Our March 2020 Progress Update is the best hot take we have on the status of things in the US due to the COVID-19 pandemic. I wrote that update in close to real time, as is my custom with all monthly updates. But, after several weeks, I felt like it was time to put out a few words specifically about our pandemic and market crash experiences. I know we will have a lot more to say as the situation continues to unfold. Initially, life as we know it collapsed so quickly that I didn’t know what to make of my feelings or fully understand what was happening. As a result, I didn’t know what to write about and did not feel much like writing at all even. Instead, I relied on previously drafted posts. When those began to run low, it felt hollow to maintain my editorial calendar as planned with recaps from our trip to Costa Rica. Those posts are still coming soon! But for this week, I will share a little bit about how life looks today. There is still a ton of uncertainty, but I do feel like I’m slowly getting a better handle on my feelings. The situation changes minute by minute. This post will probably feel outdated as soon I publish it.
The market crash
This is what hit me first. I thought the markets were overreacting to news related to this new virus and that they would quickly bounce back. I was bummed to see our net worth plummet. I had gotten into the habit of checking our investments about once a week and before the end of March, abandoned that. The markets were so volatile that it seemed pointless to look so often. Mr. Vine was one of those people who was almost giddy about the market crash because we are still in the accumulation phase. He said things like “millionaires are made in recessions!” which I did not find very reassuring. I would much prefer a steady and predictable upward trajectory. That said, my stomach is strong enough to watch the bloodbath and not be tempted to move money. And of course, during the week that I started drafting this post, the markets seemed to stabilize somewhat, upon the passage of various stimulus packages.
Even though I stopped checking our personal accounts as often, I still kept close tabs on what the markets did as a whole. Part of this was because more stable markets would hopefully indicate that life was going to return to normal soon. The financial situation remains wild, as do public health conditions. We will just have to be patient to see where the economy lands, difficult as that is. Ultimately as the days passed, I stopped checking in on the markets as a whole with the same frequency. I made it through all of April without checking at all. It was nice to see a solid rebound from where we ended in March.
Mr. Vine’s layoff meant that our contributions were reduced, even if temporarily. That also slows our net worth growth. Basically all things market related that occurred during the early days of the pandemic in the US were a major bummer. If you’re feeling the same way, know that you aren’t alone. We believe the bull will return and that all recessions come to an end. Until then, we are saving some energy by tuning out on market news.
The pandemic
As the markets tumbled, the virus outbreak was declared a pandemic. My firm began communicating plans for everyone to work remotely. That’s when things started to feel weird. I had two conferences scheduled for late March and late April. I was about to start booking travel to Boston and Seattle, respectively when I thought, maybe I should hold. Of course both of these conferences were subsequently canceled so my procrastination paid off! It’s so strange to look back and think that I had any inclination to proceed with those plans, or believed the conferences would go on. I was also in the midst of a search for a new job and deep into the interview process for a couple of positions. One interview was switched to phone at the very last minute (unfortunately after I had traveled to the neighboring state where the interview was scheduled to take place). It turned out to be a minor inconvenience. The adventure was kind of fun and bizarre (perhaps more on that later, or maybe an Instagram post). I thought it useful to document how interviews were handled during this unprecedented time.
I panicked when travel restrictions tightened and US borders with Canada were closed. This seemed drastic and dire. I feared that we would soon be in a Handmaid’s Tale situation. More rational friends talked me out of packing a go-bag and heading for the nearest border crossing. It remains to be seen what the political fallout from the pandemic will be. Travel restrictions remain in place and the politics of the pandemic response have gone from bad to worse. It is a very disappointing time to be an American. I’m sad that our national leaders are not participating with other world leaders and that makes this ordeal even more difficult to accept. Post 9/11, we had the solidarity and support of friends around the world. That’s not the case this time and it’s unfortunate that the current occupant of the White House has chosen to behave as he does when it comes to our global allies.
My firm mandated that everyone work remotely in mid-March. Our state became subject to a mandatory shelter in place order. This shut down Mr. Vine’s manufacturing plant, leading to his lay-off (along with nearly all of his colleagues). Although he was recalled at the end of April, it cost us a couple of installments of regular investments. Because the situation continues to evolve on a daily basis, his future employment status remains uncertain. Upon news of the layoff, we immediately pulled back the amount we are investing after tax to stockpile some extra cash. Pursuing financial independence has put us in a position where either of our incomes will more than cover expenses. In fact, both of us could receive unemployment benefits without worrying about losing our home or putting food on the table. It would not be a luxurious life by any means, but it would be far from destitution.
As of this writing, we and our immediate families are healthy and symptom free. We have taken recommended precautions and practiced social distancing, although we have not managed full isolation. It is uncomfortable and unpleasant. Even nearly 50 days into this new life, it still doesn’t feel normal. I haven’t had much fear about getting sick, which in itself feels like a huge privilege. We certainly do not take for granted that we are well. Money and things can be replaced, but our loved ones can’t. We have managed to find joy in certain aspects of this time, while still grieving for our lost normality. We’ve tried to be gentle with each other and ease our regular expectations for productivity. The increased time together has been such a gift.
Does this change our plan?
It’s too early to identify the full scope of effects this virus will have on our lives and our financial plan. In the short term, no, we are not changing our plan. For now, our plan involves keeping expenses low and saving a high percentage of our income. The first part of the plan, keeping expenses low, has been a sanity-saver in these uncertain times. Tracking our expenses provides a clear understanding of what’s necessary and what’s not. We may reconsider our asset allocation going forward. During this time we are glad we have a trusted financial planner. Yes, it costs money and yes we could manage our investments on our own. We may do that someday. But for now, having a coach and partner to guide us through this time has provided peace of mind.
The pandemic, working from home and Mr. Vine’s layoff gave us the best chance we’ll ever get to “practice early retirement.” We took to it well. It isn’t exactly like early retirement for numerous reasons, notably that I continued to work. But we found that we enjoy spending every day together. The weekdays remained different from the weekends. We also learned that our current location probably is not where we will want to be at this time of year if we have a choice. The ability to escape frequently to warmer climates for long stretches of time may make our current home more tolerable, but we have already talked about how we may consider a more nomadic life, or relocating more permanently.
Where do we go from here?
I mean this quite literally at a time when travel is restricted and all but suspended. We canceled an out of state trip planned for late May mostly because we were uncertain what the state of things would be in that region by that time. We are uncomfortable with the governor of that state and how he is handling the pandemic. If Governor Brian Kemp of Georgia happens to be listening, he lost tourism dollars for his state thanks to his failure to take a global pandemic seriously.
For now, we are keeping international travel plans for December in hopes that this virus does not surge again late this year or perhaps there will be a vaccine (which, admittedly, is a very optimistic hope). We believe we will travel again. Until that time, we have a library of planned posts reviewing our Costa Rica vacation in February, which should help us stick to our goal of two travel posts per month. We will also continue to talk more about travel plans as they develop.
At heart, we continue to feel like explorers. Travel and experiencing new places remains important to us. It is also helpful to find out who we are when we can’t travel. We have gone hiking in our local area for further distances. Last year we talked about paring down our travel spending, which was a useful exercise (and one we plan to continue). This year, our travel was put on an involuntary hold which is very different. It is good to know we can cope with that and still find free ways to explore what’s all around.
How are you coping with the pandemic? What do things look like where you are? Do you have a plan for getting back to “normal”?