“It’s an ill wind that doesn’t blow some good.” – Pa Ingalls in Little House on the Prairie
COVID-19 has been a tragedy. There’s no disputing that. Thousands dead. Millions sick. Millions more jobless. It’s hard to overstate the negative impacts of the pandemic. And yet, to paraphrase Pa Ingalls, even terrible situations can produce some good. As difficult as this time has been, I can’t help but think that many of us will look back on it as one of the best things to happen to us. Not in a “I just won the lottery!” sort of way, but in a “Painful, but positive” sort of way. Keep reading to see what I mean and to see how you can make sure that this “ill wind” blows some good for your retirement.
It forces us out of routine. It’s easy to get in a rut. Easy to put life on autopilot and live the same day over and over. Even if we don’t like the rut we’re in, we’ll often stay there because it feels safe. Human nature is such that we will often choose being unhappy over being uncertain. One thing this virus has done in spades is forced us all to live life in a different way. It grabbed the steering wheel and yanked us out of the rut. That’s not necessarily a bad thing. In fact, it’s almost certainly a good thing. It gives us a fresh perspective. It helps time pass more slowly (because routine is the enemy of time). It opens us up to new experiences and new ways of thinking about things. It presents new opportunities. Yes, it brings uncertainty, but hiding in all that uncertainty is opportunity. Look for it.
It forces us to reexamine our priorities. Priorities are the things in life that are most important to us. They are the people, activities or things that we really care about and that bring us meaning. When life is going along swimmingly and we’re healthy and have plenty of time and money, we tend to get lazy. We allow things in that clutter or confuse our priorities. When life gets hard, however, and one or more of our priorities are threatened, it refocuses our mind on what’s important. Hard times force us to cut and say “no.” They force us to get back to the basics. That means a life less cluttered with filler and more focused on the things that bring you joy and meaning. That’s a good thing.
It forces us to think differently about debt. When the economy is strong and interest rates are low, it’s tempting to add debt. You almost feel foolish if you don’t. “One percent interest? Why wouldn’t I buy a $60,000 car?” But when hard times hit, servicing that debt becomes difficult if not impossible. Debt increases risk and reduces cash flow. It adds stress. It can derail your plans and dreams. It weakens your financial “immune system.” The pandemic is a good reminder to use debt sparingly.
It shows the fallacy of “appearances.” On a sunny day, a house built on the sand doesn’t look any different than a house built on rock. But when the storms come, the difference is pretty clear. It’s easy to get caught up in appearances. It’s tempting to keep up with the Jones’s. But even in the best of times, that strategy can be stressful and unfulfilling. In bad times it can be catastrophic. Machiavelli once wrote “The great majority of mankind are satisfied with appearances, as though they were realities.” Don’t be one of those people. Build a life that is happy, secure and fulfilling, not one that only looks good on Instagram.
It exposes our weaknesses. Warren Buffett once said “It’s only when the tide goes out that you learn who has been swimming naked.” There’s nothing like a combination global pandemic + financial crisis to help expose your weaknesses. Too much risk in your investments? Too much debt? No rainy day fund? Strained relationship with your spouse? Underlying health issues you’ve been ignoring? Settling for a life that isn’t what you want? If the tide went out and you find yourself a bit overexposed, maybe it’s time to go shopping for a swimsuit.
One of the most important ingredients to a successful retirement is to decide what you really want out of life and to start taking those things very seriously. COVID-19, while terrible, has likely helped you in that regard by forcing you to reexamine your habits, routines, priorities, purpose, relationships, finances, lifestyle and any number of other things. Embrace that process and you’ll likely come out the other side a stronger, more resilient, more self-aware person.
What are some practical ways to apply all this? I’ll put a few ideas below along with links to articles and resources at Intentional Retirement.