The pandemic has affected our life, livelihood and lifestyle.
When it comes to life, we do not know who will be quarantined next. What we do, where we go and whom we meet, is now a matter of life and death. That’s sad but it’s true.
As to livelihood four things are becoming apparent. One, job loss and pay cuts are now a reality. It hurts different people in different ways. To the super-rich it doesn’t make any difference. The Apples and the Ambanis of the world are sitting on a mountain of cash. The daily workers who go to work in the morning so that they can eat in the night are the worst hit. The middle group is busy wondering whether this crisis will finish before the money is finished or if the money will finish before the crisis is over.
Active and passive income…
Two, people are beginning to experience first-hand the distinction between active and passive income; and that over time we should focus should move to the latter. Active income is the income from work. You work and earn money. Passive income is where money works for you! Neither emergency nor accident gives a warning before it descends on you. It is now, therefore, essential to have one year of an emergency fund in cash to be available at short notice.
Three, work from home is now a clear option. But in some industries, like manufacturing or construction, you cannot WFH. A banker says that we work with 30 per cent staff but have achieved 66 per cent efficiency and are pushing to touch 90 per cent. Does that mean the other 70 per cent who work from home will become redundant once the normal is restored? Remember, here too the 80-20 rule applies. Eighty per cent of people need supervision, while 20 per cent of people work without supervision. The latter will have their jobs, the former may not.
Superstars,doers, talkers and troublemakers…
Four, at the work place, there are the superstars, the doers, the talkers and the troublemakers. The superstars take pride in performance, are proactive in work and are honest in their response. The doers do as they are told to do; if you don’t tell them, they don’t do. You have to check on their progress and they are capable of fibbing. The talkers talk more and do just enough not be fired. They lie easily. The troublemaker finds a problem in every solution. In times of pandemic, the last two categories, namely the talkers and the troublemakers, will be shown the door.
Cash more important then profit…
On lifestyle, till this crisis broke out, we were on the fast lane. We have now realised that the direction is now much more important than speed. We now understand that we should spend more quality time with the people who are closest to us. We also realise the distinction between discretionary spending and non-discretionary spending. We realise that money in a bank is more important than having 20 shirts in the closet. Companies have understood that cash is more important than profit.
All however is not lost. There is a silver lining in this pandemic. History records that every time there is unemployment, self-employment goes up. During the Great Depression, some positive-minded people set up businesses that are today’s household names. I will name two businesses and businessmen.
Become a solution seeker
George Washington Jenkins Jr. got into trading in non-perishable durable goods. As of 2016, the employee-owned, privately held corporation included 1100 stores in the Southeastern United States with 170,000 employees and a $32 billion turnover. His company: Publix Super Market. The Gallo Brothers started their winemaking operation in a shed in California in the 1930s. They sold wine at 50 per cent of the market price. As of 2014, they are worth $10 billion and own 20 per cent of the wine business market share.
The message is loud and clear: become a solution seeker.
The article is written based on: Shiv Khera’s talk delivered on 19 July 2020.