It is surreal how differently this current virus crisis impacts families. Right now, when most of us do not know a single person who has been diagnosed with convid19, this is a financial and logistics threat, and not yet a personal health issue.
For people with children it is a daycare crisis. For people with jobs that have been converted to working from home it’s a very awkward “how do I do my job this way” time. For people who have been sent home without a work from home option it’s a time of concern over whether their jobs will be reinstated later. For those whose jobs have been eliminated it is a time of confusion over how to access government bridging benefits. For senior adults, especially those with underlying health issues, it is a time of fear of infection. For kids it is a scary time when routines have been upended and Mom and Dad seem worried and distracted, and maybe not very adept at home schooling.
For FIRE (financial independence, retire early) aspirants who were nearing or just reaching their FI (financial independence) target of passive income or investments that appeared sufficient to fund their lives indefinitely it can be a time of great dismay or depression. For people well into their financial independence journey it is a frightening and disconcerting time watching their assets fall by double digits in a single day. For people with an excess of wealth beyond their projected needs, even with a 70% stock market crash (not likely but who knows?), it is more of a matter of watching hundreds of thousands or millions of dollars in reduction of their net worth, knowing they’ll still have more than enough to maintain their lifestyle.
Later when there will be plenty of people you know and care about suffering from covid19, maybe even your family, this will become something much different and more frightening. Obviously this is already the case for hundreds of thousands of people across the globe.
Personally I’m one of the lucky few on the money side and one of the not so lucky on the other. I exceeded my FI number years before I retired and when my corporate pay and stock options soared the last three years of my job I saved and invested most of the money. I also received a large inheritance a few years ago so my assets were padded greatly due to circumstances I had very little to do with. I’ve lost some $750,000 in investments over the last six weeks but it is money I can afford to lose and also money I expect to get back some day. I haven’t sold a thing and haven’t pulled any money out of investments for my living expenses. I know that isn’t most peoples’ experience and I do realize I’m blessed and should use my secure financial position to help others around me in need.
My day to day life has not changed much. I only work a day a week and that was largely remote work from my home. I don’t need the money, its for my entertainment only, and if it does not survive the virus I will not consider it a great loss. In fact it will be an opportunity to reinvent myself again. My wife and my hobbies remain unchanged. We do not have any kind of shelter in place rules here so there are no problems with our morning runs, our outdoor tennis games, hiking, off-roading or fishing. We never get close to anybody on those adventures, I’d venture it is a safer environment than being indoors at home. As a side benefit we have stocked up the freezer with a whole lot of filets from all the fish we are catching. Not having any kids at home, with ours all grown and gone, means that the school situation is not impacting us.
As lucky as I am on the financial side I’m in a very precarious position with my health. First I’m a senior, I’ll turn 65 this year so that alone puts my risk in the elevated category. On the plus side I’ve always been fairly athletic, I ran 15 marathons in my late forties through my late 50’s and still run fifteen miles a week. I also am a fairly competitive tennis player, competing on teams and at tournaments, or I did before the virus cancelled them all. And we are pretty extreme hikers and enjoy pickle ball. But what may outweigh those positives is the fact that I do have asthma, one of the high risk factors for covid19. More troubling still, I’ve also got a rare complication that restricts the amount of air I can hold in my lungs. The combination of these two ended my marathon career and makes all my athletic pursuits more difficult than they would be for a normal person my age. I still run and play hard because of my determination to not let physical problems or pain rule my life. As long as I can go, I’m going to go hard even when it hurts.
Covid19 kills maybe 1% of its victims, I think that number is still in flux since this is pretty new. But most of what I’ve read shows it kills around 10% of people like me. Actually there are probably not many people like me, with my particular combination of issues, so I’d guess my own personal risk could be even higher. I’m fit and have made a science of obtaining reasonable athletic performance on a limited air supply so maybe that gives me an edge over sedentary types. Since my health situation is complicated I just do not know what my chances are of surviving the virus if I get it.
All this tells me we are each fighting different battles in this war against an invisible foe. Some people are running out of money and the pantry shelves are bare. Some are quarantined in nursing homes with sick people just down the hall. Some are fighting depression and loneliness in their isolation. Others are treating the whole thing like a fun family camping adventure. This is one of the most individual existential crises we have faced in most of our lifetimes and our individual circumstances make this unique to each of us. I’m not worried personally on either the financial or health fronts because I’m not a worrier. I’ve always had high stress jobs but rarely felt the stress because I was generally able to look at my career as a game, and if it fell apart I could start another game. As far as health goes, I’m in my sixties, with very active hobbies so like any other older athlete I could die any time I go for a run or chase down a tennis ball. Life has been great but nobody lives forever and at my age I realize that I have already lived most of my life, I just accept that fact. I know that isn’t particularly profound but I’ve never been a deep thinker.
What about you? Are you more worried financially or health wise for yourself or your loved ones?
If you had an office job but are working from home now, how is that going?
What do you think your kids are feeling about this whole thing?
I’m one of those who was “so close” to FI, and then this hit! Actually, since I’m 55, I’ve been through a lot (1987, 2000, 2008, etc.) so I am taking this with a grain of salt. It is only paper losses, provided I don’t sell out. Just going to have to work a little longer.
That’s unfortunate, I’m with you on the prior events you listed. I wasn’t contemplating retiring early back then so it did not phase me greatly, I just assumed I would make up for those losses later. However as a four year retired guy this one probably would have rocked my world a lot more if I had not received an inheritance as large as I did.
Thanks for sharing this Steve. It’s an astute observation to say “we’re all fighting our own battles.” We’re quite fortunate to be healthy and sane (so far). My wife had already gone on maternity leave last month with the birth of our son, which is doubly fortunate considering she’s a medical professional on the front lines. I’m still reporting into work ~60% of the time, because I can’t take the chemistry lab home with me. I’m really struggling with the ‘work from home’ situation, because a newborn and a 2-year-old are not exactly the best office-mates. But all in all, we feel quite lucky to keep collecting a paycheck and not have to be exposed to thousands of people per day in order to get paid. Here’s hoping things get better in the not-so-distant future.
Thanks Steve. Great and insightful article touching on the extreme challenges we are all facing individually and as a nation.
I am both fortunate and devastated.
I was approaching retirement this October at age 59 from a very stressful career in medicine. I am personally ok financially and prepared, but our group cannot afford to pay our bills and our employees for more than a couple more weeks with current patient volumes (and this is with the partners taking no pay). I am concerned we may need to take on debt to stay in private practice. We are considering placing our employees and partners on partial unemployment while seeing only emergencies to try to weather this crazy thing.
I feel bad even expressing sadness at my retirement plans being potentially dashed when so many others are suffering to a much greater degree.
I loved your article, and really enjoy your posts.
I’m so sorry Mapro, watching something you’ve built struggle and it’s impact on your team, that has to be a very hard thing. I chair a foundation with a large number of employees that work at operations shut down by the state, we teleconferenced today on how to pay furlowed employees on a limited charity budget. A board of relatively wealthy people
discussing laying off dozens of middle class employees, it’s not fun, and I’m just an unpaid volunteer director there. These people have rent or mortgages, car payments. It feels obscene to stop paying them. But there is no money to pay them when there is no money coming in. Hopefully the government will step in. I think it is ok to express your worries. There are always people with bigger problems, that doesn’t mean it’s not ok to share yours.
I’m not worried about my money at all, the market would have to nosedive a helluva lot further to even remotely get me to start caring. I’m mostly concerned about my Mom and my brother who has type-1 diabetes which puts him in a higher risk category.
We’ll get through this.
It’s admirable your concerns are for others. Diabetes does appear to be one of the most serious risk factors. A young man broke down in front of my house today. His wheel bearing failed and he went off in the ditch in front of my house in his F150 pickup. I pulled him out with my SUV and rolled my hydraulic jack out so he could replace the bearing, he was an amazing mechanic. I got down in the mud helping hin wrestle that heavy truck tire onto the wheel. It was only later I thought about how I was rubbing shoulders with a stranger while being a high risk person myself. But when the ox, or the truck, is in the ditch, you do what you have to do to help.
My husband is a hospital based physician in western New York State. He is 63 and is 6 months away from retirement after 32 years in the trenches. We’ve been FI for years but he wanted to put in 20 years at this hospital to get his full pension. His contract requires 90 days notice be given to leave. So he’s not leaving obviously. The irony of this situation is unbelievable. So Monday he goes back in after a very timely few weeks off.
I’ll be doing a lot of daily sterilizing around here.
Thank you for your and his service in this time of need. As a doctor’s spouse you are on the front line just as much as he is. I’m sorry the timing is so contrary. It’s a facet of personal finance that assumptions control our decisions but are also often made obsolete by reality. Thank you for commenting and good luck.
Thought I’d add an addendum to my comment- my husband just gave his hospital notice- he’s going to lose about $30,000 a year in pension which could add up to over $700,000 over his retirement lifetime . But at age 63, he decided the risk wasn’t worth it. Things are getting worse here- your money or your life- he made the right decision for us.
I’m a firm believer that when you have won the game it is smart to quit playing with risk. I turned down seven figures to go back to the corporate world a year after I retired because I do not need more money and the job was going to be hella stressful and not much fun. That’s a minor risk compared to dying or suffering permanent lung or heart damage from covid19. It sounds like you two have your priorities in order!
Given that I retired in early November, the timing of this market crash has been fantastic (LOL). Fortunately, we have over 5 years of cash available to us to weather the storm. When I look back at where our net worth is, we are basically back to the end of 2018, and at that point we were comfortable with early retirement already.
I am just finishing up a short-term, part-time consulting gig. I was working from home about 40% of the time. Since the virus has become a big deal here, I have been working from home 100% of the time over the last two weeks. Interestingly, people are still going into the office. Yes it is a relatively small office, but no one in the finance team seems to be essential employees in my mind. So I have been a bit surprised that there hasn’t been more encouragement for people to work from home.
Otherwise, we have been essentially self isolating and not going out except to take walks, go for a jog, or play tennis. We had to cancel a trip to Korea and Taiwan in April and will probably have to cancel a trip to Europe in the back half of May. Hoping things get better soon.
Stay safe!
-Dragon Guy
You sound just about identical to us! It really is a good argument for having dinner cash in your portfolio for just such an event. We ran, fished and hit tennis balls today, no close contact to others but still pretty normal pre-virus activities for us.
Hi Steve, your words “we are each fighting different battles in this war against an invisible foe” could not be truer. In this time of uncertainty I urge all of us to be just a bit more kind to others we come across in our days. We have no idea what others are personally going through at the moment. A smile, a kind word, a little more patience may not seem like much but can go a long way for someone who is emotionally stressed. Others are stressed financially. If you have the means, be a little more generous when you can. A little social support can have an impact on those who are facing difficult issues.
Well said, a stranger’s pickup truck lost a wheel bearing and skidded off the road into the ditch by our house yesterday. It felt good to pull his truck out of the ditch and help him change out the bearing and get back on the road. He was so grateful but I felt I was the lucky one for having a chance to help. We are also keeping in touch with some high risk seniors to make sure they have someone to talk to and plenty of food and supplies. Foods not an issue here, the stores still have most anything you want.
hi steve. i sincerely hope you’re doing that social distancing considering your added risk category. i’ve been home from work all week and mrs. me has worked her 20 hours from home this week. i go out to walk/run and that’s about it. thankfully it’s almost warm enough to enjoy some outdoor relaxing in the yard and waiting for it to blow over. the real concern right now is for my mother in law who is 87 and a couple of her friends in assisted living a couple of hours north of nyc.
I un-retired in 2019 to continue my vocation selling critical components to the biotech companies developing and manufacturing vaccines, antibodies and test kits. I always worked remotely from a home office and traveled around the US and Puerto Rico. I certain miss the face to face meeting helping customer solve their development challenges. However, I have more contact with those developing solutions on Skype, Zoom, Webex and one calls. I now do more presentations to 20+ scientist, most working remotely. Included in the audience, VP level decision makers that I could rarely get to meet in person. People in biotech and pharmaceutical companies have more time to explore novel ways to use products I provide. The development of these vaccines and antibodies is exciting. I’m sorry to say the timelines are not.
A couple of my customers have made headlines with medicines, but clinical trials to test for safety and dosages take time. We won’t see a drug to combat Sars-COV-2 until around Feb 2021 based on the work that I am involved with. Manufacturing at scale at a couple sites won’t be ready until Christmas 2020.
Social distancing is the short term solution to get to the long game and to buy us time.
To answer your question, I have to refer to Maslow’s Theory of Hierarchy Of Needs. I’m spending these days on the bottom to rungs to stay healthy and survive whereas before I was spending time on the top two tiers.
With respect to social distancing, you’re either part of the problem or part of the solution. It’s as simple as that.
Stay safe and stay away
It has to be motivating being in your field at this time. I appreciate what you are doing to help keep others safe.
I’m more worried about the health and human services angle than financial impact. Our paper portfolio took a 33% hit, but we were majority real estate so the overall effect was still down but muted. We will not be touching our paper assets any time soon to give them a chance to recover. In the meantime, I have family and friends on both coasts, SF and NY, and these cities are badly hit. My time and energy is focused on keeping in touch with everyone and getting my elderly mom deliveries (harder and harder to get as more workers stay inside). I am thankful that our last few years aggressively saving and investing for FIRE give us a buffer, and my heart goes out to the 3+ million newly unemployed. There is a financial cost for sure but the health and human toll is the one that worries me so much more.
I would be concerned for elderly relatives too. In our families we are the closest thing to elderly so our kids are probably worried about us, though my 65 year old wife wad planning on running a marathon next week, until they canceled it. So we are much fitter than most our age.I am also concerned for others in financial difficulty. The foundation I chair has suspended 50 people at our fitness center, with pay that we hope will bridge until their unemployment comes through.
My life, like the life of many others, has stopped … on the eve of quarantine, I was ready to invest in real estate, but now, I think it’s for the best that there was no deal. Perhaps real estate prices will drop.
I think it is a good time to put big decisions on hold. I suspect real estate will drop at least in the short term, there will probably be some distressed sales by people who were highly leveraged and have lost income sources. That’s a very unfortunate situation for some property owners.