Over the last few months, we have been so burdened by the crisis. This crisis has caused many of us to lose as much as 40-50% of our hard-earned monies, and in some cases, all our monies. Articles after articles have been focusing on this crisis. Financial experts are all dishing out investment advice. Economists are all making their guesses on where the economy will go. Clients are blaming their advisors. Public activists are lobbying for justice to be done. Financial institutions are fighting against allegations of mis-selling. 

Everyone is waiting for an outcome. Everyone is hoping that the economy will improve soon. Many are hoping that government will step in to recoup their losses. It has been a tiring 6 months, isn’t it? The pain of losing our funds, the anger of feeling mis-sold to, the fear of losing our jobs, the hope that the economy will recover soon have consumed us and in some cases paralyzed us. But instead of fearing, blaming, hoping, maybe the best thing to do is to accept the fact that it has happened and now make plans to cope with it or to capitalize on it. 

So what can you do? 

If you are not financially independent but your job seems secure, you are in a good position to take full advantage of the current situation. The first thing you should really do is to visit your entire financial plan all over again. The current crisis has wiped out a large part of your investments, but you are not over yet. Find out how much you are behind your goals now because of the fall in your investments and know the new required rate of return needed to reach your goals. If it is probably higher than before, it means you have to take more risks to achieve your goal. 

If you are not prepared to take more risks, you must be prepared to lower your goals or be prepared to invest more. Once you have accepted this fact, you must now work towards “raising cash” to make your investments. While many feel that a crisis is the worst time to “raise cash”, for an individual, this may be your best time. By raising cash, I mean lowering expenses to create more surpluses for yourself. 

Begin by doing a budget. Determine your target saving amount per month and cut your expenses so that you can achieve that. You can cut your expenses by refinancing your mortgage (especially since you are creditworthy), cutting down on luxury, looking for cheaper options in your shopping, wait for better deals because there will be plenty in a crisis. 

One other way is to re-look into your insurance plans again. For the longest time, I have been advocating that we restructure all our insurance plans from whole life to term plans. Not only because almost all of us will never need whole life protection, and that term plans are the only way to cover ourselves fully, but also it can save you a lot of unnecessary expenses. 

If you are not financially independent but your job seems to be at stake, or you have lost your job, First of all, I am sorry about you losing that job. It is never easy. But again, take courage that this is not over for you yet. The crisis will pass. Your focus is to plan towards meeting your short-term needs more than your long-term goals. The first thing you can do is to know how long you or your family can last without a job. If you have 6 to 9 months buffer, you should be fine. 

As you look for a new job, start to cut down on your expenses. Whatever I have suggested above (except for the refinancing part) will work for you. In addition, you will really have to consider downgrading your house or even selling that car of yours if necessary. This crisis is not a normal crisis; you have to be prepared that it will take a while to recover as the current crisis is a structural breakdown of the financial system. The earlier you accept this fact, the better it will be. 

If you are financially independent but you are being laid off, or you are retired, of all people, you should be the last one to complain. Thank God that you are financially independent. I guess, for you, this is the best time to sit down and reflect upon your options. This crisis may be a sign to tell you that it is time you slow down and enjoy that life that you always wanted, with the people you love and that you most cared about. Take that vacation that you deserved, plan to do those things that you always dream about. 

Plan your second part of your life, how you can use your experience, expertise to advise and help people in this crisis. You are in a very good position to be at peace with yourself. To me, this crisis is a blessing in disguise to you. You have been forced to slow down, why do you want to work and slog so hard anyway? Life is more than work, isn’t it? 

Whatever I have written seems so simple, isn’t it? But isn’t it true that the most beautiful things in life are really the simplest things? But the most difficult things to do in life are also the simplest things? 

I have been doing the same for myself and my clients. This is not the time to sit down and do nothing. You can be angry, fearful, discouraged. But now is the time to refresh yourself, rise up, do your financial plan all over again and face the future bravely. Once you have done these simple things, I assure you that you will be happy once more, just like me and many of our clients. 

This crisis shall pass, it always has and it always will. 

By Christopher Tan

CEO of Providend, Singapore’s sole fee-only independent private wealth management firm. 

First published in Conjoncture, the Bilingual Journal of PluriConseil