only able to leave your home to gather essentials or just returning home after a normal day in regional Australia, Covid-19 will have consequences for most of us or influence the way we live on the other side.

This pandemic has seen borders closed and draconian travel restrictions implemented. Countries have asked its citizens to self-isolate and endure hardships for the greater good. People have had their wages reduced or lost their jobs altogether.  Worst of all, for some, loved ones have been lost.

When thinking to ourselves how life will be on the other side, many of us contemplate two distinct areas of concern and hope.  Wealth and lifestyle.  In other words, how much is your wealth going to be affected once you get through this, and has the way you want to live changed?

From an economic perspective it’s still very much unknown.  At a macro level, economies globally expect GDP to fall significantly.  Unsurprising at a time when government expenditure is rampant (think jobseeker and jobkeeper amongst other stimulus measures) and productivity is at an incredible low (think job losses, business closures and insecurity depressing consumption, supply chain disruptions meaning goods can’t reach their destination or be sold as well as falls in tax revenues)

At a micro level its convoluted at best.  Many hundreds of thousands of people are recipients of government assistance in one way or another.  Nearly a million people are out of work, others are busier than ever.  Certain sectors of retail, Bunnings and JB HiFi for instance have reported record trading periods whilst other sectors such as fitness, education and travel essentially stopped trading overnight. 

Market volatility has seen seasoned traders’ and day traders alike speculate for profit while retail super funds take a hit. The complexity and contradiction of the situation means different people are living very different lives. Those whose employment was affected or in sectors that shut down “enjoyed” the break.  It was a novelty that had many comment on how good it was to just slow down for a few weeks and enjoy doing very little.

Those whose lives became more hectic, think of services sectors, home appliance repairs, home trades etc. and of course most importantly those on the front line in the medical, police and essential services looking after us daily are all wondering when they’ll get their “Covid Holiday”…

Despite this however, people around the world remain resilient and remarkably upbeat.  Many think it’s all a bit too much fuss and just want to get on with life. When people ponder the thought of the misery, isolation and financial anguish of a lock down or get back to work and have a go most want the latter.

The reality is once circumstances plateau and living with Covid-19 becomes the new normal challenging times are undoubtedly ahead. Fortunately, we haven’t seen a Pandemic since 1918.  Unfortunately, this means we are in completely unchartered territory.  The world is a very different place today. We know growth and prosperity evolve despite mass economic setbacks.  Virtually every decade has seen an economic crisis of some description. 

In the last 50 years we have experienced the energy crisis and oil embargo in the ‘70’s, the global recession and Black Monday in the ‘80’s, the early ‘90’s recession, the dotcom bubble in the early 2,000’s and of course most recently the GFC.

With every great recession historically follows a greater rebound. Billionaire venture capitalist Ray Dalio once commented “wealth is never lost, simply redistributed”. Having said this, Covid-19 is a big one.  How big, we don’t yet know.It will be some time before many people realise the reality of the situation and how it has affected them.  Those that will fare best are the ones that took responsibility for their financial welfare prior to Covid-19.

A report by the RBA states that “low wealth households may be disproportionately affected by the Covid-19 economic shock” and “have smaller liquidity buffers to see them through the downturn”. Those of you who implemented sound financial strategies, managing income, debt, equity and liquidity are best placed to navigate unfamiliar and volatile periods. Aside from the economic and wealth consideration, Covid-19 provoked many to look at how they were living, what mattered and how they may want to change their lives.

Those who had a” Covid epiphany” and decided they just want a simpler life with more time for family, home and a humbler existence are busy resetting goals and wondering how they may indeed be able to slow down. A work/life balance is again very much on the agenda.

A care fee life nevertheless is not too often the result of a care free attitude. Doing very little sometimes costs very much. When looking at your accomplishments to date, revising your goals and objectives and what matters most one major consideration often neglected is time. How long has it taken you to reach where you are today?  How much would you need to sustain you and your family if you were to retire or significantly adjust the hours, days and weeks previously allocated to income producing activity?  

People often underestimate the cost of “simple” or how many years they need to fund it for. One thing Covid has demonstrated is the efficacy of the medical profession and speed at which research advances and diagnosis, treatment and vaccine can be developed.

Studies have estimated the last pandemic, the Spanish flu in 1918, infected 500 million people and killed up to 50 million people. At the time of writing this article, Covid-19 has infected over 13 million people and whilst 580 thousand have unfortunately succumbed to the illness, nearly 7.5 million people have recovered. This is empirical evidence of how far medical science has advanced and underscores why a ubiquitous global increase in life expectancy rates exists.

Whilst not diminishing what millions of people have endured, and the devastating affect the hundreds of thousands of deaths have had on loved ones that remain the fact is the overwhelming majority will get through this pandemic, many completely unscathed from a health perspective.

It is very appropriate therefore to consider life after Covid, and how you would like yours to look. And whatever form you imagine yours will take and what you wish for it’s highly likely it will be a long one. So, when contemplating your future, regardless of how that looks for each of you, sound strategic planning will help you sustain it in the long term and any other challenges life throws at you along the way, including, heaven forbid, another chapter in our lives such as the current pandemic.