“Am I doing enough?” Wealth protection during global economic fluctuations (like COVID-19)

March 17, 2020

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In this episode, I respond to Rochelle, a listener who wonders if she’s doing enough for her Wealth Protection. Particularly with the financial challenges our current generation of mothers with young families face. My response is hyper-relevant to how we can better prepare ourselves for any current global economic fluctuations, such as COVID 19.

Resources mentioned:



WHO (World Health Organization) 

Ministry of Health New Zealand

RELATED: Diversified income: Are all your income eggs in one basket


Welcome to episode 7! In today's episode I’ll be addressing a listener's question.  This question was sent in by Rochelle and she asks:

“I’ve been wondering what families need to and should be doing in terms of the cost of living and growing wealth in the future.  Specifically, I’ve been worried about how the rich/poor divide has been getting bigger, for myself and my husband who are upper middle-class earners with aging parents and young children, how are we meant to stay ahead of rising costs and build our wealth for the future? 

We own a modest 50 year old house in Johnsonville, and I’ve started a Sharesies account for both myself and my kids. My husband and I have Kiwisaver, all sorts of personal insurances and in terms of debt, aside from the mortgage, we have a miniscule amount of credit card debt. 

We’re on track to continue building our wealth but I’m concerned if we loosen the purse strings to add a bit more funds, we’ll end up in a negative position. Do you have any advice, or insights for protecting and building future wealth?”

That is such an awesome question, thank you Rochelle for sending it in.

Firstly, a disclaimer.  I am not in any way qualified to give financial advice.  What you hear from me and what you read from me are my opinions only.  If you need financial advice you should definitely talk to a qualified financial adviser.  

And neither, am I an official information source on the Coronavirus.  You can get a hint of what's coming in the episode from that. These are my interpretations only, if you need more info, go to your government's health department, or the WHO website which will have current advice for you. 


When Rochelle wrote this question in, it was pre-Coronavirus.  Unless you’ve been blissfully hanging out under a rock, you will know that this event is now classified as a pandemic, and aside from how it is affecting our health, it’s directly affecting our wealth, and perhaps our perceived or planned futures. 

Investments and Wealth Protection

Our investments have taken a really steep dive. Like the value of our KiwiSaver (NZ’s retirement fund) nest egg. (If you’re interested in what I’ve been doing about this, well, I have looked once at my Sharesies* account, once.  And then I increased my weekly auto-invest amount, and back-paddled out of there as fast as I could!  I haven’t looked at my Simplicity** account, which is more sensitive to the market fluctuations, up and down. 

I may have lost a few thousand in there but I’m not looking, it’s just not worth it.  I’m not changing my track there because I’m not intending on using that fund until 20 plus years.  So, it’s okay, it’s fine, ride it out). 

*Sharesies is where I invest casually in index funds
**Simplicity is where I put my KiwiSaver(NZ’s retirement fund)

Flattening the Curve

Today is Monday the 16th of March 2020 and what we’re talking about world-wide is flattening the curve.  Which means, doing our best to slow down the spread of the Coronavirus in our communities so that we don’t overwhelm our hospitals and our health workers.  This ultimately means less deaths because the critically ill will get the treatment they need.  

What this means practically, is, social distancing.  You’ve probably heard this term a number of times in the last few days.  This is where taking care of our health starts to affect our wealth whichever way this plays out.  

Precautionary Measures

So we in New Zealand, we’re at the higher end I guess of taking precautionary measures.  Our Prime Minister Jacinda Ardern announced that cruise ships can no longer stop over in any of our ports.  And as of 1am tonight, all travellers from overseas who arrive in New Zealand will need to self isolate for 14 days.  

So that’s part of the social distancing plan and what that does is take that person out of circulation and risk of circulating that virus which they may or may not have.  That means they can’t go to the office, they can’t go to the gym, cafes, restaurants, shops, beautician, hairdresser.  

In fact, anyone with cold or flu symptoms is the same because you will become a social pariah if you cough in a public place right now.  I was at Maranui (café) a couple of days ago, and was stared at vehemently for clearing my throat. And I’m like, I have asthma!  It was really, really obvious so people are on high alert.  

Impact on Employees and Families

You can see really easily that there is a trail of economic destruction.  Businesses that require patronage – people actually turning up to use their services and buy their products – what happens to them if we have to shut down nationwide?  What could potentially happen, what happens to the employees of these companies? And then what impact does less income have, if they lose their jobs or they just don’t have any work for a while.  How does that impact these people and their families? 

Are we doing enough for our wealth protection?

 Back to Rochelle's question.  The potentially dystopic future that she was concerned about in that question, describes rising costs of living; a bigger divide between the rich and the poor; and higher financial responsibilities as a generation.  But this pandemic also shows us how fast our economy can be affected. Her concerns are just as relevant to a pandemic or some other kind of event that impacts the global economy.  

At the heart of it, I think that she’s asking, are we doing enough?  And is there something more we could, or should be doing for our wealth protection?  

My take on this is, we all do the best that we know how, with the tools and the knowledge and the experience that we have.  We do the best for what we think is right for us and our families.  


What might this involve?  You’ll probably think about the regular things like savings.  Having some savings for the future, having a KiwiSaver account that you’re contributing to.  Maybe you’ve even started a Sharesies account (in New Zealand that provides us with the ability to invest for our children as well).  Invest in index funds. Maybe you are working hard to pay off your mortgage if you own a home, in order to be more financially free when you’re older, and be able to support your child's education.  Maybe you're keeping your debt levels low, spending within your means. 

There’s lots of practical ways you can create a future that is financially acceptable, to you and your family.  But also, it has a lot to do with your personality and how much risk you’re willing to take.  

With my family, I’m taking a bit of risk venturing out into entrepreneurship, while my husband is continuing to work in a stable job.  We’re balancing our risk out there. We wouldn’t both go into entrepreneurship. I didn’t buy a business or a franchise that I knew was going to make money, I’m just totally winging it (with potentially great rewards).  We’re okay with taking that risk. 

Personal Insurances

Rochelle mentioned having loads of different personal insurances, and this is something that can definitely help us feel more assured that if something happened to our health, and any number of things could happen, like a pandemic or losing your job.  We put insurance in place to protect ourselves. That’s a very practical thing to do. You’ll definitely have home insurance, you might have contents insurance, car insurance. You might have income protection insurance, house insurance. There’s a variety of different insurances that you can have as a precaution to life events happening that threaten your income level.  

You might also have investments, like we talked about the KiwiSaver, and maybe some index funds.  Or maybe it’s a rental property.   

Those sorts of precautionary measures, those sorts of income generating measures, it’s all practical stuff – great.   But Rochelle's question was really saying we’re doing this but are we doing enough and is there something more we could be doing?  It comes back to that risk profile, your risk profile.  What you do, you have to be comfortable with. 

If you have investments, then – and this is going to become a theme here – then I believe you need to consider the diversity of those investments.  

Diversity of Investments

What I’ve learned about diversity of investments I’ll try and sum up here. Let's say you have invested in a property.  Great, your property is doing really well, but one way to diversify your property investments, and let's say you’re a property investor, would be to buy in different cities.  Or different areas, so that if one area is affected and this affects your rental property in this place, it doesn’t necessarily need to affect your other one.  

Diversity and Risk

If you invest in shares, index funds, you could diversify your investments by buying shares in different types of companies, companies in different countries.  There’s also the diversity of the riskiness of those investments, higher risk versus lower risk.  Diversify that way. I think you’re probably getting the picture here. 

Diversifying your investments across whatever you're choosing to invest in, sounds to me like a really practical thing to do to protect those investments.  So that market changes don’t hit you all at once, and hit all of your investments at once.  That's wealth protection for you.

Making Hay or dropping the basket

You can kind of see right now with this Coronavirus pandemic, and as we talked about before, our investments have taken a dive.  And I’m not quite sure about the severity of that because as I said I’m not really looking. But let’s say you threw all your savings into your KiwiSaver, every last cent, and it was on a high growth fund (or high risk) fund.  Sure, in the good times you would be like “I’m making hay!” But in times like this, when the market takes a dive and if all of your money is in that one basket, your entire basket is going to drop through the floor, if that makes sense. 

Diversity of investments, absolutely.  Having investments, whether that be savings or a house or whatever.  And diversifying those investments is going to help your wealth protection. In particular that you are in possession of and you are trying to grow.  This kind of also makes sense to me and I’m going to link to a post that I wrote a year or two ago, about diversifying your income streams as well. 

Related: Diversified income: Are all your income eggs in one basket?

If we look at diversifying the investments that’s protecting the wealth that we have, what about protecting the way we create wealth? We've got insurance.  But you know those are like worst case scenario things.  Income protection insurance. I sat down with an insurance broker and went through all this a few years ago, and you’re pretty much buggered.  If you’re in a position to claim for income protection insurance then something bad has happened. So that’s definitely a worst case scenario.  

The way we generate our wealth.  Take my husband and I’s situation.  We have one person working a full time job, it’s a permanent job.  He gets health insurance perks, (but actually he doesn’t get a whole lot now as they changed all that last year, but I’m not going to go into all of that!  But that’s the nature of having a job right?) But, we know for sure that he’s going to get paid a certain amount every couple of weeks. Pretty much that covers our necessities and our debt repayments, and a bit of play money, that sort of thing.  


Then, with my income, I am contracting, so that fluctuates depending on how much I work for my clients.  That fluctuates and then I have my leveraged income from my business which is a little bit like it’s growing slowly and then it will grow exponentially.  We’ve got some very different streams of income there. 

At times like this, my husband's job could be at risk.  If we have a global recession we have to understand that jobs will be at risk, business would be at risk, the economy will be at risk.  Absolutely. So there’s the risk that he could lose his job.  

Recessive Times

With my contracting, sure, that could definitely dry up.  Often what I’ve seen in government and commercial is that in recessive times they say no more contractors, that’s it, full time staff only.  So then all the contractors leave (and lucky for them they’ve been paid contractor rates so they’ve got a good buffer there… in a perfect world anyway). Contractors disappear for a bit until the economy starts to feel a bit more stable, then they’ll come back again.  

There’s ebbs and flows.  When you’re contracting, this is responsive to business needs.  What does a business need? They will either be employing or they will not.  They will either be taking measures to grow their company or to protect their company.  

Remember I don’t have an MBA or anything like that.  These are my interpretations totally. And I have a lot of opinions and interpretations, particularly on wealth protection

Leveraged Income

With my income from leveraged income, the idea is that I am building up different products that I can sell to people.  Online courses and coaching programmes, that sort of thing. Building up these products, putting the effort in to building these products that are going to deliver some kind of value to people that buy them.  I’ll then be able to market that and sell it. Automate the sales of that product, and then it’s going to start bringing in leveraged, passive income.  

The Internet is still on!

Would this be affected by the economy?  Possibly, I think it depends. If you look at this pandemic and what it is doing to workers, a lot of people are being sent home and they’re in lock down, but the internet is still on.  And you actually have a lot of people who are looking for ways to pass their time.  For me, if I wasn’t able to create content which I do every single day, I am learning online.  If anything, there’ll be more of a demand for online learning, for consumption of online content than ever.  There’ll be more people on social media than ever.  

While my Tane(my husband) might be sent home from his job, that’s cool as he can work remotely, I may get an influx of customers looking for ways to set up businesses like mine.  Looking for ways to increase their knowledge of online marketing, and creating leveraged income streams. 

There is some diversity in the way that we are earning our incomes.  This is how we protect our wealth generation. Say we all get sick, Tane might have some sick leave.   I’m not sure how much sick leave these companies might be dishing out during a pandemic. It depends on how bad it gets.  I might have some income from my products and courses and stuff that I sell and affiliate income, that sort of thing.  

When Parents Need Help

That’s a way of protecting our wealth generation when something is happening that is out of my control. I’m not just talking about pandemics, I’m talking about parents that need help.  Parents that need to be put into a rest home, lets say. Let’s say in the worst case scenario they have dementia and they need specialist care and you need to relocate them and that sort of thing.  You’ve got time, money, energy and focus going towards that situation so you want to be able to step away from your job. You don’t want to be both working fulltime and go “oh my gosh, we have to deal with this situation here.”  

Dial down on an income stream

Likewise if a child gets sick, or just any life event comes up.  You want to be in a position where you can go “I’m just going to turn the dial down on this income stream now so that my time and energy and focus can go on over here.”  So that deals with immediate issues and those that are caused inside our families, outside of our families.  

Most of it is outside our control, but what is in our control is how we diversify those income streams.  I bet you’re not really surprised that I’m suggesting looking at creating leveraged, passive income streams.  Or at least some sort of passive income stream. (Given the sharemarket at the moment I’m not suggesting putting more money into shares right now, I might be later!)

At the heart of creating leveraged income streams, say you’re a business or an employee, by creating a leveraged income stream, you’re just diversifying your income.  

Start Selling

You might have a brick and mortar business, let’s say that you make candles and you sell them at markets.  You might film a video course of how you make these candles, and then you basically build up your audience on Instagram, lots of people liking candle making over on Instagram I guess.  And that’s how you start to sell. You’ve got a product to sell and market and all you’re really doing is going about your daily job, right? I’m a candle maker, I make candles every day, I’m going to promote this by showing you.  

You’ll see this all over Instagram, I follow a lot of artists and creators of different kinds.  Here I am, every single day doing my thing and hey if you want to learn how to do the same thing I made a video course of it.  

So there is an income stream.  You could reinvest that income into your investment funds. 

Invest in someone else's side hustle

But maybe you’re not even that type of person – you’re not a candle maker, you don’t have a brick and mortar business, you don’t have a creative bone in your body!  Maybe, you invest in somebody else's side hustle. Maybe it’s your partner, if you have one, that’s highly creative that you monetize. I fully intend to monetize my husband!  He’s a highly creative musical genius, and he’s a DJ as well so I definitely intend to monetize him! Oh my god he’s eventually going to listen to this, and he’s going to feel like a piece of meat! 

What I’m saying is, hey look, there’s opportunities everywhere.  Everyone wants to learn. In times like these, drastic times like pandemics, everyone is looking for something to do right?  And there you are waiting, I’m going to share what I can do with you. 

So, back to Rochelle.  Do you have any advice, or insights for protecting and building future wealth?  

My answer is, diversify everything.  

What are you going to diversify?  Do you have all of your eggs in one basket in some way?  And not just you personally but for your family unit. Is there a way you can start diversifying little bit by little bit?  I’m all about sustainability and one thing at a time.  

What can you diversify?

What can you diversify?  What’s the biggest risk? Is it income or is it the way you’re protecting your wealth or investing it?  The way you’re generating it or the way you’re protecting it and growing it? What needs potential diversification?  

It’s definitely something that we can all think about.  And this is something I started thinking about 3 years ago when I lost my job while I was pregnant.  After 5 years of trying to get pregnant, multiple miscarriages and finally having IVF and getting and staying pregnant, then I was made redundant.  So I’d had enough of the risk at that point, and losing my job with terrible timing. I decided then that we needed more diversity in our income generation.  Ever since then I have been working on it. 

Related: How To Deal With FOMO On A Debt Free Journey

Is this working out for me?

I think I should probably end on a high note!  The high note here is that we have the time and the space to think about and reassess our personal situations at any time.  It doesn’t have to be triggered by terrible things such as the threat of a recession because of a global pandemic. At any time you can stop and think ‘is this working out for me?’  

Just like Rochelle asking ‘Is there something more I could be doing?’  Then going out and seeking that information. Listening to podcasts, reading books, talking to peers.  Growing your knowledge around what is possible, so you can reassess whenever you’re feeling a bit questioning about things. 

So hopefully that is a high note, and hopefully you got something out of this!  As always, I am hoping you got a little flicker of wisdom and thought ‘oh’. Actually this is pretty much why I podcast so I can get in your ear and sit on your shoulder and get you thinking about things.  So I always love to hear if you did have any of those lightbulb moments. And Rochelle, I hope I gave you some insights that are useful. And everyone else that has been listening, thank you very much, and goodbye.

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