How the foundations of FI apply during this crisis.

As the current crisis of the corona virus is sweeping our nation, I think it is safe to say that we all are seeing changes in our lives whether positive or negative. This crisis has hit our country and affected people in ways no other thing has in my lifetime. Mass layoffs, government stimulus, closing of businesses, and a volatile stock market all have put fear into the American people and have them wondering if they will still have a job, if their retirement savings will be gone, and if this is something that we as a country will ever recover from.  As both confirmed cases of Covid-19 and deaths from the virus continue to build we are all left wondering when this will end. 

As my work situation has changed as a police officer I am still lucky to say that I have a job and a steady paycheck that is getting me through this difficult time and keeping my financial situation secure. Despite record drops in the stock market that have caused me to lose approximately $80,000 in the last month or so, I am still doing ok and am actually excited for when this is all over and the market has recovered. 

One of the most common questions I have been getting during this time is “what are you doing with your money”? People are curious if I’m pulling my money out, buying individual stocks that have dropped tremendously, or wondering what type of scheme I have to take advantage of this situation. 

Unfortunately for them my response is very boring. My general response thanks to JL Collins and his book The simple path to Wealth, is to advise them how I just continue to invest in index funds, keep my money in the market, and invest little amounts here and there whenever major dips happen. They are sad to hear that I’m not following the exciting approach of investing in individual stocks and gambling that those stocks will go up. I’m not going to lie, I was very tempted to start buying up some individual stocks such as Royal Carribean as it had dropped from over $100 to per share to $20 per share in a matter of weeks. What I had to keep reminding myself of though is that investing money is not a game or something to play around with, by buying up individual stocks I would be doing just what I mentioned above… gambling. I’ve tried this before and I have failed, but thanks to JL and his wisdom I have decided that I will continue to go with the plan and just keep doing the boring but simple type of investing that I have done and mentioned in this blog before. 

What has been interesting to me is watching all of society start to fall into somewhat of a FI lifestyle. Many people have been forced to adapt the lifestyle of those seeking financial independence out of sheer necessity. This includes staying at home and cooking meals, spending time with family, managing your time effectively, budgeting, managing retirement funds, and learning to live within their means during these times of uncertainty. I think one thing that has been made apparent on things like social media is how bored people have become. It has shown through how much people rely on their jobs as their means of social interaction and just simply taking up their time. This is funny to me because on the flip side all most people do is complain about their jobs and wish they didn’t have to work and when that wish is finally granted they have no idea what to do with themselves. This is why it is imperative to create a life plan if you are seeking an early retirement lifestyle. 

While I still have had to go to work, my free time has increased and I’ve taken advantage of that by reading more. Just within the last two weeks I have finished three books which normally would take me about a year to do. I have thoroughly enjoyed this opportunity to read and am glad that I decided to do that versus just sitting on my phone wasting time. 

While there are so many negatives to this epidemic I have been trying to see the positive light in this and I urge you to as well. Here are some ideas of how you could use this time effectively…

1. Learn more- Read books, watch Youtube videos, focus on some things you’ve wanted to learn in the past but just didn’t have time for such as an instrument, foreign language, cooking, investing, home remodeling and maintenance…. Etc.  

2. Spend time with family- this could include playing games, watching movies, going through old photos and videos, and having meals together.

3. Be more active- While gyms are closed use this opportunity to walk, run, or bike through your neighborhood.  Utilize at home workouts just using your body weight or weights you may have in the basement. 

4. Figure out your finances- There is probably no better time than now to go through your finances and develop a plan for the future. This may include debt payoff, starting an emergency fund, or figuring out your long term investment plan. Also if the idea of FI is new to you this is a great time to do some research on what financial independence and early retirement is all about. There are countless blogs and podcasts to listen to and I’d be more than happy to recommend a few if needed. 

5. Take care of yourself- Last but not least I recommend following the guidelines set forth by the government by staying home and going into public only when necessary. This is a serious problem that we can’t take lightly and by all of us doing our part by taking care of ourselves and staying home we will overcome this epidemic and will be happier, healthier, and wealthier in the long run because of it. 

Thank you for reading, stay safe and healthy.

Matt