COVID Financial Crisis in Midlife

Bloomberg Businessweek Online December 11, 2020 “Covid-19 Is Creating a New Kind of Financial Midlife Crisis” “The pandemic has disrupted professional trajectories, forcing people to focus on other areas of life-perhaps for the first time in years.” By Abby Ellin

Figure from JD Power April 2020

Read the article for all the backstories and details.

Several personal tribulations are presented. Among them.

High-end travel agency forced to “cancel a year’s work of bookings, losing hundreds of thousands in income” to a business that was 15 years in the building. This combined with a “near fatal car accident” caused Stacy Small (51YO) to sell her home and begin focusing on her “emotional wellbeing” rather than on “making money.” She’s since invested $50,000 in a “fast-growing healthy food franchise.” She comments “Now I’m living a much simpler happier version of life.”

Such changes typically been dubbed “mid-life” crisis but according to psychologists such crises are tied more closely to “a jolt similar to what the pandemic has brought.” When the bottom drops out of our chosen and what we thought was a financially secure advocation we according to Amanda Clayman (Financial Coach) might wonder “Why am I doing this in the first place?”

Despite the official U.S. unemployment rate (UE) dropping from 14.7% in April to 6.7% in November the statistics misses those that have given up which at 657,000, double the prior year, and 3,900,000 that are not included in the UE rate. As a result, by several measures according to the CDC, American mental health is suffering. “It’s hard to stay positive when your life’s work is upended.” Teo Lee, who has watched his business teaching engineering online fall from 30 clients to single digits, does not have a counselor but rather is confiding in his “wife and [a] close circle of friends and family.” All the while he's trying to make ends meet relying on “freelance music production work, his wife’s salary and financial assistance from his extended family.” He remains steadfast “I will not give up on my business” as he can’t see returning to the corporate world.