The world has become a strange, foreign place; unlike the one I’m accustomed to. I was at the grocery store a couple of days ago and it was packed. There was a line of people that ran the length of the store. The shoppers were waiting to get to the dairy section which was empty.

Yesterday, I took a walk to Main Street which is usually a thriving place on weekends. Stores were closed. The sidewalks were almost empty.
As of this morning (3/16), the stock market is down another 10%. My portfolio is down $274,457 from its all-time high, less than one month ago:

My losses could have been much higher, but most of my portfolio is now in real estate. The fluctuations don’t bother me, but I’m mentioning them here because people keep asking. I’m a long-term investor and think in decades.
With all of that stated, I admit that the reaction to the virus took me by surprise. I underestimated the impact.
Backup Plans For Backup Plans
I’m a fairly conservative person. I’ve never run out of gas. I’ve never been fired from a job. Aside from birth, I’ve never spent a night in a hospital. I play it safe. I’m the type of person who has backup plans for backup plans.
I suspect that financial independence means something different to me than it does to most. The greatest part of financial independence to me is that it’s life’s best insurance plan. Money is a buffer that provides freedom. That freedom allows you to avoid bad places and deflect trouble.
The kids are now home from school for at least the next two weeks. After I hit the Publish button on this post, I’ll hold a family meeting where we’ll chart out our days until life returns to normal.
For now, my life will be very different. No more working on the basement finish or building a deck. No more spring break travel plans. Less personal time. More time breaking up sibling fights.
It’s an incredible luxury to be able to pivot my life to deal with a new and unexpected circumstance. I’m able to do it because of financial independence. FIRE is the ultimate backup plan.
Misplaced Hate
I can see why some people resent the FIRE movement. Reading glamourous stories of millennials who travel the world makes some jealous or angry. However, farting around in Southeast Asia or sitting on a beach or living next to the ocean in a camper van is only half the financial independence story. And, it’s the weak half.
It’s wonderful when FIRE allows you to live a life fit for Instagram. But it’s real value is that it allows you to overcome hard times.
Please take care of yourself and your fellow humans.

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*Only if your life is pretty bad to begin with.
Even with the massive losses I’m still at about twice my FI number, It’s a great position to be in and I’m hoping to spend some money at small businesses in need in the coming months.
Wow, 2x your FIRE number is pretty spectacular.
And supporting small businesses is a wonderful, thoughtful idea.
you’re absolutely right, carl. even though we’re both “working” it’s nice to know that if the employers close down for 6 months everything would be fine and the bills would be paid. now we’re just wondering if the beach will be open when we try to go there in may. stay safe out there.
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The beach better be open! Damnit!!!
You stay safe too!
It’s going to get worse before it improves. Hopefully, the social distancing will flatten out the curve. But I think many families will be in trouble financially over the next few weeks. This is why you need an emergency fund.
Nice move moving money into real estate. That’s a lot more dependable when the economy tank. Hopefully, it’ll be a short recession.
Stay safe!
Agreed. It will all (virus, markets, economy) get worse, but if I had to guess, I think the ‘states will do ok. All of the crappy parts about America (lack of public transportation, living in silos, etc.) are a strength here.
So, it feels like I am swimming against the tide. I have been building up cash in one of my retirement accounts for the past few years – market was too hot and expensive-> for me. But, I added to my stock balance late last week (bought some stock) when it was on sale (my term) with that cash. I really haven’t heard if anyone else is buying/adding to their mutual funds or stocks. Maybe some are and just are not talking about it?
I am checking on my folks (over 60’s) and making sure that they are being safe and if they need any supplies. I realize that I am very, very fortunate as I have a good job that is not closed down and my child is not school aged,
Hopefully, people aren’t reacting to the market and moving their money into “safe” vehicles. I remember well the lessons from 2008-09. I miss your more frequent posts, but realize that you are busy the your remodeling. I am also looking forward to more youtube videos on the remodeling, hopefully you will have more time to post/make youtube videos. Thanks.
Deb-
Unfortunately, we’re cash poor, but last week, I put every spare cent we had laying around into the markets. As new money comes in, we’re immediately buying VTSAX/VTI and will continue to do so as long as the market stays down.
Others are doing the same. This is a text I received just this morning: “Here I am sitting on a couch in a AirBNB in Moab buying more of the market on my phone. What a wonderful world we live in.”
Thank you for the kind comments! I have a ton of unpublished content! Unfortunately, it’s all in my head. I’ll get behind the keyboard and get it out, but it may be a while…
Hey Carl,
We are also thanking the planning of our past as money is at least one thing we don’t have to worry about. We are doing a lot of just staying home with the kids it’s been good so far. They do a little work, we do a little dancing. there is reading.
But you said you are cash poor? and that you are putting all extra funds into buying extra? Wow. Mindy still working right. We are not too worried about a lay off but we have a lot of cash on hand because we where in the process of buying our first home… hopefully multi unit so we can house hack. But now we are feeling like we really want to have more cash on hand in case things get a whole lot worse and income dries up from work. We haven’t touched our investments still contributing what we usually do every month.
I know why you would buy more in this moment , its on sale. But I guess the behinds the door of that is that you aren’t pulling the 4% right now even though you are retired. So you aren’t worried about income drying up…. and paying mortgage and all that. Just trying to understand the thought process
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Melissa!
Good to hear from you!
Mindy does still work which is very reassuring right now. That cash flow prevents us from having to sell anything.
Good luck with the home purchase. There may be some good deals soon!
Very nice sentiment Carl! I was just sitting here trying to think of some positives while everything seems so dire. Having “enough” in regular times sure seems like abundance right about now. Sending virtual hugs to all you Jensens.
Marla!! Great to hear from you!
Everything does seem dire, but it could usually be worse! A 46-year-old (my age!) acquaintance of mine who was also a father died of cancer last week. In comparison, sitting around the house watching crappy reruns seems like paradise. As my old friend Ron likes to say, “Any day above ground is a good day.”
Take care of yourself and if you see the virus, don’t touch it! Don’t point at it either!
https://www.youtube.com/watch?v=P-NgeXl-PPA
Mr. 1500 Days recently posted…Backup Plans For Backup Plans
The losses are either coming at a very good time for us (better now than right after we leave our jobs, right?) or at a very bad time (depending on what the recovery looks like, maybe our timeline will change pretty dramatically). Not a lot we can do now except keep the course, keep investing, and hope to keep our jobs. 😉
The financial side is the least of our worries right now though, honestly. Just happy to be healthy, able to work from home, and despite everything, feeling pretty secure in our house.
“The financial side is the least of our worries right now though, honestly. Just happy to be healthy, able to work from home, and despite everything, feeling pretty secure in our house.”
Yep, it’s a shame that some of the leadership of the country focused (or were guided by) the stock market instead of the health aspect.
Numbers: I’d bet that if you still have enough, a recession is a great time to retire. Maybe I’m nuts, but I’d feel a lot better retiring in a recession than during a raging bull market.
I went through the 2008-2009 recession without a penny to spare for investing and I’ve always remembered the opportunity cost. If I had been a 20-something with just myself to look out for at that time, I could have had plenty of cash to pour into the market when it was lowest. I had very little fear then, only curiosity, but I had nothing to lose.
Now I know our totals are dropping fast but since we don’t live on that money, I can still afford to ignore it. I’ve been hoarding cash for a while, we have enough on hand for me to stick with my weekly purchases and feel like at least I’m finally getting to bring down my average cost per share.
I hate the pain that people will be feeling during this time because I can think of so many points in my life where a hit like this would have been the final straw. It’s going to be the final straw for so many before we’re through to the other side. I know many small businesses have shuttered already, more will follow, so I hope that if the government manages to do a single good thing, it’ll be to ease the pain of the most vulnerable among us.
Yeah, there is the danger of the virus itself, but the secondary effects are going to be much worse for many. The economy is going to hurt for a while.
If any good can come out of this, perhaps it’s a wakeup call to get your financial life in order. And to practice basic hygiene.
Yeah I can’t even think about the virus itself because if I get hit, I’m immunocompromised, it’s gonna be super bad. So I’m just doing everything we can to self isolate and worry about the things I can handle thinking about. Also working and having a social five year old in a shutdown ?
Well said Carl. We’re doing something of a “pivot” here in the Tako household too. With schools canceled for *at least( the next six weeks here, we’re now essentially homeschooling….
Something I never thought I’d have the patience to be good at, but now I’m forced to try!
Wish me luck!
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Homeschooling here too! It IS NOT easy!
When you look at the amount you lost, it’s a huge number, but overall in net worth, not so much. Good thing we keep our pantry stocked (not as much with the TP, since it was getting close to our restocking time, but we missed that window). I can make cloths for TP and use cloth diapers- but what I need is formula for the baby and food for us. All we have in the garden is leeks, kale, and green onions. Maybe a couple of strawberries if the birds don’t eat those- so to have a variety of food, we definitely need food. Everything else can be done without or a substitute from the house can be made.
We’re currently using our emergency savings and reduced living costs because my husband is home without pay, and might be laid off (hotel worker in Waikiki). We shall see.
Glad to hear you’re hunkering down. There are a lot of on-line educational resources available if you’re looking to occupy the girls and also many different types of sites (education, entertainment, yoga, exercise, etc) are removing paywalls for 30 days or more to help people stay occupied.
Personally, I’m relieved that the work I’ve put in for the past several years to eliminate all debt, jack up my savings rate & investments, downsize my fixed expenses, and get to a 6mo cash emergency fund has given me a decent amount of bandwidth to deal with these events… AND given me the ability to help some other folks out…. even if I’m not FI yet.
It felt really good to be able to buy a load of groceries & supplies for a minimum wage friend (who is now out of work until our 3 wk Shelter in Place order is lifted); know that I can get takeout from a local restaurant to help support them; and donate to my college’s fund for students needing assistance w/remote learning, etc. (and that was just in the last two days) instead of it being me who needed help. It reduces my anxiety to know that I’m not currently a burden on anyone and that I can help alleviate some of the burden for others… even if it’s just a funny text or a call to someone who’s anxious.
After all of that plus living through the 2008 crash (including getting laid off twice & having to sell my house for a loss) this market drop isn’t freaking me out. I’m more concerned for the health of people and financially for low income folks, small businesses, etc.
Stay safe my friends!
(I was thinking of going back out to CO in June this year, but now it’s all wait & see.)
Be safe my friends!
I am not near your net worth, but I just had a similar thought yesterday. I turned to my wife and told her “we are so freaking lucky. I am so glad I got us into this idea of FIRE.” Thanks to this community, of people I really I have never met personally, two years ago I got my family on a plan. From being in the negative, now we have no credit card debt, we have a rental property, a nice net worth and a huge cushion of money. This emergency fund has allowed us to sleep thinking that we have money to cover our expenses for a decent amount of time.
I am a teacher. We have four kids, and my mother is also living with me.
If it wasn’t because of the FIRE idea from two years ago, my situation would be completely different.
I see some folks that I read on a regular basis and I thank you for all the content you all put out.
This movement has truly changed my life. Stay safe!
Nice job Small Budget Retirement. This is a great story, and I’m sure you sleep a lot better at night knowing you took steps to weather this type of storm.
I am like you, several safety nets in place!
At the same time I feel that the stock market is having an early spring sale so I am snooping up some discounts 🙂
It is definitely nice to be in a position of financial comfort in times like these and not reliant on keep a day job just to pay the bills. That’s impressive you are only down 10% (or were as of the time of the original post). Real estate is great for times like these, but I am pretty sure if you marked to market those assets as well you’d find they’ve gone down as well. Luckily you aren’t selling and neither am I. This is a time I’m very thankful to be extremely conservative and not a 100% stock guy, it will be interesting to see how this works out for the FIRE community who’ve bean on that bandwagon. I hope they are still right after this all shakes out!
It’s times like these I am glad I am pursuing FIRE and maximized my contributions as much as possible. I just found out today about a 20% reduction in hours (my industry tends to pay hourly). This is where my FIRE habits save me. Since I save and invest half my income, my expenses are still fully funded even if I choose not to reduce them (but I probably will a bit). If my company goes out of business (and things aren’t looking great at the moment) I would easily be able to live on unemployment.
The bad part: If I did have to withdraw funds to live on, I would be withdrawing at a huge loss. I’m relatively confident that I can avoid that, and find enough money to meet expenses at least, even without a full time job. Since the market and the economy go hand in hand, the times when a person might need to draw from funds is the time when funds are least available.
All this is said with two caveats: 1) I will be fine. I am a survivor and I built my investments and savings for a reason. 2) The alternative is much, much worse. While it would suck to withdraw at a loss if it comes to that, I still have something TO withdraw. Spending everything I make would mean I could be in big trouble. Because of FIRE, it’s an annoyance. FIRE was still the right path.
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Oh man, I’m sorry to hear about your troubles. Perhaps all of this is overblown and the worst-case scenario won’t come true. It’s nice to know that if it does, you won’t be out on the street.
Take care.
Massive losses in the market also come with massive opportunity. For new investors this can be a good way to start as some stocks are more affordable now, and Mr. Market has shown time and again that it will eventually go up.
Take care and God bless.
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“Massive losses in the market also come with massive opportunity.”
Totally. Why run for the exits when the store is on sale? We don’t have much cash lying around, but deployed about 10k last week.
If everyone had been saving instead of taking on more debt, this would all just be an inconvenience financially.
Stay safe, everyone.
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