See to choose and not choose to see | Inquirer Business
Money Matters

See to choose and not choose to see

/ 02:01 AM March 22, 2023

Question: Now that the pandemic is practically over, what advice can you give to someone who is now just recovering financially?

Answer: While over 1.8 million COVID-19 deaths were reported in 2020, the World Health Organization’s recent estimates show an excess mortality of at least 3 million. Excess mortality covers both the total number of deaths directly caused by the virus as well as those that arose from indirect impact, like from the disruption of essential health services and travel.


Harrowing as the past two years under the pandemic has been, the right thing to do is move on. But the wrong thing to do is to simply forget the lessons from the past two years. Building on such lessons allows us to see things in a broader perspective for decision-making. Alas, many simply decide to choose to see and not see to choose wisely.

Case in point is money lesson.


The old rule was to set aside money in liquid assets equivalent to three months of expenses as emergency funds, a rule that applied to employed individuals. For self-employed individuals, the rule was to set aside money equivalent to six months of expenses. But with the lockdowns, the rules have been upgraded to a minimum of six months of expenses regardless of source of income. And with the larger amount needed, it became more important to put such money in liquid but still earning deposits.

To be fair, recovering from the pandemic has required people to muster all the resources they can to bounce back financially. Yet, how many people have that intention to set up emergency funds, let alone put them in liquid earning deposits? Remember the adage that if you fail to plan, you are planning to fail?

No more than 36 percent of gross income should be allotted to all debt servicing. Fortunately, laws were enacted during the pandemic to alleviate debt burden through lower interest rates and restructuring plans. And people did make good use of their cash that was freed up from restructured debt during the pandemic. But at a time when the ceiling on credit card rates has been increased and pandemic-mandated restructuring arrangements have become a thing of the past, pent-up demand has reared its ugly head to compete for funds meant not only to service debt but to cover the extra burden of higher prices of goods due to unusually high inflation. It also does not help that companies are coming out with ads to take advantage of revenge spending, particularly revenge traveling.

The pandemic highlighted the risks to health, which as mentioned earlier, led to a lot of premature deaths. It is also a good thing that life insurance companies had begun to include COVID-19 as one of the risks that they would cover. Yet, there was no mad rush to get life and health insurance after the pandemic. Life insurance is still seen as just an expense with no tangible immediate benefits. But is it not beneficial enough to be able to sleep soundly at night knowing that you and your family are adequately protected in case the “unthinkable” happens prematurely?

With reduced wealth growth opportunities during the pandemic, many resorted to riskier investments with phenomenal prospective returns. Some even ventured unwittingly into scams that promised fantastic returns. In all cases, there was a total disregard for the attendant risks. The rule of investing cannot be broken: high returns also come with high risks. Risks from legitimate investments can be minimized through diversification or spreading funds over several investments. Yet, the hunger for more money and the fear of missing out, or Fomo, drove people to gloss over such risks and ignore diversification. Such hunger is as intense now as before the pandemic.

What is worse is that some see themselves as geniuses in portfolio management after making money over a single investment trade in a highly unusual situation. Brilliance in portfolio management is evidenced by consistent returns that span many years, in which years cover the highs and lows of the capital markets.

So, now that things are getting back to normal, see the lessons taught by the pandemic to have a broader perspective to be able to choose wisely. Just choosing to see is but a fool’s game. INQ


Send questions via “Ask a Friend, Ask Efren” free service at, SMS, Viber, Twitter, LinkedIn, WhatsApp, Instagram and Facebook.

Efren Ll. Cruz is a registered financial planner and director of RFP Philippines, seasoned investment adviser, author of bestselling personal finance books in the Philippines and a Yaman Coach. To consult with a Yaman Coach, email [email protected] To learn more about personal financial planning, attend the 99th RFP Program this May 2023. To inquire, e-mail [email protected] or text 09176248110.

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