At times like these, I'm grateful to be Mustachian

[FireLane]

We're living in interesting times, as the saying goes. Scary headlines are flying at us from every side, the stock markets are plunging, and doomsayers are promising the end of civilization. Closer to home, my job has become work-from-home indefinitely, my son's preschool has closed, grocery stores are mobbed, and my city is on virtual lockdown.

I won't say I'm not nervous at all, I'm only human. But I'm trying to chart a middle course between complacency and irrational panic, and being Mustachian has really helped me to do that.

Now more than ever, I'm grateful to be here, because...

• I have no debt and live below my means, so even if I were laid off, the bills I had to pay would be minimal
• I also have a sizable cash emergency fund I could tap if I needed to
• I'm used to cooking at home, so restaurants and bars closing isn't a huge imposition
• I enjoy free/cheap entertainment such as reading, going for walks and watching free streaming content, which all remain available when malls, movie theaters, airlines, etc., are shut down
• I know that market downturns are occasional and expected, so I'm not tempted to panic-sell and can buy more to take advantage of lower prices

Has being Mustachian helped you cope with the COVID crisis?

[LoanShark]

Agreed. I'd be losing my mind if I was levered to the hilt and had no liquidity.

[Kris]

Me, too. I'm in a private FB group with a bunch of friends from around the country. Many of them are freaking out because they're about to lose their jobs or their work hasn't paid them and they have no cushion.

[dougules]

+1  I wish this message were louder. 

[Metalcat]

I'm crazy grateful to be my personal brand of Mustachian right now.

I say my personal brand because I don't care about FIRE, my focus is more on being adaptable to virtually any circumstance, risk assessing worst case scenarios, and building resiliencies into my lifestyle through frugality and skills diversification.

I spent all of last year terrified for my health, very very sick, genuinely concerned about dying/losing function, and asked a result of my health, I lost my medical career that I spent so much time and money to be able to do.

I've handled that, pivoted, and made the most of the pivots. So a crisis that risks my health and my career is exactly what I'm prepared for and what I've built in resiliencies to handle.

Basically, this is exactly what I've set my life up for.

[Laura33]

Agreed.  DH left Quicken open last week, and we had lost around 10% of our overall NW.  That was well before all of the recent panic crashes.  I am not looking and refuse to look but would not be surprised if we are approaching a 50% loss in our invested assets.

But the reality is that no matter how much we have lost, we are safe.  We have jobs that are not in direct and immediate danger.  We live well below our means, with tons of luxury built into that budget, and we can cut back quite a bit further if needed.  The only thing we have "lost" is the ability to walk away from both jobs at the same time -- but since we had no intention of doing that until DS is out of the house anyway, it's not a real loss.  We have not lost anything we actually need; it is all fluff and excess and therefore nice but fundamentally irrelevant.  If anything, I intend to increase our spending over the next few weeks to try to support the local restaurants and merchants whose livelihoods are truly at risk.

We also have skills.  We can cook delicious meals for ourselves, because we do so all the time.  If DH's work shuts down, he can work on the home projects he has wanted to for so long -- because he woodworks for fun -- but just hasn't had the time to.  And if there is something that we don't know how to do, we know we can figure it out, because, again, that is what we do.

More importantly, we are personally safe.  Who knows what "safe" means yet, but no one in our household has any of the significant risk factors identified to date.  So we quarantine to protect others, without that overriding fear for our own safety.  And as an added bonus, I have my daughter back from college.  Yes, we will struggle with continuing both kids' educations at a distance.  But my daughter is home, likely until the fall, and that is a luxury that I really never expected to have again in my life.  She has been away just long enough for me to realize what a hole her absence leaves behind in our family, so I am quite literally teary with gratitude that I have her here and can hug her and hold her close and know she's safe.

Fundamentally, I am thankful for this site and this concept because it has taught me to focus on how much luxury I still have in my life rather than whatever has been lost.

[Kem]

A scant handful of years past ago I’d have been melting down over this meltdown – given that I was paycheck-to-paycheck, leveraged above our means, with little in the way of investments.

Now my only debts are a low interest student loan and a mortgage that costs well less than an area entry level apartment.

We are 2 weeks away from having our 3rd child, I’m building a business in partnership (no income for the first 4 months, followed by low income for 3), and -should this business falter in response to a prolonged economic drop or regulatory overhaul - after accounting for the market drop I can currently support the family sans income for 3.5 months on cash, 21 months via investment liquidations, and 26 months if willing to leverage (always paid-off credit cards).

Our family entertainment pre-lockdown was reading, an occasional movie at home, games (boardgamegeek, highly rated), occasional n64, walks, exercise, parks. 

The biggest impact  to our lifestyle is the closure of our karate gathering & my friends forced travel in response so no barbells lifts, staying away from playgrounds, and the kids learning from home. 

Already we cook the meals for the entire week weekly – and I add to a cash-envelope $60/month for food out.  Maybe this envelope gets a little fatter and we have a nice burger once the panic subsides.

Not having a large surplus of cashflow due to building a fresh business means I cannot DCA into the market as much as I would currently like, but that is the only ‘real’ financial gripe I can grope for.

[dougules]

Those of you who are FIRE have put yourselves in a position where it's easy to stay home and help not spread the virus.  To those of you that are, thanks. 

(I wanted to give this thread a bump.)

[Metalcat]

I needed to come back and read this again. 

Today a regional TV station has a story about a pregnant woman being evicted during the virus, because of course.  How awful!  Then when you read the story within it is clear this person is the architect of her problem.  Months of non-payment, lease violations, and several extensions of the eviction were all happening well before anyone knew about a virus, since well before it jumped from some tasty bat sold at the wet market.  But today we are supposed rally around miss jamma pants and feel awful for her.  It is typical manipulative "journalism" looking for some angle to strum the heart strings during a crisis and get clicks. 

There are always chaos-people who can't make it during the best economic times in history.  There will always be the mentally ill, the abused, the dysfunctional.  A crisis like this virus reveals what people truly are - as it goes, when the tide is out you can see who is skinny dipping.  Difficulty reveals character.  And I don't want my heart to be hardened so I will come back here and have gratitude.       

I am grateful for my life.  For not being raised with dysfunction and drug abuse.  For having privilege and wherewithal enough to feather my nest when times are great so I can stand the bad times.  For stumbling on the idea of FIRE.  For being healthy and fully employed for long enough to make it happen.  For raising my daughters to have similar ideas about resiliency. 

I am checking in on my elderly neighbor today and will offer to go shop for them. 

If you are lucky enough to be MMM let's see what we can do to show our best selves to others.     

You equate mental illness and abuse with personal character? Am I understanding that correctly?

[Metalcat]

No.  I made a list of things in my post that can defeat us as humans.  Should I add "assuming the worst of others" to it?  No, I won't.  I will assume you are not picking a fight but just had a genuine question from my confusing writing about my own, recognized, vulnerability.   

Yep, genuine question. Thanks for clarifying.

[jps]

Today a regional TV station has a story about a pregnant woman being evicted during the virus, because of course.[snip]

I saw this, too. We must live near each other!

[Metalcat]

No.  I made a list of things in my post that can defeat us as humans.  Should I add "assuming the worst of others" to it?  No, I won't.  I will assume you are not picking a fight but just had a genuine question from my confusing writing about my own, recognized, vulnerability.   

Yep, genuine question. Thanks for clarifying.

No issue.  It was my recognition of "what is MY character?" that I was feeling low empathy for this woman who is a total stranger and probably has a tall deck stacked against her.  It made me reflect again on this thread and be grateful and look to soften my heart.  I can't help her but I can help someone I actually do know and find out if I can cut their stacked deck down a little today. 

Manipulative journalism aside, there is someone right near me who won't make the news and could use a hand.  I want to encourage the lucky MMM's out here to do the same.     

Ah, gotcha. Thanks for the clarification.

I live in a very working class area, and I'm really concerned for the people here. My area has a huge amount of organizations that administer social programs, but I'm sure they're all shut down right now, so I'm not sure how people are managing.

[Uturn]

I have had friends and family over the years say that I should spend more, treat yo self sort of stuff.  I keep telling them I am spending, I'm buying peace of mind.  It's hard to put a price on lack of worry.

[soccerluvof4]

Yea for sure am grateful to have become a MMM believer/follower . Not only a place to go for information, guidance and, help with ideas in investing but times like this seeing how the people I have known or followed over the last 6 years plus and see how they are maneuvering during these times as well.

[DeskJockey2028]

My wife and I are super grateful for this mindset as well.  If I think back to 4 years in the past... yikes!  Today we have a sizable cash E-Fund, are still investing on our regular schedule and thankfully have pretty decent job security.

Her job is closed for the foreseeable future but still paying her, and I'm on permanent WFH until this whole thing starts getting better.

Even if we ran into one or both of us losing our jobs, we've got about 8-9 months of funds we can live on (not counting unemployment) if we stretch it a bit. Hopefully it won't come to that at all though.

[dignam]

It's weird.  For about 12 hours last week I was freaking out about the whole thing.  Since then, I've been incredibly calm and optimistic about it all.  Mustachianism is the main thing that has helped me get to this point.  Plus I'm an introvert to begin with so perfectly fine being on my own.

Only scary thing is gf works in a hospital which will inevitably be swamped with patients over the next few weeks.  But they seem to be preparing staff well for this.

[SwordGuy]

I just realized that some wage workers are going to come out financially ahead out of this situation -- assuming they don't get sick, of course.

(And no, you don't need to tell me about the folks who won't do better.  I'm not a moron.  I already know that.)

I'm talking about the families that are still getting paid and are working from home.

They'll save on gas, wear and tear on their cars, eating out and childcare.  That last is a biggie for some families.

Some families are in a position to save 500 to two thousand dollars a month that they weren't able to before.   

[Bloop Bloop]

I just realized that some wage workers are going to come out financially ahead out of this situation -- assuming they don't get sick, of course.

(And no, you don't need to tell me about the folks who won't do better.  I'm not a moron.  I already know that.)

I'm talking about the families that are still getting paid and are working from home.

They'll save on gas, wear and tear on their cars, eating out and childcare.  That last is a biggie for some families.

Some families are in a position to save 500 to two thousand dollars a month that they weren't able to before.

More to the point, if the average person loses 10% of income and you lose 2% of your income, you have come out on top, especially if you can then transfer those gains into distressed shares/property. Those with vocational/financial reserves and resilience are likely to come out on top even if they suffer some form of loss.

[Kris]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

[John Galt incarnate!]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

+1

The psychic value  of my paid-off home is inseparable from my happiness and contentment.

[Serendip]

I am exceptionally grateful.

For resources such as Your Money or Your Life,  E.R.E &  then MMM which helped me prepare financially and mentally for times like this.

Saturday was my last day of work for the foreseeable future. I work in health, am self-employed but cannot maintain social distancing protocol since my work is hands-on so I chose to stop seeing clients...two days later the clinic I contract out of closed down due to similar concerns. Being self-employed and not eligible for Employment Insurance,  I have no income stream potentially for quite a while, but am feeling calm about it (although now it sounds like the Canadian gov't is organizing a way to assist those of us in these situations).

However even if that gov't support wasn't there, I have a six month emergency fund on top of my other savings..which unfortunately is more than many of my colleagues and friends. I know a lot of people wondering how they will pay rent next month. Six months isn't much in the MMM-world but hey..it's a start :)

I walk/bike everywhere, read books (from the library) and love to cook at home so basically we are in a decently comfortable position in case we have to hunker down even further. My SO can work from home and I have my savings so we don't have add financial stress/mortgage concerns immediately on top of the health aspect of all this.

[nemesis]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

Conversely, I can't tell you how happy I am to have a low rate mortgage and having 6-12 months of emergency cash in the bank.

A paid off house in desperate times is not going to pay for emergency medical bills, it won't pay for food, it won't pay for emergency repairs.  It's an illiquid asset that is useless when you need flexibility and cash flow to buy / barter for critical things.

No one is going to kick me out of my house because I have enough cash to pay for a long period of mortgage payments.  Plus, the government will allow up to 12 months of mortgage payment deferral should I lose my job and hit hard times, in emergency times like this.

Just like back in the 2008 recession, I refinanced my house to pull maximum cash out of the house at a very low interest rate, put it into the stock market and it doubled over time. I set aside some for emergency funds and some in conservative funds for a rainy day.  Should the worst have happened with the housing market, and I had to sell / move, I could do a short sale or foreclosure and let the bank lose money along with me.  Those with paid off houses had no such option.  They would bear the loss all on their own.

Moving back to today, having a mortgage but with enough funds to cover the payments for a very long time, and flexibility to get out of dodge without all of my net worth lost in this house is real peace of mind.

[nemesis]

And you were probably  able to refinance your house because you had a job and your house wasn't underwater by 50% or more and you hadn't lost all your stache in the downturn. And back then there was no government disallowing foreclosures due to non-payment for a year.

Correct.  Which makes a wholly owned house in these times less preferable because should the finance market melt down, no one will be able to refinance houses to pull cash out to pay for emergency medical procedures, food, supplies, etc.  You can't eat your house, but you can eat if you have liquid assets leveraged by your house, pre-emergency times.

[Metalcat]

I do not want to add fuel to the pay off vs don't pay off mortgage debate, but I will say that I am incredibly grateful that Mustachianism lead us last year to downsize to a 1 bedroom apartment in an old building, which is so inexpensive that it would barely be noticeable if the mortgage were paid off.

Low fixed expenses are amazing.

[rantk81]

And you were probably  able to refinance your house because you had a job and your house wasn't underwater by 50% or more and you hadn't lost all your stache in the downturn. And back then there was no government disallowing foreclosures due to non-payment for a year.

Correct.  Which makes a wholly owned house in these times less preferable because should the finance market melt down, no one will be able to refinance houses to pull cash out to pay for emergency medical procedures, food, supplies, etc.  You can't eat your house, but you can eat if you have liquid assets leveraged by your house, pre-emergency times.

My home is fully paid off... But I've got a quarter million, unused, line of credit against it with 9 years remaining draw-period, at 4.40%.
Best of both worlds.

[PhilB]

Lots of things about the current crisis are stressing me out, but weirdly enough I'm actually feeling less stressed about finances than before it happened.  After such a long bull run, there was a real feeling of waiting for the drop to come, but not knowing when it would happen.  I was also finding it weirdly stressful that, if I believed in the valuations, then I had too much money and needed to think about what to spend it on.

Now I have an excuse to return to the comforting habits of frugality that got me to this position in the first place. 

[former player]

And you were probably  able to refinance your house because you had a job and your house wasn't underwater by 50% or more and you hadn't lost all your stache in the downturn. And back then there was no government disallowing foreclosures due to non-payment for a year.

Correct.  Which makes a wholly owned house in these times less preferable because should the finance market melt down, no one will be able to refinance houses to pull cash out to pay for emergency medical procedures, food, supplies, etc.  You can't eat your house, but you can eat if you have liquid assets leveraged by your house, pre-emergency times.

The "don't pay off your mortgage" mantra works as long as 1) you have cash on hand to pay it off (which, frankly defeats the purpose of putting the cash into the stock market for higher returns) or 2) you have a secure source of income to pay instalments until the sale of property/end of mortgage.

The big risk, which admittedly hasn't happened since the 1930s, is going into a prolonged period of deflation in which incomes and the value of money decline but the debt remains the same and in real terms increases.  Under the circumstances of Covid19, or the next coronavirus to come after this one, that is a risk and one which hasn't been factored into the calculations.

Put me in the "happy to own property free and clear" group.

[dblaace]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

+1

The psychic value  of my paid-off home is inseparable from my happiness and contentment.

+2. That plus extremely low base expenses and an EF that should hold me over a few years and the ability to make changes if needed.  And most importantly, I discovered that having more money or things or even experiences that cost money don't really add to my overall happiness.

The piece of mind is priceless. Financial at least...

[DadJokes]

I would absolutely rather have a paid off house than not have one right now. The real question boils down to which of these two situations is better right now:

1. Making minimum payments on a residence and have suffered a 30% drop on that extra money that went into the market
2. Owe less on the residence but still be several years away from having it paid off

Neither is great under the circumstances, but one of the mantras of the DPOYM club has been that your residence can be repossessed regardless of how much you owe on it. While there might be a bit of a reprieve from that in some areas, that's still not a position that I'd like to be in. In the event of prolonged job loss, I'd still rather have that money in the market where I can access it, even if the balance is 30% lower than it was a month ago.

[PhilB]

We really need a formal name for this, a bit like Godwin's Law.  Something on the lines of "As an MMM discussion grows longer, the probability of an argument about paying off mortgages approaches 1." 

Maybe we could call it Boarder's Law?

[bmjohnson35]

The OP's bullet list mirror's our situation.  I would add working out, kayaking, motorcycling, video games and home projects as activities that keep us occupied.



BJ

[Reader]

Has being Mustachian helped you cope with the COVID crisis?

i am now much clearer about what are the stuff i need and what are the wants/luxuries. this has helped me to lower my expenses really quickly.
after coming to MMM, i aggressively got rid of all debt.
with an emergency fund for a year of expenses from not spending on nonsense, i feel a lot calmer financially.

picking up low or no cost home based hobbies - reading, watching youtube documentaries and travel reviews, cooking, working out at home - made it easier to spend time at home.

[Dicey]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

+1

The psychic value  of my paid-off home is inseparable from my happiness and contentment.

As an original member of the DPOYM Club, I congratulate both of you! I do so because I know you were smart about how you went about it. You followed the Investment Order (at least roughly) and didn't cut yourselves short in any key area in order to pay off your mortgage. A paid-off mortgage and enough resources that you don't have to sell anything during this crisis to keep yourselves afloat indefinitely is definitely something to celebrate. Kudos!

On Topic: So Fucking Glad! And insanely grateful, to boot.

[markus]

I would also like to throw my hat into the ring here and express gratitude to you all and to the forum for helping me become properly Mustachian over the past several years, and of course to Pete for starting the blog and attracting my attention to all of this when I first read about him in the Washington Post, around 2015 if I'm not mistaken. I realize now that the time between then and now (discovering, reading and digging in, enacting some steady changes over the next few years, all thankfully coupled with increased earnings in my career and thus the ability to really sock away a lot of money and build a proper 'state) was, in retrospect, all preparation for today. I don't want to think about where my mind would be had I not been preparing all this time.

Several of you mentioned being surprised by your own cool-headedness in our current predicament, and I feel much the same way. Against the advice of many, I do frequently check my portfolio numbers, but even though the numbers are obviously headed in the opposite direction of what I would wish, it's 1) not as bad as it could be (and I realize that maybe we ain't seen nuthin' yet), and 2) still a very, very healthy 'stache simply because of the large amount I've been building up. End result: I sleep well at night, and my heart rate isn't rising.

I'm also grateful for my wife and her generally frugal attitude with money so there's no financial strain between us, and also for our relatively small footprint in terms of living in a very small apartment for years, cooking our own meals, and all of myriad other lifestyle kinds of things that all really add up. It would all be much tougher mentally to have to downsize, trim and change our lifestyle if we were typical sucka consumers, but we're already living well below our means so we're not feeling that change.

The only thing that breaks my heart right now is seeing our neighborhood businesses freeze up, and of course family members who are hurting because their industries are directly affected. The wife and I are very lucky so far in that regard, and while we'll also be affected (furloughed, laid off, etc.) should this go on long enough, we can still make hay while the sun shines, and if necessary will be able to help out our family members when they need it. Yeah, that means potentially digging into cash reserves that I'd been building toward a home purchase one day, but at least we have the ability to help. I'll make those dollars back later on.

And so, hats off to you all, and warm wishes to you and your families right now. This is gonna be a rough road, but I take comfort in riding it out while reading everyone's posts here, and we'll pull through because we were prepared for it.

[Buffaloski Boris]

I'm indeed very grateful. While I'm definitely not a proponent of everything that "mustachianism" teaches, the more important aspects such as striving for FI are things that I embrace and am thankful for. I'm also grateful for those areas where I happen to differ, and to be able to be more or less tolerated by this community in spite of it.   

We are blessed with stable jobs, good health, and financial resources.  The next several months are going to suck for a lot of people. Assuming we can keep our health, we will be fine and be in the position to assist. In the end I see a whole lot of silver for the clouds.

The optimism gun does work.     

[Kris]

A bit tangential, but...

I know the conventional wisdom on this board is not to pay off your mortgage early, but I can’t tell you how happy I am right now to own my home free and clear.

+1

The psychic value  of my paid-off home is inseparable from my happiness and contentment.

As an original member of the DPOYM Club, I congratulate both of you! I do so because I know you were smart about how you went about it. You followed the Investment Order (at least roughly) and didn't cut yourselves short in any key area in order to pay off your mortgage. A paid-off mortgage and enough resources that you don't have to sell anything during this crisis to keep yourselves afloat indefinitely is definitely something to celebrate. Kudos!

On Topic: So Fucking Glad! And insanely grateful, to boot.

Yes, indeed. Thanks!

[Kris]

I would also like to throw my hat into the ring here and express gratitude to you all and to the forum for helping me become properly Mustachian over the past several years, and of course to Pete for starting the blog and attracting my attention to all of this when I first read about him in the Washington Post, around 2015 if I'm not mistaken. I realize now that the time between then and now (discovering, reading and digging in, enacting some steady changes over the next few years, all thankfully coupled with increased earnings in my career and thus the ability to really sock away a lot of money and build a proper 'state) was, in retrospect, all preparation for today. I don't want to think about where my mind would be had I not been preparing all this time.

Several of you mentioned being surprised by your own cool-headedness in our current predicament, and I feel much the same way. Against the advice of many, I do frequently check my portfolio numbers, but even though the numbers are obviously headed in the opposite direction of what I would wish, it's 1) not as bad as it could be (and I realize that maybe we ain't seen nuthin' yet), and 2) still a very, very healthy 'stache simply because of the large amount I've been building up. End result: I sleep well at night, and my heart rate isn't rising.

I'm also grateful for my wife and her generally frugal attitude with money so there's no financial strain between us, and also for our relatively small footprint in terms of living in a very small apartment for years, cooking our own meals, and all of myriad other lifestyle kinds of things that all really add up. It would all be much tougher mentally to have to downsize, trim and change our lifestyle if we were typical sucka consumers, but we're already living well below our means so we're not feeling that change.

The only thing that breaks my heart right now is seeing our neighborhood businesses freeze up, and of course family members who are hurting because their industries are directly affected. The wife and I are very lucky so far in that regard, and while we'll also be affected (furloughed, laid off, etc.) should this go on long enough, we can still make hay while the sun shines, and if necessary will be able to help out our family members when they need it. Yeah, that means potentially digging into cash reserves that I'd been building toward a home purchase one day, but at least we have the ability to help. I'll make those dollars back later on.

And so, hats off to you all, and warm wishes to you and your families right now. This is gonna be a rough road, but I take comfort in riding it out while reading everyone's posts here, and we'll pull through because we were prepared for it.

Yes, I feel very much the same. Because of frugality, any stress or anxiety I currently feel is not because of anything financial. We’re totally fine, and I’m not worried about money at all. I’m not even glancing at our investments, because I know they’re down but we have no plans to dip into them anytime soon so we can wait for them to bounce back.

Meanwhile, I’m seeing friends with no cushion getting laid off, or hours reduced, and they’re freaking out because they’re already feeling the financial strain and they’re looking into a murky future and terrified because if this goes on for months, they can’t imagine how they will pull through financially. I feel terrible for them. And a little guilty, almost, at how easy we have it, comparatively speaking.