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One year after COVID: Are you financially prepared for career disruptions?

Job losses and pay cuts due to the pandemic may have abated with the economic revival. But how prepared are you for the next black swan?

February 23, 2021 / 09:51 AM IST

“Nothing serious. It was just an anxiety attack; it seems like you are under some kind of stress, so take it easy,” said neurologist Dr Gupta looking at Prashant’s CT scan report. Though Prashant was relieved, deep inside, he knew the root cause of his stress. Prashant’s employer, a leading automobile manufacturer had to let go around 200 of its employees last month and the company had indicated that it is still not done with firing.

Job loss or even an indication of the same can be a nightmare and can change your life and priorities. Hence, it is important to prepare and plan for such a situation well in advance. Here are some essential steps towards the same.

Avoid Knee-Jerk reactions

Sometime in April 2020, Akash Sinha, a close friend of mine, received mail from his employer that the company was forced to cut salaries of all the employees by 50 percent till further communication. The mail also hinted at certain job cuts in the coming month. To add to his woes, Akash’s entire 20-year savings in shares and mutual funds had suffered a massive 48 percent erosion in the market mayhem. Career uncertainties, coupled with the fear of a deeper erosion of his wealth, compelled Akash to liquidate his entire portfolio. Fast forward 10 months and Akash’s job is safe and both the economy and NIFTY have recovered faster-than-expected, but he completely missed the ensuing bull market and lost the opportunity to recoup the notional loss in his wealth. In hindsight, Akash still repents such panic-driven knee-jerk reactions, which could undo all the hard work and derail your financial planning objectives.

Also read: How to build your financial portfolio in 2021


COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Create an emergency fund

An emergency fund is the corpus you create to dip into in case of an unexpected financial crisis. Loss of job is surely one such situation that would necessitate fund requirements on an immediate basis. A corpus equivalent to 6-9 months’ salary is considered healthy. These funds should be parked in safe avenues such as short term fixed deposits or liquid funds. Without any further delay, act now and start building your emergency fund.

Also read: Don’t have an emergency fund yet? Here are steps to get you started

Revisit your expenses and lifestyle

As the saying goes “A penny saved is a penny earned.” An uncertainty in one’s career is the best time to implement this age-old wisdom and go on an expenditure diet. Some of the key steps one should take is to cut down on non-essential indulgences such as movies, vacations, eating out and expensive electronic gadgets. Down-trade on items such as branded clothes and cosmetics and reviewing monthly outgoes on electricity bills, cable charges, mobile bills, OTT subscriptions etc. Renegotiating an existing loan for a longer tenure to lower your monthly out-go can also be considered.

Discover your hidden talent

During the lockdown, Ravi Maheshwari, a senior manager in a reputed real estate firm decided to invest some of the free time available due to work-from-home and some money in his life-long passion of astrology and numerology. He enrolled into the basic training programme on numerology, followed by an advanced one and, within a week of completing his training, found his first online client from Dubai. Eight months into the lockdown, he has designed his own module, training more than 80 people on a monthly basis and conducting 8-10 one-on-one online consulting session with his clients spread across the globe every week! He now earns almost three times his monthly salary and is seriously considering embracing this hidden talent as his full-time job. While everyone may not be as lucky as Ravi, a newly acquired skill or enhancement of an existing talent can offer a ray of hope during such times to make good any salary cuts or embrace a new career.

Also read: Will or Trust? Here’s how you must choose the best way to transfer assets to your loved ones


Losing a job is an uncomfortable thought – many of us are not prepared to visualise such a situation, let alone plan for the same. But COVID-19 has taught us that even the best of us may be forced to deal with such a situation and therefore planning for similar black-swan events in the future should be a part of every financial planning exercise. And, of course, the need for a basic Will and other inheritance planning during such times cannot be overemphasized.
Shailendra Dubey is Partner-PlanMyEstate Advisors LLP
first published: Feb 23, 2021 09:51 am

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