Winter is here, are we prepared?
Every year when the temperatures drop, this statement resurfaces and I often wonder if the winter’s are getting colder or because our summers are longer, we forget how truly cold last winter was. Whether or not this is true, winter is here and that is a fact. Changing seasons have an interesting way of creeping into our lives and often, we are unprepared for this change. As we start thinking about electric blankets, heaters, warm drinks and comfort food, we are met with the reality that perhaps we are not prepared. The heater should have been fixed and the blankets replaced but we
forgot to. The very things we ignored become impossible to avoid.
The same can be said about our lives and our current economic state, change is here and some, if not most of us, are unprepared. Much like winter, which does not come overnight, our economic vulnerabilities have been slowly making their way to where we are now.
Our country has gone through two consecutive economic contractions, while the most recently recorded inflation rate for April stood at 10.3%, well above the desired 3–6% range. Simply put, winter is here. Our economic state is reminding us that saving is more than just a good habit, but it is a form of protection.
Having accessible savings for emergencies can provide stability and this is where a unit trust investment can become valuable. Unit trusts are generally liquid enough to help meet unforeseen circumstances while still allowing your money the opportunity to grow. The kind of investment matters though, because preparation for winter is not only about putting money away, it is about making sure it continues to work for you long after winter has passed.
With skyrocketing inflation, investing in noncash assets becomes more attractive. Assets such as equities, bonds and global market investments take precedence as they provide an opportunity for long-term growth and diversification.
Rather than placing everything in one place, a balanced investment approach allows you to spread risk while building and earning in assets that are not immediately vulnerable to inflation erosion. Look for a balanced unit trust, which is an investment that holds a mixture of equities, bonds and cash. It is best for growth (long term investing). This way you have a heater, a warm blanket and some warm clothes and can prepare for the winters ahead.
To everything, there is a season, and just as we are in winter, a summer is inevitably coming. But what defines how we experience each season is rarely the season itself, it is how prepared we are when it arrives. Winter does not only test our ability to stay warm, it reveals whether we made room for comfort in advance, whether we planned for the unexpected, and whether we gave ourselves enough cushion to absorb life’s shifts without panic. Saving consistently, investing intentionally and ensuring that our money is not only protected, but also working for us over time, is how we prepare for winter.
It is cold and there is promise that it may get colder, but perhaps that is the real lesson of this season: winter always comes, but so does the opportunity to prepare for the next summer.