Unless you come from an affluent family or are a big-time celebrity, chances are you have been struggling to make a living since the pandemic is still very much alive. You could be one of the countless individuals who have been laid off due to the downsizing of operations. Or maybe you are lucky enough to be still working and supporting yourself.
It doesn't really matter because money will always be a huge concern as long as the threat of the coronavirus lingers. But what should you do with yours? Is it better to put it to use or save it until the world goes back to normal?
Many would agree that saving money during this trying time is one of the smartest decisions anyone can make. It's almost as if people are surviving than living given the limited amount of movement, goods and services, and other important things people need. So you can't really knock on your friends for refusing to go out to eat.
However, others believe that money should be used constantly because it is of no use when stationary. One way of doing it is investing, which is the only way you can make your money work for you instead of working for it. Given the threat the pandemic brings, is it better to save or to invest?
Read More: Basic Investment Ideas for the Young ProfessionalIs Saving The Better Option?
Not even the top health experts know when the world can come back to normalcy. The pandemic brings an undeniable degree of uncertainty. Saving is one way to prepare yourself for bad things the future has in store for you.
Since there exists a worldwide health crisis, it will be wise to increase the amount of your emergency fund. This is basically a savings account that contains three to six months of your monthly income and should only be used for emergency purposes. It will help you stay calm and cool when things go bad, knowing you have enough to pay whatever bills you have.
For instance, what if you or someone you know catches the virus? Medical bills will be taken care of much easier. Or what if you get removed from your job? You'll be able to live off the fund until you get hired.
If you have yet to create one, start by calculating your expenses and compare that to how much you are making. Then, look at what expenses eat up most of your monthly budget and decide whether to cut them off to save more. You could be spending too much on eating out, or maybe your online subscriptions are too expensive.
Limiting your spending to essentials such as food, shelter, medical bills is just the smarter move. Basically, it's better to put needs over wants. Leisure shouldn't even be a priority, although this is debatable.
Saving also provides the opportunity to invest in something more significant in the future. You could send your children to college or invest in new companies that have great potential. Use most of your money now and see your power of doing such become limited.
Or Should You Invest?
If you're someone who cares more about making money than saving it, then investing might be something you should look into. The pandemic has forced even the biggest companies to lay off employees, resulting in a visible drop in stock price. Some are starting to bounce back, and buying their shares now will guarantee a handsome profit when they reach full recovery.
The stock market isn't the only place you can put your money in. Cryptocurrencies are arguably the hottest investment options today. Volatility makes tokens a riskier choice, but at the same time, you are more likely to see higher returns compared to other investment vehicles.
Bitcoin, the number one digital currency, saw its lowest level since March last week when it plunged from $62,000 to $55,000. Buying one is too costly for the average person, but fortunately, Bitcoin allows investors to buy it in fractions. The price drop didn't cause too much panic, as investors know it will recover pretty soon.
There are several other digital currencies you can buy, and their potential might rival Bitcoin's. One you should strongly consider is Ripple's XRP. It's currently trading at around $1.37 and is constantly fluctuating, just like other tokens do.
It sits at fourth place in terms of market capitalization. When April came, XRP was only below a dollar. And most recently, just before the unexpected plunge, it almost reached $2. Had you bought some earlier, your bank account would be very different today.
Dogecoin, which was initially made as a joke, just made a lot of people wealthy. Many came out saying the token made them millionaires. Luckily, it's not even close to hitting a dollar so investing in it is not such a bad idea.
However, it is understandable why some people haven't hopped on the cryptocurrency bandwagon yet. Digital currencies, though very popular, still instill skepticism in people. A safer way to make your money move is to invest in real estate.
A good strategy is to purchase pre-selling homes, as they are cheaper than houses ready for occupancy. You can then sell them later when their value has appreciated. An even safer way is to lease out your property and collect rent from tenants.
This way, you create for yourself a stream of income that is mostly passive. The only time you get involved is when something in the property is damaged or when you're trying to get new tenants.
It's Really On You To Decide
When you don't have much saved up, it isn't advisable to invest. You don't know when you're going to need the money. A good rule of thumb that most investors follow religiously is to invest only what you can afford to lose.
The possibility of seeing high returns from various investment vehicles is very tempting. But if you're investing most of your money while having very little in savings, then you're not doing it right. With investing, you either lose or win, and most of the time, you end up being the loser.
No one knows what happens next, especially during a pandemic. If you're suffering from pre-existing conditions, then stay with saving. Your savings might even allow you to get the best treatment if you get infected with the coronavirus.
Before making a decision, make sure that it is the right one. Make sure that it doesn't put you in a bad position. But it really is up to you what happens to your money.
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