For many years I would always have considered myself prudent with my personal finances. I worked hard, paid my bills and put some savings away on a monthly basis. I purchased my first home by myself when I was only 23 and I considered myself as “good with money“. However it’s amazing how quickly a person can lose the run of themself. All my financial planning and wise investment decisions went out the window in a very short time period. In the space of a few short years from 2004 to 2007 I personally ran up debts through reckless borrowing and highly speculative investments of close to 10 million euros !! It really is incredible, given a specific set of circumstances, how quickly that your situation can go from bad to chronic. The same applies to the current Covid 19 pandemic. The first of a series of warnings about the potentially grave threat of the virus were issued by the World Health Organisation ( WHO ) on December 31st 2019. Within a month, the virus had engulfed the Wuhan area of China. Within a few weeks of that, Italy and then Spain were also in crisis. Shortly after that, Covid 19 was officially declared as a Global Pandemic and the world was hit with a sudden and deep health crisis and economic downturn. The lesson for me is to learn to heed the warning signs. Most of us are optimistic by nature and sometimes fatally so. In hindsight,when I was digging a large financial hole for myself back in the mid 2000’s, there were plenty of amber warning lights flashing in front of me , but I ignored them or just did not believe that anything serious could go wrong. I may have fleetingly thought about the worst case scenarios but then dismissed them as highly unlikely to affect me personally.
When a potential crisis is looming in your life, you will do well to pay attention to the warnings and if possible take preventative and mitigating action as fast as you can. You may not be able to avoid all the pain, but you might just suffer less during the tough times.
In relation to Covid 19, this proactive approach has worked well for the governments of countries where they got their act together quickly when the Coronavirus started to spread quickly all around the world. Everyone had the same information that was coming out of China and, Italy and yet only some countries rapidly closed down their cross border travel and internal movement within their borders, while simultaneously ramping up their testing and medical capabilities. These are the countries that are now suffering the least amount of deaths per capita and they will be the first to recover their economic activity and normal way of life.
The lesson to take away is that regardless of the circumstances, watch out for and heed the warning signs, take rapid and sometimes painful action to lessen the blows and you will get out the other side so much faster.