FIRE – More Important Than Ever? (How to cope with the Pandemic)

So, how is everyone’s 2020 going? I do not know about you, but holy sh%$!t, what is happening? On a personal note, I had an early 2020 health scare with a cancer issue, therefore have not been able to dedicate as much time as usual to The Money Vikings blog. More on that later because I am still quite literally healing from physical, mental and emotional trauma. But at the tail end of all that, here came the Corona Virus situation like a huge meteor that crashed down on planet Earth and changed things forever. Almost overnight, many of us are either facing sudden job loss, very difficult/stressful jobs, are home working and trying to raise/educate children and juggle a million things. Many of our lives have been thrown into a strange surreal Twighlight Zone type situation.

Here are some ideas discussed in this post:

  • Were we prepared enough?
  • Will the world and society ever be the same?
  • Asset allocation
  • The importance of FIRE (Financial Independence Retire Early) life strategies.
  • How to be more Independent as these types of events occur in the future?

The Corona Virus “Black Swan”

So 2020 started off kind of normal, and then here comes the Corona-Virus. Like many families in the US we are on lockdown. Working from home, barely going out, home school and trying to keep children safe and engaged in a healthy way. In the first week this all seems kind of novel and a strange transition out of our daily and yearly routines. But as reality sets in we are facing an interesting new reality. How do we teach our own children? How do we structure the day? How do we keep engaged with work, co-workers and friends? Then there is the financial damage we are all enduring. And I am not convinced it is over yet. You can’t have 80 million people staying home and not face some kind of great recession or even depression. Not sure how that is all going to play out, but we appear to be clearly entering another great recession at the least.

We Should Do Better

I am a guarded optimist by nature. We should have seen this coming and been better prepared. And frankly I have been surprised how flat footed the US has initially responded. We seem to be making up for it now, but we clearly lost a couple crucial weeks or even a month of action. I find it disappointing because I have heard Bill Gates for years say that we should be preparing for a global pandemic the same way we prepare for war. Was anyone listening to this very intelligent and thoughtful man? Oh, I see, we were too busy playing stupid tribal politics or caught up in whatever.

The End of Tribalism

For me I believe this pandemic will mark the end of what I call tribalism. We should all have different views and have debates, but guess what: viruses do not care how rich you are, the color of your skin, your job title or political party. All they will do is survive in every single host they can get into. We will clearly need an international strategy and spirit of cooperation among all areas of the planet. Otherwise the next pandemic may be worse. But again, I am a guarded optimist. We have the tools, knowledge and resources to fight these types of situations.

FIRE

In my mind this pandemic experience makes the general concept of FIRE even more important than ever before. Before Corona we were all living a fantasy of security. Never ending stock market gains, all assets rising, consumption like crazy, low interest rates, etc. To me, the key word in FIRE has always been the “I” for independence. I have never been as fascinated with the “Retire Early” part, because work of many kinds brings many benefits and joys. But being independent is critical to our futures. Not from socializing and being a good member of our human communities. But to be able to withstand and survive external shocks. You have got take actions to be resilient and self sufficient. This is not 100% achievable, but any actions taken in this direction will help the next time something like this hits. And there are more to come.

Here are a few ideas to consider implementing to enhance FIRE and make it through this pandemic:

1. Take a Deep Breath (and follow directions)

We need to take a collective deep breath. We will make it through this if we take all the precautions. washing our hands, social distancing, staying connected now through online channels, supporting and appreciating our health care workers. Listen to the doctors and scientists. Be skeptical of the politicians. Most people will get through this just fine. And we can all do our part to help those less fortunate. We can social distance for a while in order to stop the fire from spreading. We can be clean and cautious in our actions.

2. Reconnect at Home With Family

This is an opportunity in some ways to slow down a little bit and connect with those you love and live with. It is an opportunity for creativity. How can we creatively engage our children and our relationships each day? How can we reconnect with what truly matters in life? How can we love more?

3. Asset allocation

Here is an idea from the purely financial side of things. Almost everyone has “lost” money on paper over the last 3 weeks. But, if a person lost really big and they are upset about it, then their asset allocation was off for them. Asset allocation needs to be taken seriously and considered closely. It is an individual decision in many ways and has a lot to do with one’s risk tolerance. My “Sleep At Night Portfolio” is holding up relatively well. But I am accepting of the risk associated with the equity exposure.

4. Listen to Bill Gates (And the scientists and doctors)

First of all I am an investor in Microsoft because it is a great company. It is one of our long term hold equities. But Bill has been saying for a long time that something like this was coming. We all need to collectively and individual be more prepared. Let’s also recommit to giving the scientists and doctors more of a voice. They are the ones that will save our lives with facts, data and solutions. 12 Stocks For the Long Run

5. Bargin Hunting

It must be said, many great stocks are now going on sale. This may be a great opportunity to scoop up some additional shares of either the broader market through a Vanguard fund like VDADX or individual dividend stocks you find of value. We discussed this concept in detail in Are You Preparing For Your 3 Big Financial Opportunities? If you have 10, 20, 30, 40 years of investing ahead of you, then this stock market implosion is the greatest thing ever financial speaking. This could be a rare opportunity to pick up many discounted shares of great companies or index funds. At the time of writing this, over 3 years of stock market gains have been washed away. I keep going back to our 12 stocks for the long run and others, searching for discounts.

6. Exercise & Eat Some Healthy Foods

Now is a great time to go for a nice walk in the neighborhood or bike ride. Just make sure to keep the social distancing! Here are some ideas for a Home Gym.

7. Be Good To Each Other

We are all dealing with a lot right now. This is a rare and huge existential crisis. Let’s be good to each other. Let’s do the right thing. Let’s work together to get our society, health and economy back on track so we can all thrive.

8. Afterwards

When this initial pandemic issue is behind us, let us recommit to independence and preparedness. This may look different for each person and family. Maybe it means solar panels. Maybe it means saving more and having healthier asset allocation. Maybe it is investing in stocks of companies that improve healthcare and health preparedness? Maybe we build a basement filled with a years supply of toilet paper. There are many ways for us to be more prepared.

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