Things to learn from this terrible situation.

Sea_Shell

Dandytf said:

I'm definitely learning that stock markets are proving to be much more resilient than I could have expected, at least from stocks that I hold Interest in.

Or are they just lulling us into a false sense of security, and 2021 will be a bloodbath!!!???

Wentthedaywell?

I've learned you've got to spend your money, without being reckless, as well as save it.

I should have retired this year, with a bit of money in the bank and a DB pension. I've now money and time, but nowhere to spend much of either.

I look back to when I was salting money away in advance of retirement when I was going to enjoy holidays etc and I wish I'd done more then when I had the opportunity. 

Dandytf

Sea_Shell said:

Dandytf said:

I'm definitely learning that stock markets are proving to be much more resilient than I could have expected, at least from stocks that I hold Interest in.

Or are they just lulling us into a false sense of security, and 2021 will be a bloodbath!!!???

Quite possibly, next lesson is What Impact does Brexit mean in Investment Terms.

njm123

Thrugelmir said:

soulsaver said:

Where IS that vaccine?

That's part of the problem. There's a generation who have never faced adversity in their lives.  Not war. not recession, not a pandemic. Somebody else has swept up and made life extremely comfortable. Even with a vaccine tomorrow Covid will remain with us for some considerable time. Eradication , if it's possible of course, is going to be another challenge in itself. 

So true, people now expect someone else to make things easy for them, I suspect if this was dealt with like previous recessions and people were expected to live off benefits if they lost their jobs, they'd be far more rigorous in complying with the measures to control the virus so they could get back to work.   
As it is when the financial reckoning comes I suspect the hardest hit will be those in their 50's and early 60's who have been prudent all their lives and had "retired" early to live off savings until their pensions kick in.   I suspect that a lot of the recovery measures will hit this group hard and if they are forced to look for work again they'll struggle due to a combination their age, out of date skills, lack of contacts for references as they drift out of touch with the world of work and an employment gap which indicates that by choice they wouldn't work anymore. 

grumiofoundation

njm123 said:

Thrugelmir said:

soulsaver said:

Where IS that vaccine?

That's part of the problem. There's a generation who have never faced adversity in their lives.  Not war. not recession, not a pandemic. Somebody else has swept up and made life extremely comfortable. Even with a vaccine tomorrow Covid will remain with us for some considerable time. Eradication , if it's possible of course, is going to be another challenge in itself. 

So true, people now expect someone else to make things easy for them, I suspect if this was dealt with like previous recessions and people were expected to live off benefits if they lost their jobs, they'd be far more rigorous in complying with the measures to control the virus so they could get back to work.   
As it is when the financial reckoning comes I suspect the hardest hit will be those in their 50's and early 60's who have been prudent all their lives and had "retired" early to live off savings until their pensions kick in.   I suspect that a lot of the recovery measures will hit this group hard and if they are forced to look for work again they'll struggle due to a combination their age, out of date skills, lack of contacts for references as they drift out of touch with the world of work and an employment gap which indicates that by choice they wouldn't work anymore. 

It won't be.

If they have retired early the lack of jobs won't impact them, they will have presumably most likely paid off their mortgage and if they were able to live off their savings before, why won't they will be able to live off them now?

Malthusian

I suspect if this was dealt with like previous recessions and people were expected to live off benefits if they lost their jobs, they'd be far more rigorous in complying with the measures to control the virus so they could get back to work.   

Er, no - if people were expected to live off benefits because the Government had temporarily banned them from working, they'd work illegally en masse. Hence furlough. Clapping for the NHS doesn't pay the rent.

Whether individuals comply with lockdown has zero measurable influence on how long it lasts, so it is impossible for them to make decisions on whether to carry on earning or not on that basis. It's no different to saying "I'm going to carry on spending money at the same rate even though I've lost my job, because that way the economy will recover quicker and I'll get a new job faster".

"If everyone does X then everyone will be much better off, so I'm going to do X even though it will be disastrous for me personally if nobody else does X." Trouble is that not everyone is dumb enough not to spot the glaring flaw in this logic (that large masses of people don't act logically, but randomly)..

As it is when the financial reckoning comes I suspect the hardest hit will be those in their 50's and early 60's who have been prudent all their lives and had "retired" early to live off savings until their pensions kick in.

No argument there, but a drop in the value of your savings should have been built into your plan from the start. (Assuming they were invested in the stockmarket; if you were able to retire and live off savings without taking market risk despite zero interest rates you're unlikely to have a problem.) It didn't matter if the cause of that crash was a global lockdown movement, a credit crunch, a tulip bubble or something that hasn't been thought of yet; there is always going to be another crash and the only unknown is when.

AnotherJoe

happybagger said:

On topic, I've wondered why save into a pension.
I ran a dummy quote on a £100k pension pot earlier, it came out as £227 per month from age 65 next year. 
So I'd need to live to 101 to even get it back,

(Yes I know there are other factors)

Only if you were crazy enough to buy an annuity.

And didnt understand that that £100k in a pension costs far less than that to accumulate. Maybe 10-20% of that over a lifetime.

galileangoatee

I decided to clear all my debts (except mortgage and stoozing), as I was finding it was psychologically damaging for me having them lurking there in the back of my mind when I was now also anxious about potentially losing my job and the general state of Britain/the world going down the toilet. Even though technically they weren't costing me anything as they were all 0% (apart from the student loan, which was tiny interest - I still cleared it anyway). As of 1 October, I am now debt-free and the relief is huge. My money is now all mine, and I can put all my energy into thinking about the future rather than getting rid of the millstones round my neck from the past.

Something else I've learnt... pre-lockdown I was spending a RIDICULOUS amount of money on meals out with friends. I haven't been to a restaurant since February, and when I look at how much money I've saved it's shocking... but it's also really pleasing that it's enabled me to clear the debts. When this situation recovers, I'll definitely think twice about how often I go out and how much I spend when I do... More Zoom calls, fewer 3-course dinners in future I think! 

I'm also VERY glad I didn't buy the car I was going to buy in January and kept my old rust-bucket instead. Hardly driven the damn thing and I'd be resentful of the unnecessary monthly repayment. Instead I can feel smug about it!!

lemontarts

Keep at least 20% of your funds liquid so if you suddenly run into any issues, you'll have spare cash

drphila

galileangoatee said:

 When this situation recovers, I'll definitely think twice about how often I go out and how much I spend when I do... More Zoom calls, fewer 3-course dinners in future I think! 

It's the secondary knock-on effects like this that the Covid economic optimists often fail to factor in, I feel