Personal Finances amidst Covid19

Everyone knows that if there is one thing to take seriously, it’s your finances. We’ve been through difficult and financially challenging times throughout history – the last year will certainly go into the history books as one of the more financially unstable and uncertain times. Uncertainty can make us all anxious, especially when it comes to our finances – one of the emotional triggers identified many years ago by the likes of investor/economist Benjamin Graham. However, we need to remain as steadfast and level-headed as possible and bear some basic things in mind when it comes to our financial wellbeing.


Firstly, always remember that no one can predict the future – at least not for very long and very accurately. To stay ahead and keep our heads above water, there needs to be flexibility and adaptability in our thinking. Remember that the market is, for the most part, unpredictable and driven by people. There are also other external factors which play a role in the market, but at the end of the day, it’s still people who invest in the market and people who cause its fluctuations – whether directly or indirectly. When people start to feel the ever-present devil of the fear of uncertainty, they often act on that fear instead of using logic. When more people sell commodities in the market, the price of said commodity will decrease and vice versa. In times of crises, as we’ve seen, people take their investments out of the market and often put it into the bank – the thought of losing 30 % or more on any investment would naturally drive our fear levels up and cause them to run to safety. Don’t forget what Churchill said “never waste a good crisis” – meaning, you can find opportunities to still make good returns (Zoom, PayPal, Amazon etc.) – it might take some more brain power and thinking, and there may be times when safety is the best option, but it’s well worth the effort to do some thinking here – don’t just act out of fear.


Secondly, do your own research. We often gravitate towards what everyone is saying and what the majority are thinking. Be careful. Don’t get caught up in trends and the echo chamber trap. If you have the interest in a new hot topic, make sure to do your own thinking and research as well. For example, the Bitcoin craze of the last few years has been a hot topic of discussion (despite it having started as far back as 2008). However, Berkshire Hathaway’s vice chairman and investing legend, Charlie Munger (for example) made the comically serious comment on the topic of Bitcoin. When asked if he thought whether Bitcoin is as bad as rat poison, his response was that it’s not as bad, it is rat poison. His sentiments were backed up by Bill Gates and Warren Buffett who warned of Bitcoin’s volatility and high-risk levels as outweighing its benefits. The point is, you can never go wrong when you think for yourself, don’t blindly follow the majority’s thinking and examine all possible angles. If you reach the same conclusion as what everyone is saying at least you would have more certainty that it’s the best route to take, whatever that route may be.


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Faure Swanepoel
Candidate Attorney

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