The Silver Linings of the Covid-19 Pandemic

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I saw this picture on Facebook a few weeks ago.

While we are suffering no visible physical pain, it is easy to feel frustrated, hopeless, and/or helpless since we are fighting an invisible war that we are contributing primarily by inaction and social isolation, both of which humans aren’t good at. I have a friend who would go to yoga retreat and meditate for hours, or for days at a time. I would ask myself, “how hard would that be?” “Well, from what we are going through now, very hard.”

The additional time we have as a result of no commute and no social activities could lead to an increase in watching different kinds of news and/or social media, and good luck trying to be optimistic after watching 15 mins of that.

Instead of watching of news and/social media, I prefer to ruminate on the silver linings that come out of this pandemic. I have quite a few written down

Silver Lining One – Freedom of Speech and Democracy on Full Display

Even though it seems like forever ago (and if you live in Maryland, only 5 weeks ago) since you had the last social outing, and we are far from over with this invisible war, it is worth noting that both World Wars lasted about 4 years and by all estimation this pandemic would last much shorter due largely to.

The front line workers, which include hospital staff, food processing facility staff, grocery workers, food deliverers, are working around the clock to keep under tremendous amount of risk of being infected. They publically voice their concerns about the lack of PPEs, social distancing rules, health insurance and sick pay. Under the court of public opinion, more companies are incentivized to protect their workers to remain profitable.

The government stormed to pass a stimulus bill to help those affected (remember, the government opted for bailing out the banks last recession). At first, the government required a tax return, and they shifted the rules to be more lenient after public outcry. The PPP money ran out, then the government rushed to pass another one. Shake Shack took and returned $10M due to public outcry. The prevalence of news and social media, albeit stress and anxiety inducing, lead to more efficient negotiations, in real time. It is messy, but democracy could be messy at time.

Silver Lining Two – the Growth of the Financial Independence Community

As a pursuer of financial independence, or “Phi Iota,” as I endearingly coined recently, talking about personal finance with friends has proven to be difficult, in large part due to indifference. This recession may perhaps motivate many people to start looking into and improving their personal finances. Caught flat-footed by this experience, many may want to be better prepared for the next recession. The Phi Iota co-ed fraternity is growing (and I wonder why I wasn’t invited to a fraternity in college.

In anticipation of a recession, and feeling a need to be more vocal, I decided to build my own virtual community during the first week of quarantine. I used to treat my little FI bubble as the Fight Club. What is the first rule of Fight Club? “You don’t talk about Fight Club.” It is time to pop the bubble because there is a need for more financial literacy.

Silver Lining Three – No Spending is Indispensable

As more people are staying at home and finding substitutes for their routine products, they may find that some spending that is no longer indispensable. A cup of coffee at Starbucks could be substituted by a cup of home-brewed coffee. A home-cooked meal is as delicious as a meal at a restaurant. Drinking a bottle of beer at home is the same as drinking it at the bar.

A Business Insider journalist, who was “dead set on being lifelong New Yorkers,” left NYC with his partner for her parents’ in the suburbs now wonder if he either needs or wants to live in the virus-battered NYC. Geoarbitrage, even as short-distanced as moving from one of the world’s most expensive cities to the suburbs, could allow for a drastic restructuring of your expenses.

Improving your personal finance lies more in mindset than the math. When the indispensable becomes optional, possibilities await.

Silver Lining Four – The Evolution of the Financial Independence Retire Early (FIRE) Movement

There are different segments of Phi Iota (FI) pursuers, LeanFI ($500K to $1M of net worth), FI ($1M to $2M of net worth), and FatFI ($2.5M+ net worth). With investment balance dropping by 30% within a few weeks, the LeanFI adherents are due for a rude awakening. If they retired, they may have to consider going back to work or risk their investment balance running out, unless they could drastically

At the same time, is going back to work that dreadful? Currently, Corporate America is engaging in a live experiment on work from home and flexible work policy due largely to childcare reasons. By the time social distancing ends as a result of the mass distribution of a safe and viable vaccine, both benefits could become the norm and will be used as employee attraction and retention tools. Many early retirees retired because of the lack of flexibility. This pandemic should change that somewhat.

As a result of this pandemic, the road to financial independence becomes longer. As much as we want control over our finances, we can control savings the most, incomes second, and net worth a distant third. No longer is tracking progress toward your financial independence number meaningful or attractive.

Instead of achieving happiness after reaching FI, why not design a life that involves meaningful and income-generating work. This is why I name the blog Tap Dancing to FI.

If you are interested in a numeral example, for a single person, retiring on $500K of investment balance at the age of 35 is hard; retiring on almost $2M (based on no additional contribution to the investment, 7% annual return, for 20 additional years for the $500K to compound) at the age of 55 is very manageable.

With the example above, since I assume no additional contribution, you could find a job that you like and pays all your expenses for 20 years. In fact, since you like the job, why not keep going past 55.

The FIRE movement will evolve back into the FI movement, with different variants of lifestyles.

Silver Lining Five – Miscellaneous Societal Impacts

Expanded Health Insurance – as the number of cases and deaths increase, more people will be out of work and potentially lose their health insurance. The government will shoulder some of the burden with MedicAid, Medicare, and ACA. However, in order to encourage people to see doctors before it is too late, the government may seriously consider improving its current health insurance offering as the additional cost of healthcare may just be lower than the cost of shutting the economy down.

A Cleaner Earth – since the lockdown, pollutions have declined across many major metropolitan areas. If work from home becomes the norm over long term, there would be less mileage driven and less demand for, and thus less production of, automobiles, both of which could lead to sustainable decline in pollution.

Family Time – While it is very hard to appreciate since your loved ones are probably driving you crazy by now, this period allows you to spend more time with family, boundary be darned. Cherish the time because hopefully there will no other time like this time.

Thank you for reading this in full. Here are some memes to reward your eye-strains

The silver lining is that he has already experienced the WORST pain ever at the young age. No pain will ever break him ever, if this baseball doesn’t break him.

How about this?