The Covid-19 pandemic has created such a shock to people’s lives, it’s prompted a financial reckoning akin to a midlife crisis.
Just ask Stacy Small, 51. The Maui resident’s profitable high-end travel business had allowed her to buy her dream beach house and drive a Porsche Cayenne.
On March 20, she was forced to cancel a year’s worth of bookings, losing hundreds of thousands of dollars in income. Within a week, she cut ties with 28 independent contractors. Around the same time, three close friends were diagnosed with Stage 4 cancer, while others battled Covid.
And then she had a near-fatal car accident on April 21. “Covid killed the travel business I spent 15 years building,” she said. “The car accident could have killed me. It truly was a wake-up call to make a lot of huge changes.”
With no options, she sold her house in September. She stopped focusing on making money and began concentrating on her emotional wellbeing. As part of her healing process, she began baking cookies.
She has since turned it into a business — Stacy Maui Cookies — investing $50,000 of her own money, along with an investor/partner and a “pretty significant commitment” for a licensing agreement with a fast-growing healthy food franchise.
“Now I’m living a much simpler happier version of life,” she said. “Renting a beautiful, ocean-view home, driving a Jeep.”
What happened to Small was what some have traditionally thought of as a midlife crisis. In the public imagination, these lead to men buying sports cars and having affairs, but often their effects are more common and muted. Brought on by health scares, behavioral shifts or job losses, people start to question their life choices and ponder the realization that no one’s immortal.
And while the phenomenon became associated with people between 35 and 50 years old, psychologists say it isn’t tied to an age, but simply a jolt similar to what the pandemic has brought.
“Some of us went into certain fields of work because we felt they would be more secure,” financial coach Amanda Clayman said. “We said, ‘I’ll make some sacrifices between how exciting and passionate I’ll get about my work, because it will be reliable and support other values that are important. And then, when that financial security is actually taken away from us, it’s, ‘Why am I doing this in the first place? That’s not the deal I made.’”
Michael Woodcock, 40, was furloughed from his job in late March as the front-desk manager at a large hotel chain in Boston. It was an unpleasant wake up call. “When they said they were furloughing people, some people were kept on,” he recalls. “I started thinking, ‘What did or didn’t I do to be one of those people to be kept on?’”
Losing his job, which he loved, made him question his career choices and identity — and whether he could provide for his wife and 9-year-old daughter in Beverly, Massachusetts. He took a job delivering packages, refinanced his home and spent less, while leaning on his wife’s paycheck
Covid-19 has disrupted professional trajectories, forcing people to focus on other areas of life — perhaps for the first time in years, said David H. Rosmarin, PhD, an assistant professor at Harvard Medical School and founder of the Center for Anxiety, in Manhattan.
“Having more time for sleep, friends, family and just thinking can be wonderful if one has an identity outside of their career,” he said. “But it can be hell on earth if they don’t.”
The conditions created by the pandemic are putting people to the test.
The U.S. unemployment rate spiked to 14.7% in April, but fell to 6.7% by November, according to the Bureau of Labor Statistics. The number hides that more than a third of those without jobs — 3.9 million people — have been looking unsuccessfully for work since the pandemic hit the country with full force. And the number of people who have given up — 657,000 who say there aren’t any jobs for them — is more than double where it was at the end of last year.
This has come along with intense despair. Americans’ view of their mental health declined significantly in 2020, with 23% describing themselves as having fair or poor mental health, up from 17% last year, according to a Gallup poll released this week. And about 30% of American adults now have symptoms meeting criteria for an anxiety disorder, compared to 19.1% pre-pandemic, the Centers for Disease Control says.
It’s hard to stay positive when your life’s work is upended.
Aron “Teo” Lee, 53, a serial entrepreneur in Rockville, Maryland, is trying to stay on track with his dream career, running an education startup, DEILAB, which teaches engineering, design and critical thinking to children through Lego-based challenges and other projects.
In a normal summer, he would spend June through August traveling to various communities around the country. Not this year. Instead, he spent the summer home with his wife and two teenage children, teaching robotics online, watching his debt mount and his bank account dwindle, as his 30 clients fell to single digits.
“Emotionally it’s very tough, because I feel like I failed the people who believed in the company and believed in me,” he said. “I have a son in college and a daughter in high school, and to be 53 years old and wondering how the lights are going to stay on month to month is really a heavy burden.”
Lee has relied on freelance music-production work, his wife’s salary and financial assistance from his extended family.
While he hasn’t found a counselor to talk to, Lee confides in his wife and close circle of friends and family. He has been holding weekly workshops on racial justice and equity, playing and recording music, and picking up consulting work. He considered going back into the corporate world, but he’s trying to stick to his passion.
“I have also not given up on seeking angel investment from good people that want to change the world,” he said. “I will not give up on my business.”
-Bloomberg Wealth