Staying Unemployed: Why I’m Giving Up On Going Back To Work

At the beginning of 2020, I was excited to start applying for jobs after my six-month paternity leave was over in June. After eight years of unemployment, I had done everything I wanted to do. Now with two kids, rising living expenses, and the possibility of a downturn, finding work would be the responsible thing to do.

My focus was on being a full-time dad to my daughter during her first six months after birth. Constant sleep deprivation is no fun. After six months, I planned to look for work in the tech, media, or finance space in the SF Bay Area.

Although I had anticipated a downturn, I thought I would have more time to prepare. Further, I did not foresee us purposefully shutting down our economy to combat an invisible common enemy.

The coronavirus has already negatively impacted our family so much. I was looking forward to working in an office for 12 hours a day and participating in happy hours with colleagues again. Alas, my dreams have been put on indefinite hold.

Staying Unemployed For Longer

After September 11, 2001 happened, all I wanted to do was quit the finance business and relocate to Hawaii. I dreamt of working on my grandfather's small fruit farm, picking mangoes and papayas to eat and sell, and then going down to the beach with my surfboard during the afternoons.

But fate intervened and a headhunter called my VP, who handed me the phone. One thing led to another and I ended up at a new firm with a raise and a promotion. At age 24, it was hard to pass up. Hawaii would have to wait.

The 2008-2009 crisis helped clarify my desire to leave finance, but just as I was about to hang it up in 2010, my company decided to give me a pay raise to stay. Consequently, I suffered through the one more year syndrome.

It felt like every time I wanted to leave, something always pulled me back in.

Now in 2020, as I try to leave the unemployed life behind to better take care of my family, the Financial Gods have decided to shut me out from gainful employment. It's like some sick joke!

If you're also considering getting back into the labor market after an extended period of unemployment, maybe now is not the right time. Here is what the Financial Gods are telling me.

Advice From The Financial Gods

* Don't crowd out the job market. With unemployment skyrocketing, trying to get a job is crowding out people who may be in desperate need of a job. Even though you have a family to care for, don't be so selfish. So do other people. Instead, continue donating your time and money helping people.

Giving up on going back to work

* The return on work effort has drastically declined. During good times, the work you put in usually meant a positive return. In a bear market, all you'll be doing is working and trying to keep your company afloat. Worse, you might simply be costing the company money as the overall economy overwhelms the company's business. There is tremendous social and political pressure for companies to not let go of employees during a lockdown. However, you know that CEOs would instantly lay off millions more if there was no backlash.

* Treat your kids equally. With a lower return on effort at work, you should re-channel your effort onto your kids. The first five years of their lives are crucial. Why were you willing to dedicate three years to take full-time care of your son and only six months taking care of your daughter full-time? Treat them equally, especially now that preschool is closed indefinitely.

* You're going to get angry working mainly for money. Since you've already lost so much on your investments, you're only going to get pissed off that you're spending so much of your time at work trying to recoup your losses. Once you then start thinking about all the time away from your kids, is when you'll start getting depressed.

* You're going to neglect Financial Samurai. The more time you spend at work, the less time you will have to spend on Financial Samurai. Treat the bear market as a quarantine period where you can write more content that can help more people during troubled times. When the upturn inevitably comes, people will appreciate you having been there for them and likely help you grow Financial Samurai even further. The time to build your newsletter subscription is now.

* You're not broke, yet. Sure, your investments might be down in the dumps, but they are still generating enough passive income for your family to survive. Worse comes to worst, you can always sell down some principal to pay for life. You haven't touched any principal since you left work in 2012, so maybe it's about time. Stop being so frugal. The point of saving so much all those years is exactly for times like these.

* Staying unemployed is a relative win. You going from having 100% freedom to working at a job you don't 100% love means that you are losing. In a bear market, if you keep on living your normal life, then you haven't let the bear market negatively affect you. Only your mind is getting messed up by always following the news. Therefore, in a way, you get a relative win by doing nothing.

* You have to back up your talk. You said that you won't be rioting in the streets until your net worth declines by 30% based on an estimated 70% decline in the S&P 500. Given the S&P 500 still has a long way to go before it hits 1,015, waving the white flag now is premature. You've consistently done what you said you would do. Don't break your consistency now.

* Good things are created during downtimes. By going back to work, you are giving up your creativity for something that has already been created. Use this opportunity to come up with a new product or a new process to ensure life is even better in the future. It's hard to know what will come out of your mind, but you will surprise yourself if you keep at it. Keep on working on your X Factor.

* You increase your chances of spreading sickness. Unless you find a day job that allows you to work from home 100% of the time, going back to work will increase your chances of getting a cold, a flu, COVID-19, or any number of things. Given health is way more valuable than wealth, so long as the coronavirus is around without a vaccine, you are putting your family at risk. Let your children's immune systems grow stronger.

* Change your financial independence number. Based on what you already have, you are a fool for thinking that accumulating an additional $1,500,000 will make you happier. You are already capable of paying for everything your family wants or needs with your existing capital. Always shooting for more and more, however, will only make you miserable. Desire is the cause of suffering. Get out of the trap and finally learn to be completely satisfied with what you have.

Stay Unemployed Until The Good Times Come Back

Just as the good times don't last forever, neither do the bad times. It is precisely during bad times that we should try to enjoy life more. Letting a bear market ruin our lives is infuriating. Let's not allow it!

It is ironic that it has taken a bear market to keep me from finally giving up on going back to work. During a bull market, it was the pull of greater riches that became harder and harder to resist each year I was unemployed.

Now that everything is in tatters, I no longer have the desire to trade my time for money any longer at a traditional full-time job. Instead of pursuing more money, I will simply work with what I've got and appreciate more of the things I already have.

If you have recently lost your job, unemployment benefits have increased due to the CARES Act. You will get an extra $600 per week on top of your normal unemployment benefit for the next 4 months. Total weeks of unemployment benefits is up to 39 weeks (26 weeks from state, 13 additional weeks from this new bill).

File for unemployment ASAP!

A Silver Lining Of Staying Unemployed

As I come to the end of this post, I realize something funny. Maybe I'm not an early retirement failure after all. Given the coronavirus is shutting me out of the workforce, this means I should be able to retain my 8-year early retirement membership card.

The world has a strange way of keeping you in place, no matter how much you want to change. Why not make some lemonade instead.

If you don't hear from me for several days, it'll probably be because I was apprehended by the Internet Retirement Police. If I am, after a couple of days of verbal abuse, I will relent and admit that I'm just an unemployed father trying to make a better life for my two young children. You know, like exactly what I've been saying in this entire post.

Whatever happens, the journey is what we all live for. Let's make the most of whatever crappy circumstance we find ourselves in!

Important side note: For those of you looking to get laid off to do something new, try and get laid off in the beginning rounds, not the last rounds. The people at my firm who got laid off during the 6th and 7th round got 80% – 95% less severance than the people who got laid off during the first couple of rounds. Employers desperately want to lay people off but are afraid of the backlash. Therefore, you have more negotiating power right now.

Update 2021: I don't ever plan to go back to work, even if I can work from home. My kids are growing up quick and I'll just find a way to make more money online. Once there is her immunity, it's back to early retirement life for me!

Related: States With The Highest And Lowest Unemployment Benefits

About The Author

56 thoughts on “Staying Unemployed: Why I’m Giving Up On Going Back To Work”

  1. Anton Aus Tirol

    Some healthy contrarianism to stir up the pot.

    1. Children are overrated.

    By age 11 they will turn into independently thinking humans and will not care about fulfilling your dreams. If they are smart – by age 17 they will do quite the opposite to fulfilling your dreams. If they are not smart – they are useless anyway.
    It makes sense to balance living for kids and living for yourself.
    No matter how close you are with your children – you will die alone.
    Quantity is more important than quality.

    Having more offsprings with different women increases your chances to produce a highly successful outlier. Just look at King Abdulaziz, the first monarch of Saudi Arabia – he had 45 recorded sons and about 30 daughters from 22 wives and concubines. By 2001 he had 2,500–3,500 direct descendants. That’s a success in preserving and spreading your genes!

    2. Don’t quit the workforce. First, it is hard to get back. Second, fighting for a piece of bread with other competitive humans sharpens your brain.
    Retirement is a sure path to Alzheimer’s.
    Not working is a dream of lower social classes.
    Look at the intellectual elite: Leonardo. Or, at least, Einstein. Both never stopped working.

    3. Want to have an interesting and fulfilling life? Learn a foreign language and leave the US.
    Or leave the US and learn a foreign language.
    Go to Europe.
    At least you will learn how to tell a real croissant from a fake one.
    A real croissant – freshly made with French butter – costs just 1 Euro.

    And you will have a chance to taste real butter, real wine, and real cheese.
    Have you ever thought about why French are not immigrating to the US?

    Because the US culture – is still a country of cultural misfits obsessed with material possessions, and unfamiliar with simple hedonism and joie de vivre.

    BTW, Europeans are discussing that employers have to compensate WFH workers for the use of home offices, electricity, internet, furniture, rent etc..

  2. Money Ronin

    “Change your financial independence number. Based on what you already have, you are a fool for thinking that accumulating an additional $1,500,000 will make you happier. You are already capable of paying for everything your family wants or needs with your existing capital. Always shooting for more and more, however, will only make you miserable. Desire is the cause of suffering. Get out of the trap and finally learn to be completely satisfied with what you have.”

    I’ve expressed in past comments how baffled I was by your decision to return to employment. Obviously, you should do whatever makes you happy, but I do believe you are back to taking the path that will maximize happiness. Your kids will never remember or appreciate the additional risk-free return on $1.5M. They will appreciate the time that you spent with them although it may not be appreciated until later. My 10 and 12 year old definitely appreciate having me around.

    1. Last Christmas, my grown daughter, with two young kids, said to us: I don’t remember anything as a child before my younger sister was born.

      Which means my 2-1/2 year old granddaughter won’t remember anything we’ve done together! However, it also means that their minds are like sponges soaking up colors, numbers, letters, plus everything you’re saying and doing.

      Enjoy the time together, they grow up FAST!

  3. Hi, I’m relatively new to your site, although I’ve heard it several times all these years. I’ve read several of your articles and really liked them. I think you have a big heart and have enough humility to be blatantly honest about what have worked and have not in your journey. I haven’t got time to tell more than this, but I’m here to cheer you on. Thank you for the lessons you thought us through the contents of this site. Please keep up the spirit and good work. May God bless and protect you and your family in this trying time

  4. Do you worry about finding work after 40? Or do you have enough connections in the Bay Area that this isn’t a problem.

    Just in my immediate family job situation got stressed fast.

    Brother is pilot. His hours cut. Sister in law is doctor /anesthesiologist- her hours cut by 2/3 as all elective surgeries dropped. (Seems stupid that this part of the economy not going now over .20 cents masks.) Husband down to 4 days and 15 percent pay cut. Brother in law is senior Vice President at one of the biggest most successful corporations out there. His pay has been cut and of course bonuses and stocks worth a lot less. This after a financial advisor also lost hundreds of thousands in his portfolio. Mom is semi retired. She worked events and loved her job. That’s on a never ending hold. Brother works in Middle East and his job cut back. I am still good for now. Another brother teaches public school, so I think he is okay. But I also know he has daughters at university counting on investment portfolios to pay their tuition. I haven’t asked how it is going.
    Just in our family I’d estimate a million dollars in annual income loss. Don’t know/haven’t got personal enough to ask how much everyone’s portfolio is down.

    What does it mean for the economy when just one family of people with diverse careers, all educated, success and experience behind them, gets hit that hard in two weeks? Ask yourself how quickly things are going to recover when just one family of the millions out there also losing out now has to cut a million dollars of spending, saving, generating jobs for those that work for them.
    I don’t think this will be v, but markets aren’t exactly rational. To see up days in what’s become a food economy seems totally weird to me, so I am not giving advice. I’m sharinf our personal situation to put it in perspective. Of course, we have seen service economy workers lose their jobs, but the people that could possibly pull this economy out and support those who lost jobs by getting out there and spending, are also being burned.

    1. Thanks for sharing your examples. I think it’s going to be very hard for me to get a job now, so I probably shouldn’t waste my time trying at this moment. I do mention lots of other reasons.

      Is 40 a special cut off age you’ve noticed?

      What is your situation?

  5. Do you still think this will be a V recovery as you mentioned a few posts ago, or now more of an L?

    I would lean towards an L with deaths rising significantly in the next two weeks and people in many areas still not staying at home. I see end of May as the earliest we open back up, at which point it will take another few months to ramp back up.

    1. Yes, or maybe more like a Nike swoosh. The recovery won’t be a straight line. And we could test the bottom or go lower. However, I do believe we will recover starting in 3Q sometime.

  6. Ha, I’m on the opposite side of the employment spectrum!

    When my wife stopped working to raise my son and daughter in 2001, I had to live minimally, then after feeling that the year 2020 was the time to semi-retire, the coronavirus hit! Now I have to hold off on semi-retirement until the economy get’s running again. Total flip side of the coin to your situation!

    Great for you though, at least you have the option to delay getting back into the workforce, which helps those that lost their job! Hats off to you!

  7. Retired MIL here, wife works in medical office (small family practice, not seeing many patients).

    I was laid off from my SR PM job mid FEB, given six weeks of pay and sent on my way. This was a laid back work from home gig, earning just over six figures with good bennies etc.

    My position was cut as part of a draw-down before all of this started. We started saving all income from that gig in a separate account and the savings and RET income/wives income mean I don’t have to go back to work (didn’t have to take the gig in the first place but did it to “kill some time”).

    I went from “don’t really want to work anymore” to “holy shit, maybe I SHOULD find another job” just for benefits/extra income/more padding on the networth” and have moved into agreeing with you, IF I were to take a position right now, it would mostly go into savings/401ks/extra travel/dining out etc. VS someone who needs a paid gig to pay the mortgage/buy groceries.

    So, like you, I’m going to keep chilling, doing some side gigs for people I know (handyman type stuff, mostly outdoors/not interacting with any other people in “meat space”) just to keep moving and earn a little beer money.

    I hope others who are in such a fortunate position (don’t have to take a job to pay the bills) do the same thing, put their ego aside and “stay out of the way” possibly improving the economic rebound?

    Cheers all.

  8. Marie Jacobs

    Thanks for the great reminder of all the reasons why it’s not a good idea to count on going back to a high paying office job if FIRE doesn’t work out or at the end of a planned sabbatical. Sometimes things change and/or you change in ways you can’t possibly predict.

  9. This post helps me to put everything in a new perspective. I am actually fortunate to have a job where I can work from home now and getting full pay – not very high amount but with great medical insurance. However since WFH, I get to hang out with my daughter more, start to cook and realize I can be pretty decent at it, and don’t have to spend two hour a day in traffic and be anxious about what to wear in the morning. I actually have been pondering if I should quit my job after this all ends and be a stay at home Mom, meanwhile trying my hand at small Internet gigs and stuff. Then again, I am not close to being comfortably financially independent and I don’t like the thought of relying upon my husband’s income. There are always multiple conflicting aspects to Every major career or life decision one has to make. Your post is a reminder that I really need to think this over and come to the best decision given all important factors at this point of my life.

  10. spaceassassin

    I think your post touches on a key point, that like you, most American’s tendency, as a whole, to continuously seek more might actually slow down…I think for the first time, maybe forever in our generations, people are stopping to actually think, ponder and consider alternative approaches to all facets of their lives. 08-09 Mortgage crisis, people are just as overextended again? 9/11? More people fly today than ever before. Dot-com crash? Just look at the stocks market prior to February. People are forgetful, but this one is hurting a lot more. So many of us were immune or were on the sidelines of previous events. Either barely in the market, not in the plane or not overextended, so we didn’t necessarily feel them.

    We are all feeling this one. Maybe not everyone financially, but certainly emotionally and psychologically. People are dying, health supplies are limited, and we have no idea when all these restrictions will end, and when supply chains will be able to meet demands, and regardless of how much cash I’m sitting on, that sucks and is a serious, global concern that bothers the shit out of me.

    Education? Work? Entertainment? Food/Eating? Travel? Communication? Most people go through everyday using and abusing these systems set up by others without ever questioning why or why not, trade offs, what-ifs, etc. That has changed dramatically, and I think it is a great thing. I have had deeper conversations with people the last three weeks than ever before about their own lives, feelings, ideas of the future, wants, desires, etc. And I honestly feel these times of self reflection and realization are going to pay dividends in the future, just as in your case.

    Not sure where we go from here, where the dust settles, and how things change, but I think a lot is going to change.

    I’m curious how fast people run back out to sit in restaurants, stand in line for Space Mountain, pack into a Arena for concert or sporting event, pack the casino card tables, pack in like sardines on cruise ships? I know most people have very short-term memories, but this one feels different and sounds different in my mind. And I think its a great thing.

    Your sharing of your own self reflection is sincerely appreciated and the good news is that a lot of others, who likely weren’t before, are doing the same.

    1. I think given all the examples you mention of people not changing their behavior after past crises, you shouldn’t expect too much. People have very short memories, and as much as I am enjoying seeing more pedestrians than ever before on our streets (and few cars), I doubt it will last.

      The attacks against FIRE now are just pure sour grapes, because FIRE people are in a much better position to wait this out and survive than everyone else. Now people have time to brood on their poor financial choices as they face existential consequences – maybe for the first time ever.

      Humans rarely wear sackcloth and ashes for long, and maybe that’s how we get through the horrors in life.

      1. I think the culture change will be more likely the longer this goes on. If this ends in a few weeks, most will go back to the usual. If this goes on for 3-6 months, a cultural shift is much more likely.

        I wonder what happens when a huge amount of Americans start getting used to living off an enhanced unemployment check. Will people have the will to go back to work before the 9 months of unemployment runs out?

    2. Thanks for your thoughts. I’m assuming that people will slowly start walking to the things they used to do, and then jog, and then run after about six months of things being opened up.

      I know it is very trying times right now, but I feel very certain, and perhaps foolishly so, that by July or August, things are going to feel tremendously better. We will totally stop taking for granted our freedom as much. Coming from a bad place makes going to a regular place feel wonderful.

      1. Paper Tiger

        I think another possible outcome of “corona times” is that many people are going to realize how ill-prepared they were (financially speaking) for a crisis like this. Much like the great depression, people who survived that crisis became very thrifty, frugal and increased their savings mentality and much of that mindset got passed down a couple of generations.

        It will be interesting to see how this impacts savings rates and investment decisions going forward once we have come through the worst and begin getting back to normal, whatever that new normal winds up being.

        1. I don’t know. They don’t seem to have learned any lesson from 2008. Even two years ago when the “people don’t have $400 for an emergency” article from the Atlantic went around, people seemed not to have saved an emergency fund.
          I remember a lot of people saying in 08 that this would be a permanent culture shift and people wouldn’t go back to eating in restaurants etc. Didnt happen. People don’t like to live thinking about their finances all the time. And look at China today. China reopened some things and mountain parks etc were packed.
          We are in a different world here on finance sites. We enjoy tweaking money plans all the time. Most people don’t. They spend what they have and don’t relish making any kind of plan or living like it’s 2020 forever.

    3. I sure hope people go back to spending crazy amounts of money, standing in line to pack Space World etc. since that’s what provides jobs for the regular folks that don’t have the ability to sit around being smug about how much money they still have even after the market tanks

      Your comments show a complete lack of empathy for the common man as well as a lack of understanding of the economy.

      As inarticulate as Bush 2s comment was after 9/11 about going shopping, he was right, that’s our economy folks and in order for there to be tax revenue to fund services and for you to have toilet paper, we need money to be spent, not folks sitting at home contemplating their navel.

      1. spaceassassin

        Joe–Not sure if this comment was in response to my comments or another’s above? I didn’t want to respond out of turn if it wasn’t intended for me.

        1. to you sir, although I care not about your one opinion, I just hope others don’t decide to reevaluate their life and spend more time at home and less money….they did that in the 30’s and it didn’t work out so well

          1. spaceassassin

            “We are all feeling this one. Maybe not everyone financially, but certainly emotionally and psychologically. People are dying, health supplies are limited, and we have no idea when all these restrictions will end, and when supply chains will be able to meet demands, and regardless of how much cash I’m sitting on, that sucks and is a serious, global concern that bothers the shit out of me.”

            I literally said, regardless of my own status, “we are all feeling this one” and “the global concern [is what] bothers the shit out of me.” So, I guess you and I may differ on our definitions of empathy and I am wondering how common or uncommon you think I may be (my wife filed for unemployment last week).

            Regardless, I sincerely hope people don’t go back to spending “crazy” amounts of money, that by and large, is what typically creates the larger problems we face as a society.

            Spending is a necessity, crazy spending is absolutely a problem. If your long-term solution is as simple as to get all those who can’t afford things to go back out and spend money they don’t have, then we will probably have to agree to disagree.

            And I do hope people spend more time at home, the people and economy can succeed and prosper without “craziness.”

            1. Stay out of the work force, get into the work force even deeper. I’ve got three brothers that retired before they turned 50. I am happy for them, but unhappy for the world because they are not able to share their experience and training as it was just peaking. But retirement doesn’t necessarily mean sitting at home in a Zen state contributing nothing. Happiness should be everyone’s goal, but not anyone’s end game. Happiness is a tool that we can use to go out and work our butts off (financially compensated or not) to make this place a better world. To be happy and collapse into bed each night, physically and mentally exhausted from doing our best to improve this place. That should be everyone’s goal.

  11. theengineer

    For a long time I have tried to publish this guidance about money.

    Technically for NON-AMBITIOUS personalities – if you EARNED more than 25 to 30 percents of the general population, money has little value in your life if you are not enjoying your work.

    Technically for AMBITIOUS personalities – if you ACCUMULATED more than 25 times the earning of the general population, money has little value in your life if you are not useful to others.

    Technically for ALL – money has NO value when you are clinically declared dead.

    Hopefully after COVID-19, each and everyone of you have a personal financial strategy.

  12. Hello samuari daddy, I thought you are financially independent? Perhaps you’re going back to work because you don’t want to self quarantine yourself anymore :D

    I hope that you and your family start safe from COVID-19. Even people living in a small island aren’t safe from the disease and there’s no vaccine until the next 12-14 months. It’s going to be a bumpy ride, feels bad man.

  13. Love this, Sam. The one phrase that kept popping into my head while reading this was, “it’s a marathon, not a sprint”. It’s a saying my business partner and I constantly tell each other. I’m a little older than you (45). I vaguely remember the era, and the financial crisis around 08-09 frankly just created a situation where I picked up 3 rental properties for pennies on the dollar. I really did not have much to lose and I was in the accumulation phase, to say the least.
    As I sit here, I’m wondering how I’m going to apply for the Paycheck Protection Program to cover a month or so of expenses to run my insurance business? How am I going to show that my S corp rents from my LLC which I purchased my building through? How will this all make sense to someone over a one page application?!?
    Even though I’ve diligently saved and invested for the last decade, spreading my networth and income streams for a “rainy day”. It’s different now, I have 3 daughters, all teenagers. My wife’s a teacher with a Masters Degree. This is stressful for her, but not like an entrepreneur’s stress. Her paycheck will show irregardless. As I watch the unemployment numbers and extrapolate that this will hit myself and many of my customers square in the pocket book, it’s hard not to freak out. Your article is a calming influence. It is going to be alright. We’ve created streams of diverse income. We’ve planned for something (maybe not a pandemic but something). It is a marathon, not a sprint.

    1. The PPP program is the BEST Thing I’ve ever read to help small businesses. I hope you get eight weeks of payroll expenses forgiven, like every other business. $359 billion worth of assistance directly to small businesses is huge. And the government has promised to do some more if it runs out.

      1. Hi Sam. This is probably outside the scope of your blog, but have you considered writing a post on the stimulus bill, with details how someone or a business would take advantage of each part? Ie. links to websites or banks providing the services. It is likely to early to write something like this given the govt is still trying to figure out how they will roll it out. Just a thought.

  14. Reverse The Crush

    Thanks for the read, Sam. Well thought out reasoning why you are waiting until after this is all over to go back to work. It’s interesting what you said about the world keeping you in place. I have experienced a similar feeling lately, despite a lot of change going on. There is certainly a silver lining for you and an opportunity to grow Financial Samurai by helping others. I look forward to reading more of your insight during these times.

  15. Enjoy your family time, Sam! I’m sure your wife enjoys having you around. Just wait until your daughter is really on the move. In my experience, parenting multiple kids only gets harder when they’re mobile!

    Not sure if you still plan to move to Hawaii, but I’m guessing there will be some deals on real estate soon.

    1. Oh yes, I agree that parenting kids is way more exhausting when they become mobile. My wife has seen me around every day all day since our son was born in early 2017.

      I can’t wait to go to Hawaii now. Seriously. I got to go.

  16. Despite my one thing irking me with FIRE is bloggers needing their blog income to be “retired,” I also know that you don’t need the blog income to survive. You really are FI and given your work ethic, running this site must feel like retirement to you.

    Gratitude. There’s just so substitute! I’m down… looks like 27% from my highs in net worth. I still have waaaay more money than most people though. Even if I can’t retire until 60 or 65, it’s fine. I will retire and it will be a glorious retirement. If I die young, again, what will I care? I won’t be here anymore to mind.

    Keep having fun writing your posts and you’ll provide me entertainment and good info. :)

  17. Sam, this was a good pep talk, both to yourself and to your readers. I’m sure we have all been running numbers and planning “what if” scenarios to make sure we are going to be OK no matter how things unfold. In my financial spreadsheets, I started a new tab called “Corona” where I lay everything out and try to project what might happen if there is little to no active income coming in.

    I’m retired but my wife still has a great job and benefits that cover us. Between October of last year and February of this year, I came to the conclusion that there were 3 things I needed to address. I was concerned with the aging bull market and our asset allocation which had really not deviated since my 20s. I was also concerned that we did not have enough of a cash cushion in the event we had to cover expenses for an extended period of time without a lot of income coming in. And last, I was concerned that I didn’t have enough liquidity to pay for things without having to sell an existing investment at a low point to cover any expense shortfall.

    Two of the three things I dealt with just prior to the misery that began to unfold at the end of February. First, in October, I moved a slug of money from an index fund to a high-yield savings account and a 12 month CD. If my wife lost her job, this money, along with some savings bonds we have squirreled away would cover our mortgage until it is paid off. I have a pension and some deferred income from a previous employer that is paying out now and my wife’s pension will begin next April. This money would cover our basic living expenses and not have us relying on her job or the need to sell investments.

    The second thing we did in mid-February was substantially change our asset allocation. We went from 84% in Equities + REITs and 16% in Cash/CDs + Bonds to a 42%/58% mix, (as of today). We literally cut our Equities position in half. In Q1, the S&P was down 20%, the Dow was down 24% and our portfolio was only down 9%. The idea was that this mix would keep us at about half the drop of the market which seems to be exactly what it is doing. If the market drops 50% and we are only down 25% then I feel better about our ability and timing to recover those losses as things ultimately improve and life begins to get back to normal.

    Last, we have considerable home equity that is locked up unless we sell the house. We just applied for a HELOC and have been pre-approved for a $400K LOC. I wanted to get this done while my wife still has a job because otherwise, we probably would not qualify. We ran into this during the 08-09 crisis and I didn’t want to let history repeat. The first-year rate is 1.99%, interest-only for the first 10 years, and after year one, the rate floats at Prime, but no adder beyond that. Currently, the prime rate is 3.25% and I don’t see rates going up anytime soon. I would only draw on this line as a last resort and pay it off very quickly thereafter, but it is comforting to just know we have an added margin of safety if we ever needed it.

    Our daughter will be a senior in college this fall and still has plenty of money in her 529 to cover her last year and those funds were moved from an Index Fund during the accumulation phase to a CD ladder and Bonds once she started college so we don’t have to worry about coming up with the money for that.

    With all this said, I feel like we’ve done what we can do to be prepared for however long this lasts. The point of all of this is to avoid the need to do anything else with our investments and simply ride it out until things get better.

    I really wish everyone all the best as we try and get through this. This is a great forum to discuss and we are all truly in this together!

  18. Confusing post given how financially successful you are (per your public reports of passive income/FS income).

    1. I think I’m just gonna keep holding Amazon stock instead. If I didn’t have two young children under three years old, I probably would try and work a gig job right now. I did some for a year with Uber.

      However, I can’t put my children on risk right now. I think it’s prudent to wait for a couple more months at least to have the curve flatten aggressively.

      1. A flat curve won’t save your children it merely changes the rate of spread. It;s like playing russian roulettre with 5 bullets in the gun vs unloading 2 more bullets leaving 3 in the gun. Right now the only way to immunity is to get infected

        1. Sounds great. Hopefully we all got the virus between December and end of February because we were all sick with something.

          Or hopefully your vaccine will come before you get it.

  19. Great post. I hadn’t asked about it, but I do remember scratching my head somewhat when you announced your desire to accumulate another 1.5M (given some of your other well thought out posts about money/happiness). I also didn’t understand your consternation about the hit to your portofolio given that you’d already gone down to only 25% stocks and had (correctly) anticipated some type of downturn in the near future. Plus, if I understood a previous post correctly, the income you get from FS, etc is enough for you to live on without even dipping into your passive income stream (much less principal).

    Anyway, this post was a breath of fresh air and return to some of the long held principles you’ve talked about on this site over the years. Also, if you do get pulled over by the internet retirement police, I don’t think you’d be convicted if you “showed them your papers”. ;)

    1. Everything is just relative and I always enjoy a good challenge. After all, I write a personal finance blog so not having any financial goals would feel a little weird.

      I really believe that if I wasn’t financially comfortable, I wouldn’t be able to write the stories in these type of posts consistently for 10+ years.

      Instead, you would probably see me riding boring affiliate posts every week to try and make some money. This post you are commenting on today is not a money maker. And I don’t care because I want to write how I feel.

      Hence, for the readers, I’m trying to stay as financially independent as possible!

  20. Sam, I love you to death (been following you religiously for 7 years) but I gotta point something out here. You ARE NOT unemployed. You are a small business owner. AND you own a very profitable small business. Just because you don’t log 40 hours a week doesn’t mean you’re unemployed. Your site gets tons of traffic so I’m guessing you’re netting 600-900k a year on the site at this point. Regardless, you’re a small business owner, not unemployed. Anyway, I’ll always be a fan of yours and I really really do appreciate all the quality content you put out. Stay healthy and sane with this shutdown!!

    1. Wow, that’s big bucks! Don’t tell my wife!

      Seriously though, I’m not good at monetization. This post is a great example. How am I supposed to monetize this post? I just like to write what’s on my mind. Writing is a joy to me.

      Besides, I would rather be known as an unemployed father of two children doing the best he can to provide for his family. It’s so much better reputation than saying I’m an entrepreneur or early retiree.

      1. Honestly I think since you’ve got such a solid amount of passive income from your investments, and you’re happy with things the way they are, I wouldn’t worry about increasing the yield on the site. But if you get bored and want to complicate things a bit more, you could launch a credit card comparison tool. Just have it as a link on the site. I think you’ve mentioned in the past you don’t want to peddle credit cards but you could have a non offensive tool on your site which would surely bring in some good money for you. You could also launch a paid “financial independence” course on your site. Or some other kind of course. But again, you seem happy so I wouldn’t change anything unless you get bored and want to create some chaos for yourself ;)

  21. Sam, so much reading material but im always excited when a new post of yours comes up. Im adding to my reading list. I always end up prioritizing your articles. thanks for all the hard work

  22. I’m in a situation where my wife and I lost a passive income source (our printers for our POD store are closed until their stay-at-home order is lifted) and our real estate transaction fell through. She also lost her job. Double whammy.

    The silver lining of the transaction falling through is that I now have some extra cash to cushion us through these uncertain times (specifically, our stay-at-home order in effect until May 4th).

  23. I like how you think. You’re clearly quite a deep thinker and really look at multiple angles when facing decisions and new situations.

    It does feel like an opportune time to focus on family and making the most of what we have.

    Hope everyone is staying safe!

  24. As the spouse of a 63 year old front line doctor who was supposed to retire in 6 months- his life and health have won the work concondrum. He worked for 32 years in the trenches-
    He gave notice that he will be retiring in 3 months, but is using his paid time off to meet that 3 month notice requirement. The downside is he loses a lot of his pension as he will be retiring 3 months short of the big 20 year pension bump. In essence he’s giving up about 750,000 in future pension money in order to stay safe. Your money or your life – it’s real.

    1. Most of us reading this do not have to make such a choice. But it is risky for somebody his age if he was working at the front line of the virus. I am lucky, already retired. Retirement is fantastic. I totally love doing “nothing”. Actually, I travel at least half the time, and the virus is giving me a nice break. Good luck to you both.

  25. thanks for so clearly and firmly articulating ‘what is currently so’ as well as concrete action items. it feels like I suddenly ‘snapped out of it’, this doom and gloom contagion. I feel energized again. big thanks!

  26. Hi Sam

    I am in India and in the middle of a 21 day lockdown. I am lucky to have a confirm salary paying job but there are so many who aren’t like me.

    This virus has changed and will change the way people look at things. Companies will know they can afford to have less employees in office and still be productive. People will know there is no need to rush immediately for a holiday whenever there is a break.

    This virus is a crude reminder to go back to our roots and appreciate them.

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