Instead of telling you how my family is doing OK during the coronavirus crisis, I wanted to share with you how our family is being negatively impacted.
From going through a logical exercise on how to predict a stock market bottom to providing suggestions on how to better work from home, I have been accused of being too calm and hopeful during this difficult time period. Instead of remaining optimistic, I should wake up from my dreamworld bubble and face the reality that doom is upon us.
Even though I’ve only heard from a few people online who have lost money in their investments (just read all the comments from people who said they were 100% in cash or short before the crash etc), I’m assuming there are some of you out there who are feeling the crunch. Maybe some of you are even a little scared about the future.
If so, I can see how my disposition can irk you. Let me attempt to mix things up.
Finding Joy In The Suffering Of Others
During times of fear and uncertainty, the people who are hurting the most tend to lash out at others, especially online. Civility dissolves into nothingness as strangers attack strangers to help deal with their personal demons.
One of the consistent things I’ve noticed since starting Financial Samurai in 2009 is readers, regular and new, find joy in my suffering and the suffering of others. Because I’m pretty transparent with what decisions I make with my money, when things don’t go well, I thereby enable people to make fun of me or kick me when I’m down.
Below is an example of a reader taking joy in my underperformance as described in a mid-2019 weekly newsletter. In the newsletter, I admit that I was too conservative with my then ~30/70 equity/bond asset allocation. But after a rocky December 2018 and a healthy recovery by the end of 1Q2019, I wanted to take down my risk exposure.
You may find this strange, but one of the reasons why I’m relatively transparent with my finances and financial failures is because it brings some people joy. And bringing joy to others makes me happy.
In the workforce and online, I’ve had to deal with countless bullies. I’ve been called plenty of hateful names. The common denominator all these antagonists have in common is that something is bothering them enough to throw prickly bombs. I feel their pain because I’ve gone through many painful experiences as well.
It is also a human affliction to delight in the suffering of others (schadenfreude). It is much easier to try and bring someone down than it is to take action to improve your situation. Unfortunately, our hyper-competitive world has only increased the amount of schadenfreude.
Hopefully, the difficulties my family is going through will help make you feel better about your situation. Perhaps you will find solace that you are not alone during this time of great hardship.
My goal since starting Financial Samurai in 2009 has always been to educate, entertain, challenge conventional ways of thinking, and make you feel more confident about your finances.
The Hurt We Feel During The Coronavirus Crisis
1) We lack income stability from full-time jobs. Not only do we not have jobs that pay us a steady salary with subsidized health care, but we are also going to have a much more difficult time finding jobs if things continue to worsen. If and when employers do decide to hire again, they will first try to hire people who already have jobs to “upgrade” their workforce. Then they’ll look for people who were recently laid off in a relevant field. During a bear market, folks like my wife and me are at the bottom of a thousand-resume pile.
At the beginning of 2020, I had a goal of getting back into the workforce to help increase capital and reduce our $2,380/month health care bill. The dream was to accumulate enough so that my family could comfortably retire in Hawaii by the end of 2022. Thanks to the coronavirus, my dreams have been dashed. I must find another way but I’m uncertain how.
2) We’re still paying for preschool, despite the closure. Not only do we have to pay the full $1,950/month for the month of March, even though three weeks have been canceled so far, parents are also being asked to pay full tuition for the month of April. The school could be closed for months longer.
I’m assuming there will be some type of compromise, but families who decide to protest may permanently lose their child’s spot once there is a recovery since there is still massive demand to get in. We’re talking 100+ applicants for 2-3 spots.
3) We’re getting hammered financially more than most. With the S&P 500 down ~30%, our net worth is down by hundreds of thousands of dollars.
If stocks drop any further, a decline in real estate prices may be next. Shockingly, municipal bond funds have also lost multiple years of gains as well. There’s a good chance that by the time the carnage is complete, we could lose well over $1 million.
4) Financial Samurai traffic is down ~15 – 20% YoY. Instead of Financial Samurai benefitting from fear and uncertainty in the stock market and economy, it looks like more people would rather stay as far away from anything finance-related as possible. It feels better not to look at your finances when they’re getting clobbered, so people don’t.
People also tend to stop trying to educate themselves as it’s simply too painful a time period. With a decline in traffic comes a commensurate decline in revenue. If finance-related companies start shutting down, revenue will decline even further.
One silver lining is that because Google searches for “unemployment benefits” have spiked, so has the increase in book sales for teaching people how to negotiate a severance. In such situations, you want to negotiate a severance well ahead of any tidal wave of layoffs because the people who negotiate first get the largest benefits.
5) Our mountain rental property will be negatively impacted. The Resort where we own our condominium shut down in the middle of March. The timing is terrible since the snow has been dumping and winter is the highest revenue season of the year. Yet, the HOA dues and mortgage remains fixed. Hopefully, with nobody going, The Resort will lower the monthly HOA/maintenance dues, but I doubt it. This is a double whammy that may last for months.
6) We have two children under three to protect. Life was on easy mode when we didn’t have children. We could easily hunker down when it was just the two of us. Now, we’ve got to ensure that our children are continuously fed, protected and loved.
Imagine having a highly energetic 3-year-old that needs 12 hours of non-stop attention. Now imagine having a precious 12-week-old who has not yet fully developed her immune system during a global pandemic. Difficult mode.
There is no downtime for us, only a heightened sense of responsibility. We must also put on brave faces in front of our children and pretend everything is OK. There is no point letting our dismay spill over to our children’s innocent lives.
7) Our parents and in-laws live very far away. My parents are in their 70s and in Hawaii. My in-laws are in their 70s and in West Virginia and Virginia. If something bad happens to them, we are a day’s travel away, if we’re still allowed to travel.
One of the main reasons why I want to relocate to Hawaii is so that in case of an emergency, I can be by my parent’s side within 30 minutes. When it comes to disasters such as a heart attack, every minute counts.
8) We have less time to recover financially. Now that I’m in my 40s, I no longer feel quite as invincible as I did when I was in my 20s and 30s. At 42, I’ve got 20 years less time to recover than someone who is 22.
For all of you still on your path to financial independence in your 20s and 30s, this is the moment you’ve been waiting for to build your passive income investment portfolio and try new things.
9) California is under shelter-in-place. We’re not allowed to go to restaurants, bars, events, theaters, work, school, etc for an undetermined amount of time. Even if we could go out, almost everything is closed. Even some of the public parks are now closed.
Spending more time at home is great for building a stronger bond with our children. It’s what my wife and I have done since 2017. However, 5 am – 11 pm days can get very tiring after a while, especially when it’s not under your own accord. There’s a reason why so many best friends no longer remain best friends after a long road trip.
Perhaps one of the most difficult things about shelter-in-place is that we don’t know when it will end. Our Governor has said schools might not open until the Fall. The uncertainty is what is most disconcerting. But we will do our part to beat this thing.
The Key Now Is To Survive
I acknowledge that some folks have it worse than us. And I’m not trying to win the victim Olympics. I’m just sharing what we are currently going through so you know that not everything is sunshine and roses here.
If you’re feeling pain from the coronavirus-induced stock market meltdown, I hope my list of things we’re hurting from helps make you feel a little better about your situation.
Feel free to use me as a punching bag if you’re hurting. I’m used to it. Just try not to be racist because that’s where I draw the line.
We can all agree that eventually, most things will bounce back. The key now is to survive until things do. Review your cash and liquidity situation. Review your asset allocation. Cut down on your monthly burn rate. Support your local businesses. And try to be kind to one another.
No matter how bad things get, so long as there’s electricity and the internet, I will continue writing to help us eventually come out ahead.
Let me leave you with this hilarious video from an Israeli mom of 4 who is trying to cope with school being closed. Sorry to end things on a positive note. But you got to watch the rant. If you’re a parent, it’s the best!
Readers, how are your finances and your life being negatively affected by the coronavirus? Perhaps we can share our stories so we can make sure people know they are not alone during this time of difficulty.
If you don’t delight in the suffering of others and appreciate my work, then you can support Financial Samurai at no cost by sharing my articles and recommending my newsletter to people you care about.