Lessons in Fear and Wealth from the Coronavirus

As I write this, the biggest story in the entire world is a virus that is making its way around the planet, leaving a trail of sickness and death in its wake, while sending a much bigger shockwave of fear and uncertainty out front. Last week, the US stock market dropped 15% in just a few days, the most shocking correction since the 2008-2009 financial crisis (and the most interesting drop since the founding of this blog in 2011).

I am sure you’ve been hearing, reading or watching plenty about it already, but the real question is, what should we do about it?

The Scary Side

Is this a screenshot from the fear-mongering TV news? Nope, just a moment from a classic zombie movie, although sometimes it is hard to tell the difference.

The fear and doubt seems to be what the news stories have been emphasizing. The disease is highly contagious, and very sneaky. Each carrier seems to infect 2-3 additional people, which means exponential growth. And with an observed death rate of about 1% so far (on a limited data set of older people on a cruise ship) it may be several times times more deadly than the common flu.

On the news, we see rows of hastily installed hospital beds, people wearing paper face masks even here in our own country, empty supermarket shelves and shuttered factories and public venues.

And we are reminded that we ain’t seen nothing yet, because with mild symptoms that can hide for days, most cases are going unreported and the disease is pumping its toxic tentacles through the arteries of our economy, plotting its attack while we are left POWERLESS UNTIL THE RIOTS IN THE STREET START AND PEOPLE ARE SMASHING THROUGH OUR WINDOWS TO TAKE OUR LAST FEW CANS OF BEANS AFTER WE RUN OUT OF AMMO IN OUR SHOTGUNS.

Some people are just prone to this type of thinking, and I even have a few in my own life. They have warned me to gather “at least a few months worth” of nonperishable food in my pantry and make sure I have a generator and plenty of fuel, at the very least. And to reconsider my stance of not keeping any guns in the house.

The Not-So-Scary Side

I went out on the town early on in the scare. The reality was different from the news headlines, although restaurants did close a few weeks after this post was first published.

As I write this on March 2nd, there have been about 90,000 confirmed cases of COVID-19. And while the number is still growing rapidly, at the moment it is still a tiny number, about one thousandth of a percent of the world’s population. So even if it multiplies 100-fold, it would be a tenth of one percent. And out of these 90,000 people, about half are already recovered and have moved on with their lives. And the vast majority of the remaining ill, and all those who are so far undetected, and those who are yet to get infected, will also recover.

Past and current status of the outbreak.

But do we have any idea how bad it will get, before it gets better? As it turns out, we do. But first, some perspective.

Here are this year’s numbers for the tried-and-true traditional flu for the 2019 flu season in the US alone (and remember the USA is only four percent of the world population):

Wow, 32-45 million cases of the flu already, and tens of thousands of deaths. Even I had no idea it was that serious, and yet the flu is something I don’t even worry about – ever!

Even scarier: every year, about 2.8 million people die in the US alone, and a full 70% of these deaths (over two million people per year) are caused by “lifestyle factors”, which to put it plainly means ignoring Mr. Money Mustache’s advice about bikes, barbells and salads every day.

So if we start with the common flu, which is surprisingly scary, choosing car-based transportation and TV-based entertainment and consuming processed high-carbohydrate food and soft drinks should feel at least an additional hundred times scarier than that.

But do you feel the appropriate ratios of fear in these two situations? And a much smaller amount of fear about the Coronavirus? Probably not, because we humans generally suck at putting numbers, statistics and probabilities into perspective.

We Have Been Here Before

In my lifetime alone, we have seen the rise and decline of quite a list of worldwide health scares, each of which was covered in the news with similar intensity to what we see today. AIDS, Ebola, SARS, Bird Flu, and the 2009 Swine Flu pandemic, also known as H1N1. That one was particularly serious in retrospect, having infected between 11-21% of the world’s population and taking the lives of about 500,000.

Yet here we are, with that fearful event gone from the rearview mirror and a global economy that is far richer than it has ever been. Which is exactly what we will eventually be saying about the present moment in time, from our vantage point in the even more prosperous future.

And Math Can Help Create Perspective

Contagious diseases don’t just grow forever until everybody is dead. They follow an S-curve, like this recent prediction for Covid-19’s spread. It currently estimates that we may see things flatten out fairly soon, but more importantly it continually updates to new information and makes an educated guess – a great strategy for dealing with unknowns in life in general.

One mathematical model that a researcher is updating each day – image source.

On the other hand, some estimates are more pessimistic. Disease modelers at Northeastern University used different assumptions in mid-February to predict between 550,000 and 4 million cases in China*, before we reach the flat top of our “S”. That because of extreme quarantines, that turned out to be pessimistic as well and China flattened out well below 100k.

So let’s imagine that a 4-million outbreak happened in the rest of the world. That’s still only a twentieth of one percent of the world’s population who would even get the disease, and then a further 99% of those would recover. Again, it’s too early to guess the world numbers, and I’m not qualified to do so. But it’s always important to put things into context of the almost eight billion people on Earth – that’s a deceptively large number.

As a final source of information, when it comes to world health issues I always like to see what Bill Gates has to say. And sure enough, he written this great opinion piece in a medical journal and an even better Ask Me Anything on Reddit. His main point? The damage done by a virus really depends on how well our governments respond to it. Lots of caution and a quick response leads to much better results.

So there’s still a lot of uncertainty. But when faced with a lack of information, we can choose one of two options on where to learn more:

  • Good looking news anchors with fake tans and no scientific background, who make more money if they generate more viewership hours and advertising revenue, which is proven to multiply if they can cause their viewers to experience fear, or
  • Scientists and mathematicians who study this stuff for a living, and use incoming data to make a series of continually refined predictions.

As Mustachians, we get our information from scientists rather than news anchors and politicians, and then we choose a course of action based on what is in our circle of control. In the case of the Coronavirus, I would say that means taking the following steps:

  • Continue the usual program of living a healthy life. Just the incredibly simple steps of cutting cars, sugar and television out of your life as much as possible will virtually eliminate the 70% fatality risk factor of being inactive and unfit – and yet only a tiny percentage of people – even those lucky enough to still have fully able bodies – actually follow this advice. On top of that, this strategy will also greatly boost your immunity to Covid-19, and decrease your chance of serious illness or death if you do catch it.
  • Don’t try to out-guess the stock market. Just celebrate the fact that we have a temporary sale on stocks. While the endless stream of meaningless market commentary every day means absolutely nothing, one fact remains indisputable: stocks you buy today at a 15% discount from their peak, will be 15% more profitable for you over your lifetime.
  • And finally, still important but statistically less urgent is taking actual steps related to dodging this and other viral illnesses. Wash your hands a few times a day and avoid unnecessary large gatherings of people in close quarters, until the health organizations tell us we are in the clear.

Guns and ammo and a bunker full of canned beans not required.

* a really interesting quote from that same article about the size of the uncertainty around diseases:

” In the autumn of 2014, modelers at CDC projected that the Ebola outbreak in West Africa could reach 550,000 to 1.4 million cases in Liberia and Sierra Leone by late January if nothing changed. As it happened, heroic efforts to isolate patients, trace contacts, and stop unsafe burial practices kept the number of cases to 28,600 (and 11,325 deaths). “

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  • Reade March 10, 2020, 6:36 pm

    For those of you who like graphs, this is a great illustration. The sources of the information seem very credible.


    Serious, but hardly worthy of all the panic.

    • Jason Middleweek March 11, 2020, 7:58 am

      Hi Reade

      Great infographic.

      I note in the chart of contagiousness and fatality rate that Coronavirus is pretty scary because it is both quite contagious and pretty deadly compared to many other viruses that have not been eradicated.

      I do think the draconian lock downs and societal discipline are a must unfortunately or we will see overwhelmed hospitals and massive death numbers before a vaccine is able to be rolled out. When I say massive I mean 3 million Americans worst case scenario if hospitals are too swamped to keep the 10 percent of severe cases in intensive care. Mostly the sick and old are in the firing line.

      I have faith our economic system will be able to handle the disruptions but it won’t be easy.

  • SisterMaryMutt March 10, 2020, 9:05 pm

    The *really* concerning thing about the coronavirus news? How it’s being politicized, with *both* extremes doing things that aren’t good for *all* of us: Dems scream, “The sky is falling!” while Repubs relax in their armchairs and treat us like 1st graders by essentially saying, “There, there. There’s no monster under the bed. Go back to sleep.”

    NEITHER extreme is healthy. When it comes to public health, research based recommendations from experts like the CDC & WHO are best. Leave the politics out of it. Public health concerns should not be made into a game of political football.

  • Martin L March 11, 2020, 8:23 am

    It’s perhaps worth mentioning that just five days after this post, the number of infected cases was literally off the given chart (which topped out at 100,000), and continues to rise exponentially. There is no flattening out yet — in fact, the rate of infection seems to be increasing, even accounting for China getting things under control.

    Outside of China, the number of infected people is currently doubling every four days.

  • Max March 11, 2020, 5:53 pm

    Is anyone else concerned about the out-of-pocket cost associated with this virus? As usual, Max is on it.

    Since people on Medicare are at a higher risk (for both COVID-19 and out-of-pocket costs in general), let’s start there.

    Medicare as already committed to cover the test to see if you have COVID-19 with no out-of-pocket costs (as they often do for clinical diagnostic lab tests). I hope you don’t mind the link to CMS/Medicare, MMM.


    Several commercial carriers are following suit.

    As for me, I plan on using proper precautions such as hand-washing and avoiding travel to Wuhan. If I happen to encounter someone with the virus, I will be sure to get tested (responsibly) and challenge my commercial carrier to make sure my out-of-pocket costs are waived.


  • Boise Stache March 11, 2020, 10:39 pm

    Apart from refinancing our mortgage (in the process of it right now) any other investment opportunities or cost savings you are noticing during all this mass hysteria? cheap courtside seats to march madness?

  • Philip March 11, 2020, 11:09 pm

    I’m just sad that this hit right when I was in the final stages of buying a house. If I had withdrawn my downpayment from my TFSA a couple of weeks ago, I would have saved myself almost $10,000. If this was money that was going to stay in there until retirement, I wouldn’t worry about the dip, but with it dropping literally RIGHT before I had to make my withdrawal, that stings…

  • Fredrika March 12, 2020, 5:56 am

    I kind of disagree on the beans. I am home a bit sick and as a low income person having storagespace full of beans means I can spend alot less on food now when the market is on sale and buy indexfond for my food money. Will probably also lose my extra weight.

  • Baldrick March 12, 2020, 7:29 am

    I’ve got to admit there’s a lot of conflicting advice and stories going on out there right now (And it feels like I timed my own retirement almost perfectly to line up with this market crash).

    Practically speaking I’ll be following the old adage “Keep Calm and Carry On”, though I’m going to be doing my parent’s weekly Supermarket shop, etc. until such time as things start sounding more positive. They’re in their 80’s with at-risk health conditions so it’s worth keeping them out of crowds for a while.

  • Rachel March 12, 2020, 8:32 am

    We are planning to move in the next 6 months….Don’t ask now, but I kept my down payment money in an index fund, which has now fallen 20%.

    If we sell our current house, we can buy without dipping into those funds. But I was hoping to use that stash to put a downpayment on a second house and keep this first as a rental.

    The best laid plans….

    I don’t want to panic and don’t want to fall into the trap of buy high/sell low, but now people are saying it’s going to be a while before the market bounces back, perhaps well beyond our horizon for purchasing a new house. Should I just cash out??

    • Mihaela March 12, 2020, 10:54 am


      Another potential idea is to keep your current house and rent it out, keep the money in the market, and temporarily rent a place instead of buying right away.

      I don’t know your local real estate market, but hopefully you can cash flow off of renting your home, not just count on appreciation. Then your money will grow in the index fund, your rental will spit out cash and you can buy a new home stress-free and on your own terms when you’re ready.

      Good luck!

  • Mihaela March 12, 2020, 8:44 am

    I have cash in a retirement account I’m no longer contributing to (from my former time in the public sector). I know the traditional advice is to dump it all in immediately, but the market seems to be in free fall. I’m currently leaning toward dollar-cost averaging – maybe putting some money into a US large cap index fund every other day through March. The purchases would be at whatever the price is at close of business day when I place the order. There are no fees or limit on number of transactions. I”m curious what you would do in my situation? Thanks.

    • Waingro March 17, 2020, 12:31 pm

      I dumped it all in SPY at once using a limit order of 30% down from the 52-week high. Worked like a charm.

  • Widjet March 12, 2020, 11:26 am

    I recall a post some time back questioning what would happen to the economy if everyone followed MMM and bought less things. Well now we get to see that in practice. Could this be a reset moment for the American consumer?

  • scott March 12, 2020, 2:21 pm

    MMM. Here is some good old fashioned swearing you can get behind. Please check out and consider promoting #staythefuckhome

    If you got rid of this post or rewrote it to promote precautionary behavior you could do an immeasurable amount of good considering your broad audience and reach.

    • Married to a Swabian March 22, 2020, 8:52 am

      Amen to #Staythefuckhome. !!

      If this administration had a goddamn brain in its head, a nationwide shelter in place order would be made.

      The kids are all home from school anyway. What are you gonna do, take them to day care and spread it around there?

      How fucking stupid can we be?!

      Whatever it is that your employer provides to the economy, it’s totally fucking unimportant right now, unless it is useful to fight this pandemic – end of story!

  • Married to a Swabian March 13, 2020, 6:08 am

    We have now come to the point where “the return OF your money is more important than the return ON your money”.

    At 55, I have chosen the worst possible time in my lifetime to change jobs, but made that decision before all this become common knowledge. Starting a new gig on Monday…probably will go in, not shake hands with everyone, get new laptop and start working from home!

    Fortunately, we are healthy and have downsized our lifestyle and monthly expenses, while increasing cash
    reserves, so that will help to weather this storm! Thank you MMM!

    I, too, have the situation of a 401K (past five years worth of investments) rollover from previous employer. Due to the extreme volatility, we’ve elected to sit tight and wait to transfer it into our IRA until things calm down. Fortunately, it was 25 % in a stable value / MM fund and we’ve moved another 20% into that to reduce risk. Letting the Vanguard IRA pretty much ride the rollercoaster with 60% stocks and 40% bonds.

    Maybe people will wake up now to the idea that our society could use some tweaks to improve: paying people a living wage, providing PAID sick days and healthcare for ALL. Congress is working on a bill to provide $$ now to keep people home. Hard to do when Living paycheck to paycheck for millions.

    • drplastickpicker March 15, 2020, 11:26 pm

      This is so true. I was just at the grocery store, and a young millelial mentioned that if you are living paycheck to paycheck than it’s impossible to stock up 2 weeks of food. That is why all the pasta, pasta sauce, potatoes and canned meats are gone.

  • Skye March 15, 2020, 7:54 pm

    As a nurse in an Australian hospital, I would suggest you use your reach to encourage people to undertake social distancing and self isolation. We only need a very small number of very sick people to put hospitals under immense stress…

    • Greg March 18, 2020, 5:07 pm

      Yeah, this is the main point this article misses. Getting COVID-19 and dying from it as an individual is not the main concern. The main concern is that if we don’t take significant action to stem the spread of the disease, we are likely to need hundreds of thousands of ICU beds at once, when we only have ~30,000 in the US.

      That’s Bad.

    • VS March 18, 2020, 7:11 pm

      I second this, as a fellow Aussie health worker. An overcrowded hospital puts a wide range fo people at risk who need assistance for non-covid-19 related conditions too.

  • drplastickpicker March 15, 2020, 11:24 pm

    I just check occassionally back on this blog. It’s funny that this was published on early March and if you had been following what MDs were saying, we were saying to panic and about March 3 I was posting that I was n’t too worried, eventhough I am an MD and HMO middle manager. By March 8, I was worried because I think we finally started looking at the data. This is the real deal and everyone needs to #flattenthecurve. I wrote on my blog what I will summarize here that some of my friends think that this is a mission of folly, and I’ve at times felt like Don Quixote. But tomorrow I return to work. But for you friends who are not in healthcare, who are brilliant attorneys, educators, engineers, I know you want to DO SOMETHING. But the best thing you can do is do nothing. Social distance and stay home. You will be saving lives each day you stop the spread and #flattenthecurve. Think of the sound of your grandmother’s breathe or the tap of an older friend’s cane. I post this message in hopes that Mr Money Mustache will help us save lives. This is serious. Best of luck everyone.

  • Old and FIREd March 16, 2020, 10:51 am

    It is taking every ounce of my being to not “freak out” over the news about Covid 19 and its threat to our society’s health and economy.

    I am fairly new to the world of FI and have spent the past decade trying to make up for lost time after many years of working in a shitty industry with low pay, lots of job changes, too much debt, and not saving enough money when my partner and I were young. Oh how I wish we had discovered all this great YMOYL advice in our 20s and 30s instead of now when we are staring 60 in the face. But here we are.

    The last few years were going extremely well, perhaps too well. We have been living frugally and saving like crazy. The debts disappeared and the stash grew. A bonus, albeit a sad one, was that we inherited a property that we were able to fix up and sell in a hot real estate market. By the end of last year, we had finally accumulated enough that we decided to pull the trigger on our jobs and retire in January.

    What a difference a few months make.

    As I watch the world try to deal with the fallout of this virus, I am trying hard not to worry, but holy crap! Fortunately, we retained half of our next egg in cash while the other half is invested in index funds and dividend stocks. We have used some of the cash to buy more index funds while they are “on sale,” but now I am feeling that it’s more prudent at our age to hold on and hope that the markets will recover what we have lost. Guess I don’t have the guts of steel I thought I had. Please don’t judge.

    I have to remind myself to keep this all in perspective. I can get another job if worse comes to worse, but I can’t get another life. Health is our most precious asset, and we all need to do our bit to contain the spread of this virus so the health care system has the resources to treat those most in need.

    For now, we are hunkered down at home. Our local public health officials have urged social distancing, so that is what we are doing, enjoying our home, cooking delicious meals, reading books and FI blogs, and trying very hard not to look at our stocks app.

    Stay healthy everyone.

  • Violet March 16, 2020, 2:06 pm

    Until now, I felt prepared for this madness and actually felt good about myself. I had bought in advance food supplies for 2 weeks – we totally understand the need for quarantine. But now I’m running out of eggs and milk and fresh fruits, and this is not fun when you have three small kids. So it seems I’m so not much of a prepper. Online deliveries are not an option anymore, these services are now overwhelmed, here in Romania. We’ll just have to go out to buy some food, and also paracetamol – because apparently ibuprofen is bad, and there’s a single pack of paracetamol in our house… I’m not sure what to think anymore, change is changing. It will be fine, eventually, especially for the young ones, but it’s stressfull and tiring.

    • Jason Paul Middleweek March 18, 2020, 12:08 am

      Hi Violet.

      I was quite interested in your Ibruprofin comment. Seems like an exaggeration. Try to avoid anything if you can bear the headache and discomfort, especially if you are trying to check your temperature to make sure you you might need COVID 19 testing (colds don’t usually give you a temperature). There is a real problem with false information on twitter. Check the WHO.INT website for real information.

  • WK1 March 17, 2020, 4:06 am

    Hi MM,

    Check-in time! It’s two weeks since you published this post, and in the time since cases have gone up about 90% worldwide and about 3700% in the USA. The stock market has seen some of its most extreme volatility ever, including two of its ten worst days ever percentage wise in the past week, and there are unprecedented shutdowns across the US and Europe.

    Are you still of the belief this is just a short term sale on stocks, or is this a larger economic turning point that will have permanent ramifications on the economy and investing in general? I’d like to hope your post is right, but the new cases curve is doing the exact opposite of flattening at the moment and the economic losses continue to mount.

    • Mr. Money Mustache March 17, 2020, 8:21 am

      We already know the long-term outcome of this – as a world and a species, we will get through the outbreak and be stronger from the experience. We just don’t know the exact timing (although as an optimist I personally expect a not-too-long abatement of the worst of the fear, somewhere from a few months to a year).

      I don’t mean to minimize the pain and suffering involved – For example, in the worst case if virtually everyone in the world is exposed, we would lose about 1% of our most vulnerable population and it wouldn’t be a fun ride. However, since the world seems to be taking the prevention very seriously now, you can expect far less than the worst case.

      But in the long run, hardship in the present always leads to new highs in the future, and we have been through many of those in the past. If you believe that (as I do to my core), it is always a good time to invest, and lower prices are always better.

      A side note: from a financial perspective, 2008 was much scarier because the outcome was much less well known at the time.

      • Tony March 20, 2020, 1:35 pm

        Hi MMM, I am retired and just watched my account drop.
        Q1. Approximately how many years did it take to recover from dot-com bubble After Inflation, taxes and fees?

        Q2. Do we need to pay back the QE debt in future by increasing taxes or inflation?

        Everyone please social distance to stop the virus spread, ideally stay home next 14 days if possible.

  • Patrick March 17, 2020, 4:51 pm

    As a healthy 35 year old, I don’t worry too much about my own safety, even living in a city like Las Vegas that would seem to be the perfect breeding ground for COVID-19. I’m also relatively unworried about my own young children. I worry much more about my friends and neighbors that work in the industries that will be profoundly impacted by this. Airlines, restaurants, hotels, etc. One thing that has troubled me a bit is the mentality of “Don’t worry about it, it’s only the elderly and immuno-compromised that will be affected.” Damn, almost every 70 year old I’ve ever met has some really cool stories and life experience to share. I hope we’ll learn to serve and love each other through this experience, and to cherish the amazing lives that our seniors have lived. Many of them have so much to give.

  • Dan Albrich March 17, 2020, 11:47 pm

    One quick post. I hope folks, especially young and healthy take this threat seriously. It’s important that we care about each other. I think older folks know this from experience, and do. Younger folks in some cases need to be told or ‘educated.’ But yes, this virus has already done tremendous damage.

    When I was younger I sometimes made the mistake of thinking older folks were somehow fundamentally different than me. As a human species we do need each other. And I hope we will all take this current threat as seriously as possible. Your efforts to isolate (which of course feels unnatural as a human) may serve to save others. It’s really not about protecting yourself. It’s about caring for others.

    • DuckReconMajor March 18, 2020, 5:46 am

      It may be different where you live, but where I am it’s the Boomers and older gen-Xers that are being the most careless and brazen. “It’s just like that swine flu that was supposed to kill us all hahaha what happened to that?”

      I read an article about “Why do Boomers think they’re invincible, they’re in a high risk age group yet act like they’re immune” and it’s exactly what I’ve been seeing.

      I know in the end things will be good again, but in the meantime people of all ages are doing things that we know is going to end even more lives.

  • Colt March 18, 2020, 8:07 pm

    This stock crash has ruined my family. I have relatively safe cash flow businesses but many are down 50% or more. Whole thing is a scam. Took years of saving and one month to watch it go to hell.

    • Mr. Money Mustache March 19, 2020, 4:20 pm

      Colt, this is COMPLETELY NORMAL stock market behavior! It happens every few years to few decades, depending on the severity. But these crashes have always been the very best time to invest – historically in the first year after the “trough” of a bear market, we have seen almost 50% appreciation.

      You have lost nothing at all from this fluctuation. Unless you tired to outsmart the market and panic-sold at a loss (and even then you can mitigate these losses by buying right back in).

    • Andrew March 19, 2020, 9:52 pm

      It sucks and it can be scary. Believe me, I have had a lot of the same thoughts lately.

      I just want to give you some encouragement that you and your family are the determiners of whether you are ruined from this.

      As long as our country doesn’t totally collapse or go into Venezuela style socialism after this, there will still be opportunities for those who are willing to save and work like a mustachian.

      • Andrew March 19, 2020, 9:54 pm

        And as MMM himself pointed out above, if you can weather this storm and not cash out your funds, it will be up in the future. Hang in there.

    • Andrew August 18, 2020, 4:02 pm

      Colt, are you still around and did you keep your savings in the market? I sincerely hope so. If not, you can rebuild again.

  • Bella March 18, 2020, 8:50 pm

    I live in Ontario Canada and I am a registered massage therapist. On Monday our government closed my industry down(rightfully so) as well as all physios, chiros, dentists, restaurants, bars, churches and other industries. Many other retail stores are closing daily or limiting their hours. I now have no income coming in as I own my own business and can’t work. We have been told to socially distance ourselves from everyone and to stay home. They have cancelled schools until April 5 but I am expecting this to be extended until sept. I am amazed at how many people still aren’t getting it. I expect to hear in the next couple of weeks that our province will be on lockdown like Italy and then all of Canada. If we would just stay home and away from everyone for a few weeks we might be able to flatten the curve and make this nightmare go away. I am watching my investments drop dramatically but can’t buy anymore as I have to make sure I have enough money saved up to make it at least five months as I am guessing that is when I will be allowed to start working with my clients again. MMM I would like to know what you would recommend I buy in Canada for funds when I am back to a position to buy again? Thanks for writing this blog! Over the past three months I have cut back my expenses by over $1000 per month which is going to help me in the months to come as money will be a challenge. Any advice you can give me would be appreciated! Enjoying life with my kids and dog for the next few months 😊

    • Mr. Money Mustache March 19, 2020, 4:14 pm

      Hi Bella, that sounds tricky – but aren’t there any unemployment insurance or other government programs kicking in due to the government-mandated shutdowns? I had heard they were.

      Either way, congratulations on having set some emergency money aside and cutting your life expenses so you were ready for expected troubles. As for the funds, just look up Vanguard Canada and find the largest, lowest-cost index fund they offer. See “Canadian Investing with Mr. Frugal Toque” for more, as well as Couch Potato Investor.

      • Bella March 20, 2020, 11:53 am

        Thanks for the reply. Yes the gov has finally put out a plan to help the self-employed which I will qualify for. It will be about $1800 per month but when you are used to making over $8000 a month it’s a bit depressing. Thx for the tip for vanguard Canada. I didn’t even know that vanguard was in Canada! So I will see how long it takes for our gov to send out the cash and then hopefully be able to jump right back into the saving before the markets start heading up again! Thx again and I am so excited that you replied to my post!! 😊

  • Doug March 18, 2020, 9:17 pm

    There have really been some changes in the last week. Where I live in London, Ontario all library branches, theatres, and recreational facilities like the ski hill and public pools are closed. Events like concerts and trade shows are cancelled. The kids are off because it’s March Break but they will be off for an additional 2 weeks. Most restaurants are open, but the seating areas are roped off and there’s only deliveries and take outs. Most bars are closed. Anyone who has been travelling recently is requested to self quarantine for 2 weeks in case they have the virus. It all appears quite drastic, but after seeing how fast the virus spread in Italy and how the health care system is overwhelmed it’s important to take these actions now as we are at the tipping point. Case numbers in Canada and Ontario are increasing fast enough even with these measures in effect. I personally believe these actions are necessary.

    Myself, I am 59 years old and in good health. I survived a bad case of Delhi Belly from travelling in India, the effects of which lasted 4 months after my return. If I can survive that ordeal, then I’ll likely survive getting the COVID 19 virus. However, many elderly people or those with a weakened immune system may not survive it. If the health care system gets overwhelmed like in Italy many of these susceptible people who may survive if they could get care will be out of luck. I think everyone, young and old, healthy or weak, should do their part in dealing with this virus. This crisis will pass, as the 1918 Spanish Flu eventually did. Between now and then, we can do our part to keep the casualties and suffering to a minimum.

    You’ve no doubt seen the effects this virus has had on the stock markets around the world. I have investments on the Toronto and New York stock exchanges and, rather than panic I’ve been cashing in bond funds and buying more dirt cheap stocks and equity ETFs. With prices continuing to drop I, like other equity investors, look like a fool right now. I do however believe this crisis will pass and a year from now we who have been buying equities will look like geniuses, just like anyone who bought early in 2009 did.

    Unfortunately there will be collateral damage. Big chain restaurants like McDonalds or Tim Hortons will survive, but many smaller independent restaurants and bars could go out of business. It will be also hard on those people living pay cheque to pay cheque if they lose their job. Big airline companies will survive, but smaller operations like Swoop or Flair airlines could go under. Society and humankind will continue on, but it will cause a lot of hardship along the way.

  • Married to a Swabian March 19, 2020, 4:39 am

    The book I got for Christmas and read about 2/3 through late January was Robert Shiller’s latest, “Narrative Economics”.

    He makes the case that stories such as the value of Bitcoin or home ownership and the American dream impact the economy just as much (or more) than raw economic data. In the Book, he compares the curve of these narratives over time with viruses and repeatedly uses the term “contagion”… a scary foreshadowing. Professor Schiller knew what was coming.

    As we all adapt to the new norms of social distancing, partial shut downs, etc., one thing I keep looking at is what other factors differentiate Americans from for example S Koreans. A big one that occurred to me is that we may eat a lot more food with our hands in the US than most Asian or even European nations. We eat sandwiches and fries and chips, while they eat more often with chop sticks and utensils. Remembering to wash hands well before a meal is easy, but doing so before every snack (ie. chips, nuts, etc) is harder.

  • Rwebbmn March 19, 2020, 1:04 pm

    Can I come and shop at your store? Mine looks more like the scary zombie movie pic. No TP, no flour, no potatoes, and of course no bleach. The bulk ingredients area is cordoned off as is the chicken meat area. I thought it might be just one store, so I checked out the others (both upscale and down). Nope same issues. Limited frozen veggies.

  • Bob March 19, 2020, 3:02 pm

    This post has not aged well.

    • Philippa Waterman March 23, 2020, 7:12 am

      Couldn’t agree more.

    • GailNYC March 27, 2020, 5:15 pm


  • Doug March 19, 2020, 9:46 pm

    A few notes to add to my above post. Many times MMM has mentioned the virtues of getting around by bicycle. One entire post was titled Get Rich With Bikes back on April 18, 2011. Now, with traffic way down because of so many closures it’s much more of a pleasure bicycling without dodging so many cars. Recently the normally busy afternoon rush hour is more like what you’d expect on a Sunday morning. It’s a nice consequence of this virus and I’m enjoying it while it lasts.

    Now back to the stock markets. I’ll really stick my neck out and make the bold prediction we’re close to bottom. Why? I read the business section of the Globe and Mail, a national paper, and see analysts who have been quite bullish all along are now becoming more bearish. They believe this bear market will go on for a long time and could get worse. I’m not saying there will be a big rally anytime soon, but stocks may not get much cheaper either. In other words, if you have cash on the sidelines it’s a good time to get invested. At these low stock prices yields are at insanely high levels now, which beats the hell out of the paltry yield on money market funds with the recent interest rate cuts. And now the punch line, if you’re patient and can wait it out some generous capital gains will come your way.

  • Paul March 20, 2020, 2:30 pm

    Been a while since I’ve visited this blog. Good to see MMM is still giving excellent financial advice. Lots of great companies on sale right now. Keep buying month to month and one day you will wake up rich. During the 2008-2009 financial crises, when the world was again coming to and end, I kept buying and even put more of my cash in the market. Today I’m independently wealthy, largely because I kept my head when others panicked. Over the last few weeks I bought some great companies at sale prices. In the very short term the prices may go lower, but a few years from now those companies will be worth more as will the entire market. As Buffet would ask “are you buying or selling”? If you are a young person with some dry powder, this is great opportunity to buy.

  • Dan March 21, 2020, 10:24 am

    This post aged incredibly poorly as you sit there without beans.

  • Married to a Swabian March 21, 2020, 11:12 am

    I would greatly appreciate feedback and leadership from others in the manufacturing sector on LinkedIn article I published yesterday:


    THERE CAN ONLY BE A MEDICAL SOLUTION TO THIS CRISIS. We in the manufacturing sector must do what we can to provide supplies to the hospitals.
    Unfortunately, Wall St and DC only understand the almighty Dollar. Science, engineering and manufacturing are for the “little rust belt people”.

  • Selma March 21, 2020, 12:33 pm

    I just saw latest numbers from Italy, and estimates that US is preparing for 18 months of pandemic. What is happening is unprecedented and I have to admit that since this morning I can feel panic setting in and taking a shape of the knot in my stomach. Does MMM still believes that index funds will not just melt away in months to come. I have no debt and good cash reserves and I’m staying invested, but I feel far less confident about it then ever before.

    • Frank Byron March 23, 2020, 1:51 am

      Yes, I would like to hear some opinions on this. We have savings but also have a lot in index funds, that have seen some serious losses. My wife thinks we should sell now and wait until it starts to rise again but I’m unsure. What are MMM thoughts on this?

  • Mr. Money Case March 21, 2020, 3:07 pm

    MMM is it possible for you to do a 2 week update? I tend to take the common sense approach and wholly agreed with this original article. Things seem to be escalating though, my local county is now shutting down basically everything. Grocery, gas station and banks are only things sanctioned to be opened? Can you use your resources to get some updated info?

  • Andrew March 22, 2020, 5:43 am

    I have been a loyal reader since 2011. I know the current situation doesn’t fit within your circle of control and your belief in stoicism. But what you can control is what information you disseminate, and I believe you have a moral obligation to either take this article down, or heavily edit it to remove such things as “went out on the town” and the comparisons to the flu. Two weeks ago, those thoughts were commonly held. Now, we know they are flippant and dangerous. Read up on what the epidemiologists are saying. Sure, there’s no need for rioting in the streets and hoarding toilet paper, but if people read this now and don’t take this seriously, it affects not only themselves but all of society.

    • Mr. Money Mustache March 22, 2020, 6:03 pm

      I agree – changed that caption so as not to encourage people to go out looking for restaurants at this stage.

      But I have also read way more than I had intended to between then and now (March 22), and it sounds like two competing changes:
      – the virus is LESS dangerous than I originally wrote (<1% vs 4-6%)
      - but the hospital overloading situation is much MORE of an issue (because we apparently run at 95% capacity even in normal life, so it's easy to overwhelm the system if even 1 in 300 people (1 million) get sick.

      So the new situation is actually quite a heart-warming one: the average person is at a negligible risk, but we have collectively decided to suspend our whole lives and conduct an unprecedented experiment on the world economy, in order to protect the most vulnerable people, health-wise.

      And as we do all of this, we are learning to do with less, spending more time with our families and drastically reducing pollution. It is definitely stressful for people who were on the financial edge before all of this hit, though. And the world climbs back out of it, I hope it can serve as a reinforcement of how valuable it is to NOT spend yourself to the financial edge in the first place (and provide a strong safety net for those who don't get this chance we currently enjoy)

      • Nordland March 22, 2020, 6:58 pm

        I feel like politicians have collectively dug the grave and rolled the economy there. Imagine that most businesses may run with very limited cash flow cushion, sometimes 2 weeks or so, so are many people. Your answer would probably be something to the extent “they should’ve though about it”, but there is not much flight attendant can do if airline shuts down operation or hotel/restaurant owner if the travel is suspended. The economic fallout of these shutdowns would be much more severe on regular people, than if we were to let pandemic run its course. Forecasts are saying we may have 30% unemployment rates soon – this is worst than Great Depression numbers. I don’t see anything heart-warming here, as we may save 1% of our elderly population in the hindsight we will find out that we devastated lives of another 25% of younger and more economically active.

      • WTK March 22, 2020, 8:24 pm


        My take is that one is less likely to be affected if he/she stays at home at all time. I believe that this is possible for those who have achieved FIRE and has the time to stay at home focusing on his/her interest.

        Staying at home has its own merits. One can discover more of himself and herself as this is an opportunity to conduct some form of self-reflection given the hectic schedule created unknowningly by the individuals during the non-virus time.


      • Bob March 22, 2020, 9:39 pm

        > It is definitely stressful for people who were on the financial edge before all of this hit, though

        That’s a pretty cold way of summarizing the death, suicide, and child abuse that is already happening due to COVID-19 and the associated economic crash: https://www.checkupnewsroom.com/spike-in-severe-child-abuse-cases-likely-result-of-covid-19/

        I appreciate your bold optimism — I really do. But don’t be afraid to call a spade a spade.

      • Trevor R March 23, 2020, 5:41 am

        MMM thanks for posting this response (as well as the original article)! I think tweaking the caption is sensible and a fair change. But in my opinion, calls to take down the article are extreme. Accordingly, I thought it was great you are not caving to the online pressure. I believe there is far too much animosity out there on this issue and it’s created by the over _2 billion_ news articles posted about Covid-19 already. An insane number. Any kind of questioning or dissenting opinion, even if actually based on real data from reputable sources, seem to be met with total and outright rejection out of hand. I find this concerning because isn’t debate and critical thinking what a healthy democracy is supposed to be about?

        • Mr. Money Mustache March 23, 2020, 1:21 pm

          Yeah – while I would certainly put out a correction or retraction/apology as needed, for ANY article if it turned out I was off-base, I am definitely content with what this one says so far. I’m not saying the virus doesn’t exist, I’m just presenting a framework for thinking about it.
          – don’t panic
          – don’t fixate on the daily news
          – stay healthy
          – follow the advice of scientists

          I think this will always be good advice.

          • Tom Trottier March 31, 2020, 10:21 pm

            The need for long hospitalization of Covid19 infectees is causing other sick people to die because they cannot get in. China cracked down & supported the hundreds of millions who were quarantined. Will the West do the same? Italy provided the example of a good western health system being overrun.
            It is not only the infirm who are dying of Covid19, it is also young healthy doctors and nurses.
            The US will have many dead because of CDC testing failures, FDA strictness, and mindless faith in the health system. But if most of the population get Covid19, overwhelming the health system, it looks like 5% will die, mainly from missing care and equipment. 5% of 300,000,000 is a lot of people, plus other sick people being denied care.
            Without physical distancing, Covid19 will stop exponential growth only when 60-80% of the population are immune due to vaccination or recovery from Covid19 because it is too widespread now.
            Taiwan, Singapore, & Hong Kong provide successful examples of of quarantine and tracing. It’s too late for that now in the US, and other countries will lack the will or the resources.

      • Philippa Waterman March 23, 2020, 7:08 am

        Hi Pete – relentless optimism can be useful, but I think that calling the new situation “heart warming” or saying “the average person is at negligible risk” is bizarre. Who is the average person? An average 75 year, still enjoying life, loving and being loved by his/her family? An average American citizen who has an asthma attack? An average person in poverty living in the favelas outside Sao Paulo? An average person in war-torn Syria whose health system is in ruins? FFS, don’t apply your relentless optimism to the average person when this is a global crisis and average has no meaning. There is nothing heart warming about any of it (other than the awe inspiring dedication of our front-line health workers).

      • eyesonthehorizon March 23, 2020, 8:35 am

        These latter two paragraphs are so very good – I wish they weren’t buried in the comments. I believe they might merit a full article that can circulate more easily. Seeing the sweet fruit in a thornbush takes patience and practice, but you model the skill better than most and at a time it’s very much needed.

      • Man Tan March 23, 2020, 1:50 pm

        Where are you getting the virus is less dangerous than previously thought? There are currently over 350K cases in the world and over 15K deaths. That is around 4.3% fatality. Don’t use selective data from small regions for a global issue,

      • Justine March 24, 2020, 7:56 am

        While the economic outlook is dire (and I’m a small retailer so it’s really dire for me personally) I appreciate Pete’s comments here and hope he doesn’t take the original article down.

        Yesterday I finally got my bike out of hibernation and spent the whole day riding the trails with my son (a safe 6-8 feet from others) and it was glorious.

        It might have been the first time I’ve truly slowed down and noticed all the incredible details of life in a long long time. And every single person I passed smiled or waived a greeting.

        Mustachianism is fairly new for me but I’m getting that it’s less about watching your investments tank (or grow) and more about just making do with less and enjoying what you do have.

      • JeffD March 24, 2020, 2:20 pm

        This virus will have a wrenching impact on tens of millions of people in the US that live paycheck-to-paycheck. It appears Congress will be enacting enhanced unemployment insurance payments in addition to $1000+ relief payments to reduce the overall financial burden. Many people will probably end up reevaluating their financial security and take a serious look at improving their financial security. Furthermore, a month in quarantine will likely encourage some people to reevaluate old habits and establish new ones. This is a great time to write a few articles targetting these people who may be reevaluating how they are living their life.

        • Brandon C March 24, 2020, 5:29 pm

          Now there is some optimism!

          How did the general public re-evaluate after the Great Recession?

          Not much I’d say, sure we’ve got some great traction in the Fire camp, more people every year figure out finance with Dave Ramsey. But we haven’t seen serious change in the common consumer. I don’t think we will this time either. I’m doing my best to teach others good financial habits but often I get excuses about how I must be in a unique situation or my ideas don’t apply to them.

          • JeffD March 26, 2020, 7:40 pm

            People will be confined to their homes for 21 days vs their typical routines. It only takes 21 days to change life habits, and since people are being “forced” to be frugal and family oriented, they could learn to enjoy it! It just takes the right frame of mind while experiencing this new way of life for the first time.

      • Stephanie March 31, 2020, 1:49 pm

        I live in NYC where I will likely be turned away from a hospital unless my condition is dire. My older relatives on Long Island will probably not get ventilators, should they need them, due to their age (rationing is already happening here). Your flippant tone is not welcome. On my one outing yesterday, to take out the dog, a man sat outside his building, mask pulled down so he could vomit. He surely was not sick enough to win admittance to the hospital just a few blocks away. I pray I was far enough away to escape any droplets. EMTs do not have enough protective gear and 911 is overwhelmed- hours of calls stacked up and health care workers falling ill at alarming rates. For readers in other places please enact the precautionary principle immediately and as completely as possible. Use your frugal and creative skills to cook with what is on hand before doing another big grocery shop (call the store in advance to check it is not too crowded). Cut your own hair. Get DIY house projects done. Assume you have COVID-19 and act accordingly- this will save lives.

  • Tanulok March 23, 2020, 9:03 am

    Hi Mr. Money Moustache,

    Great article, thank you so much for sharing this! I have an important question to ask you. I am already aware of the “in times of crisis, don’t sell, buy more” approach. Now, with the current crisis, we can imagine that the market is going to keep going down, probably for the next weeks/months or so. Is there any value in selling my assets on my TFSA (Tax-free saving account in Canada) now, and re-buy Index Funds in a few weeks/months when the stocks are even cheaper, to get more of it? Or is it better to just buy more and don’t touch the assets that I already bought. Thank you for sharing your thoughts on this.

  • Gene G March 23, 2020, 10:13 am

    It is wrong to assume the market will simply bounce back from this once the fear subsides. Businesses fail in conditions like this. It is wrong to assume that you should always be buying and always remain fully invested. While I agree that trying to market time is likely to lead to errors at times, it is also true that sometimes things are more risky than other times. I’m completely taking risk off the table until the growth of this virus begins to plateau and the impacts to the economy begin to subside. Maybe that will be a mistake, but anyone keeping up with what is going on can see there is much more downside that upside risk in the near term.

    The number one thing is not “time in the market” or “buy and hold”, it is risk management. We are in what may be the riskiest period for equities in decades, if not a century. If it bounces up from here and I miss some opportunity, so be it, I just see much more downside than upside right now.

    • Mr. Money Mustache March 23, 2020, 1:11 pm

      Okay! While I totally disagree with this investing approach, I am marking your comment so we can look back in a few years and see how March 23rd, 2020 looks like on a “was it a good time to sell (or avoid buying)?”

      • WanderingWhitehursts June 16, 2020, 3:15 pm

        While I am curious what things will look like in a few years, it’s only been a few months and the markets have shot back up with gusto! Simply buying more index mutual funds through Betterment as the extra cash came in throughout these past few months has caused my portfolio and net worth to grow higher than ever. Will it drop again? Sure. But if my only skill in investing is developing a habit of head-down relentless buying of stocks with as much savings as I can manage, my financial future is looking bright indeed. I’m excited for the years to come! A timely reminder that “time IN the market always beats Timing the market” motivated me to just keep pumping in the funds and ride the volatility all the way to financial freedom.

    • Fred March 24, 2020, 2:15 pm

      I am with you Gene. I was very fortunate to be completely out of the market, before this hit. Valuations did not make sense and the length of the bull cycle was very stretched. I am slightly over 60. If this turned into something like the numbers seen in the depression I would never recover. If you are twenty it is a whole different story. I will be looking to invest, but we are not down enough yet. The speed has been stunning but the level reached so far is just a garden variety recession. Anybody think this is just a normal recession? None of us can see what is next. I choose to bide my time and reinvest at my leisure.

      • Jason Middleweek March 24, 2020, 7:54 pm

        Hi Fred and Gene

        I think that with the saying “The best time to buy shares/property/gold/investment was yesterday”, it also goes “the best time to sell shares/property/gold/investments was yesterday”.

        I think there were a number of retirees that were taking on too much risk yesterday – not heeding good investment advice by trying to play the stock market and concentrating on shares because returns on cash were so poor etc.

        I am not sure if it is like the great depression. I just watched a doco about it to reassure myself. Back then people were taking out huge unsecured loans to buy stocks, it was a frenzy. And then president Hoover did nothing for years which delayed any recovery. I think that an outcome of the GFC has been more relentless caution and no crazy margin lending like there was before the GFC.

        I too regret not having sold my stocks “a few weeks ago” and expect returns to be pretty crappy for a number of years whilst the government tries to pay things back. i might have to work more hours, be more frugal etc. However I dont expect housing costs to rise much which is my main concern – especially if many older people die and have to put their houses on the market etc.

        I think there are a number of factors that might make this different. Firstly there will be nothing to spend money on so our costs of living will naturally reduce which may lead to pent up demand and secondly the governments are being very proactive now both public health wise and economically. We will all lose during 2020, I just hope that the losses and too concentrated on a few (like what happened after the GFC) and the carpet-baggers are held at bay.

        • Fred March 24, 2020, 10:32 pm

          Hi Jason. I will be interested to see if Mr MM does a future blog on what investing might look like in the future. You mentioned the government paying back. That is not what the government ever does. Can we even imagine the discipline and time it would take them to pay back even $1T. No way, no how. The best we could hope for is no more addition to the debt, and eventually grow out of it. Unfortunately we will quickly be at $30T in debt. How many generations of not adding to the debt would it take while we change presidents every 4 to 8 years. Just getting to a balanced budget would take a miracle. So we have a massive debt we can’t pay down with associated annual interest. Manageable at almost 0% interest rates. It won’t stay there forever. Add in we are about to take a severe hit to one of the most important aspects of compounding, dividends. We will also see large amounts of corporate debt default. The quickest way out may be to let all these businesses go bust. Investors lose everything but buyers scoop up the assets for pennies and start new companies with very low overhead. it would be very easy to envision a lost decade or two for investors. I would hope not and would very much like to hear some reasonable alternative scenarios.

        • Married to a Swabian March 25, 2020, 6:28 am

          Last year I read “The Great Crash 1929” by John Kenneth Galbraith. It’s a very detailed account of the highly leveraged, completely unregulated orgy of rampant capitalism that lead to the crash and its aftermath. Doesn’t shine a very favorable light on Goldman Sachs, with the ponzi scheme they ran in 1929, either. Hoover sat idly by and did nothing but RAISE taxes in the early 30s. Bernanke studied the great crash in depth and earned the nickname “Helicopter Ben”. He determined, well before 2008, that liquidity would have to be added to the economy in massive amounts, as if dumping money from helicopters. We are the only country that can just print money. Tons of it. This is a two edged sword.

          This time, the trillions that are needed will help in the short term, but could have big repercussions down the road, including a (mini version) of what happened in Japan’s lost decade: deflation, negative interest rates and a stagnant economy.

          Two BIG questions will be:
          1. Will this virus keep coming back on a seasonal basis and continue with more massive disruptions? If so, life as we know it won’t be the same until a vaccine is developed.

          2. How will the Global economy change? It’s highly likely that it will become MORE protectionist and less interconnected than before. Increasing Nationalism was already the trend before this. How will the US economy be affected?

          I’ve been studying the data here since before the post went up:


          There is some odd variability in the mortality rates among countries. The entire Southern Hemisphere seems to be minimally impacted, so it likely will be a seasonal virus. Countries like Germany, Norway, Finland and Poland all have morality rates that range from 0.4 to 0.7%. In the US, it’s about 1.5% currently and Italy is around 9%. What explains these huge differences? It cannot be that Northern Italians have 20 times the number of underling health issues, or that their population is that much older. Maybe their healthcare system isn’t as good, but this still would not account for the huge discrepancy. Why has Japan had fewer cases confirmed than the state of Michigan and only 42 deaths thus far??

          • Selma March 25, 2020, 10:35 am

            Italy has a very good healthcare system and more doctors per capita then US, especially northern Italy. From what I read insofar, the assumption is that many positives were never tested, many people were infected and were asymptomatic, so the virus was spreading for weeks before authorities became aware of the situation. And than it took a while for the country to take the measures seriously as something like this was simply unthinkable. I myself am shocked how fragile healthcare systems are across developed world – if you look at the number of critical cases, which is about 3.5k now, one would think that healthcare system supporting 60 mil Italians would be able to take care off, but it is not the case. I also have reservations regarding any numbers released from China, given the fact that they tried to cover it up at the very beginning. However, China is really good when it come to scaling up operations which made them a manufacturing superpower, so I am not surprised that they were able to setup field hospitals and gather the equipment needed with lightning speed. As for countries like Japan as well as Taiwan, they were badly hit by epidemics coming from China and they have processes in place for this kind of threat – and being situated on islands and being disciplined and close knit societies (I visited both and my brother is married to a Taiwanese woman) certainly helps containment. I am really worried about the development here in US, and even more worried about densely populated poorer countries like India or Malaysia.

          • Stubusby March 25, 2020, 12:17 pm

            The discrepancy in mortality rates is mostly related to how much testing each country is doing. Germany, for instance, has been very aggressive in testing and tracking down cases of those exposed, so this leads to a more accurate number of those actually infected. Other countries that limit testing to only those presenting to hospitals will show much higher mortality rates due to testing selection bias.

          • Jason Middleweek March 25, 2020, 9:43 pm

            “we (the US) are the only ones able to print money”.

            Well I think every nation is busily printing money at the moment; for instance the Australians, Chinese and now the Germans (finally). I wonder if we can all just cancel some of each others debt after all of this and start afresh as a world.

            I too worry about the US and the amount of disregard for its massive debt levels. And yet there has been a recent rush toward the US dollar. The world is addicted to US stocks and treasuries. Even us Australians with good financial advice to expected hold at least 30% or so of our total portfolio in US shares.

            I think the worlds economic leaders will now be forced to work out how they can quickly hibernate world economies in preparation for the next outbreak. In a world war things get blown up and have to be replaced. However in this situation its like large parts of the wold economy are mothballed whilst debt holders and the temporarily unemployed are kept on life support. From a purely economic point of view, surely the situation we face is better than a world war.

    • Paul March 24, 2020, 3:22 pm

      Since the start of the last bull market in March 2009 the S&P 500 generated %15.5 annualized returns. Excluding the best 5 days each year through 2019 would have reduced that annual return to %1.1. You simply cannot dance in and out of the market based on these short term market shocks. You will end up missing the best days, like today; the S&P was up %9.4 today. Stay the course, and keep putting money into the market. This too shall pass. I look forward to the MMM post in the not too distant future when he puts this all in perspective and is once again proven correct.

  • Jan Vidar Dahle March 23, 2020, 1:00 pm

    I just love the technique of taking a bigger perspective on the otherwise very serious covid-19 pandemic. By being analytical based on facts, it is possible to live on, invest and be concerned about what we can influence. And sorting between anxiety and facts often gives a certain serenity: Over 150,000 people actually die every day on this planet. About 1800 of those of the flu. Unfortunately, death is not something sensational. Ther covid-19 pandemic is going to require sacrifices, and though this is very serious and the measures against it should be taken seriously, for most people it will end well. And for those of us who invest more than fifty percent of our income each month now, as always, it will even be a financial advantage in a year or three.

  • Kevin March 23, 2020, 3:54 pm

    Please update the “active cases” graph from worldometer. As of March 1, there were about 40k cases and falling. This data is no longer relevant to the point of being misleading. As of March 22, there are over 225k cases and rising.

  • Jens March 24, 2020, 4:54 am

    Hi, my frugal friends in the US. Don’t panic but please do take this seriously. We can see the numbers grow in Germany and at our neighbors in the south from day to day and double every 3 to 4 days (Italy, Austria, France, Spain).

    The human brain seems to have difficulties to understand exponentiell growth. The US is at a current rate of 2 days, in which the numbers double and will unfortunately have more cases than Italy and China within less than a week:


    Please find a summary of the current situation by one of the worldwide leading virologists in english here:


    I find it sad that to see that every state and every person denies the problem in the beginning (so did I) and panics later (I am not yet there…). But please do not make the mistakes many states in the Europe did and some still do. There are some math-based models out there. However I don’t bother studying these models because I learnt that you can easily predict the numbers by looking at other states “ahead” of Germany. Austria is 3 day ahead, Italy about a week. You can see what will happen if you look at Italy and Spain.

    Don’t buy weapons or toilet papers, but stay at home or ride your bike (but not in a group…)

    best wishes, Jens

  • Michael H March 24, 2020, 9:43 am

    This is probably a stupid question but when I put money into my 401K right now am I actually taking advantage of the current cheaper price of stocks? I was never sure how that worked.

    • Mr. Money Mustache March 25, 2020, 3:59 pm

      Yes, you are!

    • Zack March 29, 2020, 11:51 pm

      You are taking advantage of cheaper prices assuming that you have your 401k set up to automatically buy stocks. One of my clients had been investing in a 401k for years without realizing that it was all going into a money market fund earning 0.01% instead of stocks. I would, and I believe MMM would, buy the lowest expense ratio mutual fund with an all or mostly all stock allocation available in your 401k plan.

  • Rich Rutherford March 24, 2020, 10:38 am

    To all the people who are considering timing the market now: don’t. Timing the market is impossible in the best of times, much less in an emergency when information (you couldn’t possibly guess) is changing by the second.

    I just placed a large buy order yesterday, and will continue to buy bi-weekly as before (assuming I don’t get laid off, lol). FWIW, the market is already up 8% at the moment vs. yesterday when I bought.

    This crisis will pass. They all do. The 1919 flu epidemic passed, 1929 passed, 2008 passed, etc. Think how sorry you’d be if you sold all your stocks in 2008 because “this time it’s different!” It’s not and won’t be if you are investing for the long term.

    That being said, MMM’s post can come across as somewhat flippant given the scale of human medical and physical suffering in this particular situation. However, as regards the notion that this crisis will pass and that there are buying opportunities, this is correct.

    I will also repeat it one last time: DO NOT TIME THE MARKET. Hold your ground and keep buying as you can.

    • JeffD March 31, 2020, 2:21 am

      Under normal circumstances your advice would be correct, but these are anything but normal circumstances. The Fed expects 30% of the population to be unemployed in short order. Things start to break that the Fed can’t fix under those circumstances. GDP is probably off by at least 20% during each day of lockdown. Revenue, earnings, and the credit markets will only get worse from here until stability in the real economy returns.

      • Rich Rutherford June 9, 2020, 8:52 am

        About 2.5 months later, and after one of the best months in the history of the S&P 500 (April 2020) seems I’m right on so far. Not surprised. :)

  • Widjet March 24, 2020, 11:07 am

    The six most dangerous words in investing: “But this time it is different!”

    • Jason March 27, 2020, 7:29 am

      I totally agree. I haven’t been a financial adult all that long, but I specifically remember that phrase on EVERY commentator’s lips in late 2008, right before the start of the longest bull market in history. Some things are different, but mostly because progress marches on, not because there was a crash in 2008. So it will be this time.

      It isn’t wrong, exactly, to say that this time is different because every time is different–we would have to be real idiots to keep having the same problem over and over again. But ultimately we should all be able to look back and see all those times that were different from each other and recognize that after a period of time, each passed. So will this one.

  • Robert March 24, 2020, 1:11 pm

    Hi Mr. Money Mustache and everyone,

    Thank you for this great article! I had a question to ask you and the community.

    I am already aware of the “In time of crises, don’t sell, buy more” and I have some Index Funds in our TFSA (Tax Free Saving Account, in Canada). Now, my question is: Since we can presume that the market is going to keep going down with the current crisis, should I sell some of my funds now, to then buy again in a few weeks/months when the price is even lower (and by doing so, geting more stocks for the same amount)? Or is it just better to leave it as it is, and just buy more stocks?

    Thanks a lot for sharing your recommendations on this.

    • Mr. Money Mustache March 25, 2020, 3:58 pm

      This is a perfect question – you can NEVER presume the market is going to keep going down. Only that on average, it will grow along with the economy.

      Case in point: on the day Robert posted this, the US market made the biggest jump since 1933, at over 9% increase in a single day.

      One small thing you can probably predict as well – the stock market tends to be a leading indicator, not a trailing one. So as soon as traders got wind that this virus was going to slow down our economy, they RUSHED to the exits, long before any damage was even done. They were guessing at future effects.

      Similarly, as soon as those same speculators see signs of the flattening of our virus curve (which is a biological and mathematical inevitability by the way, and in a very small number of weeks/months), they are going to RUSH BACK IN, trying to beat the trillions of dollars of capital that will be chasing those same easy gains. This will happen before the earnings recover – it will be based on a belief that they will eventually recover in the future.

      The lesson: don’t try to outsmart the market, and the best gains come from buying (or at least holding) during crashes exactly like this one.

      • Luke March 26, 2020, 11:36 am

        By that logic, I assume you hold very little money in cash. The Intelligent Investor by Benjamin Graham recommends a setting a certain ratio of stocks-to-cash and not deviating from it. Would you say your stock-to-cash ratio is over 9?

        • Mike March 27, 2020, 1:59 pm

          Wouldn’t the amount of cash you want to hold be more a function of your living expenses (ie: it’s an emergency fund so you can eat and keep the lights on), than a function of your equity holdings? What’s the rational behind the stock – cash ratio?

          • Luke March 31, 2020, 10:56 am

            The rationale is to not be “overly weighted” in stocks. My interpretation of it is to leave yourself recourse in case of a dramatic drop in stock prices.

      • JeffD March 31, 2020, 2:28 am

        Would this have been your advice in a free market economy, where the Fed didn’t step in for every market downturn? Serious question. Since 1987, the Fed has been propping up the market during any sign of trouble, so does your invest advice assume the existence of a Federal Reserve to work smoothly?

        • JeffD March 31, 2020, 2:32 am

          PS 9000 bank failed during the 1930’s without a Keynesian managed economy.

          • JeffD March 31, 2020, 3:42 am

            20,000 companies went bankrupt during the great depression, a 100% loss of investment. The ones that didn’t go bankrupt lost almost 90% of their value at their lows.

      • Tom Trottier March 31, 2020, 10:30 pm

        “the flattening of our virus curve (which is a biological and mathematical inevitability by the way, and in a very small number of weeks/months)”
        ? I still see exponential growth. Given the incentives (a paycheck) a lot of infected people with few symptoms will keep on spreading it until most are infected. Unless all have sick pay, it will continue to exponentiate.

      • Robert April 2, 2020, 2:08 pm

        This makes sense! Thank you for your response!

  • Hugo Velez March 24, 2020, 4:19 pm

    My name is Hugo Velez from Portugal.
    I have been reading your comments.
    Please see what is happening in Europe, learn from our mistakes and don’t waste any more time.
    Unfortunately, the USA is quickly going to be the world center of this epidemic with a high cost of human lives.
    Do not look at this as a simple flu, you have no idea of ​​the seriousness of the situation.
    * Protect your health professionals at all costs.
    * Build field hospitals equipped with respiratory equipment, your hospitals will be insufficient.
    * Mandatory social isolation.
    * No one is immune, protect everyone, especially your elderly citizens.
    Act now, this is serious.

    • Doug March 25, 2020, 8:32 pm

      It’s interesting to see your European perspective. We’ve got the news about how this pandemic has gotten out of control in Italy and Spain, I gather it’s the same in Portugal. I live in Canada and effective March 16 a lot of public places are closed, events like concerts are cancelled, and schools are closed. Only essential services like petrol stations, and food stores are open. Restaurants are take out and delivery only. We are told to stay home, and if you go outside keep a distance of at least 2 metres from anyone else whenever possible. This kind of shutdown of society can’t last forever, but it’s meant to spread out cases of COVID 19, flattening out the curve so as not to overwhelm health care. Only time will tell if these measures are effective and how long they need to continue.

  • Emah March 24, 2020, 6:26 pm

    The circle of control article is really applicable to this situation.

    Covid-19 – definitely not in the circle of control
    A chance to lower my cost basis ~30% from my last purchase – totally in my circle of control
    Stocks going down more from here – not in my circle of control (but see the point above if they do)

    In times like these, I really appreciate having the framework that MMM has laid out in these blogs to lean on. Reducing and keeping spending under control, exercising and making healthy decisions, having an investment plan and sticking with it, staying positive and working toward a better future. All of those things continue to work whether the market is good or bad, and the accumulation of those habits over time has a funny way of making you more resilient and reducing risk.

    • Ms Blaise April 1, 2020, 3:47 pm

      Yes! I was going to write something similar. Many of the comments on this thread are wanting MMM to FIX things or to CHANGE his advice. But as you have much more kindly said – its about a psychological framework to live by.

      That said, as a NZer I watch the response to the virus in America with astonishment and profound sadness.

      kia kaha ( which is Maori and how New Zealanders say Stay Strong).

  • Ted Bendixson March 24, 2020, 7:48 pm

    I just want to say thanks to Pete and to this website for giving me the psychological tools to think my way through a situation like this. I really started investing four years ago, right after The Donald got elected, and I have seen my net worth rise four fold.

    I had read several posts detailing what to do in a downturn, and here we are, a real downturn.

    About a week ago, I had some extra cash, and I had to battle my instinct not to invest it, to increase my emergency fund in case my job goes south or whatever. After some careful reflection, I decided to invest it at the price on that day, regardless. (You’ll hear all kinds of b.s. saying you can take $5k and spread it over 5 days but that’s basically the same risk as just buying $5k worth on one day).

    It occurred to me that the decision not to buy is basically the same as the decision to sell, although framed through a different psychological lens. Your mind sees not selling as avoiding a loss, but it doesn’t see not buying (and therefore losing by avoiding a gain) the same way. Most people are ever-so-slightly programmed to favor the former over the latter.

    The real risk is not having capital working for you. If you need to sell some of it later to shore up some cash, do so. But wait until you need to and do everything in your power to avoid it. That’s how I’m navigating this thing.

  • Alex March 25, 2020, 2:58 pm

    I love how this article is only 3 weeks old and the “mathematical models” presented have been proven to be complete junk. Cases “topped out” at 90k, actually now at 450k and accelerating (only tested). Deaths top around 4k, now actually 20k and accelerating (again, tested). Looks like MMM pulling a classic Dunning Kruger; I know a good bit about some things, including fitting curves, therefore I am smarter than professional epidemiologists who are predicting a 1918 style pandemic. Also a great lesson on terrible modeling assumptions with very incomplete data and fitting the wrong types of curves with too many assumptions.

    • Alex March 25, 2020, 3:03 pm

      I should have followed the link from that site before even responding, it now doesn’t even fit to an S-curve and just shoots exponentially off the page! That’s reassuring…

      • Alex March 25, 2020, 3:21 pm

        I should clarify that I don’t think the world is coming to an end, and actually have been pouring more into the stock market after pulling a big FIRE no-no over the last 2 years as I slowed my investing because I thought the market was way too expensive…

    • Kevin March 26, 2020, 5:32 pm

      Hi Alex I was hoping to see a comment like yours. This article’s take on things certainly hasn’t aged well, but such is the arrogance drummed into the tech sector Silicon Valley mentality that they know better than everyone else. Not to bag on the site or mmm too much.

      I wonder about the really smart money that pulled out prior to the crisis such as those senators on the intelligence committee and their friends they told about the real nature of this crisis while lying to the public.

      The bailout is super business focused with less than 10% of the money going to hospitals! The biggest threats now are the increase in monopoly power, board members of Goldman Sachs have said the private equity sharks are sharpening their knives. We might end up with inly 12 companies owning most of the economy and they will all be financial know nothings looking to extract money.

      Sure, jump on the crisis and make money. Buy stocks while they are low as the USA has proven they will bail out companies which mitigates the downsides. It just comes at the cost of shunting 85%+ of people out of the massive growth in wealth over the past 50 years. Really this is par for the course and there is no reason not to think monopolists and corporate power will not continue to increase. In this pseudo aristocracy the goal is to be a well fed courtesan through investing patterns. Why not improve your lot in this game of ultra concentrated wealth?

  • Top is not in March 26, 2020, 6:57 am

    I think the article should be updated with pictures of restaurants and grocery stores commonly seen atm if those pictures were intended to install a sense of security. I guess the consensus of experts around the globe where right all along, not the highly optimistic chart posted. Who knew. Nearing 1/2 million and still looking parabolic as of March 26.

  • John Madden March 26, 2020, 9:16 am

    Interesting to read this article a few weeks later and see the extent to which people (including MMM to some extent) were downplaying the potential impact of this event.

    “It’s like the flu”- no, it has a higher rate of death than the flu and there is no vaccine. “only old, sick, or unhealthy people get it”- no, even some young and very fit people are getting covid 19 and dying.

    A combined 1,400 people are dying per day in Italy and Spain and they don’t even have 1/3 of our population. If the death rate is a conservative 1.5% and there are 3 million cases in the US, both optimistic projections at this point, you are talking about 60,000 deaths or the equivalent amount of deaths as 20 world trade center attacks. It’s a serious concern and our casual response to it at the outset was a crime.

    “stocks are on sale”- sure they are, if you are a very long term investor, but you won’t know the optimal time to buy in and you will deal with a heavy amount of volatility (and red numbers) in the next year or two where stocks will suffer more drops and we don’t yet know the bottom. 1 week in and we’ve got 3 million unemployed people.

    Things will be “ok” in the long-term, no need for guns and bunkers, but this event was nothing to treat casually.

  • Jason Middleweek March 26, 2020, 7:31 pm

    Luke – I got guidance last year from a proper independent financial adviser.

    It depends on your risk tolerance. If you go in 100% you will always do better over a long time horizon than someone less than 100% if you stay the course. However the volatility would do most people’s head in so you reduce the percentage to make your life feel less stressful (like now). Some people are very risk tolerant.

    A separate issue is emergency cash reserves and how much you might need if things go badly. MMM lives on $25K a year rent free and has no job to lose really. So he might keep $25K in cash to hold out for a year or maybe nothing if he knows that his dividends are always going to be well above that. With my expenses about the same as MMM I probably have about 4 years of money outside of stocks which helps me sleep at night. I’ve also got some income insurance in case I get hit by a car riding to work and laid out for a few years.

    One problem as you get older is your chance of finding income diminishes, health costs go up, so you need to think of having more cash in reserve. This is why people generally tend to wind down their % as they get older and have to start eating in to their capital.

    It is true that government bonds are pretty much the same as cash these days. Corporate bonds give a better return – but as we find out now they come with risk.

    Think of the % stock number in those terms – what are you prepared to lock away for a 10+ years to get a better return than cash and what you might need (based on a conservative estimate of future living expenses and maybe future aspirational investment purchases (a house deposit, an education, an experience that you really need ) in the near term in the case of bad luck and lack of income.

    Good luck timing the market. Things suddenly go pear shaped due to the unexpected, not the expected. It feels bad when you miss-time things but don’t beat yourself up about it. Ray Dalio became famous by selling out before the GFC. However he really missed this latest doozey. I presume he is going to hang in there and expect he is sitting on a pile of cash also.

  • Richard March 27, 2020, 4:02 am

    In Australia thankfully! I have been watching this unfold and totally agree about the basket case the US appears to be. i note that America is number one now, the most cases anywhere in the world. Unfortunately this was all obvious a month ago and the lack of action and down playing of the seriousness of the pandemic by trump will cost many lives. Here in Australia whilst we have bipartisan support every action by the government has been at least several weeks behind the curve with massive numbers of carriers infecting others because of a narrow focus on testing only those who have travelled overseas.
    I hope things improve in all our countries and that people are finally pulling their heads out of the sand.


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