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How Our Family Is Negatively Impacted By The Coronavirus Crisis

Updated: 07/19/2021 by Financial Samurai 141 Comments

Instead of telling you how my family is doing OK during the coronavirus crisis, I wanted to share with you how our family is being negatively impacted by the coronavirus. I’ll then provide another update one year into the pandemic.

From going through a logical exercise on how to predict a stock market bottom to providing suggestions on how to better work from home, I have been accused of being too calm and hopeful during this difficult time period. Instead of remaining optimistic, I should wake up from my dreamworld bubble and face the reality that doom is upon us.

Even though I’ve only heard from a few people online who have lost money in their investments (just read all the comments from people who said they were 100% in cash or short before the crash etc), I’m assuming there are some of you out there who are feeling the crunch. Maybe some of you are even a little scared about the future.

If so, I can see how my disposition can irk you. Let me attempt to mix things up.

Note: I originally wrote this post on March 20, 2020. Obviously, things have recovered a great deal since then. However, life is not 100% back to normal.

Finding Joy In The Suffering Of Others

During times of fear and uncertainty, the people who are hurting the most tend to lash out at others, especially online. Civility dissolves into nothingness as strangers attack strangers to help deal with their personal demons.

One of the consistent things I’ve noticed since starting Financial Samurai in 2009 is readers, regular and new, find joy in my suffering and the suffering of others. Because I’m pretty transparent with what decisions I make with my money, when things don’t go well, I thereby enable people to make fun of me or kick me when I’m down.

Below is an example of a reader taking joy in my underperformance as described in a mid-2019 weekly newsletter. In the newsletter, I admit that I was too conservative with my then ~30/70 equity/bond asset allocation. But after a rocky December 2018 and a healthy recovery by the end of 1Q2019, I wanted to take down my risk exposure.

Making fun of Financial Samurai

Keeping Things Real

You may find this strange, but one of the reasons why I’m relatively transparent with my finances and financial failures is because it brings some people joy. And bringing joy to others makes me happy.

In the workforce and online, I’ve had to deal with countless bullies. I’ve been called plenty of hateful names. The common denominator all these antagonists have in common is that something is bothering them enough to throw prickly bombs. I feel their pain because I’ve gone through many painful experiences as well.

It is also a human affliction to delight in the suffering of others (schadenfreude). It is much easier to try and bring someone down than it is to take action to improve your situation. Unfortunately, our hyper-competitive world has only increased the amount of schadenfreude.

Hopefully, the difficulties my family is going through will help make you feel better about your situation. Perhaps you will find solace that you are not alone during this time of great hardship.

My goal since starting Financial Samurai in 2009 has always been to educate, entertain, challenge conventional ways of thinking, and make you feel more confident about your finances.

Related: Once You Have F You Money, It’s Hard To Tell Others To F Off

How Our Family Is Being Negatively Affected By The Coronavirus Crisis

1) We lack income stability from full-time jobs.

Not only do we not have jobs that pay us a steady salary with subsidized health care, but we are also going to have a much more difficult time finding jobs if things continue to worsen. If and when employers do decide to hire again, they will first try to hire people who already have jobs to “upgrade” their workforce. Then they’ll look for people who were recently laid off in a relevant field. During a bear market, folks like my wife and me are at the bottom of a thousand-resume pile.

Potential unemployment claims surging due to the coronavirus

At the beginning of 2020, I had a goal of getting back into the workforce to help increase capital and reduce our $2,380/month health care bill. The dream was to accumulate enough so that my family could comfortably retire in Hawaii by the end of 2022. Thanks to the coronavirus, my dreams have been dashed. I must find another way but I’m uncertain how.

2) We’re still paying for preschool, despite the closure.

Not only do we have to pay the full $1,950/month for the month of March, even though three weeks have been canceled so far, parents are also being asked to pay full tuition for the month of April. The school could be closed for months longer.

I’m assuming there will be some type of compromise, but families who decide to protest may permanently lose their child’s spot once there is a recovery since there is still massive demand to get in. We’re talking 100+ applicants for 2-3 spots.

3) We’re getting hammered financially more than most.

With the S&P 500 down ~30%, our net worth is down by hundreds of thousands of dollars.

If stocks drop any further, a decline in real estate prices may be next. Shockingly, municipal bond funds have also lost multiple years of gains as well. There’s a good chance that by the time the carnage is complete, we could lose well over $1 million.

4) Financial Samurai traffic is down ~20% YoY.

Instead of Financial Samurai benefitting from fear and uncertainty in the stock market and economy, it looks like more people would rather stay as far away from anything finance-related as possible. It feels better not to look at your finances when they’re getting clobbered, so people don’t.

People also tend to stop trying to educate themselves as it’s simply too painful a time period. With a decline in traffic comes a commensurate decline in revenue. If finance-related companies start shutting down, revenue will decline even further.

One silver lining is that because Google searches for “unemployment benefits” have spiked, so has the increase in book sales for teaching people how to negotiate a severance. In such situations, you want to negotiate a severance well ahead of any tidal wave of layoffs because the people who negotiate first get the largest benefits.

5) Our mountain rental property will be negatively impacted.

The Resort where we own our condominium shut down in the middle of March. The timing is terrible since the snow has been dumping and winter is the highest revenue season of the year. Yet, the HOA dues and mortgage remains fixed. Hopefully, with nobody going, The Resort will lower the monthly HOA/maintenance dues, but I doubt it. This is a double whammy that may last for months.

Thankfully, in mid-June 2020, the Resort finally opened back up. However, visitors are few and far between. I think it’s time for us to go back up mid-week as a family!

6) We have two children under three to protect.

Life was on easy mode when we didn’t have children. We could easily hunker down when it was just the two of us. Now, we’ve got to ensure that our children are continuously fed, protected and loved.

Imagine having a highly energetic 3-year-old that needs 12 hours of non-stop attention. Now imagine having a precious 12-week-old who has not yet fully developed her immune system during a global pandemic. Difficult mode.

There is no downtime for us, only a heightened sense of responsibility. We must also put on brave faces in front of our children and pretend everything is OK. There is no point letting our dismay spill over to our children’s innocent lives.

7) Our parents and in-laws live very far away.

My parents are in their 70s and in Hawaii. My in-laws are in their 70s and in West Virginia and Virginia. If something bad happens to them, we are a day’s travel away, if we’re still allowed to travel.

One of the main reasons why I want to relocate to Hawaii is so that in case of an emergency, I can be by my parent’s side within 30 minutes. When it comes to disasters such as a heart attack, every minute counts.

I’m thankful that at least my parents came to visit for several weeks in December 2019 right when our daughter was born.

8) We have less time to recover financially.

Now that I’m in my 40s, I no longer feel quite as invincible as I did when I was in my 20s and 30s. At 42, I’ve got 20 years less time to recover than someone who is 22.

For all of you still on your path to financial independence in your 20s and 30s, this is the moment you’ve been waiting for to build your passive income investment portfolio and try new things.

9) California is under shelter-in-place.

We’re not allowed to go to restaurants, bars, events, theaters, work, school, etc for an undetermined amount of time. Even if we could go out, almost everything is closed. Even some of the public parks are now closed.

Spending more time at home is great for building a stronger bond with our children. It’s what my wife and I have done since 2017. However, 5 am – 11 pm days can get very tiring after a while, especially when it’s not under your own accord. There’s a reason why so many best friends no longer remain best friends after a long road trip.

Perhaps one of the most difficult things about shelter-in-place is that we don’t know when it will end. Our Governor has said schools might not open until the Fall. The uncertainty is what is most disconcerting. But we will do our part to beat this thing.

As of July 2, 2020, four months in, San Francisco is still under shelter-in-place as a potential second wave hits.

Coronavirus Crisis: The Key Now Is To Survive

The coronavirus crisis is real, even if the stock market is telling us otherwise.

I acknowledge that some folks have it worse than us. And I’m not trying to win the victim Olympics. I’m just sharing what we are currently going through so you know that not everything is sunshine and roses here.

If you’re feeling pain from the coronavirus-induced stock market meltdown, I hope my list of things we’re hurting from helps make you feel a little better about your situation.

Feel free to use me as a punching bag if you’re hurting. I’m used to it. Just try not to be racist because that’s where I draw the line.

We can all agree that eventually, most things will bounce back. The key now is to survive until things do. Review your cash and liquidity situation. Review your asset allocation. Cut down on your monthly burn rate. Support your local businesses. And try to be kind to one another.

No matter how bad things get, so long as there’s electricity and the internet, I will continue writing to help us eventually come out ahead.

Let me leave you with this hilarious video from an Israeli mom of 4 who is trying to cope with school being closed. Sorry to end things on a positive note. But you got to watch the rant. If you’re a parent, it’s the best!

Coronavirus Pandemic One Year In

2020 was a doozy of a year. Here’s my 2020 review. For 2021, are are glad to all be healthy. I’m no longer getting sick every month because our son is still not in preschool. Our daughter is one years old and doing great. Further, our investments are up a lot.

We’re tired of the pandemic, but we will forge on and follow safety guidelines. I’m buckled down, trying to build as much wealth as possible until I get vaccinated or until there is herd immunity. Then, it’s GO TIME for enjoying our money and the world to the maximum!

Here are my goals for 2021. Let’s go world!

Related:

Why I Failed At Early Retirement: A Love Story

2Q2020 Financial Samurai Review: To The Edge And Back

The Enjoyment Boom Is Here!

Readers, how are your finances and your life being negatively affected by the coronavirus crisis? Perhaps we can share our stories so we can make sure people know they are not alone during this time of difficulty.

If you don’t delight in the suffering of others and appreciate my work, then you can support Financial Samurai at no cost by sharing my articles and recommending my newsletter to people you care about.

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Filed Under: Family Finances

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Order a hardcopy of my new WSJ bestselling book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Not only will you build more wealth by reading my book, you’ll also make better choices when faced with some of life’s biggest decisions.

Current Recommendations:

1) Check out Fundrise, my favorite real estate investing platform. I’ve personally invested $810,000 in private real estate to take advantage of lower valuations and higher cap rates in the Sunbelt. Roughly $160,000 of my annual passive income comes from real estate. And passive income is the key to being free.

2) If you have debt and/or children, life insurance is a must. PolicyGenius is the easiest way to find affordable life insurance in minutes. My wife was able to double her life insurance coverage for less with PolicyGenius. I also just got a new affordable 20-year term policy with them.

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Comments

  1. Shannon@RetiresGreat says

    March 21, 2020 at 6:37 pm

    Thank you for such an insightful post!

    I’m optimistic we’ll financially bounce back once this pandemic is over. For me, the greater concern is the human suffering and loss of life. Seeing the footage and how serious the situation in Italy has become tells me we’re in for a bumpy ride. Thankfully, the government appears to finally be taking it seriously. We’re all in this together!

    Reply
  2. JeffD says

    March 21, 2020 at 4:50 pm

    I was 98% in T-bills when all this went down. On the plus side, I didn’t lose anything. On the minus side, my T- bills are now yielding zero, so I feel compelled to consider alternatives. Given that the Fed is thowing the kitchen sink at this, and the remedies are actually starting to have negative consequences (e.g. global dollar shortage), this may indeed be a global 1929 credit crisis rather than a run of the mill recession. I am nibbling at stocks that are down 80%, as well as taking 0.25% of my assets nibbles at index funds. When stocks lose 40% of their value, which i believe they will, I will take 0.5% nibbles, and 1% nibbles at, 50% losses. At 60% losses I will take 5% nibbles, etc. If this lockdown lasts 90 days (!!) real estate will take a nice hit, and at that point I will look at real estate.

    Reply
    • Financial Samurai says

      March 21, 2020 at 6:00 pm

      Good stuff! Another anecdote of someone not losing any money in the downturn. It really seems like a lot of people are fine who read this site. I’m assuming most people you know were in treasury bonds as well.

      Are you retired as well? What is your net worth and age? Thx

      Reply
      • JeffD says

        March 21, 2020 at 6:31 pm

        I’ve been retired 3.5 years. I sold my hoje in the East Bay in early 2019, feeling something was about to break. I tried to warn people I know. A few of them increased their treasury allocations, while others felt they had a long time horizon, so no need to worry since their time horizon was twenty years and they felt the Fed put was all powerful and a given. In their defense, without a true black swan that cut economic activity by 25% or more for months, the Fed put would have worked for at least another five or ten years.

        Reply
        • Financial Samurai says

          March 21, 2020 at 8:12 pm

          Cool. Yeah, I think Most everyone I know who is retired has a conservative portfolio, especially after the 10-year run we had. So I do believe most people have invested based on their financial situation, even if it hurts to lose.

          Reply
  3. Jon says

    March 21, 2020 at 3:47 pm

    Sam, always enjoy reading your content. Sorry to hear about the paper losses you’ve got and the double whammy of expenses. In similar boat: lost half my net worth on paper, largest dividend payer cut it on Friday, and the State where I have most of my real estate assets has made it impossible to evict people who do not want to / cannot pay. Mortgages, taxes, insurance, HOA, etc. is still due.

    On the bright side I’ve never been forced to put together a budget or make the hard decisions on what to cut. Always had more money coming in than expenses or ways to spend it. I think on the bright side, this may be an opportunity for us all in the finance community to reevaluate where we spend our money and eliminate our waste. You may still yet be able to get the Hawaii dream by 2022, you just may need to hustle more and figure out a way to reduce expenses. I’m not looking forward to ripping that band-aid off.

    Reply
  4. KC Chuck says

    March 21, 2020 at 2:41 pm

    Sam-
    I echo this reply to you-LOVE reading all your detailed posts and the Video was hilarious.
    You are such a positive, caring person who shares your information to the max.
    Please ignore/flip off the haters!!
    You bring so much value to our lives.
    God bless you and your family-Salud!

    Reply
  5. Scott S says

    March 21, 2020 at 2:16 pm

    Hi Sam-

    Long time reader, just wanted to say that your vulnerability and honesty are refreshing and inspiring. I also have a “rambunctious” 3-year-old testing my wife and me through shelter in place and relate to your fear and uncertainty being so much more heightened in this crisis because you have kids. I wish health and safety for you and your family – and a return to normalcy before we all have to watch every single movie on Disney+.

    Yours,
    Scott

    Reply
  6. Paper Tiger says

    March 21, 2020 at 12:13 pm

    I will cut right to the chase. Our investment portfolio is down 1.2M from the 2/19/20 peak and 1M YTD. It looks better on a % basis where we are down about 15% from the peak and 12.7% YTD. Fortunately, we moved a considerable amount of our 401Ks to bonds in February which is what keeps us from being down where the Dow and the S&P are today. I am retired but my wife still has a very good job so we are grateful for that.

    Let me offer a little perspective in the hope that it will help provide some comfort about these kinds of market declines and the impact on one’s portfolio. I graduated from college in 1979 and it was a horrible time for the economy. Inflation was rampant and interest rates were peaking around 21% during the Carter administration. Since I had no money during this time, I really didn’t feel any personal financial impact other than getting laid off from my first job 1.5 years after graduation but quickly finding another one with a pharma company. A year and a half later I moved into Medical Devices and stayed in that industry for the next 33 years until my retirement in 2015.

    The next negative financial milestone for me was Black Monday in October 1987. I probably had 200K invested at the time and just let it ride right through that bad patch and quickly recovered. Then the internet bubble burst in the early 2000s. We were down about 40% at the peak but again, we just rode it out and came out just fine. At the beginning of 2008, our portfolio was 3.8M. At the end of 2008, it was 2.7M thanks to the sub-prime mortgage mess and near-collapse of the financial system. It was up 27% in 2009 and 22% in 2010 and took off from there. In Q4, 2008 our portfolio dropped 900K but quickly recovered in 2019 and peaked in February 2020.

    My point is that for long-term investors, this is reality if you play in the market. This will get better but I do think it will get a little worse over the next few months. If we flatten the virus curve we will start to see a recovery in the 2H of the year and, with so much cash sitting on the sidelines, a potential boom in 2021. However, if things go worse than planned, a recovery would certainly be delayed but ultimately, it will come.

    Personally, I’m satisfied with my current asset allocation. I had structured it such that in a downturn, our drop would be about half of the market drop and so far that is holding. The allocation as of today looks something like this:

    ALLOCATION %
    CASH/CDs 14.5
    BONDS 45.0
    PE 5.8
    REITs 5.2
    ANGEL 3.5 (Mostly invested in my own healthcare startup)
    EQUITIES 26.0
    TOTAL 100

    The only move I am considering is taking out a Home Equity Line of Credit (HELOC). We have lived in our home for nearly 16 years and we are just over 10 years into a 15-year mortgage so we have a considerable amount of home equity that is locked up. I found a HELOC that floats with the prime rate so it currently sits at 3.25%. Since rates will remain low for the foreseeable future, I think having this extra reserve set up in case my wife loses her job is worth considering.

    Other than this, we just batten down the hatches and hold tight. Hang in their everyone. I know this too shall pass, just like all of the other times I have experienced over the last 35+ years of investing.

    Reply
    • Financial Samurai says

      March 21, 2020 at 12:26 pm

      That’s a pretty good asset allocation during a bear market. Congrats!

      I have a lot of bonds too, but I also have a lot of muni bonds which have been smacked. So sad, but I think most munis will be fine, especially with Federal government support.

      Are you investing your wife’s income into the market? How about just having her call it a career and enjoy retirement life together?

      Reply
      • Paper Tiger says

        March 21, 2020 at 1:11 pm

        The first question you asked about my wife is easy to answer, the second one, not so much ;) She is investing 10% pre-tax and an additional 8% post-tax into index funds in her 401K so she hits the pre-tax limit and then has additional after-tax to invest. We also max out her HSA but right now that just sits in cash. Fortunately, I have a pension and deferred compensation that pays out annually from a former employer so that I at least contribute SOME income to the family nest egg. A year from now, her pension from that same former employer kicks in so that will be a nice bump in income for us.

        With our startup, I chose early on to take equity over salary until we really got the company off the ground. That was 5 years ago and we are close to crossing the chasm from startup to a self-sustaining entity. Most of my part-time work has been raising money through the startup phase and keeping us capitalized until we could generate enough cash flow to maintain our expenses and grow from there.

        As far as my wife joining me in retirement, that does not look to be in the cards right now. She loves what she does and enjoys working. She is almost 4 years younger than me (today is her birthday) and she thinks she still wants to grind for another 5 years or so. A lot will depend on how things go from here but I support her in whatever makes her happy. I have enough going on to keep me busy and out of trouble and our nearly 27 years of marriage has been a good partnership with a lot of give and take around our careers. The way I look at it, she supported me and all of my moves while my career was on the upswing and now I get a chance to support her and all that she wants to accomplish with her career. I think this kind of flexibility in our marriage is what gets us through the tough times.

        Sam, let me just echo what others have said. I enjoy your writing and love the passion and energy you put into it. The financial moves I made in February to somewhat de-risk our portfolio were directly related to things you have written about and I appreciate that “coaching” from you that gave me the nudge to get a bit more conservative when things were near the market top.

        I wish everyone safety and good health throughout the next few months and I really do believe that if we can hold on through this period, we will come out the other side just fine.

        Reply
  7. Mark says

    March 21, 2020 at 10:23 am

    If anything good comes out of this crisis, I really hope it will be humility. Of course, I sincerely hope and pray that the health impacts of all this are more limited than what I and many others fear.

    But since this is a financial blog, one thing I will point out is that you didn’t have to be a day-trader or a stock speculator to suffer massive losses this week. Municipal bonds, for instance, are not investments that are day traded or speculated through by average investors (although institutions and hedge funds still do with their ETFs, obviously).

    The average muni bond fund dropped 11% last WEEK! That is nearly the same as the S&P 500’s weekly loss. That is truly staggering. While 10% weekly changes (up and down) in the stock market are not that unusual–and should be considered as the risk you take for the potential outsized returns, there has truly been nothing even remotely of precedent as what we’ve seen in the muni market. Yes, that includes 2008-09 by a huge margin. For a product that in the last ten years has only seen annual gains on the order of 3-5% per year, it did not participate in the huge run up stocks had, yet are being penalized just as much. Maybe stocks are a safer investment after all?

    Reply
    • Financial Samurai says

      March 21, 2020 at 12:24 pm

      Yes, the muni bond drop has been shocking and one of my biggest disappointments. What you can at last do is add up all the tax-free coupon payments you’ve received so far to offset the losses. Also, if you hold your individual muni bond to maturity, you will be 100% whole if they don’t default of course.

      Reply
      • Rob says

        March 21, 2020 at 6:57 pm

        Munis will get worse with all the revenue gone for a month and a -24%+ gdp print in q2 (Goldman’s latest). I fully expect pensions to blow up from this as well all over. If they lose control of US treasury rates….

        Reply
        • Financial Samurai says

          March 21, 2020 at 7:15 pm

          For sure. Were you mostly in cash or is treasuries as well before the crash? It feels like most people have had defensive portfolios here.

          Reply
          • Rob says

            March 22, 2020 at 5:47 am

            Excluding my real estate, I was 67 stocks/ 33 bonds before this happened but had started moving into equities at -25-30%. However, I never expected states to start shutting everything down entirely. I took advantages of rallies to get my parents $ mostly into cash but am closer to 80/20 right now. Unfortunately the damage they’ve done by shutting down the states will be far more damaging. It took 60 months for hotels to recover from 15% drop in occupancy. How long. Will a 90% drop take? How many restaurants and other small business will never reopen or will do so with a significantly smaller staff and menu? Will the airlines ever recover? What if this virus comes back or another one? The “cure” will be significantly worse than the virus imo

            Reply
          • Mark says

            March 22, 2020 at 7:28 am

            Samurai, I had 100% of my Thrift Savings Plan in the G fund up until last week, then I moved 5% in the L2040 fund. I will continue to add in 5% increments to the L2040 fund until I get to about 50% of the total, assuming the market continues to track down. But my Roth IRA was about 40% in stocks as the market meltdown started. I have not made any changes with that portfolio. I did have fairly substantial holdings in municipals, but decided to sell most of them last week…they were intended to be relatively stable investments so I got out once I had a total capital loss (including reinvested interest over the last three years) of -1%. I also have owned gold since 2005, and have gradually added an ounce every couple of months through the years. I have been disappointed with its performance compared to the stock market of course, but now, it is one of the few investments that is still UP year over year. As the federal/global debt gets blown out in response to this crises (far far more overreaching than the Great Recession), it may end up being a better investment–especially now since the argument that it doesn’t pay interest is moot…neither does anything else!!

            Reply
    • Kevin says

      March 21, 2020 at 10:33 pm

      “If anything good comes out of this crisis, I really hope it will be humility”
      Mark,Thank you were saying that.

      I am a conservative investor and have only lost 10% and we have good income.
      But the bragging from real estate and other “risk investors” was really tiring last few years.

      As I like humility, I won’t say I was right this time around. But hope that wave chasers also appreciate conservative investor, We have different mindset… and not mock us for being conservative and fail to chase high tide.

      Reply
      • Mark says

        March 22, 2020 at 11:07 am

        Kevin, Thank you for commenting! I thought I was the only one thinking the ramp in risk assets over the last decade was insanity…400% increase in stocks in 10 years with only 2% annual rises in GDP and CPI only about 2% annually–didn’t make any sense to me. But central banks and/or their designees (member corporate banks, in the case of the Federal Reserve) seemed determined to point the firehose at US stocks. There was plenty of warning over the years, most recently with the bond repo crisis, that was indicative of a lot of rot being kept behind the scenes. But over the years, these signs were ignored as the stock market powered higher. For some time, it seemed like it never had a down day. And the up days were often most pronounced when bad news was announced.

        I make no predictions as to where the market ends up. This looks to be a hybrid version of the 1918 “Spanish” Flu triggering a global depression. Certainly the spread of COVID has been truly astonishing even compared to what was written about the 1918 flu–blame overnight transportation and over reliance on global supply chains.

        But, one thing I’m thinking is out of the tens of trillions of dollars that will eventually be spent providing fiscal stimulus, there will be much public outcry for stock buybacks going forward. I wouldn’t be surprised if the practice is made unlawful, as it was prior to 1982 (and, coincidentally, the start of the 18-year massive stock bull market). This will undoubtedly lower future stock returns as the practice of goosing share values artificially comes to an end.

        In all this, I’m far more concerned about the human toll going forward. I just don’t really know what to think. And I’m sure I’m not alone. I do think however, that the trajectory all our lives had been on has been/will be permanently altered…probably very conspicuously.

        Reply
  8. jdogo says

    March 21, 2020 at 8:44 am

    Well the upside of the current situation is that the 10yr bond yield is 92bp so you are good to go on a return of 2.76% based on your above tweet calling out a target rate of return that is 3x10yr. Sorry to hear you lost a a bit, but taking a 30% whack on 30% of your nut is onlly 10% overall, so that is actually pretty good! This is more or less where we are at relative to the market high. The important thing here isn’t your absolute dollars anyway….what is important is your realative wealth…since everything is relative. So if you lost less than most you actually gained on them in buying power.

    Reply
    • Financial Samurai says

      March 21, 2020 at 9:45 am

      True. In retrospect, staying conservative and trying to follow the first rule of financial independence has help stem the bleeding. However, it is still painful to lose.

      But just like how people will make fun of me for staying conservative on the way up, people will make fun of me for losing money on any risk exposure on the way down. It’s just human nature, but I think it helps some people feel better about their own situation, which is why I will continue to share.

      Reply
  9. Erwin says

    March 21, 2020 at 8:25 am

    Hi sam,

    Im an avid reader of your website. First of all Having bashers and haters means that you are already very popular and thats good! I find your site very helpful.

    Im from the philippines and just recently in 2019 we bought a property in manila. I feel like an idiot for buying the market top. The good thing about this is that this will be our primary residence as a starting family of 4. So i will just view it as sunk cost.

    On the plus side i have stayed 100% cash on the liquid side meaning no stock or bond investment. Our index is already down 48% off the highs and the last 2 recessions were just 56% off highs. Although no one can call the bottom this for sure is a great opportunity for us millennials to take advantage. I plan to wait for overall sentiment to improve before investing to reduce risk.

    Good luck to all of us and i hope we take full advantage of this crisis unfolding in front of our eyes. More power to you and your family sam, I sincerely believe with your financial background that you will be more than fine!

    Reply
  10. thefi35 says

    March 21, 2020 at 6:08 am

    I admire your willingness to share honestly and be transparent. It’s what makes you such a good writer. For every hater, I’m sure there are at least 10 others that support you.

    Here’s hoping that you and your family make it OK

    Reply
  11. Jason says

    March 21, 2020 at 6:00 am

    I really enjoy FS and the tone in your writing. I actually think your insights are a great resource and I appreciate you sharing them for free. I wish you the best of luck. Best from Switzerland (just moved here after 20 years in NYC)

    Reply
  12. Reverse The Crush says

    March 21, 2020 at 5:58 am

    Thanks for sharing, Sam! I’m sorry to hear about what’s happening for you and your family right now. It’s a tough time for all of us. It must be a lot to deal with day care and with having kids during this time. But at least you’re not living pay to pay like a lot of people. Regarding your YoY blog traffic, I found that surprising as I would have thought it would increase with everyone sitting at home. But I certainly agree about people not wanting to look at their investments during times like this. As for me, my portfolio has been absolutely hammered. I’m feeling a lot less powerful these days. But I’m just holding and plan on incrementally adding to the highest quality stocks at during this time. All the best to you and your family. My blog traffic has actually been increasing a lot the first 3 months of the year. But I guess my blog is about flexible work and blogging in addition to dividend investing. And I have been making an effort to grow traffic. I have no doubt that your traffic will increase in the future. All of us need your investment expertise.

    Reply
  13. V says

    March 21, 2020 at 5:18 am

    I think it’s hard to be very negative and complain when you are aware of everyone else’s plight. You know the bad coming, but you also know that you have the resources to ride it out for at least a given time.

    I’m most concerned about our hourly workers who are now either at reduced hours or not working period. There are many families that do not have an emergency fund, unfortunately.

    Also wanted to thank you for everything you do on this blog, Sam. Your blog and background is what started my journey toward financial literacy 2 years ago. I am better prepared for the future because of it.

    Reply
  14. B says

    March 21, 2020 at 4:58 am

    Hi Financial Sumari,

    We are around the same age. Thanks for having this site! These times are hard on everyone regardless of socio economic class, but I do feel hourly workers and people who depend more on government assistance will be heavily impacted. In my household, we are trying to stay sane. My fiancé has lost both of his jobs and I work for a company that inspects nursing homes and apts nationally. I pray for everybody and coworkers everyday for protection against this virus.

    I have 401K and some stock with a few well known banks. I wish I had liquified funds last year. What is recommended for those that have not liquified? You thoughts on this are appreciated and I hope your family the best. I believe that we will be able to survive and tell our grandchildren about this just like some of our ancestors lived through the recession before.

    Reply
  15. Gasem says

    March 20, 2020 at 9:43 pm

    I bought a freezer, filled it full of steak and went 100% cash. I did loose some money but not much. I think this is going to be much worse than people are expecting. 2008 was a financial crisis this is going to be a world wide political and economic disruption making 2008 look like a cake walk. The Vix was > 80 OVX is > 160 GVX >50 TYVX >27 That means the volatility of every non correlated asset class was 5 SD beyond the norm. I’ve NEVER seen that. My state just cancelled ALL elective admissions in the hospitals meaning they are clearing them out for a surge and all restaurants bars the theme parks etc are closed. Unemployment is going directly vertical. The fed has no bullets and interest on the T bill went negative last night for a while. The dollar is spiking and dollar denominated debt is coming due in foreign countries meaning they won’t be able to refi and will go out of business and likely default. The boomers are retired and just lost 40% of their dough so they are going to have to sell more shares to have enough to live on. This will keep stock index prices low as these accounts de-accumulate. The repo market is going crazy. This virus is far more deadly than we have been led to believe and will persist for at least 12 to 18 months. 1929 happened in 2 stages first a 66% loss followed by a 66% loss on what was left. Unemployment peaked at 25% in the depression The government is already predicting 20%. Maybe I’m wrong. If so I still have 95% of my money. I’ve been thinking of buying TIP but right now cash works for me since we are deflating and inflation won’t happen till deflation is over.

    Good luck Sam Kids are the best thing I hope your blog survives and you fare well. I think the whole FIRE narrative has reached its zenith.

    Reply
    • Jd says

      March 21, 2020 at 10:42 pm

      I’m with you on all your points. Too bad toilet paper is in short supply because the market is probably going to make our stomachs turn for a while.

      Reply
  16. steveark says

    March 20, 2020 at 9:34 pm

    I’m not telling you anything by saying the German’s invented a word, schadenfreude, for enjoying the pain others experience. Distressingly I find myself feeling that awful feeling, maybe you do too sometimes. Because as people who are predisposed to prepare we are also very tempted to judge those that don’t. OK, that’s just me you aren’t judgy by nature. Anyway, great post as always. I’ve tried to make the case for rural living in the past, I wonder if being rural is a disadvantage or a plus in this crisis. Or maybe it is both?

    Reply
  17. Bill says

    March 20, 2020 at 9:19 pm

    Hi Sam,

    After reading your article I spent some time thinking how this pandemic negatively affected me. First, I’ve lost more money than I made in the first 35 years of my life. Hell, I’m down more than the S@P. My business is about to be forced to close. At least 20 percent of my customers aren’t going to make it through this. A fair amount will probably not pay me . My daughter is self quarantining herself in Alaska of all places because we traveled in the last 2 weeks.

    Then I got to thinking what I have to be grateful for. First, I got enough money to pay my employees while we’re closed. Second, I got enough money to buy the dip. Third, my daughter is learning what “real life” is all about. Fourth, I got 26 rolls of toilet paper. Fifth, I got enough food to last 3 weeks. Six, my wife and I after 28 years of marriage are reconnecting in a way that wouldn’t be possible if we didn’t have this time. We pulled out some lawn chairs, sat in the driveway, drank a few beers and talked about nothing and everything. Seventh and most important my family is healthy.

    This virus is the best thing that’s happened to me in a while. It’s opened my eyes to what is truly important to me. It’s actually been quite liberating.

    Thanks, Bill

    Reply
    • Paul says

      March 22, 2020 at 1:16 am

      Best post I’ve seen. You win the internet. Great outlook Bill, I found it uplifting. Folks like you will be the engine of rebuilding main street. Best of luck.

      Reply
  18. Y.Peff says

    March 20, 2020 at 9:03 pm

    I would definitely not pay the daycare even if you loose your spot. With a newborn you need to be extra vigilant with bringing in sicknesses,especially since this will probably last months.
    My biggest concern is my husband is a firefighter in a big city (Philadelphia) so I feel like its inevitable for it to get to our household. Typically I don’t get anxious but I’m pregnant with baby #3. I will be relying on my good health and strong immune system (have not even had a cold this winter)
    Money wise we are ok, sure retirement accounts are down but we are 35 & 39. My husband has great job security and is actually getting paid hazard wages (time and a half) for his regular shifts)
    I’m trying to convince my husband into investing some of the 160k we have in a bank savings account but he is such a boomer its infuriating (beyond conservative in investing) we do max out his 403B and both of our ROTH IRAs so he thinks that’s enough. I do invest all of my part time income (I sell stuff on Ebay and stay at home with the kids)

    Reply
  19. MrFireby2023 says

    March 20, 2020 at 7:34 pm

    I’m feeling much pain Sam. First of all my brokerage account is down 40% which spells a few hundred grand. Next, my real estate crowdfunding is invested in hotels AND is leveraged. I may possibly lose my entire investment in the fund which is $50,000. and I purchased it through Crowdstreet’s platform of all places! My other crowdfunding investment is also in hospitality and they emailed to notify me that all monthly distributions are ceased. Occupancy went from 90%+ to 27%! I’m torched and all of my plans to retire early in 2021 are no more.

    Reply
    • Financial Samurai says

      March 22, 2020 at 8:54 am

      Oh man, I hear you as I’ve got a couple investments in hotels (Dallas FT Airport Hotel is one).

      Hopefully the rebound happens this year.

      Reply
  20. moom says

    March 20, 2020 at 7:12 pm

    After listening to that woman (I speak Hebrew) maybe it is better that we have a 1 and 4 year old than grade school age children. Normally, I am envious of parents with older children who can look after themselves more. Here in Australia things aren’t shut down yet. However, I am a college professor, and we have put our teaching 100% online from next week. We are going to be hard hit by a steep fall in foreign students (one of Australia’s biggest exports) next year (well from July). I have been fairly conservatively positioned financially because I was expecting a correction of recession sooner or later. However, some of my supposedly conservative investments turned out to be riskier than I thought. So, we have been hit quite hard. In percentage terms still it is better than the GFC when I was almost wiped out. But the absolute dollar numbers are larger.

    Reply
    • Financial Samurai says

      March 20, 2020 at 7:58 pm

      Yeah, I was talking to a couple of moms who say they wish they had babies and toddler age children instead. I guess they know better since they can compare the two age differences.

      All I know is that our three-year-old has the energy of the sun. It is literally nonstop 12 hours so we need to take shifts. And then we need to juggle our baby who gets disrupted because of his noise.

      Reply
      • ravi says

        March 20, 2020 at 11:24 pm

        We are in the same boat : 3.5 year boy + 2 month toddler. The elder kid is having a blast since he gets to spend so much time with us ! But it sure can get taxing for us parents doing the parenting job 100% of the time :)

        Reply
  21. OP says

    March 20, 2020 at 5:58 pm

    I was very conservative with my 401k and tax-advantaged brokerage accounts and moved virtually everything to cash in late January. I was following the situation in China very closely from the very beginning and my spidey senses were telling me there would be a huge correction in the coming months. My ordinary / taxable brokerage accounts have been another story and I’ve taken a much more aggressive / speculative line with short term SPY puts and longer term SPY calls on the inverse of market sentiment at the start of day and end of day trading. It’s been relatively profitable, but I’m mostly doing it for the adrenaline rush to ease the monotony of working from home.

    Reply
    • Financial Samurai says

      March 20, 2020 at 7:59 pm

      Congratulations. Again, another good example of why I think a lot of people are doing OK in this downturn.

      Reply
  22. Amenomori says

    March 20, 2020 at 5:39 pm

    We are also feeling the pain. Kicking myself every day for not selling a chunk of our stocks in February as we had planned.

    I found your blog in 2018 when we were trying to buy a house in the bay area, and it was my guide to everything. Thanks to you we went with a 5/1 ARM at 3.05% over a fixed rate. Then I consulted the blog for insurance, buying a car, and every other financial decision I’ve made since. We also became parents and I learned a great deal here.

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:00 pm

      Nice to hear from you. Sorry things have to turn out this way this year. We just got a hang tight and enjoy what we have. Best of luck!

      Reply
  23. TheEngineer says

    March 20, 2020 at 5:25 pm

    “Finding Joy In The Suffering Of Others” is an over simplification of human nature. We are animals based – animals expressed personal pain and suffering by transferring to the external environment – people, gyms, punching bags, tennis matches.

    People who lead successful lives have mastered the transferring of their own sufferings to
    anythings inorganic. They work to promote the joy and happiness others – people, animals and plants.

    Reply
  24. Social Capitalist says

    March 20, 2020 at 4:24 pm

    You forgot your last hardship- that you prefer eating out. Going to be a tough one for you and the fam eating cold cuts.
    Seriously, appreciate the post. Troubling times for many. Hope my lighthearted bashing wasn’t too much.

    I’m down 33%, unsure what to do even though I fully expect another 30% drop.
    In 2008 I left it in and came out okay- and I will this time too but it will again likely be many years before it’s made back. I can’t guess or time market but clearly things will get worse before better. Lot of wouldas couldas and shouldas- at least you keep a solid hedge.
    Good luck to you and yours.

    Reply
    • Financial Samurai says

      March 20, 2020 at 4:34 pm

      Oh, but I actually love delivery even more! With two kids under three, we actually don’t have much time to eat out. It’s mostly just delivery and cooking steaks at home.

      I hope equities isn’t a massive part of your net worth. GL to us all!

      Reply
  25. troybot says

    March 20, 2020 at 1:54 pm

    FS has been my compass this past decade navigating me through the calm and treacherous financial waters out there. Look forward to every article and love your weekend newsletters.

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:01 pm

      Nice to have you as a reader. Oh continue to do my best to try to help you navigate the waters.

      Reply
  26. Terry M says

    March 20, 2020 at 1:27 pm

    LOVE reading all your detailed posts. You are such a positive, caring person who shares you information weekly. Please ignore the haters!!!!!! You bring so much value to our lives.
    God bless you and your family always.

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:01 pm

      Thank you Terry! Bless you and your family as well in these difficult times.

      Reply
  27. Pete says

    March 20, 2020 at 1:24 pm

    Thanks for the post. My wife and I are 100% stocks and pretty much always have been. We’re down hundreds of thousands of dollars. No perfect market timing for us since we don’t do that.

    The silver lining for anyone in this situation is, if you do a back test on your portfolio to see where you’d be right now versus a “very safe” investment scheme, you may find that you still have more money now, even with the losses. Granted, you may not. Sorry. That’s the fun of investing.

    Losing money on paper is not fun, but at least you had a lot of money in the first place to lose! If you didn’t have a lot of money saved up, hopefully you keep your job and start piling the money in!

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:02 pm

      I love your attitude Pete! It will take you far in life. Hope you and your wife go through this just fine.

      Reply
    • John says

      March 21, 2020 at 6:00 am

      I also had a lot in equities, probably 70%. I’m down about $1M but it doesn’t really bother me. I expect the market to eventually recover. I’m in my 30s and own an Internet business that makes a lot of cash with almost zero expenses. Additionally, I own my home outright and have enough cash to live for 6 years. I won’t ever need to sell, so my investing timeline is forever. The only thing that would change my view is if the long term prospects of the USA turn negative.

      I feel for the health care workers who have to go into work everyday and risk exposure. I feel for the grocery workers and others who have no choice but to go to work. I feel for the small businesses with debt and expenses. It must be a helpless feeling to be laid off with no prospects of finding a job.

      Reply
      • Pete says

        March 21, 2020 at 10:31 am

        You’re in great shape! I debate how much I will mix in more international stocks (we’re at 20% right now) over the long haul so I understand the internal struggle.

        It is brutal for those who lose work in those industries right now. I so badly hope it is a V shaped recovery for them.

        Reply
  28. rich_r says

    March 20, 2020 at 1:12 pm

    Are you counting your losses compared to how much money you invested, or value prior to the crash? Personally, I feel better when I compare it vs a year ago vs recent highs.

    Reply
    • Jim R. says

      March 21, 2020 at 3:07 am

      Rich, by accident, I performed this type of calculation last night. It was comforting. Measuring from the all-time high is unnecessarily painful. Using a beginning of the year or year ago reference is much more comforting. I love this site.

      Thanks to a financial advisor, I began taking less risk a few years ago. Even still, down hundreds of thousands of dollars in the last four weeks. This is a real psychological fitness test.

      Although this is a public health issue, the primary damage to most is economic. Lost jobs, closed small businesses, market declines. We Americans are not used to being patient and long-term thinking. I am doing my best to get better at those things. Be safe everyone and hang in there.

      Reply
  29. Untemplater says

    March 20, 2020 at 12:48 pm

    Thanks for being so open and real with us. It is a crazy time indeed and we are all feeling it financially one way or another. If that GS chart on unemployment is real that is way way scary. This definitely isn’t the type of recession I was imagining would come. Thanks for keeping the site running and writing so much timely content in these crazy times. I know that’s not easy with schools closed, having small kids in the house 24/7 and trying to watch the markets and news around the clock.

    Here’s hoping the virus dies off soon and we can all start rebuilding.

    And PS thanks for that video. Gave me a much needed laugh!

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:03 pm

      The video was so hilarious! I’m assuming there is going to be a turning point where people start writing against business shut downs because the economic suffering is worse than the health risk of the pandemic.

      I give the economic suffering at most one month before please aggressive shelter from home and other methods are lifted.

      Reply
  30. Curtis Sharp says

    March 20, 2020 at 12:47 pm

    Sam my portfolio is down about 200k, 70/30 ratio. Both of my kids are home. They’ve broken 2 things already though neither one apparently did it. Me and my wife work at a local hospital and while they have no positive cases yet everyone is anxious. Its very easy for me to worry about the market dropping another 30%. I plan on buying more stocks but its hard to pull the trigger. I plan on catching covid 19 eventually as will most healthcare workers. Love your posts, i’ve read most of them. Very helpful during these crazy times.

    Reply
    • Financial Samurai says

      March 20, 2020 at 8:05 pm

      Hang in there Curtis! My son is breaking things left and right as well. He’s also drawing on the walls, banging doors, and it seems like he might eventually shatter some glass.

      I think we’ve got to just accept that we will eventually get the virus or have already gotten the virus. I have been often on sick since early December. And so is my family. It’s like a merry-go-round. Now I wonder whether it was the coronavirus or not.

      It is good to see that there are over 90,000 recovery so far and all the rich and famous people are reporting back that they are doing well.

      Thank you and your wife for being on the front lines.

      Reply
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