How To Enjoy Your Life After The Fed Ruins The World

Enjoy your life, no matter the economic situation. If you do, then you'll always be winning. The key is to recognize reality and take appropriate action.

The Fed hiked another another 0.25% on March 23, 2023 to 4.75% – 5%. Despite multiple consecutive lower-than-expected monthly CPI numbers, a blowing up of regional banks and Credit Suisse, the Fed indicated it will hike to a terminal rate of 5.25% or thereabouts. Most investors were hoping the Fed would stop at 5%.

Meanwhile, the 10-year bond yield is only at 3.5%, meaning there is a huge yield curve inversion. It's the largest inversion in over 40 years. The bond market is screaming for the Fed to stop hiking, but it just won't listen. Even with the bank run at Silicon Valley Bank, the Fed won't stop.

As a result, the United States will likely go into a recession again in 2023 thanks to the Fed's overly aggressive tightening. Over a million people will lose their jobs, banks will go bust, and trillions of wealth will evaporate. Instead of expecting inflation in 2023, we should start worrying about deflation again.

All the good done by governments to support billions of people during the pandemic will have been for nothing. Can you imagine struggling through a pandemic for three years, finally coming up for air only to be run over by a speedboat driven by a rich central banker?

When you are worth ~$100 million, as Fed Chair Jerome Powell most certainly is, you may not care as much about the middle class as you do about your legacy. Instead, you want the history books to emphasize how you were tough on inflation and gloss over the human suffering caused by your decisions.

Federal rate hike speed versus other times in modern history. Fed is hiking further and faster than any other time.

The Fed Is Turning Into The Enemy

What Jerome Powell, Neel Kashkari, and other central bankers fail to realize is they are quickly turning into public enemy #1. You can't say things like, “We are seeing almost no evidence that underlying inflation is coming down,” when real-time evidence says otherwise.

In the beginning, the rich and mass affluent class will object to an overly aggressive Fed as they see their investments lose value. But nobody cares how the rich feel. The key is the middle class.

Mass layoffs always come after stocks collapse. The average person can stomach paying higher food prices. But they have a tougher time accepting being laid off while their central bankers are still gainfully employed and worth eight and nine figures.

Smart employees will get ahead of the curve and try to negotiate a severance before mass layoffs begin. After all, the first people to get laid off tend to have the best severance packages. Further, the sooner you get a severance, the sooner you can get in line to do something new.

Yield curve inversion, most inverted since 1981. A recession always follows

The Fed Is Toying With Us

Let's imagine Fed governors are sipping cognac and eating caviar on a balcony at Jerome's mega-mansion. After all, they sold before the bear market began.

They're having a merry good time while looking down upon us peasants. Jerome nudges Lael who nudges Michael who nudges Neel to play “Hoops.”

Jerome says, “Whoever can throw an hors d'oeuvre into one of the beggars' bowls below gets a point! Everybody else has to take a shot of XO. First to five points wins!” Everybody cackles and cheers with glee.

Please don't depend on politicians or central bankers to help you. They spent and cut way too much in 2020 and 2021, and now they are going to constrict and hike way too much now. To enjoy your life, you must look out for yourself!

Global shipping rates collapsing - Enjoy life in a fed-induced recession

How To Enjoy Your Life During A Global Recession

I used to think the Fed would pivot before getting to 5% on the Fed Funds rate. At the very least, the Fed would acknowledge the signs of moderating inflation by year-end 2022. The signs are obvious, especially after the latest Series I Bond rate offer declined by 2.7%.

But after the December 2022 Fed meeting, the Fed is now determined to tank the economy.

Therefore, it's worth thinking about what you would do in terrible times so you can be better prepared. On the off chance an unfortunate situation occurs, you won't be surprised.

This is typical premortem planning. You write out the three things to do in case of a car accident so that if you do get into one, you know what to do. The shock doesn't completely override your brain.

The main thing you must decide during a global recession is whether to work harder or enjoy life more. You might want to work harder to increase your chances of keeping your job. Or you might want to coast because the return on your effort is no longer there. I believe the latter is the wiser move.

Here are my thoughts on how to enjoy life more in a situation of imprudent monetary policy according to the U.N. Given it will be much harder to make money in 2023, it's best to enjoy life more!

1) Quiet Quit Harder And Be A Middle-50% Performer

Although a global recession sounds scary, usually only the bottom 10 percent of performers are let go. But the media will amplify the doom and gloom stories of those being laid off. As a result, you may feel more at risk than you actually are.

In October 2009, the unemployment rate peaked at about 10 percent. It has since steadily fallen to about 3.5 percent today. Worst case, the unemployment rate could surge back to 10 percent by 2024.

historical unemployment rate and employment-population ratio - How To Enjoy Your Life After The Fed Ruins The World

You don't have to outrun a bear. You just need to outrun the slowest person in the crowd.

Hence, do enough at work to be in the middle 40 – 60 percent of performers. If you want to really take a gamble, you can try to be in the 11 – 20 percent of performers. But I don't recommend it. Those who work only 40 hours a week or less and complain why they can't get ahead are most at risk.

During a global recession your return on effort is low. Therefore, the logical move is to work less since performance isn't rewarded. You could bust your ass working 60 hours a week only to get paid less. Be careful of making the second biggest financial mistake and feel entitled to always make more. During a Fed-induced crisis, your company's share price is likely to lose value.

Quiet quit harder. Ask to work from home more. Take longer lunch breaks. Leave earlier to pick up your kids from school. Refuse to travel when Zoom meetings will suffice.

The name of the game is to focus on more important or fun things while you wait out the recession. If you really want to do something new, try and negotiate a severance and explore the world.

The opportunity cost of not working during a recession is much lower. Conversely, when the economy is going gangbusters, you want to try and capture as much financial upside as possible.

Just make sure you're not too obvious about taking things easier!

How I plan to enjoy life more if the recession gets worse:

Given I don't have a day job, I can't get fired from one. But I can do things to simplify life.

The first thing I will do is cut my posting frequency down from three to two a week. Then I will reduce my weekly newsletter to once every two weeks. I'll might drop my podcasting to twice a month, although podcasting is fun and easy.

The frequencies should still be enough to keep readers, listeners, and myself engaged. But it will help reduce self-imposed pressure as I return to re-retirement. I told myself I would publish three times a week for 10 years starting in July 2009. So I already achieved my goal long in 2019 and just kept going.

Online revenue is a nice bonus. But if the economy really starts to tank, then I should probably maintain my online income buffer. Here are thoughts on making money online since 2009.

Another thing I might do is shut off the comments section completely for a while. Even though it's always interesting to read different perspectives, there is a ton of spam I have to wade through every day. Then there are the occasional hateful comments or irrelevant comments. Shutting down comments saves time and reduces stress.

Complete Big Goals

Finally, what helped get me through the first two years of the pandemic was writing Buy This, Not That. Having a big goal to accomplish was a defiant way of not letting a terrible situation defeat me. Hence, if bad times are here for another 12-18 months, I could write another book to keep me busy.

You don't get rich writing a book. But you do stay occupied and have a triumphant reward once it's published. Financial Samurai was born out of the global financial crisis. It's always nice to make lemonade during difficult times.

Heck, I may even get into the best shape of my life! Nah.

2) Spend More Time With Family

For those with children, one of the best things to have come out of the pandemic was the ability to spend more time at home with your children. Plenty of adult children moved back in with their parents as well.

From all the feedback I've gotten since 2020, nobody has told me they regret spending more time with their parents, siblings, or kids. Instead, the regrets come from those who didn't take advantage of the situation to relocate closer to parents or adult children.

Even though 2020 and 2021 were difficult times, I will always appreciate our family's local outings. We went on so many great nature walks. Homeschooling accelerated learning and provided for better accommodations. I also learned to be a better parent.

Once you have a basic amount of financial security… money, career, and status are unimportant when compared to family.

Declining home prices due to rising mortgage rates

How I plan to enjoy life more if the recession gets worse:

If I reduce my Financial Samurai work from 20 hours a week to 15 hours a week, I will dedicate 70% of the free time to my kids.

My daughter turns three in December 2022, which means it'll be go time for me to be more present. Three is when memories really begin to stick. It was also the age my son consistently began to warm up to me. I'm hoping the same will happen with my daughter.

It's easy to put everything you've got into your first child and slowly not spend as much time with every subsequent child. I'm sure I haven't spent as much time with my daughter as I did my son at the same age. Therefore, I plan to course correct.

My biggest goals are to teach my kids how to ride a bike, scooter, and swim. At six years old, I remember the moment when I realized I was riding my bike on my own without anybody pushing me. Magical! I can't wait for my kids to experience the same thing.

A deepening global recession will help improve our family relationships because it will reduce the temptation to spend time making money. The problem with money is there is an endless amount of money to make. It's often hard to quit even if you have enough.

3) Make Better Friends Or Find New Love

If you find new love, the sting of losing so much money in a global recession will fade away. Remember the feeling of meeting someone you like for the first time? So wonderful!

If you've already found the love of your life, work on improving existing or new friendships. If misery loves company, then building better relationships during a financial crisis should be easier.

You don't have to be lonely if you don't want to. Make the effort!

Mannheim used car prices declining big time

How I plan to enjoy life more if the recession gets worse:

Given I already have my wife, I'm good to go on the life partner front. However, it would be nice to have another close friend or two.

I tried softball, but the demographic was a little off (most were much younger than me). Tennis is the easiest avenue since I play for a couple of league teams. I'm also playing a lot more Pickleball now, which has opened up a new community of cool friends.

The next way to find adult friends is through fellow parents at my son's school. The trick is giving my son time to find consistent friends and then arranging playdates with their parents. I also went to another kindergarten dad's night at Spin the other other night, a ping pong bar. Very fun.

Ideally, our families get along so well that we go on family vacations together. Finding such relationships takes effort, which is why we're committed to going to every school-related event.

4) Travel More To Enjoy Life

A good thing about a global recession is declining flight and hotel prices. With the pandemic winding down, there's no time like now to travel everywhere. If you are earning U.S. dollars, it is at its strongest level in decades, making international travel even more affordable.

Given it's tough to make money at work or with your business, you might as well take all your vacation days to see the world. Go see the ancient temples in Angkor Wat, Cambodia. Visit the pyramids in Egypt. Travel to Paris for the French Open. You won't regret it!

When you travel internationally, time seems to stand still. All the stress and responsibility back home seems to melt away. Back before we had kids, I dreamt of being a travel blogger. It was one of my favorite ways to enjoy life.

U.S. dollar strength a major factor in 2022 asset returns

How I plan to enjoy life more if the recession gets worse:

For the summer vacation of 2023, we may travel to Taiwan. Taiwan, like many other Asian countries, has finally dropped its quarantine policy for international travelers. No more do we have to isolate in a hotel room for one-to-two weeks.

Taiwan is an affordable country with friendly people and fantastic food. I think it would be a great experience for our kids to learn more Mandarin. I grew up there from first to fourth grade and have fond memories.

The great thing about traveling in June 2023 is that my kids should be old enough to remember. They will be 6.5 and 3.5. What a shame to travel to a faraway place only to not remember. The best time to travel abroad with kids is after they turn five.

Living Abroad During Grade School

I also have this grand plan of living in various cities for years at a time until our kids hit high school. I grew up in Manila, Lusaka, Kobe, Taipei, and Kuala Lumpur until the eighth grade and loved the experiences. But it was gut-wrenching to leave my friends behind in middle school.

Hence, we would probably stay in one place from seventh grade until high school graduation. We have the ability to live anywhere. The question is whether we will have the motivation to live exciting lives.

Here's a picture of reader Steve with best-seller Buy This, Not That (Amazon link) at Lake Atitlán in Guatemala. His career enables him to live abroad and help countries develop. What a fantastic combo!

Reading more great books during a global recession is one of my absolute favorite activities.

Buy This, Not That at Lake Atitlan in Gautemala

Thank The Fed For Gaining Back Your Life

Without going through the global financial crisis, I wouldn't have started Financial Samurai. I would probably still be working at my boring job with a lot more stress and health problems today. If that was the case, I'm sure I would be constantly wondering whether there was more to life.

But instead, the global financial crisis pushed me to change. It spurred me to finally propose to my girlfriend, start this site, and figure a way out through a severance negotiation. Despite having less money, I was happier due to having more freedom.

So let's look forward to a Fed-induced economic meltdown! It will finally spur us to do things we've been putting off for too long. Because once the water of money recedes, you're left focusing on what's most important.

Related: The Upside Once The Fed Destroys The Middle Class

How Do You Plan To Enjoy Life More?

Readers, how do you plan to enjoy life more after the Fed ruins the world? Besides loading up on short-term Treasury bonds to make more passive income, all ideas welcome! Does a global financial recession reduce your temptation to make money? Or are you working harder to try and not lose as much money?

To gain an unfair competitive advantage in building wealth, read Buy This, Not That. It was written exactly for volatile times like these. I synthesize my 27+ years of investing experience to help you make better financial and life decisions.

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192 thoughts on “How To Enjoy Your Life After The Fed Ruins The World”

  1. Read Creature From Jekyll Island if you think they’re just now turning on the people. This is in the Fed’s design. G

  2. Sam, what are your thoughts of risk vs. return. If you can receive 4.5% from Treasury bonds/bills what level of return would you need to see/expect from Real Estate or Stocks to invest new money? I’m thinking at least 4% and 8% respectively more than the risk free rate, which I don’t see happening in 2023. Even with this good start to the year. I personally think the best place currently for new money is short term treasury bills.

  3. The Fed needs to redefine an acceptable inflation rate from the 2% that Powell quotes all the time to something more reasonable, post-Covid. I have a feeling that years from now the Fed will look back and say that 2% was not achievable and will have to accept something of a higher rate (maybe 3%-4%).

  4. Sam, you sound just like Cathy Wood. I am not too sure about the call for deflation right now. It is simply too early to know that. We still have a very low unemployment rate, which will probably go above 4.5% before a real recession hits, so long way to go. I also don’t think 12.5bps (terminal rate of 5.125% vs. 5%) will really make that big a difference at the end of the day.

  5. Charlene Lohmueller


    Can you please help me understand the mechanism behind your statement that “Mass layoffs always come after stocks collapse” please?

    Aren’t these companies still profitable despite collapse of stock prices? If so, why the lay offs?

    Thank you so much!

    1. Sure. Executives are largely compensated with stock options. They have the incentive to keep the share price as high as possible. When the stock price collapse, executives and shareholders want to take action. One action is to cut costs and get rid of excess employment fat. Do more with less people = increase productivity.

      Executives have to show shareholders they are doing something to support the share price. Laying people off is one of the most straightforward ways to cut costs. Otherwise, management tends to get fired.

      1. Charlene Lohmueller

        Thank you so much for this explanation. It makes sense.

        So does this strategy of “mass layoffs” usually work to raise the share price? To play devil’s advocate, couldn’t retail investors view the mass layoffs as a sign of an unhealthy company?

  6. LOL, I spit out my coffee when I read the line about the speedboat. That sure paints a picture. What a circus! Thanks for the article and sentiments I agree with you 100%. We often do these things to ourselves just sad a bunch of out of touch people have so much influence.

    1. It is impressive how one man has the ability to create or destroy trillions in wealth and create or destroy millions in jobs. Maybe we shouldn’t let one man have so much power.

      In the mean time, let’s not fight the Fed!

  7. Your meaning of life philosophy (i.e. how you spend your time day to day) shouldn’t depend on the Fed funds rate. If it does, you’re a slave.

    1. Easier said, for people who are already rich. But for people who depend on a job to survive and take care of their family, getting a huge pay, cut and losing their jobs could be a very big problem.

  8. Hi Sam

    Merry XMAS and Happy new year to you and your loved ones. I am a big fan of yours for many years. Thanks to you, your posts, podcast and newsletter, i learn a tons and i was able to make many right decision. I totally rhythm with your saying “Once you have a basic amount of financial security… money, career, and status are unimportant when compared to family.” It is so true, at least to you and me. Keep on your good work, you make a difference to many people!!!

  9. I totally agree that working more during a bear market makes no sense. The returns are terrible. I’m sitting in traffic at 4:45 PM. Picking up my son, and the traffic is ridiculous. I can’t believe there are so many people going into the office and commuting, when the economy is tanking. I feel foolish.

    It’s better to just wait things out and relax during a bear market. Go travel and see the world. Spend time with family. So much better.

  10. Hi Sam,

    I’m gonna finally pull the trigger for a Masterbath remodel and adding a new bath to make a guest ensuit. Why remodel this during a recession? I’m just hoping for less competitive prices for both labor and materials. Also to enjoy the new masterbath ourselves, and host family/friends in the new guest ensuite as soon as possible.

    We plan to stay a frugal with everything else, maybe even travel, unless there are very good deals. One reason is that we travel a lot for work already.

      1. Thanks Sam. The process is hell hence the procrastination! But 2023 is the year before inflation increases the price further. The earlier done the longer enjoyment~

        I travel to South Asia and Europe for work. I try to combine mini sightseeing whenever I go, especially when I have to spend the weekend there.

  11. I have a line of credit agreement with a 100k balance. I opened it a few years an ago with my broker and paid less than 2% interest. I used it for all kinds of things – redoing my roof, replacing all my windows, and investing in higher dividend paying stocks. Now that interest on it is 7%, I will be paying it down in 2023. By the end of 2023 it will be paid off, but it looks like Powell will still be increasing rates.

  12. A few questions and comments:

    How much do the FED open market operations actually influence market ups and downs? For example one of the reasons we didn’t have a large decline in stock market during Covid when everything was “going to hell” was because the FED was pumping trillions of dollars into buying stocks right?

    Now that the FED wants to unwind their balance sheet isn’t that a reason why the market is dropping because the FED is selling? Honestly asking these questions because I don’t understand it that well. Related and relevant questions are what percentage of daily or monthly volume is due to the FED, or estimated due to FED? Is that something that you can track or shed light on Sam?

    Lastly my view is that the FED overcorrected by pumping up the market too much when things were actually doing pretty bad. Instead a correction would have been normal and healthy and would have naturally helped to tame inflation. Now to your point they are probably overcorrecting a fair amount..

    Appreciate your insights and data on questions above Sam!

  13. Well stated! I am not in favor of cheating one’s employer by loafing about, if you are accustomed to giving 110% and are only getting 90% in return, a little re-balancing is not inappropriate.

    More importantly, though, excepting in dire circumstances such as grave illness or natural disasters, ‘happiness’ or well-being cannot be contingent on circumstances.

    Today is the only today you get. Same for tomorrow. Might as well be happy. You have a choice.

  14. FabulousFrank

    I retired four years ago at age 53 after 30 years of owning/growing and then selling a successful education company.
    I was/am committed to enjoying my retirement as long as the years I worked and have thus far loved every single day of it.
    The key for me is to divide my time equally between Faith, Family, Finances,Friends and Fitness .
    If any one of these areas is severely lacking I rebalance my life to be strong in all five.
    I will never spend all of the money I have made and am so happy to have had an amazing 30 year run. Often times I feel as if I do not deserve the life I have and remain eternally grateful.
    I learned a long time ago not to count on anyone or anything to come through for you. No one will meet you half way. Often times when you are on top of the mountain in this world half the people will try to push you off and the other half are on the bottom telling you to jump. Be extremely careful with your money and do not trust anyone. None of the financial advisors in my opinion own the garbage they are always trying to sell you on. If you loose everything in the stock market, or other seemingly “solid” financial investments do not be surprised, it has happened many times before throughout history. Be very careful of any debt because it is all structured to eventually crush you. Many years ago I began investing in high end single family residential homes with little to no debt. I knew that no matter what people would always need a place to live. This strategy has served me well. If and when America collapses as it very well might, have an exit strategy until things possibly settle down. The best scenario would be if China and Russia slowly break apart and the US leads the world again by example. Possible, but highly unlikely. Good luck and God Bless everyone.

  15. With the caveat that I am not good at predicting the future, I suspect we’ve entered a new financial era. Higher interest rates, higher inflation (at least higher than the 2% we’ve growth used to), higher cost of capital, less venture funding (crowded out by higher returns on lower risk investments), and perhaps more volatility. I’m not sure it will necessarily be a return to the 1970’s but it is likely going to be different than what we’re used to since 2008.

    This new environment will create a new set of risks and opportunities.

    Articles like this really help us think through what it might be like so we can make good decisions with our money. Thanks Sam, I enjoyed the read!

  16. Another great article putting things into perspective! This has to be the quote of the year: “You don’t have to outrun a bear. You just need to outrun the slowest person in the crowd.” LOL

  17. I don’t believe it’s any sort of organized conspiracy. But it sometimes pays to pretend it is. For example: I pretend there is an Illuminati of the ultra-rich who periodically say to themselves, “Too much money is getting stuck in the middle, we need to free that up so we can move it where it belongs.”

    Then they tank the markets with the full knowledge that a lot of less well-off folks will inevitably panic at losing what little they have (at least by comparison) and panic sell, locking in their losses, no matter how much they have been told not to do that. There will also be those unfortunates that know better than to sell, but won’t have much choice.

    The conspiracists then swoop in and pick up what they want for a song and, when they decide it’s time, they permit a recovery. Mission accomplished! They have successfully transferred large sums of wealth, that had gotten clotted up in the middle, back to where it belongs, the people who make all good things possible and will use that wealth wisely, to do things like create jobs for the little people and to buy bigger yachts and better private jets (because that also creates jobs).

    Again, I don’t believe this conspiracy really exists. But it helps to avoid being a victim of circumstance (or hidden Illuminati) if you act as if it does, because the net result is kind of the same.

  18. I have mixed emotions about this post Sam. Because it was the Fed that provided a generational opportunity for the middle class to get rich, if they paid attention. It was only the Fed that allowed for so many marginal companies like a ROKU for instance to go from 80-500 in 18 months, or a horrible company like UPST to go from 17-401. Think about that! Think about the gift of wealth that was given to all (including the middle class) because of loose FED policy, not great businesses. If you didn’t take advantage of that – opportunities for middle class people in their 20s to 60s to basically set themselves up for life – well…

    And then on the other side, Powell couldn’t have signaled more clearly his plan at the end of 2022. Those market actions never come without a price. You/we/they had every opp to preserve massive gains and step to the sidelines. If you didn’t, well…

    I am hearing too many people act “caught” as if they had no chance to get out or re-organize their wealth. Couldn’t be farther from the truth. This has been about the most communicative fed in history. Never fight it – the mistake is people think it might be different this time. Just need to pay attention and have a small amount of knowledge about economics!

    Andy by the way, we are reaching some incredible entry on equities right now. Personal favorites are MSFT and CRWD.

    1. All good points. I think most people who’ve read Financial Samurai for years will be fine. But the vast majority are not as focused on their finances as we are.

      I just don’t want the Fed to over-tighten and cause another 2008 Global Financial Crisis, which will result in massive unemployment and ruined lines.

      As for me, I’m already unemployed. So getting more unemployed doesn’t matter. How about you?

      1. I’m pretty set – quiet quitting as I finish my last few years in a partnership and transfer equity stake. Plenty of cash/fixed income to weather multi-year storm.

        And just FYI, my son is graduating spring 2023 with a BA in CIT from the business school of a not top of the end college in VA, with a not top of the line GPA, and already has a job offer from a big 5 firm (Deloitte) starting with a salary more than I made until my 40s and a 10k signing bonus. So take heart, those who know about economy and how to run a successful business must not be too worried about what lies ahead.

        1. Congrats to him! Sounds like Computer Info Tech (I had to look it up) is in high demand. Not easy to get a job offer from the likes of Deloitte. I remember getting rejected by all of them when I graduated from W&M in 1999.

  19. dunning freaking kruger

    So after reading FS for a number of years and listening to the advice, ill leave a comment yet again.

    How do we plan on enjoying life more after the fed ruins the world? Well, doubt the world will be ruined but definitely will be stuck on the “this sucks” cycle for a bit. We bought braces for our daughter, we paid for a trip to Kauai in 2023 including airline tickets. We are on a 10 FRM at 2.45 and paying that down. House paid for in 30-36 months. No other debt. Investing 5 digits per month in equities.

    The suck cycle will eventually return to market averages. Looking at historical data the 5 years after a recession the average return is over 20%. So we continue to invest, don’t do anything too stupid and enjoy each morning.

    The money we make we are putting to use long term. I am currently studying for series 65 license for a transition once I separate from my 3 decades in gubment service. Ha! I will be working part time while still working full time gig with big brothers permission. So this recession is incentive to make more and put it to work.

    Extra cash will be for real estate, equities and some travel to Hawaii again.

    Reading BTNT was some extra incentive to do the series 65 . Website always has some nuggets. Love reading old posts and comments.

    Keep up the great work esteemed Financial Samurai!

  20. Sam love your practical advice as usual especially about “Quiet Quitting Harder”. It reminded me of one of your old articles when you wrote about the art of sandbagging. So many people get burned out or frustrated at work because they don’t know how to make the necessary adjustment to even the playing field.

    Keep up the great work and congrats on your book!

  21. Hi Sam – please don’t publish this post publicly. I just wanted to send you my story and give you some positive feedback here. Very appreciative for everything you do.

    I’m 31 and located in Southern California. I’ve been following your blog for about 8 years now. I’ve never commented before but felt like I should give some positive feedback here.

    I’m a mixed-race hapa. I work in commercial RE finance specializing in multifamily, stabilized and construction. I make a good income from my work but have really exceeded the financial goals I set for myself, in my early 20s, because I not only saved aggressively but invested in equities. From Apple to Tesla, I know how lucky I’ve been. Extremely lucky. While I have certainly seen a drop in my brokerage and retirement accounts this year, I am still riding high from my 2014-2019 cost basis for many of my investments. Additionally, I sold off a significant portion of my gains in 2021 and bought my current home. It’s an SFR with 3 beds/3 baths and 3 blocks from the beach and within a walkable 1-mile of a touristy downtown (not in a flood zone either and we have earthquake insurance). My 30 year fixed is 2.75% and because of its corner NE orientation, we have never had to use the HVAC. I’m very content with these golden handcuffs.

    I’ll add that I attended a CalState, graduated late, but worked fulltime the entire time I was in school. I graduated with no debt because I paid my way through while living on my own in a rent controlled apartment. I grew up below the poverty line as well. I didn’t even have health or dental insurance until I was 18 and started working. Looking back, there were government programs that could of helped as a kid but my single-parent household didn’t know about them and spoke limited English.

    So, my point with the above is that I didn’t have much in the way of real financial literacy as an individual or from my family (let’s not even mention school). This blog helped broaden my perspectives and see behind the curtain on how the well-to-do and investor classes see the world as well as financial products that I would of never known about earlier. I attribute a lot of my success to this blog and the real world anecdotes you have shared.

    It gave me the confidence to learn more, it guided my career interests, and it most importantly clued me into some of the best decisions I’ve made financially: upgrading to an SFR in 2021 with low rates, buying tech equities starting in 2014, having sound insurance/net worth/and retirement planning…

    I’ve done very well. I certainly cannot retire yet but having gone from having nothing to a net worth exceeding 6 figures, I am just very thankful for this blog. Lastly, this blog shares lifestyle advice that is so important, too. My husband is a tech product manager and he is a dedicated reader of FS. The importance of finding and being a good partner, of giving back to your communities, and just recognizing that wealth includes health and family, too, has been very helpful.

    Headed into 2023, I plan on taking a step back from work myself. We are currently looking into fostering to adopt and big brother mentoring programs. Recessions are unavoidable. Even if my investments continue to decline this year and next, I have a home I love and finances that should see me through the storm. I might not be wealthy when I come out the other end of it… but the journey you’ve helped me take so far has afforded me my home and my family’s security. So, I’ll be fine.

    Please don’t let the negative jerks on here bring you down! People like me rely on you for advice.

    1. J,

      Thanks for your comment! So wonderful to hear you are doing great and have made awesome progress in your finances and in your life.

      Your story means a lot to me. It gives me the motivation to continue! I hope you do become a mentor and foster parent. So many kids need and deserve love. I know you will do great because you’ve come from a difficult place, have a great attitude, and appreciate what you have no. GO YOU!

      And I will tell you a secret. “Negative jerks” sometimes bring me down. But most of the time, they just refill my tank.

      Best to you!

  22. FS… I was going to comment a certain way initially as your questions I thought were great, along with your post (per usual). However after reading through all of these other comments my answer is shifting slightly…

    1. Please don’t shut off the comment section. I realize there is likely a task involved that we don’t understand, but this post alone has generated unlimited value. The pros, and cons and in some cases almost comedic responses have been amazing. In all of these I always hear your message about these FREE articles, and FREE advice. Yet, people get jealous or mad about it. Perhaps you should offer a 50% discount on the FREE topics and see if they take them better.

    2. Your articles and comments have been invaluable to me, and with each post read I feel myself thinking about things in a different way, so I for one am grateful for your efforts. Hopefully, you can keep up the good fight and keep the energy going even in a down turn. Understandable if not, as you have already hit your goal 3 times over. But hopefully, you’ve got another few “rounds” in you…

    3. I have been trying to balance working and what I get out of it lately. Your previous post about status coupled with this one does make one think about the why’s of effort. My wife and I are each relatively highly paid, and in senior level positions. Sometimes, we take it for granted as we both have extremely flexible work. However, we are also both very type A, and find it hard to let go. I recently took on an executive coach to help me in my mindset, and to ensure I’m using energy wisely. One of of the best items of advice I’ve received from him so far, is that highly motivated people always get more work and yet, if the company name isn’t your own the work is just that. So, I have been thinking about all those extra hours I’ve put in and all the problems I’ve solved over the years. Sometimes there have been pay outs for it, and other times it just raises the bar and expectation to keep the grind going. I’m starting to get that feeling that it’s no longer worth it, yet, I haven’t hit my number so I push on. Though, I’m starting to grow tired of the games. I’m on too many committees and boards and advisory panels and such for the industry and sometimes I think what’s the point other than job security.

    Anyway, to answer your questions…

    Despite the hits to the overall net worth, I intend to keep focusing on enjoying life with my family and friends…

    I surprised my wife this summer with a birthday trip to Positano. I secretly got a few of our college and post college friends from around the world to meet in Italy for a 10 day trip. She was completely blown away as we were able to keep it a surprise for 5 months. I coordinated the trip so we all landed in Naples at the same time, which was no small task, as people flew in from London, DC, NY and Boston for the trip. I had hired a car service that took us to a mountain top villa overlooking Positano. It was an epic trip full of adventure with great friends.

    I’ve decided I’m no longer going to miss my kids sporting events no matter what. I have been rescheduling meetings, and putting in block out slots in my calendar to ensure it. I’ve recently skipped board meetings, and conference events to ensure I could see them play. And, I have no regrets. There is something so special about seeing kids have fun at play. I have even surprised them recently going to games and practices they didn’t think I would make.

    I just finished a large reno on my house. We finished the basement: added a weight room, bar, bathroom, and entertainment area. I also finished the attic and added a spare bedroom and bathroom and a movie room. So, my plans are to start enjoying those more and entertaining more. I have been inviting my kids friends and parents over to enjoy the space, and to make new relationships. The added entertainment space has been great so far. So far we have got along great with the other parents and have started spending time with them sans kids as well.

    This past weekend I had friends fly in from out of town to stay at the house and we went to a football game. I hired a limo to take us so everyone could enjoy the game and not worry about driving and I took care of all the food and drinks for the weekend. It was a great time overall. So many laughs, and in the end I wasn’t thinking about the bank account, just the memories being made.

    All in all, I’m reminded of Ferris Bueller in all of this, and his quote, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it”

    1. Incredible comment! Thank you for sharing.

      “ highly motivated people always get more work and yet, if the company name isn’t your own the work is just that”

      This is very insightful because I felt the same way. Even if I got promoted to managing Director at my old firm, the Mundane wouldn’t have ended. I probably would’ve felt proud for three months and then it was back to the same old stuff.

      When you on the majority of the firm or all of the firm, things feel different. You are more motivated and you feel more proud of the work you do. It’s completely rational.

      I love that you’re surprised your wife with a great trip and are spending your money on wonderful experiences. Well done!

    2. Ms. Conviviality

      Irish247 – you’re insights and the advice I was able to glean is a good example why I enjoys the comments as well. Thanks for sharing.

  23. I could never do what you you did working that long in investment banking, an absolutely soul sucking meat grinder of an occupation. No wonder you plotted an escape – good for you.

    I’ve been in technology sales since the dot com bubble and it has been an incredible ride, one where I’ve rarely worked 40 hours a week, let alone the hours you had to put in. Being in Silicon Valley I see and know lots of very successful people, from friends met throgh kids to friends I’ve made at my golf club and customers, and the one common element with the most successful people is they are still working. Some of them are very competitive golf and tennis players yet once you’re in the big leagues in technology there is a rush that’s hard to replicate.

    A few questions as I am a first time poser:
    1. Why do you live in SF with kids? So many nicer parts of the Bay area to reside with great preschools that aren’t social status proxies.

    2. Do you think your passive income real estate investing strategy is going to be impossible to replicate moving forward as the Fed seems determined to punish the mis-allocation of capital to real estate over the prior 2 decades?

    3. Don’t you think Quiet Quitting has deleterious psychological effects for most people with a brain that likes intellectual competition?

    Finance is super boring and requires lots of hours, but sales is pretty easy if you have the personality and can learn how to create value.

    Keep up the great work on this blog.

    1. It’s great you have found an occupation that provides meaning to you, that you enjoy. What kind of tech do you sell?

      I did enjoy Finance for about 10 years, then it got boring because it was the same old thing and then the market collapsed in 2008. I really wanted to focus on doing something that was more helpful.

      1 What other places do you recommend in the Bay Area to raise kids that are better than Sam Francisco? Where do you live?

      2 I think real estate is going to be an even greater demand once the correction is over. People losing so much money in Stocks now is a great reminder of how much more stable and sticky real estate and real estate rents are.

      3) No. I think they provide positive effects because people can improve their mental health and focus on doing things they enjoy.

      A great thing about life is that we do things we enjoy and stop doing things we don’t. Everything is long term rational.

      1. Thanks for the response.

        Background is in software, spent most of my career in silicon but am now back in software and loving it.

        You know the good areas – Piedmont or LaMorInda if you wnat EB, Peninsula down to South Bay if that better suits you. Bay Area outside SF/OAK has the best public schools in the state. Our local South Bay high school is an ideal 50/50 asian/caucasian mix with the elementary/middle/high schools all within walking distance. Friday Night Lights, the whole bit.

        Your real estate strategy worked because of cheap credit, which is a thing of the past. We are entering an era of permanently elevated inflation driven at its core by onshoring – having spent a few years very intimately involved with billion $ levels of hardware mfg I can tell you there is NO China substitue for mfg – endless supply of migrant labor that is conditioned to work as hard as they can to please mgt and they always work the OT. Try getting that level of productivity out of a factory anywhere else, not to mention losing the benefit of the world’s supply chain in the Pearl River Delta…inflation and high rates are here to stay for a while. I also feel the Fed is signaling hard their intent to crush the speculative and income real estate sectors and force dollars back into Treasuries and equities, and force people back into the labor market to boost labor force participation rate. Killing these 2 markets with expensive debt and no govt backstops will restore traditonal pricing signals and, ther Fed hopes, drive down rents by making income real estate investing unprofitable at current valuations. I see the 30 yr hitting 9% next year and staying elevated for the rest of the decade.

        I don’t think Quiet Quitting generates a positive mindset for people working now – if anything it likely creates more stress. My sector (cloud software) is booming and I am super excited for what the next 10 years until I plan to retire holds.

        1. Glad you find software sales to be very meaningful. I’ve had the exact opposite feedback from people in software sales who told me they quit because there was no meaning to their software sales jobs. They told me that when they look back on their lives, they won’t feel good trying to hit monthly quotas to sell software for productivity management or whatever.

          So that just goes to show you how lucky you are to enjoy what you do and that everybody has different feelings about their occupations. We have to decide what moves us and change if we don’t like what we do. I disliked my banking job after 10 years, so I planned my escape. But some people I used to work with in 2012 are now on their 20th or 30th year. Incredible!

          I really enjoy the beauty and diversity of San Francisco. I think there’s a high correlation of satisfaction between whether you can comfortably afford to live somewhere or not. And people will rationally be supportive of where they live, especially if they move. The more expensive a city, the more people will dislike it. It’s just the way it is.

          Do you expect rents to go down in an inflationary environment? Because so far, I have not seen this at all. Rents tend to follow inflation. But of course, double digit rent increases cannot last.

          Higher interest rates are also great for retirees. I am thankful to be able to earn a 4.4% risk free return on Treasuries. Check out my post on buying Treasures. $44,000 in risk-free income without having to pay state taxes on a $1 million investment is pretty nice. Just last year, we could only get $15,000 a year in risk-free income. As a result, there is no need to work as hard if you have the capital.

          1. I’m super happy about my private real estate and physical rental properties. They are doing phenomenally well in the spare market. Rents continue to go up and I wish I had even more real estate. So I will be waiting for some opportunities to buy real estate over the next 18 to 24 months.

          2. I have to chime in and agree with Sam/FS that if anything, MORE people will want to be in RE rather than equities if OC2SV’s belief of 9% mortgage rates for the next decade and high inflation hold true…Look at the NASDAQ/SP500 crushed ~30%/25% already and more downside likely until the inflation peaks..and I think it will peak much sooner than later as soon as the Russian war finally ends. We already see heavy deflation in used cars, airfare, big sales at Walmart/Target, rents coming down actually in many metros and that is the biggest CPI factor..gasoline should soon follow.

            Side note, I have never as well seen anybody enjoy software/tech sales in general: very high stress with a lot of travel and repetitive. Awesome how OC2SV has found joy in it.

          3. Your real estate thesis from your July article has not aged well:
            “In my opinion, we are going to be in a low-interest rate environment for the rest of our lives. Even if the Fed hikes the Fed Funds rate three times, the 10-year bond yield might only go up by 0.5% at most given the yield curve is sufficiently steep.”

            Your opinion was dead wrong, and as you can now see the Fed has to hike rates higher than you ever imagined to tamp down inflation. And with 40% of PCE coming from housing how will the Fed bring down rent inflation? The mechanisms will be painful for real estate as an asset class. I’m 2 years into my 15 yr /1.99% so will just pay off this house and rent it out in retirement but I don’t see good cash on cash returns for new real estate investments moving foreward until values crater. At 7% payments have doubled in a year for a new buyer, so don’t you think values need to deflate proportionately?

              1. Once again I’d like to thank you for responding and being willing to debate. I will comit to no snark..

                I think you should do a re-assessment of your views as I’m not seeing you provide any evidence to back up your mid-2023 time frame, and in fact both Dimon and Dalio and Brainard have al sent signals in the opposite direction over the past few days. The leak on PPI tomorrow is 8.5% – not good.

                Mortage credit has dried up to such an extent, especially for non-owner occupied, that values are going to tumble – basic economics. I saw this in Orange County in 89 where values declined and then moved sideways for almost a decade. The Fed is hell bent on defalting rents as part of their inflation mandate which translates to making income real etsate investments are current pricing completely unattractive. As of today investment grade corporate bonds are almost 6% – between Tbills and AAA 6% bonds why go anyhwhere else?

                I was lucky enough to buy the last time rates went up in 2017, which created a serious lull in the Silicon Valley housing market that we pounced on, buying at $600/sq ft with the peak pricing last Dec up to $1100/sq ft. Refi’d down four times over the next 3 yrs to 15 yr/1.99%, a Quicken Loans shop in SF that had such a huge lender credit I actually got a few hundred back at the closing table.

                We’re in a big name school district that is super popular with Asian families that can’t quite afford Saratoga/Cupertino/Palo Alto/Los Altos, and we bought an small home below our means which will make it a super attractive well priced rental, and I took advantage of the Dem’s misguided climate policies to take my home off the grid with a 26% subsidy for the full Elon stack. Given I enjoy the intellectual challenge from working here in SV where my sales-guy-with-a-top 10 computer-science-degree lets me virtually select my own employment I plan on working at least another 5-10 yrs. We will rent out this house and buy another down in SoCal to live in. I’d like to buy that 2nd home in the next few years but I’m going to do my best to time that market as OC is not a major job center and thus I feel will see values slashed by 30-50% from 2021 peak depending on location. 2nd home purchase loans are riduclously expensive now as well.

                On the private REIT front I saw some news today that was troubling – see yesterday’s WSJ:
                The North American Securities Administrators Association is looking into new rules that would limit how much an investor can buy into a non-traded REIT and prohibit such funds from paying out distributions from capital earned from selling shares, The Wall Street Journal reported. Investors would be prevented from putting more than 10 percent of their liquid net worth into a non-traded REIT and other investments provided by the fund sponsor.”

                Thanks again for being willing to engage in debating your investement theses.

                1. Sounds good to me. We feel thankful we get to buy a nicer house and some securities at a discount over the coming years. Younger folks and children should be pretty excited as well.

                  The key for our family is to continue living our lifestyle and not let a bear market affect us. One of the ironies so far is that our passive income continues to go up as rents and rates go up.

                  Our main goal is to not have to go back to work so we can have more control over our time. The kids are growing up quickly, and we don’t want to mess too much time with them.

                  Everybody I know has a lot more cash that in the past. I think a lot of people will benefit greatly in the long run, including yourself.

  24. Canadian Reader

    Nobody can see the future, but with all the upheaval, we felt that slower times were probably coming and that is one of the reasons we decided to expand our family again. I’m also doing another professional credential in the down time and putting more energy into my volunteer job with the family centre.
    That should keep us busy!
    As for the job market, well the wages aren’t high enough for my husband to go back to work and I work casually just to keep a little more status than SAHM. I’ve already been mailing it in forever and work seems to put up with it. At my new job, they promoted me to an easier position with more money this last week. Maybe the whole underdog ruse is the way to go!

  25. This post has me scratching my head. What will I do to enjoy life in a recession? The same thing I do to enjoy life at any other time. Money might make life easier, but my happiness and fulfillment don’t depend on the economy.

    1. Longtime/First time

      I agree, Mary, we should always focus on being happy. I didn’t come from much and my Dad always said: 1. There’s nothing wrong with not having a lot of $. At least you know people are being friends with you for you and not your $. 2. When you have $, share it, because you can’t take it with you.

      I will say that I don’t share all of the doom & gloom on the economy for a few reasons: 1. Global inflation has been impacted by Covid supply chains (which are getting better every day), China (sigh), and the Russian war (UKR is doing their best to kick ass and end this ASAP) and I think most of this will ease up over the next 3-6 months. 2. I think the political climate is a bit amped-up heading into the midterms but I think the Dems narrowly hold the house and gain seats in the Senate, allowing them to make some policy decisions that will help things out (I know politics is a sensitive issue and many feel differently, so I am moving on from this). 3. I think the Fed will back off on things and not make them (any) worse. 4. There are just over 1 million fewer people here with us now due to Covid. 5. The unemployment #s are still really positive. We have about 6 million more job openings today than eligible workers. The unemployment rate for college grads with 3+ years of experience is 2.3%. Our economy & demographics were quite different in 2009.

      because of all these factors, I believe that this downturn will not be anywhere near that level of severity. On top of all the other employment #s right now, many more boomers are retiring and there are not enough people to fill their positions. We have new roles in alternative energy, newly built assisted living and retirement facilities, blockchain, and crypto firms…all new in the last 13 years with many fewer people to work them. I think some people will be laid off. Unfortunately, likely those that can afford it the least, but I don’t think there will be nearly as many layoffs as some are predicting. We have been running on fumes when it comes to employee headcount for years and still need more people in most areas. Will a bank lay off some people in their mortgage processing area? Yes. Will that bank lay off thousands of people? No. They are going to train some of these mortgage people to do other roles in their firm that they haven’t been able to fill for the last 10 years (I know this for a fact, as I have discussed this exact situation with several banking clients) and I believe this will have a significant impact and eliminate the need for many of the layoffs. These factors added together will help make the dip short and less severe. The makeup of our workforce is very different than at any time in the past 100 years. For once, I think the ball bounces our way and this helps us move through this quickly and get things humming once again. Just my .02.

      1. We won’t get all political here but any prediction that Dems will hold the House seems to be wishful thinking at this point. I just looked at 7 different polls and not one of them has the Dems holding the House and these are a collection of both liberal and conservative-leaning polls. The average consensus of all 7 polls has the Republicans up by 11 seats.

        To be fair, these are still tight and anything can happen over the next 4 weeks but as confidence in the current administration continues to erode, that only favors the non-ruling party in a mid-term election. Dems do have a better chance of holding the Senate but that will also be close and definitely not a slam dunk.

    2. Wonderful! And it’s really great you are in a financial position where bad things in economy don’t matter to your lifestyle.

      What were you doing back during the global financial crisis?

      1. In 2008? I was working part-time in a legislative office while my husband took a $4 an hour pay cut in his hourly construction job. Then as the crisis was winding down, he was diagnosed with cancer and died a few years later. It was stressful, and I wouldn’t wish it on anyone else.

        Now I am self-employed and make slightly more than I did back then. More importantly, I got out of debt and built up an emergency fund. You probably make more in passive income than I make in active income in a year, but I live in the Midwest and my living expenses are low.

        In a worst case scenario, if my business income dried up, I could piece together enough money to cover my bills by working at the grocery store or one of the local restaurants that is now paying workers $20/hr (seriously!). And if that fails, I have enough in my emergency fund to cover expenses for a year.

        So I don’t stress about the economy, although as a middle class person, inflation is far more bothersome than my declining IRA balance.

  26. Long time reader, first time commenter.

    Pretty much doing all except #3 as I have many good friends a wife already. Currently, travelling to europe then asia and home-basing in southeast Asia while I raise my 1 year old for a couple months.

    1. Awesome! I’m very jealous you get to travel around Asia with a home base in SE Asia. I don’t have the patience to travel far with toddlers. I’m waiting until my daughter turns 5.5 in 2025.

  27. Fun read; interesting perspective too.

    I think maybe career stage plays a part in your cavalier attitude; it’s pretty logical to choose “living it up” over “work harder” when you’ve reached a level of wealth where the marginal benefit of another dollar is somewhat low.

    I’m choosing the work harder route, but this is probably because I’m at a much earlier stage in my life. Not to mention that lean times call for lean measures, and there’s rarely a better time to earn that “workplace goodwill” than doing the job that no one else is willing to at the worst time. If you want to pull ahead from the pack, the best time is when everyone else is resting on their laurels.

    1. Paper Tiger

      I think you have a very healthy perspective and one that makes sense for the stage of your career and current net worth. I would never encourage everyone to give less than their best effort but I would encourage folks to work smarter and not harder where possible. To me, working harder should come with a tangible benefit to the one doing the work.

    2. Great attitude! And you are definitely right about how my perspective is different from others because I am at a different stage my career.

      Building a goodwill during downtime is important to protect yourself and to benefit from the inevitable upswing. Best of luck to you!

  28. Sam, your replies to many of the commenters on this post are very polite and graceful. My blood was boiling while reading some comments.

    I took a few months off from work to work on my health due to burnout from work.

    I booked a trip to the UK with my kid! Excited to go on an international trip, it’s been 3 years! Looking forward to stretch my USDs over there.

    1. Thanks Ceci. The comments come with a territory of being a blogger. After more than 13 years, I’m used to it. I just try to enjoy the process and observe the mood of readers based on what they say. It’s pretty fascinating how some interpret what I write.

      I’m glad you were able to take some time off and heal! Enjoy the UK!

  29. Great article Sam! I didn’t just quiet quit my job. I fully quit my job and it is the best decision I ever made. I am spending more time with family and finally getting enough sleep. I am buying treasuries just like you. The I bond is an amazing deal and now with treasuries paying well I may never need a full time job again.

    I may at some point take a job just for something to do, but the pandemic really put the importance of family in perspective. I enjoy college football a lot and one of the things I will never give up are my great seats to football games.

    Enjoy all the freedom you have earned Sam, I read this blog regularly and love your take on life.

    1. “but the pandemic really put the importance of family in perspective. I enjoy college football a lot and one of the things I will never give up are my great seats to football games.”

      YES! You are very right about the pandemic putting things into perspective. The greatest silver lining of making people think what they want to do with their lives.

      Can’t believe the desertion of some Pac 12 teams like UCLA and USC!

      1. Thanks for reply, College football is becoming the land of Mega conferences and Mega money. No more amateur athletes soon, but things change over time. Again I enjoy the blog very much and the financial opinions you have are outstanding. The young workers in this nation could benefit from reading your advice on investing and diversification.

        Teachers sometimes can’t talk with experience about money because they don’t have a lot of it. I have observed some high school financial literacy classes and while they do well at the basics, the teachers can’t explain some of the issues as well as you do. You sometimes have to make a lot of money to explain to others how to do it.

        Thanks again for all you do!

  30. Wow! You’ve really brought out some of the crazies with your post on enjoying life more! lol

    I guess nobody wants to face reality the Fed won’t pivot and bad times are likely to continue for a while.

    My company’s stock price is down and management said cost-cutting measures will be conducted by year end. This is also a way to manage lower bonus expectations. So I will happily be “quiet quitting” and spending more time with my family!

    We’re also planning a trip this winter to South America, where it’s summer. It feels good to take things down and not have to work so hard for the almighty dollar anymore. We all need a break!

  31. Jim Johnson

    Hi Sam
    The over the top irrational irritation of the comments should cause concern…people are scared.
    Your responses to objections sounds like a poker player on a losing streak… it’s been my experience from personally waisting way too many hours playing poker that winning only brings in happiness of 20% compared to the misery of 80% (4times as much) when you lose.
    Your not used to losing in the stock market…
    You really haven’t lost money in the equity markets, yes you have had set backs but the Fed always had your back…
    Now the Fed actually has to do it’s mandated job and it’s not what the “investing class” likes…but it’s job to stabilize inflation and keep employment full.
    You were wrong about inflation and interest rates.
    Now your acting like a poker player that is on a losing streak… blaming the dealer or bad luck.
    You like so many others have been on lucky streak because of Fed/ Government gifts…now you actually have to succeed on your own….good luck!

    1. For sure. The vast majority of my gains and wealth are due to luck. Maybe 70-80%. I’ve written about this before. With gains mostly due to luck, giving them up doesn’t feel as bad bc a lot of it felt like funny money.

      Not sure if you are aware, but I have gone through the 2000 dotcom bubble and 2008 global financial crisis with significant investments. But again, surviving the downturns were also mostly due to luck.

      I’m assuming you are doing very well in this environment. If so congratulations! The rest of us will have to just stay patient and maintain their cash flow.

      Why do you think more commenters don’t share how they plan to enjoy their life more during a global recession? This is the main point of the post, yet most commenters, including yourself don’t discuss it.

      What are your plans for living it up now that money is harder to come by? Also, all suggestions for building more wealth in this bear market are welcome!


      1. I think it’s because the negative commenters, including Jim, are losing a ton of money. And when you are losing a ton of money, most people can only focus on the negatives, instead of looking at the positive side of things like you are.

        It totally makes sense to spend your time and effort doing more enjoyable things than working to try and make money when it’s so much harder to do in a recession.

        I’m going with the boys flyfishing in Montana next summer. It’s going to be our great trip. And we will go to Whistler this winter for some snowboarding. Things are cheaper in Canada with the strong dollar!

      2. jim johnson

        I have never been a believer in the stock market. Between my kids 529 accounts and my small 401 k I have less than 3% of my net worth in equities. All my net worth and cash flow comes from warehouse/ factories and companies I own. Rents are going up.
        I have not changed anything in my life to “enjoy life more during a global recession”. Each day is a gift, I walk, enjoy my kids and and wife and try to be as thankful as possible. I never watch TV news anymore, TV in general. Your blog is the only one I have ever commented on. I am impressed with all you have done for good for FREE!
        “What are your plans for living it up now that money is harder to come by” is hard for me to relate to. I have too many people counting on me. I enjoy each day, but I will succeed global recession or not…
        I think equities investing will be difficult for many years to come. The combination of the Feds QT and rate hikes and strong dollar will make it difficult on equities. I am going to invest $ in Portuguese real estate. In addition its a good time to have “dry powder” as I see hardship opportunities in 2023-24 for cash buyers in real estate.

      3. sell A little real estate, park your proceeds-monies in some safe CDs or bonds, than reinvest in solid stocks when you see market drop another 15 or 20%.

  32. Interest rate is just a lever: low interest rate favors investors and rent seekers, high interest rate favors savers and wage earners. After 2 decades of zero or negative interest rates, finally Fed decides to give workers and savers a break. It’s bizarre that boomer media portrays neutral interest rates as detrimental to our economy, like boomers want negative interest for the next century so their assets can go to infinity?

    One benefit you notice immediately is this summer traveling in Europe, everything is cheap: food/entertainment/housing are cheap, their public transportation are brand new and working (unlike NYC or SFO), and nobody needs a car let along a Tesla. In Rome you see seniors riding buses and walk everywhere, here in America seniors get fat and weak living in senior home because they couldn’t drive or can’t afford a car.

    When assets inflation is gone, what does American dream even mean? Should we beg the Fed to keep rate at 0% so the party can resume?

    1. No. Rates need to come up to moderate the boom and inflation.

      It’s just too bad we are getting whipsawed given rates were cut so quickly and stimulus was so plentiful for two years. Now the rate of increase is the fastest and most aggressive in decades.

      Got to stay on top of one’s finances in this environment.

      1. Yes agree current rate hike is too fast, too high, and focus too much on short term rate. Ideally Fed can/should reduce balance sheet first and asap, and it’d easier if they keep short term rate low so long term rate becomes more attractive and easier for them to unwind. Instead they kept a measured pace on reducing balance sheet yet got ferocious on raising short rate, now we got an inverted yield curve and they’re still going at it on the short end!

        In the early 90s you could buy a 400 sq ft apartment in NYC with 1 yr starting salary of $40K and with 9% mortgage rates. Back then people can just work, live and no need to know financial planning at all (most got defined pensions). Now with all these Fed interventions not only the market or economy isn’t smoother, everyone regardless of professions has to learn M1/M2 and guessing JPower just to protect their livelihood. It’s the end of capitalism when Uber drivers are arguing about how rate hikes affects his car loans.

  33. I love all the guys here virtue signaling they will work harder and that other people should too, during a global recession, as a way to have more fun and joy.

    Americans really have it backward. Living to work is terrible and it shows Americans are trapped I this never ending desire for more status and more money.

    Open your eyes wage slaves! Life is not all about work! Travel to Europe and see how much better work-life balance is. Oh yeah, most Americans don’t have a password.

    Only in America will people get upset about people focusing on more important things like family and friends during a recession.

    Well done Sam for exposing all the workaholics, politically hooked, and miserable people in the world.

    I’m happily spending more time on travel and family if my investments and work compensation isn’t increasing.

    If you want to kill yourself at work, feel free! Just don’t get mad at people who rationally have better work life balance if they aren’t properly compensated.

    1. As a German who works hard, the obsession Americans have with making money and never taking time off is surprising. It’s unhealthy, which is also one of the reasons why American never ranks in the top 10 happiest countries in the world despite having so much money.

      1. I totally agree. This summer we travel in Italy and see for ourselves how enjoyable Italian lives are, compare to US: All the fat people walking around in Rome are Americans, Italians are lean and fit from living in a walkable city, there’re a couple of restaurants around every corner, people living their life (surprise!) and unlike Americans whose dinner conversation you overheard were always about stocks, interest rates or their real estate prices in Austin, Texas.

  34. “All the good done by governments to support billions of people during the pandemic will have been for nothing.”


  35. How stupid is this article. This is EVERYTHING wrong with this generation. “Quite quit harder” “try and negotiate a severance” as a business owner who busted thier ass to get to where I am. I would never gave gotten here by “quite quitting” if I had taken this advice I would still be a bank teller and never advanced my career. You need to work hard save money and open a business of your own. You will NEVER get there by “quite quitting” The publisher leaves out the part about how hard it is to get another job when you were laid off for horrible performance or to reinvent yourself when you’re in your 40’s. No one wants to hire the 40 yr old with no experience. Take it from a small business owner with decades of experience. If you quite quit you will only get your hours reduced till you’re forced to quit or worse get fired. Severance packages are for executives not for low level employees in a small business. I would rather have an EPLI insurance policy and get sued for wrongful termination than pay an employee a severance package for “quite quitting” So don’t get your hopes up for being rewarded for doing the bare minimum. If you want to spend more time with your family and less time working good luck trying to take your kids to a ball game on unemployment. It’s easy for “bloggers” and people without “real jobs” to tell the world to “quite quit” and reinvent yourself and get a job that magically pays double one day down the road. You will have to go to school get another degree and start FROM THE BOTTOM! Please people look at reality and think for yourself…does it make more sense to do the bare minimum to get ahead in life, or work as hard as you can while you’re young build up capital and invest in a business and THEN enjoy spending time with your family and a work life balance.

    1. Thanks for your comment I guess I’ve been out of the loop for too long since I last had a day job in 2012.

      How does working even harder during a global recession with less compensation bring more joy to someone’s life? The purpose of this article is to figure out how to enjoy life more during bad times.

      I definitely do believe there is a lot of satisfaction and some joy in working on some thing you really care about. But I’m not sure that’s the case for all people with jobs they don’t love.

      1. I put myself in a situation where I had to continue busting my ass for the last decade. Blaming no one but me. Having said that, it has paid off. We are enjoying life, kids are grown, yeah. And for what it’s worth, the whole “quiet quitting” conversation is amusing. If you don’t need the job, just quit, cupcake. If you don’t want to work hard, don’t. But don’t bitch about those who do, whatever their motivation. It makes you look weak(er) and petty.

        1. Not sure why people are moaning about people who aren’t willing to work hard? It’s their life. They can do what they want and except the outcome of their efforts. Everything is rational.

          The last 10 years of a bull market were a pretty good time to work hard. Now it’s time to enjoy the fruits of our labor.

          My goal is to work hard on parenthood while the kids are still at home. And then I might consider working hard and making money after the kids are gone. I know it’s backwards, but I think it makes sense if possible.

    2. Nick, do you know how stupid you sound for telling people to work overtime when they are not being properly compensated. If working more is your definition of enjoying life more, then you are the perfect work slave.

      Do you need a job? Because I’m hiring at a big discount and I require you to work 70 hours a week. Let me know if you’re interested.

    3. I think the point of quiet quitting is to only temporary ride out the storm, not continue it indefinitely.

      It also depends on many factors. In many cases entry level work doesn’t necessarily reward effort. Things like raises are determined by distant corporate offices and given equally to all employees. Promotions are often few and nearly non existent. In other cases, maybe for mid sized businesses not governed by faceless distant corporate overlords, hard work is seen firsthand and raises given more consistently. Workers need to be smart about how the delegate their energy.

    4. Back when I was working for a large aerospace company and lay offs were imminent, I was really worried about being laid off before age 55 when I would be eligible to receive my “Magic 75” early contributory retirement plan payment. But then I heard the boss man refused to lay off anyone who was within three years of retirement because he “didn’t want to pay people to retire.” Since I had less than 36 months to go before turning 55, I figured, “why should I worry? I’m golden. Boss man isn’t going to lay me off because he doesn’t want to give anyone close to retirement a severance package.” Do you think I would be motivated to work extra, extra hard for boss man? No. I knew I was safe until retirement. I guess that was a form of quiet quitting before quiet quitting was even a thing.

    5. Nick, maybe you have a reading comprehension problem. The publisher talks about being a middle of 40% to 60% performer, not the 90%+ performer who doesn’t get reward during a recession.

      FS has been a proponent of the grind for over a decade. How else could he and others retire early?

      You don’t sound like a fun person to be with. Work harder is your idea of fun? Haha. Quiet quitting is about not going above and beyond your day job requirements and pay. Not about slacking off.

    6. Have you looked in the mirror today? You sound very angry and unhappy – the feelings you are projecting must be reflecting anger and frustration in your own life. Happy people don’t attack others like you’re doing. You chose to do things one way that was hard for you, but what you felt was the best way. That doesn’t mean that there aren’t other best ways for other people. And the way you’re attacking like this actually makes your views look worse man. You sound way too stressed and need to take a step back and chill out for a minute.

      The reality is the current working generation, which is majority millennial, is not the same and never will be the same as your generation. Quiet quitting is often misinterpreted. It’s not telling people to be lazy. It’s about still meeting expectations at work but not overstressing and getting caught up in the rat race if your employer isn’t going to reward the extra efforts anyway.

  36. Great post, Sam. Your premortem is a really good perspective in which to move through a recession. Thank you!

  37. Don’t Fight to Feds, we are seemingly in the Quick Sand market to recession. The past 12 years of low interest rates have built empires and new millionaires alike. Feds have failed at their job of maintaining price stability. Neat thing about inflation and the recession is that touches all of us. A Fed pivot or hint of slowing down hiking would on cause the Wall Street idiots to run the S&P back up to 4500 in less than a week. Never waste a good crisis, now America must take its medicine. No one likes a quitter.

  38. Sam

    I’m heading to Japan for the month of December and looking forward to it being deeply discounted.

    Hotel rates are down about 40% in yen. Then the exchange rate of 140 to the $ makes it another 20% cheaper than the usual 105 to 115 over the last 25 years. My wife’s from Japan so we go every year – haven’t been since December 2019 due to Covid.

    Thanks for another great Sunday read.

  39. Henry= 300k/yr job
    Rich= 500k/yr based off 5% return on 10mil in assets
    Every year Henry falls behind!

    If Jerome brings Rich’s assets down to 5mil, now Rich’s income is only 250k
    Now every year Henry catches up by 50k

    Conclusion: Jerome is a friend of the working class and an enemy of the rich.

  40. Craig Tester

    I’m never sure if your posts are serious or not.

    But I’ll give you the benefit of the doubt that you are just baiting people with your crazy statements, to get more clicks.

    The Fed is just the janitor here…. Cleaning up the mess of insane government spending.

    As stated by others, the Fed being forced to raise interest rates is just a symptom of our country’s hard left turn toward socialism….

    Socialism has been unsuccessfully attempted over 300 times in recorded history… We’re just following the pattern with excessive government spending causing runaway inflation…..

    The only cure is to vote out all the liberal clowns in the current car…

    In the interim, let the fed do its job and pray we don’t get a repeat of the 70’s….

    PS. If by chance you actually believe what you wrote, please read a history book about the 70’s inflation yo-yo before responding….

    1. I wonder if you and the Fed think the Fed had anything to do with inflating assets by cutting rates to 0% and leaving them there for so long?

      That would be interesting if the Fed ends up blaming the federal government for too much stimulus and then the federal government starts blaming the Fed for too loose monetary policy for too long.

      If we see institutions passing the buck, then it’s another sign to focus on taking care of ourselves first.

      1. Craig Tester

        I was about to give you grace as it dawned on me that you are not old enough to have lived through the 70’s….

        Then I glanced over and saw the sponsor of this post is the Watauga “Democrat”

        Nothing new under the Sun….

        I assume you would have bashed Paul Volcker as well….

        And in case you don’t know who that is, please Google him before responding

        Very disappointed reader,

        Craig Tester

          1. Craig Tester

            Like I said, I never know if your comments are serious or not.

            The 1970’s were a period of high inflation. Several half-start attempts were made by the Fed to raise interest rates to curb it. However, every time it started to work, people complained (sound familiar?).

            It was an extended period of misery before a new Fed chair named Paul Volcker finally ignored all the whiners, and fixed it. (by raising the FFR higher than inflation)

            If Volcker had read your post back then and succumbed to the “pressure”, who knows how it would have worked out….

            As for your question of “who is the Watauga Democrat”, apparently it’s one of your paid advertisers unless you posted their banner on your site just for fun….

            1. Honest question. Is it inevitable that I’m going to grow grumpy, combative, hooked on politics, and miserable like you when I get older?

              This post has nothing to do with politics, and it’s like you’re sitting in your rocking chair yelling at the laptop for no reason.

              What happened to you?

              1. People grow old, think they know it all, and are not flexible in their ways anymore.

                Craig Tester is probably in his 60s and not really happy person. You can just tell by the way he writes and tries to pick a fight. Sad.

              2. Maria Ireland

                Sam is writing an article saying “the Fed is the enemy”.

                That is an extremely political premise, which is what Craig Tester is correctly pointing out.

                Craig is right that the root cause of inflation is too many dollars being created out of thin air – through massive government spending.

                The Fed is not the enemy. As Craig says, he is just the guy being asked to clean up the mess….

                You should not attack Craig Tester for pointing this out, or the Fed for doing its unenviable job….

                Sam is on the wrong side of this one, and it looks like you are too…..

                Don’t take your frustrations out by attacking the only grown up in the room…..

                If you don’t like inflation, attack the spenders, not everyone else….

                You make me embarrassed to be called a millennial, Maria

                1. Can you elaborate what the “right side” is? To me, nothing the Fed does will really matter. I may become poorer, but I won’t be going back to work or changing my lifestyle. In fact, I’ve been buying treasuries to earn the 4%+ guaranteed return, which is pretty sweet.

                  What is your current situation? And does what the Fed does matter to you?

              3. Craig Tester

                Well, to answer your “Honest question”, I’ll need a little more info (Though I gotta say, its not looking good)

                So what can you tell me about yourself other than you like to randomly attack strangers on the internet for speaking the truth?

                Or perhaps more to the point, what specific point that I made do you disagree…?

            2. lol the banner ad you saw is reflecting your own search history bro. Nobody else here has seen anything about “watauga democrat” haha Hilarious how some people like yourself believe something that has nothing to do with politics is because of banner ads that are reflecting your own interests. You should find something better to do with your time than attacking Sam.

  41. Great post Sam, its funny the same people who got us into this mess are trying to get us out, it’s like the fox guarding the hen house. Sad thing is, they really dont want to help middle class folks, they just simply want to control them.
    I would love to go to Taiwan or Cambodia, mainly I’d like to see that part of the world. The people seem genuine and the sites look amazing. Ever try pickleball Sam? It’s a very social sport and since you like tennis, you’d likely be pretty good at it. Just a thought!

    1. You should definitely go visit Southeast Asia. Wonderful people with a relaxed and more balanced way of life than here in the United States.

      I like pickle ball, but I’m too focused on tennis right now. I finished 25 USTA matches so far this year with probably four or five to go. The battle is great!

      1. Middle Child

        “$160k of my passive income…” Are you serious with this post?! Of COURSE you can use a recession to travel, see family, pick up origami, whatever.

        You are trying to give advice to the middle class from your completely out of touch financially free Dreamworld in the upper class with just PART of your passive income being $160k! You said it yourself: No one gives a FK how rich people feel.

        Umm, that’s you. You were a banker at GS and CS. You already hunted and pillaged the financial markets long ago for what I’m sure was an absurdly over paid salary and bonus. 5 year severance package? GFY !

        Yeah, I’m envious, bitter and feel cheated, but so what, it doesn’t change the fact that you exist in a crystal citadel, doing a labor of love you don’t have to if you don’t want, and are literally free. Not just financial. You have no business trying to advise the plebs.

        I’m your age (I checked) and my “work my ass off , college degree educated, professional ACTIVE income” is half of your passive at least. Passive income in the real world is at best a few grand a month if such a thing as PASSIVE even exists outside of capital appreciation and real estate income.

        Congrats on your success, I’m sure you deserve it and are a great person. But don’t write BS articles like this trying to appeal to “the middle class” when you have no freakin clue what you’re talking about and what is actually possible for the average Joe. It’s insulting and I wish I could have the time back I wasted on reading your ridiculous suggestions when I could have been spending time on my 2nd Full Time Job- oh, I’m sorry, I mean my “Passive Income Streams” that take, ya know, WORK and TIME I don’t have.

        Do your readers a favor and change the title of this post to cater to only those with 7-8+ figure net worths. Geez what a crock of dung.

        Congrats though!

        1. GFY too! But do you play pickle ball though? That was the question from this thread. It’s a pretty fun sport that might help you relieve stress and meet new people. But you’ve got to be nice to make friends.

        2. Dear Middle Bitter Child, nobody cares. Try harder!

          You only have a few thousand dollars a year in passive income in your 40s? Now whose fault is that spending excessively and not saving and investing in your 20s and 30s? Go ahead and blame others for your problems.

          Being a bitter loser will only keep you a bitter loser. It’s so evident you self-sabotage yourself. If you have no friends or partner, just look at yourself in the mirror to find out why.

        3. The only thing positive in your comment is that you recognize that you’re envious, bitter, exhausted, and have middle child syndrome.

          Attacking others shows you need to go back to school because you forgot how to play nice and have respectful conversations with others. Even if you have different opinions, don’t be an ass about it. Sheesh

      2. Robert Walker

        Google or You Tube vehicle crashes in South East Asia. It is as crazy as Happy Hour in Russia. Scary…& Deadly.

  42. I sold a majority stake (60%) of my company a year ago in anticipation of the unintended consequences that would follow the unprecedented measures taken during the pandemic. No one knows the timing for sure but I wasn’t willing to risk going backwards and losing all the value built.

    By selling we hit both Financial Independence and Financial Freedom. As you very well know, we will always overshoot in both directions and I’ve been a big fan of constantly de-risking during good times – even when that means leaving money on the table.

    We also sold my wife’s business and she will be done working at the end of the year. I officially went down to 4 days a week starting this month. I’m still leading the business for another 4 years but don’t plan to put in nearly as many hours that I did pre-acquisition.

    We have built up a passive income stream of ~$225,000 from RE, Stocks, and ownership in private businesses. This doesn’t include the profit share of $400,000+ from the remaining equity I still own – assuming the business is as recession resistant as I think it is. We are also sitting in enough cash to fund our life for 15+ years…which really means we have lots of dry powder to back the truck up to take advantage of things overshooting to the downside during a recession.

    We will be very focused on picking up additional units of ownership in assets with attractive returns. We will work hard but not long hours. We will be spending more time with our young kids, our relationship, and our health.

    1. Kudos! Thanks for sharing. These are the types of posts that hold lessons for eager and hungry folks starting or building a career or a business.

  43. After I read that the very first advise is quiet quit harder, it turned me off. Quiet quit will never be a good thing. Management is not stupid, it is very easy to identify the quiet quitters. During a financial down term, those quiet quitters will be the first ones to let go. if one relies on a regular salary, it is better to secure that income.

    1. The highest skilled quiet quitters are undetectable. This is especially true things to work from home. Even my friends who run companies and our managers love working from home because you have more freedom.

      1. re: “The highest skilled quiet quitters are undetectable.”

        That is so true. Efficient workers can quiet quit and still run circles around perhaps 50% of their work office colleagues.

  44. We did a bunch of post Covid travel in 2022. While I had not planned on a repeat, that trip to the UK just might need to happen in 2023! I also plan on using more time to continue to build my cooking skills, keep in good shape and look to take advantage of the kids off days to do staycation activities when we aren’t traveling.
    I’m also very much looking forward to taking advantage of the inevitable Fed pivot (or at least pause), which I think can be an excellent mid term money making possibility for 2023.
    Meantime, good enough at work will be, as you point out Sam, good enough.

  45. Manuel Campbell

    I think the Fed will pivot when the US financial system is about to collapse. This seems to be happening currently in England. Then the pound will collapse. Hence the “crack-up boom”.

    Japan and Europe are likely to be next. I watch their currency exchange rate closely for early signs of weakness / breakdown. Then maybe Australia / China. If China fails, Australia’s economy probably go down with them.

    Canada and the United States could be ok. Except if there is two continents in recession, it will be nearly impossible for the US banking system to withstand the shock. The Fed pivot would happen at this point in my opinion.

    How am I preparing for this ? I am 100% invested in equities, but mostly in defensive sectors (food, energy, utilities). The volatility should be extreme. But companies that do not fail during that time will be worth much more after those events – with less competition.

    I’m also looking at dislocations in the market to see if there could be good deals to buy. For example, Lumen Technologies 2042 bonds are currently yielding 12.1%. Also, TD Bank (one of the most solid bank in the world – rated AA) just issued 8.125% LRCN bonds yesterday.

    But it may be too early to make a move right now. I expect many companies to go bankrupt in the coming months. When things will get bad enough, that’s when we will have the best deals and the best environment to buy. If the Fed has already pivoted at this point, it will be even better.

    1. Manuel,

      Am new to FIRE and Financial Samurai blog!! Have never purchased bonds other than I-Bonds from Treasury Direct.

      How does one go about buying Lumen Technologies 2042 & TD Bank 8.125% LRCN Bonds?


      1. Manuel Campbell

        You have to find a broker that sell those bonds. That’s not an easy task. My broker doesn’t offer US bonds at all. So I’m looking for similar opportunities in Canada.

        My guess for the best brokerage for specialty bonds would be Interactive Brokers. But I’m not on this platform and I have never used their services yet. So I can’t really guarantee you this is the place to go.

        If bonds become even more attractive, I’ll have to have a more serious look into moving to another broker.

  46. An English teacher in one of my former lives, I wonder if I am reading an unreliable narrator in this piece? You champion “quiet-quitting” and “riding things out” but clearly the overall tone is frustration with a government that is championing mediocrity and selfishness. Very thought provoking.

    My personal belief system is that I am never very happy when I focus on making my life easier. All that happens is I become very big and the world becomes very small. This is never a recipe for happiness and joy in my book. I propose that this is the perfect time for working harder than ever and challenging myself to be the best I have ever been -maybe not for financial gains but for achievements that raise the human condition. Now more than ever we need heroes, not quitters.

    So personally I plan to teach history for a few more years than I intended because of the suffering I see experienced in the children who weren’t adequately “homeschooled” for a variety of reasons often beyond the control of loving parents. These kids need vital and caring teachers now for socialization they didn’t receive in a “pandemic free” middle school experience. Because I am slowing down with age I have arranged my schedule so that I can take more of my sick time ( without the dreaded substitute teachers) so I can exercise, rest and take care of a few medical issues. Mostly this means I skip all staff meetings and professional developments. I have been developed enough professionally, I believe.

    I have committed to traveling in the abundant vacation time of which I am blessed. I have begun skiing, hiking, backpacking again as well as learned how to paddle-board. I have begun studying for my Graduate in Gemology degree and was GIA certified in diamond grading this summer. My thought is when I do retire I will be able to work for my favorite charities in providing certification for tax purposes at charity auctions or provide certification for fair market jewelry endeavors . Please do not think I am promoting myself as some kind of martyr. Far from it. I have a huge ego and constantly need to be reminded what a small and grateful part I play in this amazingly complex world.

    1. I’m glad you are going back to teaching! The world needs more teachers, and I did enjoy teaching them high school tennis for three years until the pandemic began.

      Can you elaborate on what you mean by this? “All that happens is I become very big and the world becomes very small.”

      How do you become bigger if you take things easier? Thx

      1. What I mean by I become “big” is that I become very self centered and lack all sense of proportion for my “first world problems” compared to what is happening in the world around me. I forget to be grateful and then I get petty and become miserable to be around. A good example is this: A friend of my retired last year as so many teachers did in the pandemic. She moved into a Del Web retirement community. Now they argue about the plants everybody puts in their front yard and if the Christmas wreath is taken down in a timely matter ( no kidding – HOA says it has to be before February.) Meanwhile I keep teaching and one of my students is two weeks late to joining my class. I begin to get on my soapbox and list all the make up work she will have to do. Then she apologizes earnestly and tells me she just got out of Afghanistan and almost didn’t make it after the US pulled out. I tell her with the greatest humility she has an A for the quarter so far, no make ups required. I am back to my right size. I never want to argue about Christmas wreaths in February.

        1. Why do you think some people get so petty and grouchy as they get older? The stereotype about the homeowners association is so true. And you can see a couple commenters here on this post that are very grouchy as well.

          Like am I destined to be rich, fat, argumentative, and grouchy like the old people you mention and “Craig Tester” below?

    2. re: “Mostly this means I skip all staff meetings and professional developments.”

      Ummm … the way I understand “quiet quitting,” skipping staff meetings and professional developments would be a form of “quiet quitting.” Quiet quitting means not giving every last minute of your life to your employer.

      1. Paper Tiger

        I think what she means by skipping staff meetings and professional development is that she is much closer to the end of her career than the beginning and she no longer has a need to climb the ladder or network in order to position herself for things that no longer matter to her. She has other priorities now that she is near the sunset of her career and would rather pivot to those things that matter more to her.

      2. I use my accrued sick leave. I am not quietly doing anything. When I am still on the clock, I volunteer for duties rather than go to the staff meeting. For instance, rather than attending a soul crushing curriculum meeting which is forcing us to use multiple choice questions ONLY to assess students, I judged FFA speeches. Totally life affirming. The kids were so excited about it and the message they are promoting is awesome. Instead of using mandatory hours hanging out with other teachers avoiding supervising duties, I tutor on my lunch hour twice a month.

        Perhaps we are defining “quiet quitting differently.” From what I have read about it, it means not being passionate about your work, moderating the quality of you effort to “save” things for your personal life. I am extremely passionate about my work. I come home tired but it is a good tired.

  47. Ronald reagan

    Root causes of inflation have been brought on ourselves and will not end soon:

    1. Reversal of globalization will create higher prices as we onshore production that was previously done at much lower labor rates overseas. We’ve benefited from these lower costs since the 80’s and now we are seeing higher prices due to much higher cost of domestic production.

    2. Higher energy costs due to several reasons. a) much lower investment by domestic energy producers and refiners over the last 10 years has reduced supply; b) the extortion by Russia and OPEC limiting supply; and c) the transition to carbon neutral will have a huge up-front investment.

    3. Lower labor supply as there are 2.5 million less workers employed today versus 2020 pre-Covid. Also multiple long term reasons including; a) lower birth rates, b) more people “dropping” out of the work force due to early retirement, unavailable child care, or gen x living a lower lifestyle; and c) a drop in legal immigration from over a million annually to less than 100,000.

    For every action, there is a reaction, whether it is anti-Chinese, anti-Russian, anti-immigration, or anti-subsidized childcare. In this case, these all are contributing and will continue to contribute to higher inflation.

    Not being political, just stating facts.

    1. Choice of facts = political leaning. Here is my attempt at a balance:

      1. Increases in cost for offshore labor, costs, international trade cost and availability uncertainty, and production inconsistencies mean the benefits between offshoring production and keeping it stateside have inverted.

      2. Points b) and c) only exist as reasons because the U.S. and Europe began barring increased production and consumption of fossil fuels before it had a viable solution for green energy. OPEC+Russia sees this as a window of opportunity to get what they can out of us now, before a viable green solution presents itself. Add to this Point D) safe, cheap, proven, and carbon neutral nuclear power being wholly ignored means affordability is being sacrificed in the name of optics.

      3. Fewer workers can be a deflationary force due to lower demand, except when the Fed pumps new money into the economy. You have to look at Money Supply/GDP. Production is the pie, currency is the knife.

      Indeed, there are fewer legal immigrants than previously, but legal + illegal immigration is at an all-time high as a percent of the US population. This is a lever the US has always been able to pull to keep it’s population and production steadily growing.

      You are right to say that every action has a reaction. These topics are complicated, and there’s probably no silver bullet to any of them, so it becomes a matter of which downside do you prefer more? Right now, the Fed is fine with stifling demand and production to maintain the value of the dollar.


  48. Sam,

    If the fed fund rates go even higher, how come we haven’t seen the interest rates on money market funds and CD’s go higher.

    I remember in the 90’s when the Vanguard money market fund paid around 4.5-5% interest.

    Could you please explain how the fed increasing rates affects CD’s and money market funds. We’ve seen the increase in mortgages and auto loans, why not the instruments I mentioned?

    Thanks Sam.

  49. As a business owner, I’m not a big fan of quiet quitting, but I can get behind spending more time with family, making new friends, and traveling more.

    1. As a business owner, are you working hard in a recession or enjoying life more?

      I’m not a believer in working harder to just run in place or go backwards, hence why I’d rather take things easier. It’s like working harder while taxes are being increased. No thank you.

      1. Unbelievably bad advice for anyone! Samurai? Should change to Sabbotage Financial. Let me guess, you got a trophy when your team lost?

        1. Actually, you get no trophy for working less hard. Instead, you reap what you sow. Everything is rational. But employers love you for going the extra mile in a recession, even though they probably won’t pay you more. So feel free.

          Why would one work more when they have enough passive income to cover their living expenses? What is the benefit to that? And why does me not working as hard as you matter? Great psychology!

          What are you doing for more joy during the recession?

          1. He’s probably staying miserable, arguing with people on the Internet about things that don’t need to be argued. I love seeing grumpy comments that serve no purpose but to reflect their own problems and insecurities.

  50. Good perspective as always Sam.

    Fortunately, not a lot of economic stress in our family, and we’ll be able to help others through this mess.

    Through years of work and planning, we’re debt free, and able to focus and family, relationships and some deferred travel. We homeschooled 5 kids (23 years with another 7 to go!) and owned several businesses, so travel wasn’t always an easy thing to pull off. While we enjoy the occasional dinner out, we love going on a free hike to the waterfalls in the Olympic rainforest.

    Scheduled to close on a planned merger of our main business the end of October. That will lock-in a significant cash windfall and allow us to “retire” worry-free. Still plan on. Working for another 4 years in the new firm, until age 60 and then it’s “Peace, Out!”

  51. What is your suggestion on what the Fed should do in this situation (other than not exist in the first place, which would’ve been my preference)? The simple fact remains that government spending has been out of control for decades, starting with an endless war, continuing with a pointless bailout, then onto some increased entitlement spending and finally getting put on overdrive with trillions in pandemic spending that was unnecessary had we all taken a more pragmatic and logical approach to the situation after it became clear very quickly that a massive shutdown of our economy was likely to result in much more dire results than the alternative. Not to mention other ancillary factors like the illogical push to end reliance on fossil fuels overnight, which pushes prices higher all the way down the supply chain.

    This bill was always going to come due. We have attempted to print and spend our way through the last 30 years as the modern monetary theorists have taken hold of our economic strategy. Now we’re faced with the solution being either massive inflation, reduced government spending and increased taxes, or even something more nefarious if you subscribe to the notion of a great reset. The Fed is a symptom – doing what it’s supposed to do by trying to thread the needle to reduce inflation which you correctly point out will screw the middle class.

    Unfortunately, the middle class (really just most people in general) was always going to get screwed no matter what happens. This is the outcome of an increasingly stronger tie between corrupt politicians, central bankers and a “global economy”

    I really do enjoy your blog, and agree with your advice to start focusing on what is really important in our lives – family, friends, etc. I’m not smart enough to know what we do now to get out of this mess.. I just wish we all would’ve done a better job at not standing idly by while we watched it happen.

    1. Bingo.

      The main piece completely ignored the cause of the need for tightening. Thank you, Frank for telling the truth that I suspect Samurai already knew… but gotta keep the angry internet people coming.


      Middle class dude who would rather not have Venezuelan inflation where the rich do just fine and everyone else basically starves. We middle class will be okay, just gotta quit being entitled Americans for a while.

  52. Man, I’m working too hard. I had to do a double take when I read the heading “Make better friends or find a new love.” I could have swore it said “Find a new Lover”! Ha!

  53. Definitely needed to see a post like this given the current circumstances. There really isn’t much positive sentiment out there!

  54. I can see the United States going the way of Japan for the next few decades. Massive everything bubble following a decade of cheap borrowing.

    Your stocks and real estate could be on the steady decline for the next 30 years. Hard to see a bright outcome to this situation for sure. Idk what boomers will do, as you mentioned that most have their wealth tied up into their primary residences.

    Maybe a massive political shift will occur, and the US will cease to be (great reset of sorts) but nobody really knows for sure. Guess we just have to accept that there is always a chance life as we know if will change for the worse for the remainder of our lives.

    A pessimistic perspective for sure but one we should consider.

  55. Before you go maligning the evil Fed for staying the course to gain control of inflation, perhaps you should get a cheap education on what happened in the 1970s and 1980s. Back then, the Fed pivoted two soon and ended up having to hike the Fed Funds rate to 20% before inflation finally started reversing. Be aware, Sam, that the Fed’s job isn’t to prop up Wall Street or Main Street, despite what ex-investment bankers like yourself might want to believe. It’s true that if Powell et. al. had acted much sooner, instead of making delusional pronouncements about “transitory” inflation, this could have been nipped in the bud last year, possibly with a soft landing. Now that they have finally turned hawkish, a recession is indeed inevitable (we met the official definition last quarter, though politicians with much to lose categorically deny it). If the Fed keeps ratcheting until inflation moves down meaningfully – if they pivot too soon – inflation will get entrenched and we’ll repeat the Paul Volcker era perfectly, with Fed Funds rates in the high teens or low 20s. Wouldn’t a peak rate of 6-7% and a shallow recession be a preferable alternative? I just hope the Fed doesn’t cave to pressure thanks to short-sighted and ignorant attitudes like the one in your post.

    1. Jerome, is that you? Hope you’re using your non-work phone. I know you and your fellow board governors will be OK. But try to think about the middle class too.

      What are some some things you’re doing to enjoy life more during this recession?

      1. The middle class is losing 9% every year adjusting wage increase and inflation -from San Francisco fed governor. If the inflation is not controlled, soon people will just take free food from Walmart and Costco. I see almost nobody in the high price meat section of Costco (>20 $/p). You may cry because you lost a few m/b$ but I do not think it is for the better of middle class.

        1. It’s all relative. I’d rather lose buying power to inflation than actually lose money in my investments, take a pay cut, or lose my job.

          But your comment and others makes me realize that caring for the middle class and encouraging them to get their finances right and not rely on the government may not be worth it. Maybe we should not try to help people gain a stronger control over their finances and to just focus on ourselves.

          But that feels bad. I think if we have the ability to help, we should.

          Anything you’re doing to enjoy life more as we head into a deeper recession?

          1. Sam, capitalist economies have boom and bust cycles. Look through history. The period from ’09 to ’20 and that ridiculous 40-day recession we had at the onset of COVID lulled investors and the middle class into complacency. Now we’re shocked that after 12 years of almost unabated good times, there’s a recession? Let’s not be a Polyanna here.

            The writing was on the wall in 2021. It didn’t take much thinking to see where this was headed, but most investors and workers were too fat and happy to believe what was happening. Everything done in response to COVID was inflationary. Stimulus payments, QE, and near-zero interest rates were like poison to an economy with 3.5% unemployment. The demand/supply imbalance persists, even with three 75 bp raises. There’s a ways to go.

            Based on your cutesy response to me, you either don’t understand or refuse to acknowledge what got us here and that the Fed’s actions are absolutely necessary. I would think that your professional expertise derived from your 13-year career would help you explain why this is happening and what folks can do to prepare. Instead, you chose to lament reality and tell people to throw on blinders and sing kumbaya. Normally I enjoy your posts, but this one was very disappointing.

            1. The writing was on the wall in 2021, which is why many of us asset-allocated accordingly.

              But the key really is to think about and help the middle class, for the greater good of society. Unless you’re a rich central banker, why not care for them too?

              Just because you’re financially fine doesn’t mean we should ignore them. Instead, let’s help folks survive through a downturn and thrive on the upturn.

              As a writer, I’d love to understand more about your background so I can understand why you think the way you do. And I welcome my guest post as well. Taking action is always better. Thx

              1. Sam, I work in marketing for a large healthcare business, but like you, I have an MBA and have been an active and passive investor for over 30 years. I have a fair amount of exposure through private syndications in commercial real estate and other alternatives, specifically chosen due to their light or non-existent correlation to public markets.

                I learned a long time ago that we cannot expect the government (or our employers) to take care of us. The best advice I have for the middle class is to recognize this, save as much as you can, learn about true diversification, and set up an all-weather portfolio. This will allow wealth to grow in good times and bad, and make sleeping easier – well, much easier. For some time now, I have had very minimal stock market exposure, and it’s mainly via some cash-covered puts. I’m keeping dry powder in a trading account and 401k money in cash equivalents until inflation is under control and the Fed pivots for real. Dollar cost averaging works fine for many, but I believe the only real way to “buy low and sell high” in the stock market is to exit when the macro picture starts looking really bad and have idle cash available for after the crash. I’ll probably tiptoe back when the S&P is under 3,300, and if it dances near 3,000, I’ll go all in.

                Your middle class readers are likely eager to learn these types of strategies (I know I was). Short of blind luck, it’s the reliable way only way I know of to jump classes over time, have a financially worry-free retirement, and leave a legacy for your children and/or favorite charities. Ask 100 reasonable people, and all would agree that this is an outcome they would like.

                1. Congrats for making so much money off the middle class by charging exorbitant healthcare premium rates! Market the crap out of your product and make a fortune. All the middle-class others, healthcare executives get richer and richer. You must feel so proud of yourself.

                  But maybe you haven’t made that much money yet because you’re still working after 30 years of marketing healthcare. What an irony.

            2. Hear hear Paul!

              We rich folks gotta stick together! Not sure Sam wants to write posts to help the masses get through a difficult situation.

              Its’s better to write about how we can make money off people who sell their assets at fire sale prices!

        2. Paper Tiger

          Costco still has their $1.50 hot dog and soda so I will be OK eating that every day for lunch and dinner…

      2. Deflection. The sign of a post that is spot on and a liberal can’t defend. Great.

        I do tend to agree with you a bit on something and that is that if we can’t get energy prices and governmental spending under control raising the interest rate alone won’t do much good in the end. However, for a guy like you and if people listened to your principles the raising interest rate would have too much impact on them. Only borrowing should occur for homes and car loans. My mortgage is fixed and I have enough financial freedom to buy a car at 2.9% interest and just did.

          1. Sick In Head

            It’s weird how people get political on a non-political post. It’s almost as if they watch Fox News or CNN all day and just go crazy. Whatever they do or think I have to be political. It must be some kind of disease.

    2. I agree! Screw the middle class and the poor. This is capitalism and a dog-eat-dog world.

      Fed Governors got cleared of insider trading and got out at the top of the market. So did I and many other rich people.

      The more others suffer, the more we gain Paul! We rich people have to stick together and like our rich governors crush inflation. Then we can scoop up assets at huge discounts and get richer as the economy inevitably rebounds.

  56. Great post and very insightful. My wife and I have been growing our online info business for 6 years, and are finally able to see the light. We will be able to coast, starting in Jan 2023, for the next few years!

    I plan to work 15 hours per week or less, start a family, continue traveling the world while working remotely and kitesurfing.

    Most importantly – I’m going to put my full effort into write awesome music with friends and using my acquired marketing skills and excess capital to disseminate our tunes to as many listeners as possible.

    Funny how we must, at times, put our greatest passions on the back burner in order to generate wealth and abundance.

    No more! Music, kiteboarding, and travel to the max. Thanks Sam for the great post.

  57. My solution has just been to make sure that I have my living expenses for the next 2 years plus already paid for. I don’t have to stress about living paycheck to paycheck, therefore I can plan in the future rather than worrying about the present. It’s been remarkable for reducing stress.

  58. I love this post and I’m in complete agreement that Jerome Powell is doing way more harm than good. So why the hell did he recently get reconfirmed for another 4 years?!?! This seems like a total catastrophe. What am I missing here? It makes absolutely no sense.

    1. He got reconfirmed before he started the interest rate ramp. The problem is the aggressive cuts and aggressive hikes both ways. Creates boom busts, which whipsaw people into difficult situations.

  59. Great perspective! I am actually making some career moves myself since finding the joy is important.

    I would actually love to hear more from you about your childhood moving around abroad. Our kids are receiving a bilingual education (Mandarin/English), and as older parents who also plan to retire early, we are interested in slow traveling abroad. I know there are international schools, the “world schooling” concept and more. In some ways, I think our money would go further living abroad (depending on location) but I also wonder if the education costs in dollars and the social costs in terms of childhood friendships would be worth it?

    1. Maybe I’ll write a post or do a podcast about it. I loved the experience. It was all I knew until I came to the U.S. for high school. The U.S. was very boring compared to living in Kuala Lumpur for middle school, for example.

      I would have loved to have stayed in K for high school and graduated, the Ngo to college in the U.S.

      I highly recommend the experience. It’s an adventure worth living!

  60. Must be nice to have enough money to do all that. Speaking of real middle (and lower) class, some of us cannot afford to lay back and “reduce our blog posts from 3 to 2 times a week”. We have to do what we can to put food on the table and roof over our heads. What you do is being rich and write for the rich.

    1. I’ll just keep on doing what I’ve always done. One day at a time. Work part-time and look forward to seeing my grandkids at Halloween. Just a thought since you’re now that age:mid-life crisis perhaps?Whatever your decision, I enjoy your writing.

  61. Christine Minasian

    I love your comment about looking for another friend of two. That shows how meaningful relationships are to you, Sam! Which we readers already know. You’re on the right path to getting involved in your kids’ schools- you will make lifelong friends that way! You have a common interest and you get to hang with your kids. It’s a win-win! Just make sure you align with parents similar to your style. That’s a whole separate post!

    1. Thanks Christine! What’s better than a wonderful relationship with anybody right? I look forward to what the future brings. Let’s just hope the global economy doesn’t get too bad beforehand.

  62. Man it’s hard to imagine thinking about the economy coming to an end all over again especially with the pandemic finally starting to feel like a past memory. I would be so disappointed if all the progress we’ve made goes down the toilet.

    In any case, what would I do? I’d try to get more balance back in my life, stress less, help my parents more without getting overwhelmed, be a better parent, and preserve capital as best I can. Life is accelerating and I don’t want to continue feeling out of balance.

  63. I am converting some large chunks of my Traditional IRA to my Roth IRA, so I can capture the eventual recovery in 2023-2024.

    For real fun, I am adding some metabolism boosters (NAD supplements) and working out more.

    This too shall pass.

      1. Except I don’t travel much except for work. I need to take vacations vicariously, and I’m guessing you could write it off :)


        1. I encourage you to see the world Kevin! I think you’ll have an amazing time experiencing different cultures and perspectives. International travel really does make time stand still and make a lot of problems go away.

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