Have We Entered A Post Americanism World?
First, a tip of the cap to Jonathan Hoenig for the word Americanism. The catalyst for this post is fragility of the US way of life exposed by the Coronavirus. We've touched on people needing money right away and how the $1200/$2400 seems like it would be a drop in the bucket if this turns out to last several more months. If this does last for several more months then the reasoning behind the first stimulus check would imply that there will be more to come.
We mention all the time the various surveys and polls showing that essentially no one has any savings for emergencies and this has been revealed to be pretty accurate. Regardless of how or why, it seems to be true and based on what I can tell, it seems to have gotten worse over the previous ten years than it had been previously (would love to see a link that refutes this).
Another source of our fragility is our health. On Wednesday night, PBS aired a two hour documentary on diabetes. As with savings, the numbers here are grim and trending worse. In the documentary, a source was cited as saying 50% of the population will either have diabetes or be prediabetic by 2025. I'd previously seen something along those lines but targeting 2030. Either one is terrible. It is a deadly malady and more of us are getting it.
The Coronavirus event is now at the point where the country is asking whether the response thus far has been appropriate, been too cautious or too lax. We are also trying to figure out how and when to "reopen." The same dilemma confronts both questions which is that we don't know all that much about the virus. We don't have a good sense of how many people actually have it, what the correct rate of spread is, how many people have died from it; if it came here earlier than we thought and it was mis-diagnosed, then all the numbers we have are wrong. We don't know how to effectively treat it; I see a 50/50 split of hydroxychloroquine is good/hydroxychloroquine is bad articles.
A reasonable place to point skepticism is to political motives. All politicians have motives and we shouldn't rule out motives being dark. Incumbents want to stay in office, challengers want to get into office, some love the power, for others it leads to money and as much as I hate to say it, we should not assume our best interests are their top priority. We should assume political motivations are behind anyone's opinion on when we "reopen." For that matter, we should also assume economic motivations will drive when and how we "reopen."
Meanwhile, the stock market seems to be disconnected from the realities of job losses, negative GDP and people dying which for now is a ray of sunshine for most people reading this blog, I admit it is for me, and also an argument to just stick to whatever investment process you chose as being best for you and your goals when you weren't worried about plagues.
Anyone who is trying to tell us how serious the virus is compared to the flu or anything else, when it will be safe to do something or telling us what drugs are or are not safe is doing so with incomplete information. This could turn out to be less than the flu but right here right now we have no idea. Hydroxychloroquine could turn out to be an easy solution but at best we have conflicting anecdotes on that. Warmer weather could help but we aren't certain. It is likely that decisions will be based on incomplete information. You could say we never have all the information before making important decisions but realizing we don't know it all is important information too.
Whenever they tell us we can go back to stores or go get a haircut or go to the gym or stop wearing a mask, we still won't have complete information. If you can accept that, then you realize that you have to be your own advocate for how you get back to normal life whatever that means. Being your own advocate in this context means preventing the problem, your own problem, of getting the virus. I have to think that while I will get a hair cut and go back to the gym if it's still there I will want to be aggressive with washing hands and other precautions (wearing a mask at Trader Joe's maybe) and I doubt I would go to a sporting event for a while. You should do whatever you think makes sense of course, to me it makes sense to think about this now ahead of time and based on what we know, which isn't much, and stay engaged with how it evolves. I am inclined to bet that we don't get this exactly right and that the risk is being wrong means another wave of illness. Great if that is wrong but I want to be prepared for that scenario not the rosy one. Figuring it out ahead of time is how I try to do all the important things in life. That last paragraph describes how I manage money in the stock market for clients.
Everyone knows they should save money. Everyone knows too much sugar is bad for them. I'm pretty sure everyone knows politicians are conflicted imperfect beings. I am also pretty sure that everyone knows that the stock market goes down a lot every now and then. These things are simple to understand but not necessarily easy to manage.
If the virus has you shut in then you might have a little more time on your hands than normal which can be an opportunity to figure some things out for yourself. We've talked about isolating vulnerabilities and figuring out how to overcome them now or if you have to wait until things normalize....somewhat anyway. As alluded to above, I personally place a huge priority in my life on preventing/solving my own problems. My wants are pretty simple and don't involve being rich. I want to be independent (both financially and with my time) and healthy and if I have both of those then it increases the odds of being happy at home. In defining these priorities for myself, I think of it as every aspect of my life being easier if I can own my time, be a few months worth expenses ahead, not have expensive chronic health maladies and have a happy home. If you've read this far you probably have at least some interest in these things.
The issues at the top of this post about lack of savings and poor health detract from the opportunity we have for a fulfilling life. I get pushback on this but it is up to us to create our own opportunity, to take ownership, as complete an ownership as possible, of our outcomes. It may very well be much more difficult to graduate from school with very little debt and go find a good job (however anyone defines good) but we have some measure of control over the inputs. Anyone can eat less sugar. Anyone can take a little time to do pushups and jump rope. If you think you can't cut spending now, maybe this is a time to work on some sort of intermediate plan (like over the next six to 24 months) to reduce spending.
A while back I started to define being successful as making enough to pay the bills, set a little aside for the future with a little left over for some fun. That, combined with being moderately fit makes life easier and more fulfilling. If you're not there now, you have an opportunity to figure out your path to however you define easier and more fulfilling.