As I type, COVID-19 cases are surging, and we are awaiting a vaccine. Continuing and recurring health issues from those who are infected may have lifetime ramifications. Realistically, we have another year of (serious) pain in the pandemic recovery process.
The negative toll on our children’s education is underestimated, as well as the toll on our teachers. The economic turmoil hit record levels of pain at the end of 2020 that will continue in the first quarter of 2021 and beyond.
There are two economies existing concurrently. It has been an amazing year for the stock market; however, the actual economy functions like a letter “K”. The upper arm represents the stock market. Approximately 10% of Americans own 84% of the stock market. The lower arm of the letter “K” represents the actual economy.
The number of people who are hungry, homeless, unemployed, and generally struggling is staggering. I wish I could understand why such a situation exists. America has seemingly unlimited financial resources and yet so many people are really hurting. I wish everyone had food in their stomachs and a roof over their heads every day of the year. I have friends who are teachers and healthcare workers. Each one works very hard, and they have been working harder than ever this past year. Each one feels like they should be getting better results from their work.
Another thing I’m sad about is that the issues we are currently facing are going to roll into the future and will be with us for some time. In addition, many of the negative aspects to our lives are out of our control. It is hard when one does not control one’s fate. The challenge is how to deal with this situation? I think there are several areas that we can control.
One choice we can control is how much we read, educate ourselves, and keep up to date on current issues. As avid lifetime reader President Harry Truman said, “The only thing new in the world is the history you don’t know.” As I watch the news, and talk to people from many places, it seems to me that educating ourselves through reading is so important.
Some Suggested Reading
The pandemic has exposed issues in our society, many that go back decades. Spillover: Animal Infections and the Next Human Pandemic by David Quammen and the National Geographic articles on viruses and pandemics from last summer provide a complete guide to pandemics and the steps a government can take to control the spread.
If you read Capital in the Twenty-First Century by Thomas Piketty, you realize that a major weakness in the capitalistic economy is that wages are too low for the working class – at the same time as salaries for upper-level managers are unreasonably high.
How can an economy like ours have some 50 million people hungry when we have so many multi-millionaires and billionaires? If you read Thieves of State: Why Corruption Threatens Global Security by Sarah Chayes, you get an understanding of the effect on the world’s population from the poor and often corrupt leadership of leaders around the globe.
My favorite read in 2020 is How Democracies Die by Steven Levitsky. He gives the reader real insight into the last 40 years to the present day as well as a history of democracies around the globe that have failed with the reasons why failure occurred. There are many other books I could add to this list – and I even have several fun reads as well! – but the point is that we can control whether we decide to constantly learn and inform ourselves.
More Ways to Stay Engaged
In addition to reading, I just heard about a new podcast from AARP hosted by Bruce Carlson. He interviews experts on many topics, including finance, happiness, and health as well as experts on local issues. This is another way to keep up to date on topics and learn a few things along the way.
Volunteering is another part of life that we can control. There are still many places that need volunteers either online or in person. I love the variety of the places I volunteer and all of the people I have the opportunity to learn from and help (I only volunteer in person at three places now, and always with a facemask on). It does add meaning to my week.
Part of volunteering is role modeling positive behavior. Our young people need role models who show them, through our actions, how to deal with conflict, differing opinions, and so many other areas of behavioral choice. Working with and helping other people tends to add some purpose and meaning to one’s life.
Financial Tips Recap
In continuing to think about what we have control over during these challenging times, I am reminded of previous EIA (Experience in Action)*newsletter articles I wrote, which were sparked by the events of 2020. Two areas in finances and budgeting, and a broad tip to pay attention to the world around you stood out to me, so I’d like to repeat them here.
Annual financial review
One personal finance concept I previously discussed was annually evaluating your finances with a trusted person or advisor. Investing for the long term means having a plan in place in advance and sticking to that plan.
The stock market last year took a huge downturn in the first quarter and then came roaring back to historic highs. The people who made the decision to invest for the long term did not sell in the middle of the panic are now happy about that decision. People who did not have a plan in place and sold in panic during the fast downturn are likely paying extra taxes as a result and trying to figure out how to get back in the markets.
Six months’ cash savings
Another financial concept is the need to have cash savings for six months or more of living expenses, because you never know what danger is out there. I know how hard this is for many, but by budgeting religiously and working with someone as needed, cash savings can be accumulated. We will have more crises occur in the future, and everyone needs to be ready.
Protect yourself from fraud
In a previous newsletter, I discussed fraud and techniques to use in your daily life to combat it. The thoughts and comments in that article are relevant today. During this pandemic, fraudsters have created more ways to illegally use your identity and personal information. With so many people working from home now, it makes it somewhat easier for people with ill intent to try to steal your information.
Some of the current methods are: Fraudulent unemployment claims using your information, extortion scams, hate crimes, targeting children online, fraudulent sales of healthcare equipment (e.g., COVID-19 test kits, unapproved treatments of various sorts), and blackmail.
Additionally, please remember the government does not call you. Monitor your phone calls, and if you do not know who is calling, do not answer it. If it is a legitimate phone caller, they will leave a message.
If you do get into a conversation with someone you do not know, do not give out your social security or credit card numbers to anyone. Make sure you use strong passwords. Using password managers like OnePass and LastPass is highly recommended. Do not open up links in emails. Rather, try to figure out the web address in the link and type it directly into your web browser and see what happens. Set up strong passwords at Social Security and monitor your earnings record and your general information. Do the same thing for Medicare if you are old enough to be a recipient. In general, identity theft originates from friends and family, phones, computers, and emails.
Prepare for a rainy year
If there is one financial thought to take away from the events of 2020, it is this: At the individual level, I think we need to change the classic phrase “prepare for a rainy day” to “prepare for a rainy year” – for the rest of our lives. It will be quite a while before our current problems resolve, and there will be more years like this one that will hit randomly in the future. Education, reading, and following the financial advice in my EIA articles and/or from your financial advisors is critical to surviving tough times.
If you’re 55+ and interested in learning more about volunteering through Solid Ground’s RSVP of King County, please contact RSVP Coordinator Megan Wildhood at firstname.lastname@example.org or 206.694.6786.
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