Investing in COVID-19 Part II

JC Project Freedom Investing During COVID19

I want to provide my self-justification why I took the role in Malaysia and put my self employed business on hold. I will continue to buy stocks because prices are lower but does not mean the businesses are going bust. Interest rate is going to zero and stocks will become extremely cheap. Yes, you can buy gold or silver but they are not meant for me because they will compensate you negatively during good times and they do not provide cash flow. It is all about what you want and what works for you.

Income

From my experience in 2007 – 2009, the market downturn can last around 1-1.5 years to recover. I need to have sufficient monthly income to invest at the end of every month. My self employed business was building up over the last 6 months but it cannot provide the desired level of income for me to invest. My last self employed income in February 2020 was $934/month. It takes time to build and it can be an exponential growth when you have your own team. It is important to hold on to your job in times like this as you need your work income to invest.

Expenses

Everyone is tightening their purses and there is no chance for us to spend money except on necessities such as groceries and medical during times like this. It is important to minimize our expenses. We need to save more money to cater for investment and emergency fund. Everything is uncertain and job security is almost non-existence. It is important to have at least 12 months of emergency funds.

Core Expenses

The lock down situation has helped me to understand that I don’t really need a lot to survive. The core expenses are essential expenses which we need to spend on such as groceries to buy food to cook and dine from home, our telecommunication expenses, insurance, transportation (minimum) and medical expenses.

Present Portfolio and Investment Strategy

I won’t suggest to sell during depressed times like this. We won’t know how depressed the market will become but you need to ride through this one. That is why we always advocate to invest using money which you won’t need in the short term.

I am trying to use my dividend income to cover total annual household expenses. I believe this year’s expenses will be low unless there are unforeseen circumstances.

Health

I believe health is wealth. It is important to exercise, take multi-vitamins to boost your immunity and drink plenty of water. Without health, wealth does not mean anything.

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