Poll reveals majority of those who go through stressful financial setbacks come back stronger with time
Given the impact the COVID-19 pandemic has had on businesses, jobs, and financial markets, it’s fair to say the coronavirus has been financially devastating for all generations. But as a new poll from Ameriprise suggests, it’s not likely to be the end either.
In a survey of more than 3,000 U.S. investors aged 30 to 70 years old with at least US$100,000 in investable assets, nearly three quarters of respondents reported having experienced at least one major financial setback, with most (52%) losing over US$50,000 in the process.
The number one cited type of setback came from market losses (26%), followed by earning less money than expected (23%), job loss (20%), supporting family members financially (17%), and bad financial decisions (16%).
“Unfortunately, as we’ve seen in recent months, everyone – regardless of their income or assets – is susceptible to financial setbacks,” said Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise.
But on the bright side, among the respondents who said they experienced a financial setback, nearly nine tenths (89%) said they bounced back or are on the path to recovery. One common factor uniting the comeback stories was time, with nearly two thirds (64%) saying it took between one and five years to get back on track financially. Around one fifth (19%) said it took six to 10 years, while 8% said they needed more than 10 years to recover.
Another critical ingredient was deliberate action. Half (50%) said they had to adjust their spending habits, and 37% said they changed their saving behaviour. Around one fourth of investors also said they had to either work more or longer (26%) or dip into their emergency funds (24%).
While investors who went through a financial setback said they felt “stressed” while going through that period (29%), more than half (56%) said the experience made them feel stronger in the end. Nearly nine tenths (89%) said they’ve come back at least partially, with 21% saying they were in a better financial position at the time of the survey compared to before they encountered a setback.
“We’re halfway into the year and have seen millions of people’s finances upended overnight,” Keckler said. “No one knows what lies ahead, but it’s important for investors to stay calm and focused on their financial goals. With time and patience, they may be able to bounce back from financial hardships."
