No, You Didn’t Just Lose Half Of Your Retirement Savings

So here we are just a month later,  in a full-blown economic panic, and at the start of the most sudden recession ever.

The pandemic has spread much further and faster than most uninformed people (including me) would have ever guessed, and the whole world is on some form of lockdown. Nothing quite like this has ever happened before in the modern world.

What should we do?

On the financial side,  I’ve seen media stories about “The End of FIRE movement”, and a close friend even said to me, “Well, I’ve got to go back to work now because with all my investments down 35%, I’m not financially independent any more.”

And I’ve seen plenty of similar statements out there on the Internet:

Is it time to be worried like this commenter on my last article?

Even worse, some people are trying to time the stock market, selling off their investments at a discount in the hopes of “protecting” them, hoping to subsequently outsmart everyone else and re-buy them at an even lower price just before some future rebound.

On the human side, we have seen a death toll of thousands of people per day in the US alone with best-case forecasts of 200,000 by the time things calm down, which implies several million worldwide.

And so far, we have not been performing like a best-case country so these numbers will probably be higher.

This all sounds terrible, doesn’t it?

It makes sense that many people are fearful and pessimistic. So why is it that I remain as optimistic as ever, with the full expectation that you and I will come through this humbled but also wiser and better than ever?

It’s because I already know how this all ends.

The world will keep rallying and doing its best to slow down contagion. Caring people will keep helping each other. People will stay home and heal, hospitals will expand, nurses and doctors will do their best to save as many lives as possible, and the 80% of us in jobs that allow us to keep working, will keep doing our jobs.

Meanwhile, innovators are still innovating all over the world. People are staying up late working in labs, vaccines are being tested, genes are being sequenced and the current virus will end up beaten and then written up as a very significant chapter in the history books.

But apart from all of this, there is still way more going on out there, which just isn’t making it to the headlines. Engineers and scientists are still inventing things that will drastically improve the future. Solar panels are still streaming out by the trainload and being installed worldwide. Better and better batteries which will eventually displace all fossil fuel use are evolving. The most efficient factories in history are being built. Gene therapies are advancing which will eventually make a mockery of all of our current health conditions. Internet connectivity and education is becoming more widely available and cheaper which is allowing the next generation of brilliant kids to to grow up and learn faster and do more than you or I could have even dreamed. And all this will happen regardless of the course of the current pandemic.

If all that is true, then why is the world so Scary right now?

I get it – never before has something from the daily news come home to affect our daily lives so much. Grocery stores are cleaned out, people are wearing masks, and you probably have friends who are currently unemployed, or sick, or both.

But in this situation, it really helps to understand the big picture of what is actually going on. The world is not ending. The air outside your windows is not a swirling cloud of certain death.

All that has changed is that we are in a self-imposed economic slowdown that has been created purely to save the lives of our most vulnerable people.

Which is one of the most compassionate things our society has ever done. To me, this is a remarkable and wonderful moment and I would not have guessed that such a capitalist country would ever have the balls to do it.

To put it into a visual, we have decided to prevent the following worst-case scenario:

(IMPORTANT NOTE: The timing of these hypothetical deaths is not real medical data, just an illustration of my own personal guess – made with a mouse pointer rather than a spreadsheet. However the US background death rate really is about 2.8M per year per the CDC)

In the worst case, we might lose 1-2% of our people, biased towards the most vulnerable. There is some overlap because this accelerates some other deaths that would have happened this year, and pulls some future deaths into the present, which is why the death rate dips for a while afterwards.

And turn it into this:

With enough prevention, we cut the death rate by twentyfold, to about 0.04-0.06%.
200,000 is still an enormous number, but the existing death rate at least puts it into perspective.

In the worst case, our public officials would all downplay the risk of COVID-19, and we’d keep working and traveling and spreading it freely. We’d maximize our economic activity and let the disease run its course.

From the disease models I have seen so far, about 70% of us would eventually contract it. Half of those would have no symptoms or very mild ones, a smaller (but still huge) number would get sick or very sick, 10% might end up in a very overloaded hospital system, and in total about 1-2% of our population would die from complications – partly depending on how quickly we could put up temporary treatment centers to cycle through 30 million people in only a few years.

It would feel cruel and chaotic, but in reality we would still not be even approaching the conditions that people in the developing world deal with every day. Our world has always been cruel and chaotic in so many ways which affect a much larger number of people – we just happen to be used to them. And one thing that humans are exceptionally good at, is getting used to things.

List of causes of death by rate - Wikipedia

In the more compassionate case which we are currently following, we drastically reduce the amount of contact we have with each other for a few months, which cuts the number of deaths in the US down from 3-6 million, down to perhaps 200,000. In exchange, our economy shrinks by several trillion dollars (it was about 21 trillion in 2019) for a year or more.

Assuming we are preventing 3 million early deaths, this means our society is foregoing about one million dollars of economic activity for each person’s life that we extend and frankly, it makes me happy to know we are capable of that.

So that’s the big picture: we are cautiously and temporarily buckling down and making some sacrifices, in order to help other people.

To me, that is not a cause for panic or fear – it’s a chance to try even harder and be thankful for such a once-in-a-lifetime opportunity.

Meanwhile, some good stuff is happening as a byproduct:

  • We are driving around and polluting far less. The air is drastically cleaner everywhere.
  • People are out walking with their kids far more. The streets of my town are nearly free from cars, and are being enjoyed by (appropriately spaced) bikes and people for the first time.
  • Our expectations are being reset. Someday soon, it will feel like an absolute joy and privilege to walk into a store and see things fully stocked and prosperous again. And imagine the feeling of taking a vacation or attending a big event or a restaurant or a party!
  • People in rich countries may realize that we can afford to be helpful and compassionate after all – while actually increasing our long term wealth and happiness rather than compromising it.
  • And the world is getting a valuable “practice run” at handling a pandemic, with a relatively mild disease rather than something even more serious.

So How Does This Affect my Retirement?

Once you really get the big picture above, you can see that we are going to come through this better in every way.

Just as with any recession, weaker companies will go bankrupt, stronger ones will streamline their operations and get smarter, and the chaos and broken pieces will become the raw materials from which an enormous batch of brand-new companies will form.

Better ways to track and treat disease, more scalable and less bureaucratic hospitals, more options for remote medicine and more support for remote work and virtual offices and virtual learning in general. More home delivery services and fewer big box stores and wasted parking lots, more support for biking and walking, and a million other things that a billion other people will think of.

The end result will be a better, more resilient and richer world than ever. Yes, that will also eventually mean more money in your retirement account, but more importantly it means better and happier living conditions for every living thing on Earth.

While this all sounds like optimistic magic, it’s actually just a byproduct of human nature. We are a lazy and change-averse creature and we become complacent when our fearful and primitive brains think things are “good enough” for survival and reproduction.

So, oddly enough, we often need a good slap upside the head to get off of our collective asses and actually make some improvements. Observe the wisdom of our elders:

  • When the going gets tough, the tough get going.
  • Necessity is the Mother of Invention.
  • What doesn’t kill you, makes you stronger.

As old and repeated as these slogans might be, they stick around because they keep proving to be remarkably true. They are the real-world manifestation of a badassity that is built right into our Human DNA, which is why they are some of my favorite phrases in life.

Are things a bit hard right now?


See you in the inevitable and incredible boom-time that will result.


Other Interesting Things That Might Help You Feel Better:

The Simple Path to Wealth, by my longtime author/blogger friend JL Collins, explains long-term investing in the most simple and calm way imaginable.

Towards Rational Exuberance is a more technical and detailed (but still very fun to read) history of the stock market and how the Federal Reserve bank serves to stabilize our system. Although I read this book over fifteen years ago, it has underpinned my understanding and confidence in long-term investing ever since. I would love it if author Mark Smith would add a few chapters to cover the two most recent market crashes as well!

A Guided Meditation for when the Stock Market is Dropping, is Jim’s witty YouTube reminder of the same thing, which he somehow created long before any of this panic started – how could he possibly have known in advance??

Good News, there’s Another Recession Coming is my own magical forecast of the present moment, made over two years ago.

Why We are Not Really All Doomed, my 2014 take on why the world was (and still is) well positioned for many decades of future prosperity.

How To Retire Forever on a Fixed Chunk of Money gets into the reason why stock market drops like the present one don’t really hurt an early retiree (it’s because the vast majority of your shares will be sold several decades from now, when the present panic is barely a blip on the graph.

And finally, just for fun here’s an example of something that is not written to make you feel better. In recent weeks, I spent several hours writing out some interview answers for an article in the New York Times.

I was truly excited to share the details of why the Principles of Mustachianism are more useful than ever in times like these, and it’s quite the opposite of “The End of FIRE” that the silly and financially naive media have been peddling in recent stories.

I was disappointed in the end result. Most of my answers were cut out, and instead the article is focused on “hardships” that other early retirees are currently working through. And the clickbaity title sets the expectations wrong to begin with:

They All Retired Before They Hit 40. And Then This Happened.

(that link will take you to my Twitter post about it, where an interesting discussion has formed in the comments – what do you think?)

  • Lauren April 2, 2020, 10:28 pm


    I love your optimism. It’s contagious… for a lack of a better word. I’m SO grateful I discovered you months before this period in history (I was like, who is this moustache guy everyone is talking about? What kind of name is that?!). Because of you I am confidently continuing to invest in the market, while it’s “on sale”. It’s an optimistic move, betting that the future will be worthwhile, and I thank you for given me that way of seeing! Your reason and thoughtfulness and intellect is refreshing, and desperately in need. Oh, and I love the mustache name now, don’t fret! Very happy to see people like you can have a platform to reach a person like me. You’ve taught me so much!! You’re the best!! Thank you!!

  • Nordland April 2, 2020, 10:56 pm

    Unfortunately, I don’t see any point of growth within next few years. Not only US, the world economy is decimated and it’s going to take decade to be rebuilt with entire industries being wiped out. There is going to be a lot nationalizations, bailouts etc to the point where gov’t has to take over the entire automotive industry etc. Or end up with major unemployment and societal near-collapse. Even future of US Dollar as a currency seems to be at stake now. We’ll see if Weimar republic hyperinflation is to follow these odd monetary moves.
    There is going to be a lot more deaths due to societal issues (hunger, depression, bankruptcies, lack of healthcare access) than virus would bring if gone unchecked completely. Unfortunately, most will understand this only in the hindsight and time will prove these “quarantines” very wrong…Most likely, a major war is to follow within 6-12 months, because of all of the imbalances in the world and being even more aggravated.

    Unfortunately, with all due respect to MMM’s approach – I would much rather see more polluted world with less people suffering hardship than cleaner world with deep and lasting human suffering this crisis brings to everyone.

    And I’m also negatively impressed (nearly disgusted) by the people behavior – it is unbelievable that almost everyone who called themselves part of “free world” (US, Europe) showed they will gave up their rights and liberties in a drop of a hat after being scared by media and after not being able to do a basic research and math about the virus and its impact. This will have profound effects and end up in totalitarian rule and beginning of “digital concentration camp” in the very nearest future.

    • Mr. Money Mustache April 3, 2020, 8:35 am

      Okay Nordland, you are ON!

      I am publishing your wildly imaginative speculation just so I can take the opposite side of this virtual bet and we can check back in a few years to see how things have gone.

      NL predicts “worldwide chaos and war”
      MMM predicts “unprecedented prosperity and continued improvements in human lifespan, health, and decreasing reproductive rates as the poorest countries raise their income and education levels”

      (I also predict fast rising CO2 levels for a good while yet, but with renewable energy continuing to be the largest source of new power generation and continuing to replace coal/gas and electric transportation continuing to take market share from fossil cars.)

      • Nordland April 3, 2020, 10:14 pm

        Appreciate the honest approach. I wish time proves your point right and me wrong, we recover from this by the end of 2020 and in the hindsight my post above sounds like a panic cry, but at this point the light at the end of the tunnel seems to be quite distant.

        To be more constructive – I’ve taken a “cover the bases” approach and late last year split my portfolio nearly equal between the stocks, cash and physical precious metals. I know you (and a lot of FIRE movement) is quite skeptical about investing in gold and silver, but it seems to be the only true safe haven compared to fiat where Fed is inflating the bubble beyond any reason.

        • Married to a Swabian May 12, 2020, 8:22 pm

          I find it interesting how we have to brand and label everything in the US. This includes the “shape” of the recovery. Will it be a “V” or a “U”? Perhaps it will be a “W” or a “Swoosh” recovery? I would like to put forth the suggestion that it could also be a “large intestine” recovery … bumpy and curving around and down, and ending in a big pile of shit!
          Cash and gold may not be such a bad idea.

  • Patrick April 2, 2020, 11:12 pm

    I’m curious why you think that this recession is different and that the economy will bounce back quickly once this is over.

    Isn’t the reason for a recession that people lose their jobs, and people who still have jobs cut spending in anticipation of job loss, leading to more job losses, etc? And that people / businesses need to start building up savings / have confidence in the future before it feels “safe” to spend / expand again, which is a slow process that takes many years?

    Why is this recession different in your book?

    • Mr. Money Mustache April 3, 2020, 8:29 am

      I don’t think this recession will be different, which is why I’m optimistic. In the most recent 80 years, recessions in the US are generally very short and shallow, and lead to an even bigger period of prosperity immediately afterwards. (they used to be much deeper and more frequent, but we have gradually been learning how to smooth things out – with the Federal Reserve Bank and other SEC being a big part of this)

      If you look at the Recession article linked at the bottom of this one, you will see a few more numbers. I think that part of the reason recessions are so feared in our country is that the media makes a lot of money from making a big deal out of them.

      • Ron Cameron April 6, 2020, 6:02 am

        MMM, I think you’ll find that this is going to a hard and sharp recession. When this started I was shaking my head when I heard economists say there was a “25%-50% chance of recession”. It’s 100%. The world has severely slowed consumption and production. I don’t think that’s the end of the world or anything, but it will have severe consequences. This one won’t be “very short and shallow”, but of course economists have predicted nine of the last five recessions so I could be wrong.

        On a related but separate note, how do you feel about stimulus packages that are trillions of dollars? I have no interest in talking politics here, but I am interested in talking numbers and outcomes.

  • FormerFrontRangeGuy April 2, 2020, 11:19 pm

    Sad that early retirement/wise spending/frugality so often gets the rather dumb treatment it got in the article. And from the Times even. It’s insulting when thoughtful comments are tossed aside in service of a misleading narrative and headline. The rearview mirror is always clearer, but if I were MMM I’d find out who/what the reporter was, before spending time carefully formulating answers. I probably wouldn’t spend time talking about the philosophy of saving and spending and investing with a reporter whose description is: “Steven Kurutz joined The Times in 2011 and wrote for the City and Home sections before joining Style. He was previously a reporter at The Wall Street Journal and Details.”

  • Ilsy April 3, 2020, 12:01 am

    Wanted to comment on this “And the world is getting a valuable “practice run” at handling a pandemic, with a relatively mild disease rather than something even more serious.”
    Mild disease is way more dangerous than a “serious” one, because serious diseases are usually self-limiting, and healthy people can recognize signs and symptoms of serious diseases and stay away from the infected people, like with Ebola for example. Corona-virus – because it causes “mild” symptoms in many people – can stay forever, like the flu. So, hopefully we do develop a good vaccine and/or treatment, because of it’s mild symptoms, it may never go away.
    So, how about this worse case scenario (I like to ran those in my head, to know how I need to prepare): the virus stays forever, it takes us 18m to 2 years to develop a vaccine, another 6m to scale it up. By then this slow mutating virus has mutated and is now infecting even the ones who recovered from it before, but now the vaccine doesn’t work as it was designed, and half of the vaccinated, are actually getting COVID-22 now.

  • Kath April 3, 2020, 12:08 am

    A great optimistic article MMM and some great debate in the comments!

    From a financial perspective I completely agree we’ll bounce back.

    As a UK reader I’m also currently wondering how all this will affect and shape your Healthcare System. I heard yesterday that over 80% of Americans don’t have adequate health insurance? Jeez.

    If that’s true, what happens to the inevitably much bigger poorer portion of society in the years to come? Perhaps a more caring even system will be born?

    • Jen April 3, 2020, 12:44 pm

      As a US citizen who has been privileged enough to never go without private insurance, I sure hope this crisis paves the way for a more equitable health care system in the US. I share MMM’s optimism about many things for this country’s future, but for health care and gun control I am not as optimistic.

  • Kathrin April 3, 2020, 1:20 am

    What a remarkable and uplifting article. Let’s all work together to get through this and make the world a better place afterwards. I really do hope that this crisis will cause some sustainable change in the world.

  • Axel April 3, 2020, 2:17 am

    > And so far, we have not been performing like a best-case country so these numbers will probably be higher.

    Well, that’s putting it mildly! The exponential curve of active cases is just starting to really pick up speed in the US, and it’s almost three times higher already than China’s, which has now flatten. Although I agree that index funds and human society as a whole will come out of this crisis stronger, I do hope the US will take note that liberalism and individualism made it a hell of a lot worse.

    I hear of states having to outbid each other for medical supplies, of gig workers having to go on strike to get a mere 14 days of paid sick leave, of unemployment benefit sites going down from too much traffic, of people not even being able to access those sites at all because they used to go to their local library (now shut) to have access to a computer, of people being enticed to tip more because companies can’t pay their workers a decent wage…

    I sincerely hope the US finally realises what it’s missing… A global health care system, a decent minimum wage, well funded public services, nationalised infrastructures … the list goes on.

    Stay home and stay safe.

    • Mr. Money Mustache April 3, 2020, 8:24 am

      Unless you are working on those specific issues, I suggest you should stop reading the news and use that time for self-improvement and reading. It really does lead to a better life than absorbing daily reports about which you have no control over.

      • Annamal April 3, 2020, 2:09 pm

        Living in a smaller country, the idea that you lack responsibility for the things that your democratically elected officials do is confounding. The US has much lower level elections than we do (some towns even seem to elect their law enforcement and judiciary). The attitude that you don’t on some level have the ability to apply influence seems like a bit of a cop out.

      • Axel April 4, 2020, 11:09 am

        I don’t have a TV, I don’t read newspapers and I don’t have social media apps on my phone. Honestly, I’m actually quite an advocate for the Circle of Control! However, I do think it’s important to stay informed on some level — by reading a small amount of serious, investigative sources — in order to remain aware of societal issues and not become completely ignorant of what’s happening in the world. How can a democratic society improve if people only see what’s happening within their own happiness circles?

  • Ben April 3, 2020, 3:42 am

    Can MMM headquarters remain open at this stage? I feel it would be great to keep a nice cycle and workout routine.

    Our regulations have turned off all non-essential services as well as any form of outdoor activity, including walking, jogging, cycling and dog-walks. We’re only allowed to train inside our homes.

    I feel like a nice walk and cycle would be wonderful for the mind. Luckily there is much we can do at home and as such at least can do home exercise/weights.

    • Mr. Money Mustache April 3, 2020, 8:21 am

      Wow! Where are you located Ben?

      Banning outdoor activities altogether sounds like backwards health advice to me, unless the area is so dense that people can’t help but come in close contact with each other. I know that my own mental health depends pretty strongly on spending a lot of every day outside, so, tough-guy-MMM-persona aside, I might be gone pretty soon if somebody was able to truly lock me in without even access to my own deck/yard/driveway.

      • Ben April 3, 2020, 10:54 am

        We’re in South Africa. Large parts of the population is immune compromised due to TB and Aids so an outbreak would be severe. Due to many also living in poor areas where their homes are little more than tin shacks in close proximity they are at risk.
        However due to inequality we have significant portions of the population live in decent sized homes.
        We cannot have 2 sets of rules. As such we have the more draconian set as its more compassionate.

      • Ben April 3, 2020, 11:25 am

        Your own deck would be fine, as long as it’s inside your walls/boundary, so yes you can be sort of outside assuming you’re one of the lucky ones that have a garden =)

  • drplasticpicker April 3, 2020, 5:24 am

    Best post I’ve seen from you in a while. I’m on the front lines and diving back into hospital medicine from outpatient to help with the Covid 19 surge. I think FIRE will survive but it will be a leaner crew and more focused. Hats off to you for your prospective of this entire situation. It is an uplifting message. If you make masks from surgical drapes Haylard 600 out of a design from university of Florida anesthesia dept (I’ll post it on my blog) , it’s a complicated design but passed their fitmask testing. A local sewing group is doing it for me. $0.04 a mask. $90 worth of surgical drapes , using left over bits of fabric and pipe cleaners . They cut enough fabric to make 2000 masks. We are going to give half to first responders in our area and half for clinic. Whereas surgical masks even in bulk are selling for $0.75 a piece and forget n95 – can’t find those anywhere

  • David April 3, 2020, 5:25 am

    I’m a big fan of passive investing (the more passive the better) and have most of my investments in vanguard funds. That said, I thought this would be an interesting time to learn about hedging market crashes using options trading, so I took a small amount of cash and bought some bearish positions in mid February. It was really interesting to watch this pay-off since when the market (and most of my investments) dipped a couple dozen percent, my options trading account actually peaked up by 25%. Granted, my timing was good, though my execution was highly amateurish. Going forward, I’m going to keep on using the passive model for the majority of my investing, but I’m hoping to get more skilled at hedging future market downturns. I know from my reading that this can be done in a cost effective way, though my skills are currently low. The idea is to make small, steady losses and occasionally big pay-outs. This counters your index funds which follows the opposite pattern. Thanks for the steady hand MMM!

  • Brian Bailey April 3, 2020, 5:40 am

    Thanks for what you do, MMM. Refreshing perspective as always.

    I couldn’t help but notice a contrast between your vision of technological growth and another author I recently read, Charles Eisenstein. His first book, “The Ascent of Humanity,” is published for free on an eponymous website. In it, he discusses the idea of a technological utopia and makes the case that striving toward that end is ultimately a destructive tendency, because it furthers the perceived separation between people and nature. But I think it’s also fair to say he doesn’t advocate throwing the technological baby out with the societal bathwater; rather, that our technological priorities have gotten out of alignment with our true nature and need to be reoriented.

    I’m an engineer by training, and I can see truth in the vision you articulate here. But Eisenstein’s arguments also resonated strongly. I’d love to know what you think of the ideas presented in The Ascent of Humanity and how you square your views with his (if at all).

  • Nathan April 3, 2020, 5:48 am

    I was wondering if you might’ve been taken a bit by surprise with how this has turned out. Crazy how quick things have changed.

    I like how you’re always breaking things down by numbers. Didn’t think I liked math until I saw it being used in the real world through statistics lol

    I’ve seen a lot of panic in the people I know locally about the financial impact of this virus and I wish I could get them to realize they’re in the position they’re in due to the choices they’ve made with money. If your business is “going to go under if money stops coming in for 2 weeks” it doesn’t sound like it was going very good anyways.

  • Mattias April 3, 2020, 5:52 am

    I understand the point of not despairing but:
    – What does not kill you sometimes to often leaves you weaker or scarred.
    – There can be value destruction.
    – Building on what Mark Rush noted, the globalization and lean/just-in-time practices that have helped growth and innovation also increase the impact of crises.

  • Julie April 3, 2020, 6:35 am

    …and we can’t forget the home hair-cutting skills that will be forged!

  • Jon April 3, 2020, 6:37 am

    Thanks MMM. As a “math guy” I do appreciate some of the numbers and graphs. But it’s also those things that simply don’t add up.

    The 70% number of people getting this is correct based on an R0 of 3. (1 – 1/R0) * 100% = 66%. The good part is that this isolation and social distancing is lowering that number, but it’s simply not enough. Unless you get that R0 below 1.0, the spread will continue. It is very possible we are getting it below 1.0 now, but if the virus isn’t eradicated completely, the R0 goes back to nearly 3 once you lift the restrictions. This eerily reflects what has happened in other pandemics, such as 1918, which had 3 waves. The 2nd have by far had the most deaths.

    The worst-case scenario then is that we flatten the curve, but don’t eliminate it. Then a 2nd wave hits simultaneously with next winter’s flu season. Under that worst-case, we’re looking at numbers far higher than 2-3 million. In that case, everyone with the regular flu suddenly has a “pre-existing condition”. Tack Covid on top of that and that’s when many normally healthy people don’t make it.

    The first graph is great in showing the overlaps of the deaths. The second graph though assumes this is flattened and eradicated within ~1 year, so basically no 2nd wave. Let’s hope that is correct. Keep in mind that the more you flatten the curve now, the higher the odds of a second wave.

  • Amy Kosh April 3, 2020, 7:31 am

    yes and yes and yes!
    “The world will keep rallying and doing its best to slow down contagion. Caring people will keep helping each other. People will stay home and heal, hospitals will expand, nurses and doctors will do their best to save as many lives as possible, and the 80% of us in jobs that allow us to keep working, will keep doing our jobs.

    Meanwhile, innovators are still innovating all over the world. People are staying up late working in labs, vaccines are being tested, genes are being sequenced and the current virus will end up beaten and then written up as a very significant chapter in the history books.”

  • Liz April 3, 2020, 7:33 am

    MMM, growing a garden seems like a very Mustachian thing to do. Do you have a garden/kitchen garden?

    Last year I decided to expand my garden and add several more raised beds. So glad I did as this activity is so soothing during this time. I’m growing extra food for my local food bank this spring as well. I also started extra seedlings for friends and family, so I’ll be dropping off some tomato seedlings at my friends’ doorsteps for now, since we can’t socialize in person.

    Thanks for mentioning gardening in your last paragraph! I highly recommend this activity for everyone right now (even if you only have a small window and kitchen counter for a pot of herbs).

  • Aeowulf April 3, 2020, 8:03 am

    Things are going to get really bad economically in the short-term, but I think a few years from now we’ll be stronger because of it. This is also one of the things that may be a driver of capitalist goals meeting with environmental benefits and being sustainable for longer. I hope businesses see that remote work can be just as productive without the overhead.

  • Jema Khan April 3, 2020, 8:17 am

    I have long admired the MMM website. It shows people another way of living with confidence on their own terms. The FIRE community is probably the best prepared, at least financially and to some extent mentally, for this pandemic. I am sure most in the FIRE community have accounted for their worst case scenario and should be able to ride out this pandemic.
    I would however like to give a Malaysian man’s perspective in regards to the various Government’s handling of this pandemic. Today in Malaysia, which has a population about a tenth of the US , we have 3,333 positive cases and 53 deaths. We have been ordered to stay home since March 18. The order remains till April 14th. We have flattened the curve so far. By contrast the US has 250,000 cases with more than 5,000 dead. The US Government has failed its people in not taking the proper precautions when they had the time and prior warnings. I hope your Government bucks up now because going by the Malaysia’s experience so far , it is unacceptable that you can calmly accept a death toll of more than 100,000 and not feel aggrieved. The US is a first world country, Malaysia is a middle income country, it doesn’t make sense that your total deaths are 100 TIMES more than ours ? ( Btw I do trust Malaysia’s numbers. We are not China 🙂) . You need to hold your Government accountable for the many thousands of unnecessary deaths to come. I pray that your health services will not be overwhelmed and you will be able to flatten your curve soon and avoid unnecessary deaths.
    I am sure that there will be a vaccine and even a cure. I just don’t know when exactly. Maybe 12 to 18 months? In the meantime, we need to keep people safe. In Malaysia, we stay at home and practise social distancing if we really need to go out for provisions. I wish MMM and the FIRE community all the best during this challenging period. Stay safe.

    • Ms Blaise April 4, 2020, 2:03 am

      Very interesting to hear about Malaysia. Here in New Zealand with 1 death and fewer than 100 cases, our whole country is in lockdown. We can leave our homes for essential errands, staying in our suburbs, most businesses are closed – except supermarkets, pharmacies, gas stations, and the Government is providing wage subsidies and business loans. As well banks are offering 6 month mortgage payment holidays. It is biting very deep. But our Prime Minister and Government ( who I trust) say Be Kind. Act as if you have Covid-19 and you don’t want to infect anyone.

  • Anonymous April 3, 2020, 8:23 am

    I feel vindicated in that last bit! We always listen to The Daily, which is the daily news podcast by the New York Times. I normally enjoy it but lately it has been nothing but Doom! Despair! Agony! I had to stop listening to it, it was giving me really bad anxiety when I’m normally a very positive person! My fiancé will still listen to it and some days the difference in our mood about the whole situation is so polar opposite, I’m trying to get him to stop as well!

  • thorto0803 April 3, 2020, 8:47 am

    Well Spoken MMM. The market will certainly recover when the current crisis ends. I think pandemic death affects us more than “natural death” because it happens so suddenly and unexpectedly. Most Cancer, Heart Disease, Diabetes, and Alzheimer’s deaths have a period of at least a couple months to sometimes years where you can see that death is approaching and emotionally prepare and be there for your loved ones in their hardest times. Contrast that to Covid-19 where if you get sick you can die within several days and are forced to be isolated from everyone in the process! So Scary!

    I will say, since we’re still at the beginning of our careers, we’ve moved about 10% of our portfolio into risky stocks just to see if we can get a bit lucky on the upswing. The other 90% is still in VTI and broad international indexes. In this case our risky stocks are airlines, hotels, energy and restaurants.

  • Wanton April 3, 2020, 9:29 am

    MMM – What will be the purchasing power of the US Dollar and other fiat currencies in, say, five years? Central banks are on track to magically summon $10 trillion or (much) more out of thin air to keep all the wheels greased during the crisis. Is this sustainable? Who gets left holding the bag when we paper over the malinvestment, wasteful spending, bailouts and other shenanigans? In the long term, human ingenuity will overcome. In the short to medium term, the reality check is coming. This was inevitable, the virus only lit the spark.

    • Mr. Money Mustache April 3, 2020, 4:45 pm

      I do agree with this general thought, Wanton – there is a limit to how crazy central banks can go, and the dustbin of history has a lot of fallen governments who did themselves in with their own debt, inflation, deflation, whatever.

      I’ve tried to read a couple of books each year on both sides of the opinion spectrum on how the US is doing on this – for example pitting Peter Schiff’s “Crash Proof 2.0” against former Fed Chairman Timothy Geithner’s “Stress Test”. And Warren Buffet / Bill Gates’ perspectives on the world economy and productivity.

      So far, the deepest technical parts of Geithner’s explanations go a bit over my head sometimes, so I’m still working on understanding that part. For example, what exactly is happening in an overnight loan and a repo market, etc.

      But in general, so far I have noticed that Gates, Buffett, Geithner and even old much-maligned Alan Greenspan seem to sound a lot more calm, sane, and frankly more intelligent than their strongest critics.

      And so far, all of them have a track record of success in allowing our society to run well and produce a lot of GENUINE wealth – which I define as technologies, human wellbeing like lifespan and infant mortality, and physical things like factories and housing. So I’m kind of judging their character as a substitute for fully understanding the full extent of their technical knowledge.

      In the end, I figure things like currencies and debt and interest rates are all made up, anyway. Those can be reset and reinvented in a crisis, but in the end what matters is what they allow us to DO. As long as we are still inventing things and exchanging goods and services, you can say that the economic system is doing its job.

      • JeffD April 3, 2020, 5:50 pm

        Just a tangential side note. I am unaware of any country in recorded history that has ceased to exist due to rampant deflation (the US has had two such periods). Virtually every government not destroyed by war was destroyed through currency debasement.

      • Wanton April 3, 2020, 7:54 pm

        “Currencies, debt and interest rates are all made up anyway.”
        Might I suggest that FIAT currencies are all made up anyway …. and all have eventually failed (Witness Rome diluting coins, Chinese experiments with early paper currency, Weimar Germany etc etc) Gold, however, has been money for 5,000+ years across practically all civilizations on all continents and held its value the whole time largely due to the laws of physics. So, yes, a reset is probably necessary. Got gold?

        Interest rates ‘made up’ by central banks cause malinvestment and blow bubbles when artificially low. Market interest rates allocate resources efficiently in terms of people’s time preferences. Got bonds? OMG no, not today.

        Debt is a simply a contractual obligation. Agree it is ‘made up’ when it likely won’t be repaid. Yes, a mass debt jubilee (reset) is probably in the works. Got bonds? No thank you!!

        Got stocks? My goodness you must be patient! Their REAL value will certainly come back after a generation as we invent new technologies and rebuild our capital stock and real wealth- factories, houses, well-being.

        Did your 401K lose a third of its value? Not really – you might have been temporarily fooled by recent central bank trickery.


        PS – I live in Florida and my hot wife really enjoys her naked $20 private swims with me during the Coranavirus lockdown

        PPS – Geithner’s explanations don’t make any sense. You’re just smarter than he is. Buffett is taking a page from Hugo Stinnes “the inflation king” by buying real assets (think BNSF) and will probably come out ahead. Got Berkshire Hathaway? YES!

      • Nordland April 3, 2020, 10:24 pm

        True, currencies and monetary systems can be reset, but I wish we never live in one of those days. Scarce of TP may look like a minor thing compared to all the other issues that follow such a reset. During the reset barter prevails and those are not the fun times by any means until a new system is setup, which may take months or years. Monetary system is based on trust, which is easy to lose if reset is done and hard to regain to force people to invest in fiat again.

  • Bo April 3, 2020, 11:11 am

    Being stuck indoors for a few weeks (with 4 more weeks ahead) has made me think a lot about COVID-19 and what silver lining will come out of it. I believe it will change the world as we know it. Perhaps we’ll take better care of one another and realize that the world isn’t all about massive sums of money. Maybe I’m just being naive, but I certainly hope we don’t simply return to how everything was after this.

  • Mel April 3, 2020, 12:58 pm

    What a great positive outlook! Thank you for that, MMM.

    For my part, this is helping me kick my last few bad habits. I’ve been cooking everything I’ve eaten for 3 weeks now. And guess what? I’ve eaten good food, I’ve thought creatively about what I want, my waistline is shrinking (much needed), and my credit card bill is in the negative (due to a refund from a cancellation, and because I haven’t been spending much). I’m focusing on a few social connections and playing more of an instrument I’m learning. I’m learning what I can live without – and it turns out, that’s most things.

    I’m 30. So even if this were economically awful, I have a lot of time to recover. But instead, I’m finding that I need very little to get by, and that’s empowering.

    Hoping for better tomorrows, and I can’t wait until I can see my family again or head to the beach for a day in the ocean. But for now? I’m doing just fine.

  • Ryan April 3, 2020, 1:05 pm

    Nothing like a couple MMM graphs to put my mind at ease! Thanks!

  • JoeHx April 3, 2020, 1:07 pm

    > Even worse, some people are trying to time the stock market, selling off their investments at a discount in the hopes of “protecting” them, hoping to subsequently outsmart everyone else and re-buy them at an even lower price just before some future rebound.

    I thought about doing this as soon as the market dropped… Then I saw an article about how the market had a huge rebound on March 24th.

    Which reminded me I don’t know how to time the market.

  • Kenneth F. LaVoie III April 3, 2020, 1:18 pm

    This post gave me more hope and set me straighter than anything I’ve read since this began. Though I’ve been through 2008, I only had half the money then. This time was different, and I did end up turning my retirement savings over to my FA (who previously handled half of it) Not a big deal. I’m clear I’m not cut out to watch 200K disappear on paper in the course of a week. But I didn’t cash out. I do realize I’ve gotten complacent and “spiritually” lazy over the years, mostly because of how badly this shook me. I wasn’t right for a week. Now I am. I’m going to share some of your thoughts with the people I love, especially the eloquent way you reframed “What we’re doing”: (i.e. to save our most vulnerable). God bless you, you’ve done great things with your life young man!

    • Lance Coleman April 4, 2020, 1:36 am

      Your words express exactly what I felt… I too was in a bad place mentally after watching $200k on paper disappear over two weeks. . I managed to step back and straighten myself out after a while and MMMs article helped me reaffirm my thoughts.. after all none of us is going to enjoy early retirement if we die of a stress related heart attack!

      • Kenneth F. LaVoie III April 4, 2020, 5:28 am

        Lance, I can’t tell you how much I appreciate your reply. I’m 54 and I’ve known about “buy when others are fearful” and every cliche and mantra ever written since I was 22. My favorite book was “One up on Wall St.” by Peter Lynch when I was in my 20’s. But it didn’t help a danged bit! May we both remain infarction free for the foreseeable future. Here’s to you and your family.

  • Darren April 3, 2020, 1:36 pm

    Thank you for being the voice of reason in an unreasonable world. I’m an RN student here in California and I (along with all other nursing students in California) have totally lost our clinical sites due to the shelter-in-place order by Governor Newsom. over 14,000 RN students won’t be able to move forward now in California because of this. While other States have made changes, the California Governor and Board of Registered Nursing isn’t helping us. Tensions have risen between me and my friends as I tell them not to panic and that things will be okay, but they just get more irritated. This country has survived two World Wars, Vietnam, the Great Depression, multiple recessions, and disease much worse than this one….yet people are still afraid. Thank you for being logical through all of this.

  • Rachel April 3, 2020, 1:48 pm

    Thanks, Mr MM, for posting. I like to think of myself as a disciplined investor but it does take nerves to do nothing (or put money in–if you have some) with this kind of market drop. Hearing your voice in my head has helped me stay strong. Although I can’t be quite as optimistic as you about human nature, I agree that we’ll recover and with luck perhaps improve some things in our society. And I agree that this is a beautiful chance to practice stoicism–being without some simple pleasures for now will make them seem so luxurious when the pandemic settles down. Keep your posts coming–they really help me maintain my commitment to the Mustachian way. Bikes, barbells, salads and frugality.

  • Carrie April 3, 2020, 1:50 pm

    I guess what I worry about is that there is no end in sight. These shutdowns will result in a huge surge in crime, domestic violence, child abuse, suicide, mental health injuries, joblessness, poverty, and about a hundred other social harms that we haven’t even realized yet. If we keep society shut down for too long, there won’t be a society to save.

  • Pedro April 3, 2020, 1:52 pm

    “Its because I already know how this all ends”. He does know the future indeed……

    Aside from that, he forgots to mention the difference between have invested one month ago/one year ago/five years ago in a index fund. “More money on your retirement”. Yeah, right.

    Man, you just don´t know. Maybe things turn out for the better. But maybe not.

    • Gonzo April 4, 2020, 1:36 pm

      I’ll follow Rachel, Carrie and Pedro with this one. I’m a bit optimistic and pessimistic at the same time. I am optimistic that it (market) will bounce back and as I have enough cash to carry me 3-4 years, I’ll be OK and then I can start living off my stash. J. L. Collins is a smart man and if he says it will come back, he’s probably right.

      I am pessimistic about the idea that people are being generous and benevolent in these times. The US government is controlled by the rich folks. Rich folks don’t want to get sick. When the rich folks realize that the rest of us can make them sick, they say “Whoa!” Then we get the restrictions and Social Distancing. When the rich folks realize that they can lose money due to this pandemic and wish to minimize their losses, then they have the government throw a few bones to help the rest of us survive so that their super stashes will survive.

      I’ve seen some of these same conservative guys in power want to cut all kinds of programs to help the vast bulk of the US population, i.e. ACA, Medicare, Social Security, etc. Nah! They ain’t compassionate.

      I’m optimistic that when these rich folks see that the rest of us can give them our diseases, that they will put their heads together and figure, “Guys! It’s time for Socialized Medicine.” It will be an easy sell since most people already want it, it will make them more money and make businesses a bit easier to run. Preventive medicine will be a part f the program. It will mean less down time from their employees. They can give Socialized Medicine a new name and claim it was their idea all along. Maybe, “All People’s Medicare.” They can say they were just waiting for the time to be right to introduce it. And, you know, that’s OK with me.

  • Chris April 3, 2020, 1:53 pm

    Thank you MMM. I thought this article was very much needed and spot on. Stay safe and healthy everyone.

  • Anca April 3, 2020, 2:01 pm

    Quick question for MMM
    Did you buy health insurance ?

    • Mr. Money Mustache April 6, 2020, 8:04 am

      So far, I haven’t gotten around to it. Not because of strategy or cleverness, but just because I am somewhat disorganized and attention-deficit-disorderly and it has not gotten to the top of my list. When I do, I am going to sign up with a direct care practice rather than true health insurance.

      I am “self insuring” against the risk of bigger, more unexpected medical bills because I could afford them in the worst case (even though I of course wouldn’t enjoy writing those checks) and I can still sleep at night.

      This approach is not for everyone so it is definitely NOT advice, just an explanation of my own situation so far.

  • fpb April 3, 2020, 2:12 pm

    I agree that we will recover from this, but not in time to help someone like me. Since I’ve lost my job, I’ll need to start drawing on my 403b fairly soon, about 7 years earlier than planned. I moved from a “balanced” portfolio to 100% in the money market about 3 weeks ago, locking in a 15% loss from the peak (a few points lower than that if December 31, 2019 is used as the benchmark). I consider myself pretty fortunate. I agree that the stock market has been a great wealth-generating engine, but it’s also true that the market didn’t reach its 1929 levels again until the 1950s.

    • JeffD April 3, 2020, 6:21 pm

      The great thing about 403(b) is that there is no penalty for early withdrawal, unlike IRA or 401(k) accounts. 403(b) withdrawals are simply taxed as income in the year received. I dipped into mine a few years ago.

      • JeffD April 5, 2020, 1:46 pm

        Sorry,normally the 457(b) has no penalty but the 403(b) does. I have one of everything, so I get confused.

        This year though, the CARES act allows you to deduct up to $100,000 without penalty from 403(b), 401(k) or IRA if you or your spouse test positive for covid-19, or if your income is displaced due to covid-19 lockdowns. All three are still taxed as income.

  • Arha April 3, 2020, 3:55 pm

    Thank you for the excellent article. While the pandemic is real and may kill up 3% of those infected (I really think it is less than 1%), to call this the worst is a huge exaggeration. There has been worse pandemics that kill almost 50% of population (like the the great plague of 14th century). Pandemic is regular event for animals. In 2012, white nose syndrome killed almost 90% of bats in the US. Frog fungus is decimating and almost to the point of extinction some frog species, I can go on and on. But our view of life is limited to human species and forget to see this in context. Humanity will easily survive this thanks to its ingenuity.

    At the hospital I work, fear of the virus is palpable. We have seen only few patient with COVID 19, and hopefully will remains so. We may get the infection given some exposure risk, but with mask and other protection we remain hopeful. But for most of you out there, the risk death from this virus is 0%. The fear and the economic meltdown is what concerns me the most. The sooner we get to normal life with personal precaution the better. Unfortunately during times like this, decision is made by emotion and fear. With 24 hrs news saying the sky is falling, irrational fear has grasped the world. I wish we can follow the model of Sweden, and South Korea where people are allowed to go ahead with normal life but with physical distancing, wearing mask, avoiding congregating in closed space etc.

    For those of us worried about stock market, it will be painful. And if one is not prepared to lose more than 50% , one should not be in stock market in the first place. This virus is not going to kill your wealth, but if it causes world war, then all bets are off. The chance of that happening hopefully close to zero.

    PS: By the way those of you who have hoarded N95 mask, please donate it to local clinic and hospitals, they are the one who need it. Just regular mask (even home made) is all you need outside hospitals/clinics.

  • Craig April 3, 2020, 4:38 pm

    MMM – Thanks for your perspective in this article.

    Your mention of the benefits of Badassity has me wondering if you’ve come across the Wim Hof method or the book “What Doesn’t Kill Us”. His argument being that living constantly in comfortable/climate controlled environments is bad for the body and that we should be challenging our bodies with exposure to more extreme conditions, which should make us happier and healthier.

    Anecdotally, I’ve been playing with the strategy for a few months and I believe I feel less anxious.

  • IDG April 3, 2020, 4:48 pm

    Thanks for this! I know you’ve stopped publishing as much recently, but I hope this crisis draws you back to the keyboard. I feel like we all need a good dose of optimism (in a non-bullshit way) right now. Plus a hearty sprinkling of good sense on how to save money, invest sensibly, and ride a bike. The world kind of needed Mr. Money Mustache (the super hero personality) before….but really needs him now!

  • Ryan Schlomer April 3, 2020, 4:59 pm

    If everyone had no debt and an emergency fund in place, we could have shut down for a month and this would be over already.

    • Kristine April 3, 2020, 5:58 pm

      You are correct! I have robust emergency fund, my only debt is house payment and it’s only $500. I could go without a paycheck for many months. My boss on the other hand makes over $100K and can barely make it to our next payday. I make half of what he does but yet he’s broke. People need to wake up and plan for life.

  • Mashed Potatoes April 3, 2020, 6:07 pm

    Situations like this and attitudes like the one you outlined above remind me why I don’t visit this blog or many financial blogs anymore. This whole situation exposes in an instant every governmental shortcoming and institutional rot that has been made in the name of austerity and privatization. It lays bare the class divisions in our society, and we will unfortunately have a body count to point to in order to demonstrate this inequality. Current estimates indicate a quarter million dead in the US. There’s no optimism to be had there. You mention 80% of people can work from home? For how long? And what about the other 20%? Did those 20% just suddenly get a case of complainy-pants? Those 20% are not a statistic, they are a substantial percentage of the population and American workforce. They are the bottom quarter of the American economy, and they have been given no life line to weather this storm. They will not be immediately re-absorbed into the workforce. Those are MILLIONS of people who are being financially devastated right now, through no fault of their own. But at least you’ll survive and a majority of your acolytes will survive and be “humbled” by the experience. Bravo.

    Now, we could reasonably get through this with a competent government that cared about its human workforce more than corporate profits. But we don’t, so we’re going to be forced to go through this national trauma and prolonged economic recession in order to maintain our decrepit economic system that only enriches a select few.

    A few things that would go a long way to flattening the curve:

    1) National moratorium on mortgages, rent, and property taxes for the duration of the crisis. The only reason why people will leave their homes in the midst of a global pandemic is because they need to pay for their living situation. Same applies to businesses who need to cover their rents. A moratorium on this removes the single largest expense for every citizen and incentives them to stay home. It’s the beginning of April. How many people of the 10 million recently unemployed missed their rent payments How many of them will come out the other side of this crisis with 3 to 4 months of back-rent that they are unable to pay? As soon as the health crisis ends, the economic crisis will begin, and the poorest among us will be thrust into a debt hole that they’ll never be able to crawl out of.

    2) Monthly payments to each citizen to cover food and basic needs and the deployment of state services to deliver food to the vulnerable (turning public schools to community kitchens, having meals delivered by the post office, etc). This would be far more effective than a one time payment that is unnecessarily means tested. You can always tax it at the end of the year if it’s too much.

    3) Medicare for all. Look, this pandemic is going to rip through vulnerable communities and leave a wake of destruction, both physical and financial. How many of those 10 MILLION (and still rising) recently unemployed people just lost access to their healthcare because it was previously tethered to employment? How many of those uninsured who recover will now be forced to pay a hospital bill that they can not afford because they have no income and no insurance? Those people now unemployed, uninsured, and now housing insecure. They are the ones most likely to get infection as they are forced to find income during a plague when nobody is hiring. How many hospitals have been shuttered this decade alone because they are not deemed profitable? There are major US cities that don’t have a public hospital because they were sold off as assets for cash strapped municipalities. Hospitals will not expand, because it is not PROFITABLE to do so. Our healthcare system is designed to run as streamlined as possible to expand corporate profits. Guess what? That is directly at odds with saving human life.

    4) Nationalize key industries, even if only temporarily. This pandemic has very clearly shown that are 40 year drift toward hyper capitalist privatization has thoroughly hollowed out the infrastructure needed to keep our society functioning. We are going to learn that the federal government has been forcing states to bid against one another to drive up the price of necessary medical equipment and personal protective equipment as well as using agencies such as FEMA to outbid state governments to funnel equipment to party loyalists and agencies such as ICE (this should be an outrage that forces a regime change, but we’ll be so disoriented from this ordeal that it will go largely unnoticed.) Even energy and telecommunication industries should be democratized, as it is now apparent that they are now essential infrastructure items needed to maintain any semblance of our economy. Instead of having companies foot the bill for these items, it will be offloaded onto the backs of their workers. A negative outcome of this pandemic will be the “uber-ization” of the private sector, where companies learn to cut costs by having their workers pay for most of the key overhead needed to run a business. This is the “innovation” you are going to see.

    5) Immediately release all non-violent offenders in prisons and ICE concentration camps. An outbreak of a deadly infectious disease in these closed quarters will devastating. And if we honestly and soberly assess the communities who are targeted to fill these detention centers, then the question must be asked: Will this be a genocide? It’s important to remember that Anne Frank did not die in the gas chambers. She died along with 17,000 other prisoners from a typhus outbreak. These people will be left to rot. That is an outrage.

    6) Shelter for the homeless. Similar to above, but without a guarantee to housing, the people most likely to die in the streets will be the poor, the mentally unstable, and those with addiction or victims of domestic abuse. And without a moratorium on rents, the number of housing insecure will go up during this plague.

    But we won’t do any of these things. Instead we’ll do what we always do: Infuse the markets with liquidity and bail out industries with no strings attached (looking at you, Mnuchin) even as those same industries hemorrhage their workforce. And the result will be more and more people thrust into poverty and economic insecurity, with their entire existence dependent on their ability to provide productive value to a new boss — at a reduced wage.

    So let’s add these up and guess who will be most targeted by this pandemic: The poor, the elderly, minorities, the homeless. In short, those who have been deemed economically un-productive.

    Our government is not making efforts to protect the most vulnerable, as you falsely and naively claim. On the contrary, the government is sacrificing the most vulnerable so that those with capital can retain their economic privilege. This was quite evident when leading members of the government floated the idea of re-opening the economy to please the stock market. They are not pausing the economy to prevent 3 million dead, they are pausing the economy because they know 3 million dead would lead directly to violent revolution. But at least you can buy in at a discount!

    And as for your positive by-products? You flirt dangerously close to endorsing a form of eco-fascism. Yes, millions may die, but hey, less pollution! People are dying from the criminal negligence of our government, but hey, at least you can enjoy a nice sunny walk in the park! This suggests that it is the existence of humans (mainly the poor and afflicted) that are the cause of climate change, rather than the economic model that forces them to work and maintain good standing in the workforce in order to retain the privilege of being housed and fed.

    And why? Why neglect to address the items above? Because to actually solve these issues, the state would have to admit that our current economic model is ineffective by design. That it always has been. Solving these issues would spread the idea that collective ownership of production of necessary industries is not only feasible, but morally responsible. But instead we are left with a false choice between re-opening the market balanced against an acceptable body count. Apparently we’ve settled on a quarter million dead. And if at least 200,000 people have to die in order to maintain this system of extreme privatization followed by a deep and prolonged recession where more and more people are thrown into the streets, then that is what the government is going to do. Because screw you, poor people.

    • Mr. Money Mustache April 4, 2020, 9:16 am

      Mashed Potatoes, it sounds like you have no need to visit my blog – you should start your own!

      You are right that it sounds like our views on economics and the role of government are quite different. I know we have plenty of problems here, but what the US government lacks in skill, we make up for in having a wilder private sector that occasionally spits out stuff that probably wouldn’t have been invented anywhere else. But this definitely comes at the price of much more wealth inequality.

      One thing I would note however, is that I think the reason our politicians suck is because our voters rely too much on emotion and don’t care enough about the science and numbers. And when I look at the emotions versus the numbers you cite in your own very long blog comment, I think you are doing the same thing but just on the other side of the political spectrum.

      For example, 200k earlier deaths is insignificant against a background death rate of 2.8M annual deaths – especially when over 2,000,000 of those background deaths are caused by our car culture and food system and consumer lifestyle, which are the main things I am trying to address with this blog!

      Any discussion of ANY important issue like this should be calm and respectful, and we should be citing numbers and studies and leaving emotion and criticism and blame completely out of it.

      If we have a disagreement, we need to duke it out on the Battlefield of Math, not just yak back and forth at each other between two Podiums of Rhetoric.

    • JeffD April 4, 2020, 3:17 pm

      “Those 20% are not a statistic, they are a substantial percentage of the population and American workforce. ”

      This is pretty brutal, and true. Hard to overlook the fact that roughly one in five of the most vulnerable part of the working population just had their life ripped apart in a way that the least vulnerable one in five can’t even imagine.

  • Kk April 3, 2020, 6:38 pm

    “…one million dollars of economic activity for each person’s life that we extend…”

    Extend for how long? 1 year on average? 2 years?

    If I were 85, I would probably take 1 million dollars (and give it to my grandkids).

  • Gordo April 3, 2020, 7:52 pm

    We are in the deleveraging stage now, the market probably won’t bottom for another 2-3 years. See: https://youtu.be/PHe0bXAIuk0
    If you have a never sell philosophy, you can just ride it down then back up on the other side of the deleveraging. You should expect to lose at least half of your current stock holdings’ value by the time we hit bottom (just like in the 2008 deleveraging), but since this is hard to time, I get the idea of riding it out. Warren Buffett raised a lot of cash last year and hasn’t put it to work yet as far as we know, one thing you could do is buy when BRK shows they have put most of the 100+ billion into stocks. Another signal of the bottom seen in 2009 was massive insider buying (right now there is just massive insider selling).

  • James Harris April 3, 2020, 9:34 pm

    Your bar charts seem to be saying that about half of the people who die from COVID-19 in the first year would have died from something else that same year. How did you arrive at those numbers?

  • Mar April 3, 2020, 9:38 pm

    You are a buffoon! This is not simply the beginning of a recession as you put it. This is the beginning of a world wide depression, much worse than the great depression. This is long over due and is in response to the flagrant disregard for sound economic principals, resulting in enormous amounts of debt not just here but in all of the “developed” countries. Once you finally understand what this is and where it is taking us, it will be far too late for you (and others like you) to do anything about it both with your personal finances and your personal safety.

    Yes, you have lost half of your retirement savings and you are about to lose another 45% of it.
    WAKE UP! Read some economic history, its not that hard to see what this is and where we are headed. Once awake, if its not to late, you should then warn all these lemmings here on your site.

    • Mr. Money Mustache April 4, 2020, 9:00 am

      Wow! This is an extra extreme perspective and the real reason I write articles like this one.

      It is important to note that there are comments exactly like this circulating everywhere on the Internet EVERY SINGLE DAY. They amplify and multiply during recessions and times of fear, but they never go away.

      And meanwhile, miraculously, most of us continue to invent new things and create new art, raise new children and continue to cure diseases and help those less fortunate. The world goes on whether the pessimists choose to believe it or not.

      If we took this hopeless perspective, we would do none of it.

      Fear is the most USELESS perspective to adopt. Do not get let this completely inaccurate perspective soak into your own mind.

      And Mar, I am sorry for using you as an example, I genuinely wish we could all just give you a hug because that would probably help a lot more than anything we could share with you over the Internet.

  • Chris April 3, 2020, 10:16 pm

    I appreciate the encouragement and agree that it is best to remain confident and not to sell stocks (the latter is true in virtually any situation except when you absolutely need the cash; in theory also when you know for certain that the company is inevitably doomed – problem: you will virtually never know that before everyone else knows).

    However, mere reliance in confidence is also not a good strategy and in particular not in an unprecedented crisis like this one. Yes, humanity as a whole will recover and continue to grow. But huge groups of people will suffer losses and never really have a phoenix experience. The death rate is one thing and yes, for most of us it is just sad and otherwise totally harmless. The destruction of values on the order of tens of trillions of dollars and the many million people losing these values is another thing. And it is not just virtual stock market losses. In this crisis we are really losing economic output + capital stock (+ “human capital”), lots of.

    I am now extremely happy that I did not indulge into early retirement (while one month ago I thought I was stupid deferring it, given that I had saved more than enough to meet the 4% rule). If I had to sell stock now to make ends meet this would be an extremely bad situation. Also little hope for significant dividends this and next year, so selling stock would be necessary if no cash flow from active work was available. I still have my well paying job which is nearly 100 % safe and I am extremely grateful for it right now (I hated it before the crisis, meaningless bureaucratic stuff). And I have deep compassion for the less fortunate ones.

    Lets hope that this Corona thing will be over in 1 or 2 months, so most early retirees might get away with moderate losses. Should the lockdown last 6 months or more many will hit the wall.

  • Forgotten April 3, 2020, 11:36 pm

    The big picture. As always… Thank you :)

  • Ann April 4, 2020, 12:35 am

    Thank you times infinity. I was excited to see that you had done a post and it did not disappoint, but then again I would read your opinion on almost anything. I agree with you about how much there is to be optimistic about here and I think after this is over a lot of people will be open to new ideas (for them) like home schooling, permaculture, a universal wage, working from home, cooking from home and creating instead of consuming. And as for carbon emissions, we really did need a big kick up the arse. I too have been surprised by the response of capitalist governments and I’ve been wondering if there is a catch. Time will tell. Too bad about the New York Times.

  • Joe April 4, 2020, 1:14 am

    Every time I’m at a crossroads in my life, I come to this blog to hear advice like this. Every time I feel better. No one knows what the future will bring, but all we can do is hope for the best and do everything in our power to make that happen. These are trying times. I hope as many people as possible stay safe and healthy.

  • Lance Coleman April 4, 2020, 1:14 am

    A great thought provoking article that helps put everything in perspective. Number of deaths from cardiovascular disease is astonishing. We can all follow the advice given about Covid19, but most would gain even more by practicing the principles outlined by MMM for a healthy lifestyle.
    The markets in freefall undoubtedly caused myself and many FIRE advocates a certain amount of stress initially, more so than the most others simply because we have more invested than most! Realising that Human ingenuity and progress will both overcome this virus and lead to further prosperity is the antidote.

  • Ms Blaise April 4, 2020, 2:12 am

    Thanks MMM. A kind and positive post. I’m planning no working again this year ( for an income) and thanks to your blog among others, that is just fine for us.

    • Ms Blaise April 8, 2020, 4:22 am

      oops that should have said ” I am not planning on working again this year ( for an income)….


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