Five months in and it kind of looks like the worst tsunami of the past hundred years has been averted, contained at the very last moment, as it was engulfing our civilisations. It looks like the Kings and Masters of our Universe have made the financial magic work, and that we will adapt and thrive.
Somehow, a new normal is slowly taking place. Rich nations governments continue to subsidise their citizens with a large scale version of Universal Credit. A fair part of the recipients of these giveaways end up with too much money to know what to do with it, so end up becoming rookie traders / investors waiting to be scammed. Meanwhile, another part of the society is struggling beyond acceptable hardship, and in the background of all this, our liberties are shrinking.
In this world part-protected and part-demolished, it looks to me that anyone getting too complacent will be punished big time. It looks to me that if you want to navigate this transition to the new world in good shape, you will have to build resilience big time too.
Resilience: the capacity to recover quickly from difficulties.
So far, I thought I had built enough resilience in my life and my financial planning, but now I need to review it again. If you have followed me and read my articles over the past year, or if you have read my book Out of the Rat Race, you surely know that I have a rule of multiplying my risk by some factor (usually Pi 😂) and that my three tiered approach of earning (from multiple sources) / saving / investing has helped me to not only go through lots of crisis mostly unscathed, but also be ready to take some opportunities when they came knocking.
Indeed, I have built enough resilience to go through this crisis and survive. Early 2019, I have lost my job and main income stream. Early 2020, I have lost my holiday rental income stream and it has become a liability instead. I have lost half my UK rental income in the lock-down. I have suffered further hardship in the form of unexpected large costs which always have the habit of showing-up at the worst of times. And finally, during all this time I have received no help from any government. Despite all this adversity, I have survived. Only for one reason: I had built enough resilience in my life to go through this.
Now, a new question is knocking on my door: what if it continues like this for longer than you think possible? Can you go through another 3 years like this (eh! eh! Pi again!)? Or 5? or 10? There is no escaping it: until now, I had built resilience into my life, but now, I need to build Ultra-Resilience. For my well-being and protection, I had built 5 income streams 🤗. Now I need 16 😧 (Pi again)!
I hope you can see my point. Let me ask you a few questions:
- If you get made redundant from your job by the end of the month, and you cannot find another job for another 18 months, can you survive this?
- How long can you live off just your savings? If less than 6 months, review the situation now.
- How many different income streams do you have? If less than 3, review again. I had 5 and 2.5 went out of the window in the crisis.
- What does it mean for you to build resilience into your life? Start building a plan now!
- What will it take to make you say with confidence "if or when the world collapses, I will still be here standing and in good shape"?
Don't get me wrong, I certainly do not hope for the worst. But if I do not plan for it, then I am the liability. So far, my worst case scenario, in case of the world around me collapsing, did not even plan for a quarter of what happened to me. I was prepared for some risk, but I never planned for a tsunami to hit me like that. Still, incredibly, and thanks to the rule of Pi, I survived it.
Now, I know that if I am to survive anything that can happen in the next few years, the Pi factor should not be applied on a moderate-to-high risk, but on a mother-of-all tsunami kind of risk. Then I can say, bring it on, I am protected! This will require more income streams, less regular expenses, and more built-in resilience. In fact, there is a concept which appeared a few years ago, called antifragile, and this is exactly what I need.
Antifragility: a property of systems that increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures.
If you can build antifragility in your life (systems, processes, finances, health, mindset...) then the more shit 💩 is thrown at you and the more solid and resilient you become 🥳.
This is how it has to be in the new unkown. We will have to become antifragile 😎. It is not too late to realise it: we may have to suffer this same shit for another 5 years, so better be prepared now!
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My dear friend, I started to post weekly articles exactly a year ago. I hope you benefited from my views, rants, insights, and hopefully a tiny bit of wisdom... As this 12 months of uninterrupted publishing has flown by, I am reflecting and reviewing my next priorities. As I mentioned many times, I review my priorities a few times per year, and the summer one is generally "the big review". As a consequence of this review, it is very likely that I will start scaling down on my publications. In fact, this may be my last regular post. You never know, I may send a few more from time to time, probably always on a week-end but not on such a regular basis.
I sincerely hope that you enjoyed the journey with me. If you'd like to keep in touch, do not hesitate to email me, or follow me on twitter (at the moment, I tweet very infrequently but this may change). Or forward some of my articles to whoever you think may benefit from them.
Finally, if at some point, you'd like some financial advices 🤑 which are not financial advices 🤔 (Eh! eh!, these financial regulation rules 😅), let me know too and I will review with you if I am able to help.
To your journey! 🥂