Note: I wrote this post last week before war broke out. It’s silly and narcissistic to worry about money when others are fleeing for their lives and children are dying (<– WARNING! This links to a story about a child killed in the attack and is graphic, tragic, and all-around horrible.).
#perspective
My normal modus operandi is to not pay attention to news that isn’t local. Cable news channels are toxic places, broadcasting sensational stories designed to scare the shit out of us. Even if they produced quality information, there is little that you can do, so most of the time it’s best to keep your distance.
I’ve had a more difficult time with the war. Perhaps it’s because I know a lot of Ukrainians. Or maybe it’s the distant threat of nuclear warfare (this terrified me as a kid!).
Whatever it is, hopefully, the war ends soon and perhaps some good will result. Wars provide opportunities for resets. Borders are redrawn, alliances strengthen, and the world operates a little bit differently. Perhaps this will lead to a positive reset in the world.
Here are some organizations that Mindy and I have donated to:
Six Thoughts On Losing $1,000,000
Our portfolio peaked in early November. Around 11/2, our net worth briefly topped $5,200,000. Last week, Mindy and I were down $1,000,000:
The past version of me would have freaked out. I lost my mind during the Great Recession, stopping most 401(k) contributions. Big mistake.
Now, I couldn’t care less. I wrote this post to help those in the “freaking out” category.
Stock prices don’t always reflect the condition of the company or economy.
Over the long-term, a stock price will eventually reflect the state of the underlying business. Benjamin Graham famously explained it like this:
In the short run, the market is a voting machine but in the long run, it is a weighing machine.
One need look no further than the past week to see how the markets were shaken up by geopolitical strife. Over the long-term, the event will pass. Mr. Market will pull his pants up and the world will carry on. That or we all nuke each other, cockroaches will rule, and none of this stuff matters.
Thought #1: Be in it for the long-term. If you’re into individual stocks, you should pay more attention to how the company is doing than the stock price. If you invest in index funds, the overall economy is what matters.
Downturns are healthy.
Just like humans, Mr. Market is sometimes euphoric and sometimes sad. And this is healthy. If someone is always happy, there is either something wrong with them or they’re taking illegal drugs. See Inside Out which explains this much better than I ever could. Markets go up and down, but over the long-term, mostly up.
Thought #2: Don’t freak out the next time Mr. Market loses his mind. This too shall pass.
Putting it in perspective makes it easier.
If you’ve been in the markets, you’ve had a very, very good decade. It’s better to be thankful for the market’s incredible run than to get worked up over a hiccup.
In our case, our net worth reached $4,200,000 last just 5 months ago. So, it’s silly to be upset that it’s now back at that number.
Thought #3: Don’t get anchored to a recent data point. Again, play the long game.
Sequence of returns risk doesn’t need to be scary.
If you figured out a way to retire in your 30s or 40s, you probably did one of two things:
- Worked in a high-paying career. You got paid a lot because you were in demand and worked hard to educate yourself. If you retired a couple of months ago and are worried, it probably won’t be hard for you to go back to work or find a new job.
- Hustled your ass off and figured some shit out. Apply the same skills that got you to financial independence to figure out how to not go broke.
Thought #4: Stop being scared. Stop underestimating yourself. You’ve got this.
Look to history for comfort.
The world has been through a lot of shit over the past 100 years. Recessions, depressions, world war. And we’ve survived and thrived.
Thought #5: Your money (and your life) will be OK.
Your life is still pretty great.
There are some bad things going on in the world right now. However, if you’re reading this, you’re not hiding in your basement trying to survive a long-distance artillery attack or on the run to a country that will accept you as a refugee. Your child hasn’t died. Life is good.
Thought #6: If you have the means, consider giving. Here is my list one more time.
If y’all know other good charities, leave them in the comments or shoot me an email and I’ll add them to this list.
Famous Last Words
Sophie Scholl was an anti-Nazi political activist who was convicted for treason in 1943. Here are her last words before she was executed by beheading for distributing anti-war leaflets:
How can we expect righteousness to prevail when there is hardly anyone willing to give himself up individually to a righteous cause…. It is such a splendid sunny day, and I have to go. But how many have to die on the battlefield in these days, how many young, promising lives. What does my death matter if by our acts thousands are warned and alerted. Among the student body there will certainly be a revolt.
And the last words of Ukrainians defending Snake Island (click the photo or here to see the video):
Be good to yourself and each other.
Join the 10s who have signed up already!
Subscribing will improve your life in incredible ways*.
*Only if your life is pretty bad to begin with.
Our situation is much like yours. I like it when I cross over that next million mile marker and don’t like it much when I pass it again going in reverse. But the fact is a single million would be enough to support our lifestyle for the rest of my life, thanks to Social Security. So the extra millions we have are unnecessary in that we won’t ever use them. Realizing that we have enough keeps me calm.
The Red Cross is another good one.
I added the link. Thanks for mentioning it!
Samaritan’s Purse is far more efficient than the Red Cross, far less administrative costs…..
The International Fund for Animal Welfare (IFAW) has a sister shelter in Gorlovka where volunteers have stayed behind while everyone else evacuated to care for the animals, and they’re running out of dog food. Here is the link to their Ukraine donation page: http://www.ifaw.org/action/ukraine-emergency-aid-update
Just added the link. Thank you for mentioning it!
I will say, per reports, that those Snake Island Ukrainians are apparently alive, albeit captured by the Russians (and damn heroes who gave a slogan to the whole world)
I saw this! I hope they survive.
Slava Ukraini!
I lost less than $100,000. I’m jealous of you! 🙂
Yikes, it hurts! I don’t know how much I lost , around 120k for sure. But as you said, I am still contributing (actually investing more).
One question, do you still buy or just holding. I know Mindy is working so apart from her 401k, are you investing when it’s 20% down?
Oh, we’re totally buying. We have a couple of syndications that are paying out this month and we’ll instantly put the proceeds ($125,000) into VTSAX.
Carl, you always impress me with your interesting headlines! I’m glad you’re not beating yourself over this as you’ve obviously worked very hard and done very well, and don’t need to worry about downturns as much. Very noble of you to be mindful of world events and do what you can to support others in need.
Thanks Gary!
The war is horrible. It’s crazy that humans can do beautiful and amazing things like sending humans to the moon. But, we’re also capable of horrible nightmares.
Here are additional charities that I have donated to on behalf of Ukraine this week: World Central Kitchen and United Help Ukraine
V0latility is never very fun, but it’s a very real function of a normal market. Price will vary, and you seem very keyed into this. Losing $1 million might seem awful, but it’s just a number. Your life hasn’t change, (and probably won’t change) despite that drop in the number.
Market volatility is nothing compared the importance of keeping our families and friends safe and alive.
Mr. Tako recently posted…What Have I Been Up To? (Winter 2022 Edition)
Oh man, sorry to hear. And this is losing $1,000,000 BEFORE the war began and stocks have fallen even further?
I don’t think I could handle that type of loss. I’m glad you guys are okay with losing so much.
Are you doing anything now to change your portfolio? Maybe buying more tech stocks?
Thanks for sharing.
Yep, it was down $1,200,000 at one point, but I also don’t care. We’re not currently withdrawing and everything will be OK long term.
As money comes in, we’re deploying it as fast as posisble. Nothing sexy, just plain old VTSAX.
Thank you for acknowledging the unprovoked Russian war on Ukraine. Many bloggers have not. Slava Ukraini! Heroyam slava! Glory to Ukraine! Glory to the heroes!
You’re welcome!
Slava Ukraini!
Carl,
Thanks for writing this. I’m sure plenty of folks need to read and hear it. I think you’ve struck the right balance between empathizing with the financial pain many of us are feeling while recognizing how it pales to the emotional, physical — familial — rending that so many are experiencing as I write this.
I also appreciate the worthy donation list and hope it encourages those of us who can afford to help in such a way, to do so. And one day, I can only hope, we don’t find the need. To your point – perhaps we can find a way to come back out of this better than we started; at least for those of still hurtling around on this rock.
We’re behind on our monthly budget but I’m hoping we’ll offer up some useful info to help with those in need as well. Soon.
Lastly, I hope you, Mindy, and the kids are well.
I’m glad to see you’re writing about this. We’ve donated to World Central Kitchen and HIAS, and I’m hoping we’ll be opening our borders to refugees as well. If we do, I’m sure our regional Jewish Community Centers will be instrumental in assisting any folks relocating.
It saddens me how many equally terrible conflicts have gone ignored in the past but I can only hope we care more about them going forward.
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You have succinctly verbalised my own feelings when war broke out. Watching the news and looking at photos of the devastation really brought home how very fragile our lives are and how everything we own could disappear in a heart beat. It made my concern with my finances appear puerile.
Thanks for the links for organisations to support in order to help the Ukrainians.
It’s hard to believe wars like this still happen. Humans should be beyond this stuff by now. Sad.