What Have You Learned, How Have You Adapted?

rogernusbaum

The Coronavirus Pandemic has been an incredibly disruptive event for everyone and even worse than that for many people directly impacted from the virus through the loss of a loved one or loss of a job. At the start of this when the market crashed, a lot of pundits predicted the end of FIRE, financial independence/retire early. A market crash with the visibility for depression-like job losses will obviously disrupt a lot of financial plans or at the very list cause people to take out their spreadsheets and revise some numbers. My sentiment back then was the same that it has always been where FIRE is concerned which is that never working again is a bad idea for several reasons but that being independent enough to set your own schedule with multiple streams of income that keep you engaged is a great goal, this is how we've structured our lives anyway.

Marketwatch circled back on the idea of people bailing on their FIRE ambitions and found that quite the opposite of bailing, FIRE aspirants are more emboldened than ever but are showing adaptability that you'd hope people would muster in the face of adverse circumstances.

The pandemic may have shifted some retirement dates, or given a new perspective on how they feel about their current jobs, but for many, achieving financial independence has never been more important to them.

While I may be adding 1+1 and getting eleven, I take the quote to mean that people are more focused on being financially independent as opposed to ceasing to work. The folks featured in the article made some changes. What sorts of changes have you realized you needed to make and have you figured out yet how to get those changes made? On a small scale, we are probably leaving the gyms where we work out. My wife has a spin bike that we got for free a couple of years ago and she subscribed to the Peloton app, she also picked up a few dumbbells she can use for non-cycling workouts on the app. The firehouse has accumulated a pretty good weight set, with a few more heavier dumbbells on the way that allows me to get a complete and exhausting workout. I also jump rope a few days week and we hike on Sundays.

Of a little more importance, we are staying a couple of weeks ahead on our grocery needs. I understand why there were disruptions in the food supply chain back in the spring but I am blown away by the fact that it happened. I mentioned back in the winter as this was just starting to unfold that we bought some extra hamburger patties at Costco and a couple of other things just in case.

On a larger scale, I've been talking about getting a generator for a while and that we'd made a down payment for a solar setup, not the lease kind but where we have battery back up functioning as a generator. While money is being invested in the internet and other forms of communication, I am concerned that the electrical grid is not being tended to with the same effort. Additionally, where we live in sort of an isolated community with just a few hundred people spread out over a large area, I'm not sure it makes economic sense to ensure that Walker's (the community where I live) infrastructure is the most up to date that it could be. If that is possibly true, then I don't want to be vulnerable to someone else's idea of what makes economic sense.

Solar, the way we're doing it, is not cheap and this gets to something important I've learned lately. Although I am all in on living below your means, there comes a point where for certain things, we are clearly better off for spending the money. A simple contrast for me would be that I see no value in buying a new car every few years, like as soon as the old one is paid off but believe that adding solar with a battery backup improves our resiliency in the face of some sort of disruption that I can't predict, that is different than the pandemic but just as bad. The solar company also provided a schedule of when the setup we're getting will pay for itself but I'm not too bullish on that aspect.

You have your own new car no, solar yes equivalence of course to apply to your life in general along with any other changes that the pandemic has you considering. Evaluating and improving your life in this context is not about trying to predict a specific event but to understand your life, what is important to you and how to make improvements. We've done the above as well as a couple of other things. Part of the gym issue is not the pandemic itself but after two 1 month closures mandated in our county we're not sure that our respective gyms can survive a third such closure or a fourth.

The investment actions are similar. I've been writing about sequence of return risk for a while. Maybe more people will give this risk the priority it deserves in retirement planning. Not to predict something specific but because disruptions can come from anywhere, they can be large scale like a pandemic or unique to the individual like an antiquated, underinvested electrical grid on the mountain where you live. Whatever you might be vulnerable to in various aspects of your life, figure it out, get out in front of it and then mitigate it.