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?)

  • Stephen Desmond April 4, 2020, 2:43 am

    My portfolio is currently down about 35%. But my spending is down by 70%! Brilliant!

    So I’d be about £500 a month better off, if I was withdrawing from my investments, which I don’t need to do for a while (cash in bank) so I’m actually about £1k up a month at the present moment in real terms. That’ll change as I’m sure we’ll be out of lockdown (ie, free to move and spend) sooner than the market rebounds but it’s a good reset phase and I must admit I haven’t really missed the pub, cinema, golf course, drives to the lakes, snooker club, etc as much as I thought I would.

  • Rob from Canada April 4, 2020, 6:42 am

    Pete, I was waiting for this post! I fired in May 2019 with a plan, a plan that would allow me to take a huge it if needed. Here we are in the beginning of something most of us cannot grasp, I chose before this post not to worry about my investments, nothing is for sale for another 15 years or so. I can sit back and watch and you and your readers make it so much easier. I am a true Mustaschian, bad ass from the age of 8 when I sat on the milkman’s truck delivering to homes in my neighbourhood and shovelling walkways in winter for a few quarters. Today, your posts, lifestyle and readers are an awesome community to have as a resource and source of info to continue this journey of freedom. Stay home and six feet apart when you have to go out!

  • B Unger April 4, 2020, 6:48 am

    While I haven’t retired early (in my late 40’s) I am definitely FIRE-sympathetic. I work in a hospital and like a lot of folks these days, I’m getting a lot of extra email related to COVID-19. During some down-time last night at the start of my 12-hour overnight I was sorting through those extra emails when I came across this one. Normally I would have quickly dispatched it to my “Diversion Review” folder but I like MMM, didn’t have anything urgent to do, and read it as part of a break. I found myself sympathetic to most of the sentiments.

    As I see it, there are a number of strategies and characteristics which both increase one’s likelihood of achieving FIRE and also of making one’s way through uncertain, difficult times. For one, FIRE folks are always flexing that creative muscle by asking questions around, “Is this the only way to accomplish something? Is there a cheaper way without too many trade-offs? Is there some skill I could gain?” That’s a universally useful perspective and especially useful in times like these.

    I heard a friend complain about all of the food he normally eats that he doesn’t have access to now. I tried to think if I had noticed that at all and hadn’t. Sure, I had seen a lot of empty spaces at the grocery store but as someone who has honed the skills of making delicious food from what’s available, what looks good and what’s on sale it hadn’t cramped my style at all.

    Moreover, FIRE folks may also be more psychologically flexible in how they define themselves and success. Conventional wisdom may put forth certain titles and expensive experiences and consumer products but the FIRE mindset needs to break things down to their first principles first.

    In short, I see the psychological, social and practical skills used to achieve FIRE as having a great deal of overlap with those needed to deal with big changes like we’re experiencing now.

    Thank you, Mr. MM, for everything you do and for providing a nice diversion last night.

  • Anthony April 4, 2020, 9:28 am

    MMM: Thank you for this post and for embedding the word, “badassity,” into my vocabulary. For avid readers with time on their hands, I recommend The Intelligent Investor, by Benjamin Graham. Graham’s book helped to reinforce my thinking about long term investing, exercising patience during downturns, and avoiding herd mentality and the media. Caution: It’s a long book and it is loaded with teaching. Do not be afraid. (Knowing that Graham mentored Warren Buffett helped me).

  • Fergus April 4, 2020, 10:36 am


    “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.”

    This analysis is simply wrong. Statisticians, epidemiologists, and other health experts are responding to uncertainty (“noisy data”) with regard to the COVID-19 pandemic.

    Dividing the world into vulnerable and non-vulnerable populations is simplistic. Please don’t pretend that the data emerging on COVID-19 is “clean” with regard to non-vulnerable persons. We simply don’t know.

    Long-term health impacts of COVID-19 on healthy persons are still unknown. Acute cardiac injury? Permanent scarring of the lungs? Other long-term health issues?


  • Andrew April 4, 2020, 11:21 am

    Love the optimism. I agree we will come together for a shared purposed and continue to progress and create wealth. However, I am not so sure voluntary economic slow down: social distancing via shelter in place, closing bars and restaurants, and etc. will do more economic damage than just not reacting. I imagine the economic hit of 50% to 70% infected leaving millions badly sick with overwhelmed hospitals and a couple million deaths would also cause a loss in productivity. Possibly more fear, panic and disruption.

    I’m glad we are not going that route. But I don’t think any affluent country has. Makes me doubt anyone believes the economy would do better if we just took it on the chin.

  • Ann April 4, 2020, 11:27 am

    Thanks for the dose of optimism!

    I have one comment about education. As a teacher, I am wholly unconvinced that increased connectivity/internet access will actually revolutionize education and allow kids to learning faster or better. Unfortunately, in education new technology has continued to be heralded as game-changing, and it has yet to happen. For example : radio, TV, the advent of online courses… all these things do allow students to hear from experts or outstanding teachers, but do not dramatically improve learning.

    • Mr. Money Mustache April 4, 2020, 2:34 pm

      Thanks for the perspective Ann, and you’re right that I read about the big picture of this further.

      So far, my experience is surely biased because I have watched my own son’s experience with this (plus those of some close friends who do homeschooling). What I’ve found is that he seeks out information with a vengeance and soaks up incredibly good quality YouTube videos on all sorts of subjects. Plus websites with how-to-guides that help him figure out whatever he needs.

      In the early days, Khan Academy, Vsauce 1-3, Veritassium. Nowadays really great music stuff like Andrew Huang, Adam Nealy, Rob Scallon. Oh! Also the Reply All podcast, Smarter Every Day and Captain Disillusion. And much more niche stuff on programming with the new IOS shortcuts tool.

      And of course on my side I follow all the channels about battery technology and Sandy Munro’s tesla teardowns and so on. A few Cold Fusions for general interest because they cover great subjects. TED talks. Everything Bill Gates writes and some of his recommendations.

      When you add all this up, my boy has taken himself to college level or beyond in some fields before he has even started high school – with no credit to me because I can’t control the kid or really get him to do anything. So I focus on making sure he at least comes out for some frisbee and a walk with me each day.

      • Terry from Edmonton April 4, 2020, 2:49 pm

        Please don’t suggest that homeschooling is useful. There may be the odd privileged case, but for the most part, people learn through interacting and socializing with other humans. The reason why Moocs didn’t take over is that the completion rates were so low and they weren’t sufficiently engaging for a large portion of the population. It gets a bit tiresome to keep reading your opinions on things you have little experience with (e.g.: pedagogy). Stick to what you know best.

        • Drue April 4, 2020, 9:28 pm

          Terry, that’s a little insulting to those of us who completed our education through homeschooling methods. I was a home school student from first grade through high school. Afterwards, I went on to complete my bachelors of science in nursing (I am currently working on my masters at this time). Several of my friends were home schooled as well and obtained similar professional degrees. Home schooling is a fantastic option for many people (an option I am considering for my two children as well). While I am impressed with your use of the word pedagogy, I am less so with your understanding of the success that can be obtained with home schooling.

          • Terry from Edmonton April 4, 2020, 11:32 pm

            You miss my point. I realize that a small portion of individuals can succeed through homeschooling (since this is a venue to throw around percentages, let’s say 1%). However, it is a bad recipe for any society that seeks to adeuately educate their children. When I read a post by MMM suggesting that homeschooling is a particularly successful and equivalent learning method, it causes me concern. Many a right-wing gov’t would be delighted to pawn this off to the unqualified family unit. That would be about as good an idea as home brain surgery. MMM consistently and correctly states that knowledge, education and expertise should guide us. Why does that not apply to our education system!!! I’m worried MMM is more of a Pangloss, than a realist.

        • Ann Stanley April 5, 2020, 2:08 am

          Interacting and socialising with others doesn’t take place only in schools Terry!

      • DuckReconMajor April 4, 2020, 8:24 pm

        People of all ages are teaching themselves things like programming, but still run into the “we only want college grads” attitude when looking for a job. I hope this attitude goes away in the future.

  • 5 O’clock shadowstache April 4, 2020, 12:56 pm

    Question for Pete and the group. My wife and I participate in DCA investing via our 401ks- simply because it’s the place where we can put the most ROTH tax advantaged dollars to work. These investments can be turned off and on with ease each pay period.

    We have plenty of funds to ride out a loss of income, and which seems unlikely.

    There are some serious thoughts in the marketplace that this contraction is far from over. Which I am not afraid of, quite the opposite.

    What are general feelings on curtailing bimonthly 401k investment for 2 reasons
    1- sounds like the worse isn’t here yet
    2- more cash could be a great vehicle for an alt investment later, eg- real estate

    (Data if it matters- no debt outside of mortgage 6 mos plus cash saved for expenses)

  • Andy April 4, 2020, 3:16 pm

    You know if I was a conspiracy theorist, and I am not, I would see this COVID-19 reaction as the coming of all their Christmases for those in the state and academia who have always hated the self-employed, entrepreneurs, property owners and small businessmen, the sort of people who don’t like being told what to do by the state and who, apparently are to blame for all the problems of the world from homelessness to climate change. Suddenly they are ruined and will now have listen to and kiss the backsides of state officials or starve.

    The underclass, they are fine, they always have been. They live on the dole and public handouts so nothing will change for them.

    The workers in factories or shops will simply change over from working for the private sector to whatever department of the government has taken over their former owner’s business.

    Public sector workers will also be fine, they will in fact be the new heroes and their managers will become intoxicated with new-found power.

    The billionaires, well needless to say they will be hunky dory, they might see their personal fortunes decline by a few percentage points for a year or so, but that will be small change to them.

    The celebrity class, the elite sportsmen and Hollywood stars will also be fine, they will continue to spout the government’s message and will be well rewarded for doing so.

    So who will be wiped out? The small shop owner, the contractor, the self-employed businessman, the landlord, the independent trader, the small factory owner. The sort of people who learned to grow up and wipe their own asses. The people who made their own decisions about life, who preferred to look after their own affairs, their own family’s health care and education, their own pensions and who often voted in ways their ‘betters’ preferred they didn’t.

    Bang! They are destroyed through no fault of their own but because of the incompetence of governments all around the world. They must pay the penalty of this crisis, they must accept that the way of life they once knew is now over, they must now be supplicants of the state and abide by the state’s directions or find they have no roof over their heads.

    • Married to a Swabian April 4, 2020, 7:15 pm

      WTF – Rush Limbaugh, is that you?

      • Andy April 5, 2020, 2:49 am

        Nope just an ordinary person deeply concerned at the number of small business getting trashed, probably never to come back.

        In the US it’s becoming rapidly clear that the small business loans are really hard to get — which is either even more naive, administrative incompetence, or part of a co-ordinated Machiavellian plan to take out Middle America, hopefully the former.

        This issue has barely been mentioned all that much. But it will be in the days and weeks to come, it probably will do. All this is because paradoxically and nonsensically, if you don’t already have a loan with a bank, you’re ineligible. Go figure.

  • Doug April 4, 2020, 9:36 pm

    So what’s to happen to the economy and stock markets going forward? In the last century we had 4 years of World War 1 immediately followed by a pandemic in 1918. The situation probably looked hopeless back then but somehow the economy and markets recovered. In the 1930s there was the depression, immediately followed by World War 2. Again it probably looked hopeless but the economy recovered. Throughout the rest of the 20th century there were many more wars, the 1973-74 energy crisis and stagflation, mortgage rates of 20% in late 1981 followed by a recession, a long list of other troubles and, you guessed it, the economy and stock markets bounced back and recovered. This time won’t be different. So what do you do between now and then? If you have extra cash on hand now is the time to buy more stocks and equity ETFs if you haven’t done so already. Actually the best time was in mid March, but now in early April there are still some good deals out there. Remember, buy low and sell high!

  • Troy April 5, 2020, 2:04 am

    Reading this, all I could think of was how I don’t ever think MMM will run out of bullets for his optimism gun :). It is an inspiration that you can always be so optimistic, and has most likely been a key contributor to your success, kudos.

    Regarding corona, honestly this shit sucks. I think the world will be forever changed, but hopefully for the better. People are taking more care to wash their hands and be more considerate of others and that’s not a bad thing, hopefully it sticks. I’m not sure when this will end but I hope soon, because the longer businesses are shut down, the longer and worse off our recession/depression will become. At a certain point you are ruining/killing more lives by shutting down the country/economy than by not doing it, the question is when is that point and how could anyone really know?

  • Marc Hastenteufel April 5, 2020, 4:49 am

    I have most of my €€€ in health – as of today the 5th of April it is 50% (Stryker, BD, J&J and Coloplast) Apart from Coloplast the other ones took a hit but it is still ok. And they still pay dividends. And they are still up way over 100% and Colo over 250%. The other big part is energy and water and another 40 or so smaller chunks of everything.
    Of course, everything I got the last 1-2 years is down right now. I wait – it will go up again. Some might not go up in the near future so what. But the rest will go back up if we look at the past. And I have no worries it will get better. It is only a question of time – in a few months or in 2 years. So it does make sense to have some cash on hand and I never invest cash that I might need the next 5 years. So far it worked for me.
    If I look at the current depot that I started in 2013 with everything together I am back at the beginning of 2019. That is 35% up including dividends. It was a bit over 50% only a few weeks back but I am still happy with the 35 and will be happy to have the dividends coming in.
    If you started out in 2019 you are really unlucky but stick with it if you can!

  • Robert April 5, 2020, 5:03 am

    Pete – That was one of the most uplifting things I’ve read in a while. Yes, things are a little hard right now, much of my outdoor recreation has been closed, and it hurts my retirement portfolio is down even a little bit more than the index (the joys of individual stocks), but so much good will come out of this. The level of appreciation we have for little things will increase and it is amazing a capitalist society like ours can decide to do this for the most vulnerable.

    Thank you for the positive message you shared in these challenging times.

  • Married to a Swabian April 5, 2020, 7:54 am

    I know here in the US, as throughout the world, we all hope that this pandemic passes soon.

    Sometimes a bit more PLANNING and execution based on science (in addition to hoping) is a good thing.

    Here’s a good article in NYT yesterday on how Germany is coming out better than average. Hint: it wasn’t an accident.


  • Dillon April 5, 2020, 8:29 am

    Huh. I’m not particularly worried about the 30% drop in my portfolio. I am optimistic and I see all these beautiful things happening in our society right now. I’m an introvert and an avid gardener and it’s been kind of great to be home right now – fully acknowledging that this experience is not the same for other people who are dealing with abusive homes, job loss, food insecurity. I have a semi-secret hope that this will show so many people that life can be simple, local, cooperative.

    But despite all that optimism and how great we can imagine society will be on the other side of this – I have to watch my husband leave every day and go into a hospital in southeast Michigan (one of the hardest hit “hotspots” right now) where he will reuse his PPE because there isn’t enough to keep him safe and where we drops off the cloth masks I’m making at home. I hope above all hopes that this amazing, dedicated, cancer -surviving soul mate of mine and father to our beautiful children will come home safely where he strip’ll in the laundry room, sanitize everything and shower before touching any of us. I hope it isn’t the day he says he’s been too exposed or his temp read too high before he left (they take it at the beginning and end of each shift) or he coughed too many times and we have to move to plan B where he’s isolated from us. The optimism is *almost* enough to distract myself from that fear of our house’s reoccurring exposure risk and the psychological repercussions of him having to choose who gets a ventilator today – hoping he made the right calculation of someone’s chances of survival and therefore worthiness – while we all wait for the innovators to get FDA approval and the forced manufacturers to make *almost* what we need (locally GM is making non-N95 facemasks?) I’ve read articles talking about hospital ethics policies on ventilator decisions and I want to make it very clear that hospitals have guidelines but the actual decision – multiple times a day – falls to a real person – a real person who has to make that call over and over again and it haunts them – every day PTSD style haunts them.

    ERs here in Detroit are closed because the hospitals are full. There are folks here don’t have access water to wash their hands which is increasing the spread. That’s insane. I do have hope. I have to have hope but that wonderful place that exists post-pandemic (and even the peri-pandemic place that’s showing itself now) is only available to those who survive this and very few will make it through without massive battle scars. For this reason (and again because my husband currently has job security – terrifying job security) talk of the stock market has a levity that doesn’t quite sit with me. This isn’t a criticism of your post – in fact I appreciate you following up with humility and not doubling down from your previous post – but more of a public musing….I haven’t journaled much since this started and what started off as a simple comment turned into a flood of thoughts. If there are any other family members of healthcare workers out there reading right now – I’m thinking of you. There are facebook groups providing social support specifically for us right now – seek them out – I’ve found them particularly helpful at feeling less alone.

    • Jen April 8, 2020, 11:11 am

      From a fellow SE Michigan resident: please tell your husband THANK YOU for me. We live just outside of Detroit in Wayne County, and I’m worried enough for my cousin and friends who work as first responders in the local medical systems. I can barely imagine how hard this is for your family. Once this is all over and our surviving medical workers can take a breath…yes. So many of them will require therapy for PTSD.

      Like you, I appreciate Pete’s optimism but am worried about the future and how much this will harm our medical workers, small business owners, and so many of our residents who were already low-income and just barely hanging on.

  • SachaFiscal April 5, 2020, 12:52 pm

    This is my first real financial crisis recession where I actually had a significant amount saved/invested. So, yeah, I’m freaking out a little bit. The recessions before did affect me and my family and we did pull through all of those but this one does seem like it could be much worse.

    Thanks so much for this article. It really helps to put me at ease and put things into perspective. I will be staying the course through this (not selling anything). I am lucky that my husband is still working and bringing in income so we don’t have to pull from our savings yet. We’ll see how it goes. This is a good test of the Mustachian and FIRE philosophy in general.

    I’m really grateful for the journey I’ve been on since 2014 when I found this blog. I’ve been able to slowly trim down my expenses and find joy in creating and learning instead of just buying and consuming. I have a significant savings in case my husband loses his job. We take pleasure in the little things in life like a good meal and being in nature. And also the important things in life like having fulfilling relationships and a strong spiritual practice. Also, I’m grateful that I was able to retire from my job and live the past 2 1/2 years living my life as I wanted to. If I die from this, at least I had these past two years where I was really happy.

  • Martin K April 6, 2020, 3:08 am

    “the world is getting a valuable “practice run” at handling a pandemic, with a relatively mild disease rather than something even more serious.”

    This is often overlooked, but may well be the most important aspect of this whole thing…

  • Liz April 6, 2020, 8:32 am

    I wanted to comment after the previous post but put that post down to you being earlier in the situation, but now having read this one find this current post’s lack of empathy too much to bear without comment. Please realise some of your readers are personally affected by this. For a moment, put yourself in other people’s shoes. What if you have relatives in a country with a death rate of 10% because they are overwhelmed. Your elderly relatives there would not wish to die in this particular situation, in isolation surrounded by staff in masks and goggles and no family with them. And if they die, you would not be able to attend their funeral. I do not think your lack of empathy is intentional but it is very real, so I would respectfully ask, actually implore, you not to post more about this virus until it is over, or keep only to the subject of finances. To grieving families, these posts, especially the second one given the situation in the US at the time of the post, are completely the wrong tone – with charts and numbers but not seeing each number as an individual person who has a grieving family. Your last comment, looking forward to the ‘boomtime’ is incredibly insensitive to grieving families, whose lives will not be the same again, to read at this point in time. It is shallow, bordering on callous, at this time. Maybe at some point in the future, talk about it, but NOT now, when people are dying from this every day.

    • Mr. Money Mustache April 8, 2020, 9:16 pm

      But Liz, I think you are missing the whole reason I wrote this.

      EVERY SINGLE LIFE AND DEATH in the world is equally important. Just because it’s now Italians and Americans does not mean anything is more sad than it ever was before.

      One of the points of this article is to show that despite the news headlines, no, even in the worst case, COVID-19 would not result in a significant increase in the world’s tragic deaths. So therefore we have a much bigger job to do than getting through this pandemic.

      Good decision making is not made with this type of emotional focus. You need numbers and percentages to have any hope of making the right decisions, otherwise we do things like spending $10 million to save each American baby while letting 50,000 African children die from Malaria in exchange.

      We need to drop our rich world centric bias, feeling so sorry for ourselves at this moment when we still have it so much better than most people even in their best of times.

      p.s. I am going to be writing plenty more on this subject over time, so you’d best tune out now if you don’t want to read it :-)

  • MKE April 6, 2020, 9:13 am

    “…. 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.”

    I agree. It’s wonderful. Thank you for saying it and pointing it out.

    Here goes the pessimistic side: most people are cooperating because it is easy. It involves sitting around doing nothing.

    From a physical safety standpoint, it feels safer for me. There are not as many cars flying through red lights, bombing through stop signs, or gunning down my street. I am walking to my office where I am self-employed. The palpable sense of danger is significantly diminished . Interaction with drivers are easier to avoid. A car parked in a garage is a car that can’t kill anyone.

    No one has commented on the fact that, on the fatality chart MMM posted, car fatalities are the only thing in the top ten causes(or more) that no one gives a shit about. Yet, car crashes are the most preventable cause of death! Over 90% of crashes are caused by bad driving. They are not “accidents”, as we call them, as an attempt to make killing and maiming sound cute and fun.

    But being responsible behind the wheel is HARD. It’s hard to put down your phone. It’s hard to stop at stop signs. It’s hard to go the speed limit. And it’s socially acceptable to have a high crash rate and high death rate. The coronavirus is not socially acceptable.

    Killing each other with cars has implications. Senator Ron Johnson of Wisconsin tried to use traffic fatalities as an excuse to do nothing about the pandemic. His reasoning was basically, “We don’t try to avoid killing each other with cars, so why should we avoid killing each other with a virus?”

    It’s a sick viewpoint, no doubt. I only ask, “Since we are capable of learning not to kill each other with a virus, why don’t we learn not to kill each other with cars?”

    I know the answer: stopping crashes would be hard for 99% of the driving population. I wish more people saw this as a learning opportunity for preventing preventable deaths. But no one is going to start a charity to avoid traffic fatalities. I could go on a charity bike ride when this all ends to prevent all the diseases in MMM’s top ten killers. There will be no charity rides or contributions to any organization trying to eliminate car fatalities.

    Change in behavior can save lives. But a change in driving behavior – who is gonna go for that? We have all been taught since birth to stay the hell out of the way of the all-important car, and that cars are more important than human life. There are statistics beyond MMMs fatality chart that back up that statement.

    So as encouraging as it is to see the adjustment in behavior from the coronavirus, the most easily preventable large-fatality category will absolutely not be addressed. Try telling someone to slow down and put down the phone and see the reaction you get. Try telling someone you had a car-related death or serious injury in your family and see the response you get. Apathy.

  • Michael James Ryan Allison April 6, 2020, 12:34 pm

    As an aside, I do find it interesting how you curate comments. I don’t think you are afraid of the really silly and irrational type of criticism from the uneducated or uninformed, I see those all over the comment section. This makes sense, Whenever your opponent is a dimwit, it makes you look brilliant right?

    I can see, however, a fear of genuine criticism. I mean you are basically selling a psychology hack, you have to trick yourself to make it “Work”. Like most ideologies/religions it relies on, not reason, but faith. The market takes the place of the messiah in your story, and the guiding philosophy is much more important than the underlying reality.

    An argument that has real teeth might disrupt you (or more importantly your readers) from plugging your ears and whistling past the grave yard. It is the same reason other ideologically possessed people cannot stand to hear truth, it inspires too much cognitive dissonance.

    Optimism is good, blind optimism is not. Or as another fan of free market’s put it “You Can Avoid Reality, But You Cannot Avoid the Consequences of Avoiding Reality”.

    I’ll be following your blog with great interest in the coming months, I want you to show me how strong that faith of yours is! Martyrdom awaits I think, but hey, unlike you, I could be wrong.


    Mike Allison

    • Mr. Money Mustache April 16, 2020, 5:21 pm

      Confession: I read Michaeljamesryan’s long comment aloud to my 14-year-old son in a very slow and dripping-with-evil Disney Villain voice. We both enjoyed it quite a bit.

      MJR, it sounds like you are new here and you probably just dropped by to leave this comment never to return. But if you DO read some of the other articles from these past nine years, you will learn that this not a really an investing or “faith in the stock market” blog. The actual purpose is something quite different, but I won’t ruin the surprise by telling you here.

  • ted halvel April 6, 2020, 1:31 pm

    What about the self-imposed economic slowdown’s creating MORE vulnerable people – the US’ 8 figure unemployed (just March so far), small business owners, gig economy/independent contractors. Entire industries are being decimated (hospitality, travel/transportation, food & bev service, entertainment); others will limp along (‘essential’ retail, non-covid healthcare, manufacturing, real estate, education, construction, performing & visual arts). At least banking, financial services & high-tech seem stable – only 1 tiny WV bank has failed so far.

  • Pamela April 6, 2020, 1:33 pm

    Thank you Pete for being a voice of reason and common sense at this time (and with all things FIRE).

    It shouldn’t be a surprise to anyone that microscopic organisms have been trying to kill human beings since the beginning of time. It’s just that people have become complacent since the invention of penicillin and antibiotics which have made most people’s lives disease free from nasty microbes for a few decades now.

    People need to take a step back and look at the big picture. As of today there are nine deaths per million people in Canada from Covid-19. Yet every year in Canada, there are fifty deaths per million people from car crashes!

    I agree with you Pete, this is a wonderful display that world-wide we can show care and compassion for our fellow human being simply by staying home for a few months. Hopefully, the first world can re-learn the joys of simple pleasures like walking and saving money. The world will be a much better place as a result.

  • Lauren April 6, 2020, 1:54 pm

    I have found the “scariest” thing in this current situation to be the lack of reliable news/facts/info etc. Thank you MMM for always providing a rational logical viewpoint.

  • DLcygnet April 6, 2020, 4:48 pm

    Those are NOT the best case scenario outcomes for the pandemic infection/death toll. And I KNOW you know better than to trust anything that comes out of the white house these days. Where’s that eternally optimistic, data-driven software engineer I know? Please tell that guy to get back here and bring a double dose of badassery with him.

    Check out the data generated by the University of Washington. It gets updated daily as well. In just the last week alone, Washington state’s projected death toll has dropped from nearly 2000 to less than 700. Why? Because most of the governors are doing their jobs, people are listening (read:scared), and some practical measures are being put in place to stop the spread. Yes, in a vacuum, projections are scary, but that’s all they are: projections. We all have the power to help change the infection trajectory, not just our bottom lines.


    • DLcygnet April 7, 2020, 8:04 am

      P.S. I wish your forum had an edit button.

      I agree completely with the financial sentiments. In fact, my husband and I chose March 26th as the day to start funding our 17 month old’s college fund – we figured we had put it off long enough and the discount on stocks was too good an opportunity to pass up.

      Also, after reading more of the comments, I have to laugh at the wide range of feedback you’re getting. There’s no such thing as too optimistic. There are more than enough doomsayers in the world. Please hold on to your niche in this wonderful world!

    • Mr. Money Mustache April 8, 2020, 8:52 pm

      Yes! I have been following that page as well. You are right, US death toll is now looking way less than 200k and maybe even well under 100k.

      It’s important to note that the US (and world) situation for this pandemic has improved a lot in the less-than-a-week since I wrote thus article. I am just as happy as you about it.

  • Ryan April 6, 2020, 7:01 pm

    I found this to be the most well-rounded case for the quarantine and its compassion. I really appreciate that, so thank you. It eases my doubts a little.

    I agree with all the benefits you list at the end! But what are your thoughts on the virus rebounding, and infecting roughly as many, after we lift the quarantine, as if we hadn’t done it at all? Could we be making ourselves weaker, poorer and lonelier before facing the same (or very similar) fate?

    Or repeating this process 3 or 4 times…

    I am writing from Ontario where public life, including exercises spaces, has been closed off, and more businesses are closed than in the States. In Toronto, there is a $1000 to $5000 fine for being within 6 feet of anyone other than a housemate in a public space. It seems to me that this quarantine is not tight enough to work, yet already too tight to tolerate for much longer.

    Maybe we need a more individual, consensual approach, down the road?

    I am trying hard to be realistic, not pessimistic, but maybe I have misjudged. I think your attitude is better than mine! Please keep writing.

    • Mr. Money Mustache April 8, 2020, 8:50 pm

      Hey Ryan, I guess we will see – it all depends on how fully we open back up, and how long it was circulating in the background without our knowledge. And remember we have actual TESTING now! Lack of testing is the main reason we had to practice such ridiculous Medieval Medicine this time around – close everything immdediately even though 99% of people don’t have the virus.

      Also, whoo those Ontario rules sound harsh. In most of the US, a looser form of quarantine has already flattened the curve (as of April 8th), so I don’t think you have to ruin lives in order to still reduce the transmission rate by 75-90%.

      Nothing is worth locking people indoors over – without the outdoors we might as well be dead already.

  • Jess April 6, 2020, 7:19 pm

    Agree with you 100%. I think the virus has shined a light on many things most of us willingly choose to ignore. I think people are starting to be more considerate of the minimum wage “essential” workers. I think people are questioning the new temporary sick time programs and free covid testing and treatment as a convenient remedy for this particular crisis without any promise of a living wage, sick time, or health coverage for an illness that effects the individual employee tomorrow … We see so many of us can’t pay rent if we lose a paycheck, and it’s way past time to get frugal. I honestly hope that this will change so many aspects of American life for the better. The market will rebound. Will we remember that “we’re all in this together”?

  • Rick April 6, 2020, 7:49 pm

    I’ve got a way to go before retirement (these discount stock prices are great though). However by having low living costs, these tough times are very manageable. You don’t have to be financially independent to reap the benefits of not being addicted to luxury.

    Your mindset has really prepared me for the storm!

  • Chip April 6, 2020, 8:23 pm

    Just to avoid further misinformation, “On the human side, we have seen a death toll of thousands of people per day in the US alone” is wrong if you’re referring to actual data.. At most we’re a smidge over a thousand daily, on the day this article was written there was exactly one day over one thousand. Also, “Vox” would probably not be my first choice for epidemiologic information.

  • Ben K April 7, 2020, 2:36 pm

    Pete — careful what you wish for!

    While the federal government puts the value of the average statistical life at around $10 million these days, which suggests that $1 million per live saved would be a bargain, research a few years ago from MIT implies that this varies with age: Highest for prime earning-age adults, lower for children and the very elderly. So $1 million per life saved, when most of those saved lives are old people with existing health conditions, might be nearing the limit for how much we want to sacrifice economic output to save human lives.

    In truth, I suspect that the non-zero number of younger lives saved, plus the material reduction in suffering by those who wouldn’t die of Covid-19, plus the non-trivial reduction in medical costs across the board, makes the current level of social expenditure an unquestioned good deal. But there does come a point when it is no longer a good deal, which kind makes President Trump’s point for him.

  • Paul April 7, 2020, 9:27 pm

    Things haven’t been this bad in the stock market since LATE 2016! On the one hand, a large amount of investment money has disappeared. On the other hand, it’s the gains that have been made since late 2016. Everything you made before that – likely a substantial sum – is still intact and will be made whole again if you wait a bit. No one knows how long but probably within 2-3 years that money will come back around. If the stock market doesn’t recover, there will be bigger problems than our portfolios to worry about.

    MMM would probably roundhouse punch me in the mouth again if he knew how I spent my money prior to this collapse. I’m no no where near FIRE but reading this blog has given me a lot of tools to weather the storm – not sure if I’ll want to go back to my previous way when able to. Thanks and everyone stay safe and healthy!

  • Travelawyer April 7, 2020, 11:11 pm

    Hi people! I just tried to access the forum and it says I’ve been banned for being rude after many warnings. There’s definitely a mistake. I’ve never made a rude post or received a warning. I actually haven’t posted or been on the forums much lately since I’m in that boring accumulation phase and been busy with a move etc. But there’s been times in my life when I’ve lurked in their daily, and I’d hate to lose that! Posting here because I can’t find any other way to contest a ban or ask for help. Hoping someone can help me!

  • No Time to Fish April 8, 2020, 6:33 am

    As far as the status of the markets and investing in general in times like right now (when times are scary), it always helps me to cherry pick some numbers to find an extreme point of view to put things in perspective. It was pretty easy this time. The S&p 500 is currently up 13% over the last 16 months (choosing the Christmas Eve 2018 low). So if one were convinced the economy and markets are to tank based upon what is the current situation, one is certainly free to sell everything now in great shape and lock in those gains and venture back into the market when they are comfortable again. Maybe this is a silly game I play…but it certainly helps me reason away any panic arguments out there.

  • frank April 8, 2020, 6:58 am

    There is no getting around the fact that the current situation is shit. But I think MMM point is we can either see this as an opportunity for growth or we can continue to dwell on how shit it is. Personally I’m trying to see this as an opportunity to break my addiction of eating out and grabbing coffee’s from starbucks etc.

  • Tyler April 8, 2020, 7:16 pm

    “ 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.”

    At the risk of sounding too cynical, I think the reason we entered this voluntarily “halt” was due to the converse: government is scared that too many people dying would cause more economic damage than temporarily halting. Saving lives is just the side-effect.

  • Social Capitalist April 8, 2020, 8:48 pm

    Gosh, I hope you’re right MMM. And I agree there are some great folks out there. But I see something far more nefarious underneath the pandemic. The inherent racism and disenfranchisement of so many Americans that really make economic issues or even a pandemic somewhat pale.

    First thank you to all, so many who are immigrants, on the frontlines fighting for our lives. Second, to see as disease devastate there poor rest and weakest amongst us yet again says so much about real care in this country. But that aside, if it can be, the government response will lead to largest number of deaths in any country and they will be the aforementioned weakest, economically, socially amd physically.

    In the meantime, while the biggest tail in our nations history wags, judges are being installed at a record pace who support voter suppression, polling places in minority and populous neighborhoods are being removed, Mail in voting is denied and ultimately the most important freedom we have, the right to vote, is being turned into (back into?) a privilege.

    It’s interesting that Leftist, elitist rebels founded this country in 1776 and now they, we? are the problem. We are on the verge of Civil War, I say it because I hear it; no matter who wins the next election, though likely it will be the current worst president ever.

    This is an economic forum but economics of freedom is what you preach. We may push through in your manner, I hope so. I fear we may not, racism is too entrenched and folks will destroy each other because your piece of the pie tastes just as good as mine when mine should taste better.

  • James April 9, 2020, 12:56 am

    I am long time reader of your blog and as always you have very sensible approach. I am not sure if you are aware but the projected death rate has been dropped to 60,415 COVID-19 deaths (by The Institute for Health Metrics and Evaluation – IHME) https://covid19.healthdata.org/united-states-of-america.

    Remember that initially the experts were predicting 1 million to 2 million deaths in the US. It was then reduced to 100k to 200k deaths. Now the experts are predicting around 60K deaths. It does seems strange how the number of projected deaths trends down quickly.

    To me it seems that the projected death rate is extremely inaccurate. The current numbers are quite comparable to what we see in tough flu season. I didn’t see the media getting hysterical every flu season so why did get into this complete meltdown.

    I couldn’t see anyone mentioning in the comments what Sweden currently does. Sweden builds a herd immunity by keeping the schools open and letting children develop immunity.

    Here’s what Anders Tegnell, Sweden’s state epidemiologist said:
    “This level of measures that we have in Sweden — there is no problem for us to keep it running for months,” he told Reuters. “Closing schools, more stringent measures like that, closing borders — you cannot do that for months or years ahead. But what we are doing in Sweden we can continue doing for a long time, and I think that’s going to prove to be very important in the long run.”

    You may want to share with your readers an interview with Prof Knut Wittkowski to discuss lockdowns, social-distancing and the best way to handle the spread of a new disease. He worked for 15 years on the Epidemiology of HIV before heading for 20 years the Department of Biostatistics, Epidemiology, and Research Design at The Rockefeller University, New York.

    This is a really eye opening interview where he dismiss all the current steps.
    Here’s what he says in the opening of the interview: ” We are experiencing all sorts of counterproductive consequences of not well-thought-through policy….

    Well, we will see maybe a total of fewer cases—that is possible. However, we will see more cases among the elderly, because we have prevented the school children from creating herd immunity. And so, in the end, we will see more death because the school children don’t die, it’s the elderly people who die, we will see more death because of this social distancing….


    • scott April 9, 2020, 11:56 am

      Ugh. It is very discouraging to see so many people (including long time readers of this blog) who do not understand exponential functions.

      “Remember that initially the experts were predicting 1 million to 2 million deaths in the US. It was then reduced to 100k to 200k deaths. Now the experts are predicting around 60K deaths. It does seems strange how the number of projected deaths trends down quickly.”

      It is not strange at all. With an exponential function, small changes in the inputs (various human behaviors) can have a drastic impact on the outputs of the model. This is why “overreacting” early on in a pandemic is so crucial to flattening the curve.

      James, this how FIRE works! The magic of compound interest!!! Saving and investing a small amount each month creates a massive lifetime worth of wealth. But with FIRE the timeline is 30-60 years. With COVID-19 the timeline is days or weeks.

      “The current numbers are quite comparable to what we see in tough flu season.”

      UGH again. For anyone still comparing this to the common flu, please point to a time when 500+ people died within 24 hours in one U.S. city from the seasonal flu, like we’ve been seeing on consecutive days in NYC with COVID19 deaths.

      This is not comparable to the FUCKING FLU!

      • Cameron April 14, 2020, 3:55 am

        I watched that video… what a strange interview. Who eats during a pandemic interview? Also, his argument seems to be equivalent to “if everyone stuck bananas behind their ears when I told them to, we wouldn’t be in this mess!”. No one did, so his theory can never be proved or disproved. I’m cool with the saving millions of lives option, despite the interruptions to daily life.

  • Gnomad April 10, 2020, 5:44 am

    Great to hear a calm voice of reason amid all the panic. If it weren’t for the advice on this blog, I’d be sitting here today in debt, with no savings or investments, wondering how I was going to pay our bills with the world (and my hair) on fire.

    Thanks to finding this blog and applying the advice within 2 years ago, now I’m sitting on a healthy cash nest egg with no debt, two rental houses and a decent portfolio, just waiting for my investments to recover. I have a hard time believing anyone who speaks badly of the FIRE movement, simply based on my own short experience with it. If this hurdle means it takes longer to get to our destination, so be it. I’m still infinitely grateful to have discovered the movement (and particularly this blog), because it’s SO much easier to weather the storm when your expenses are minimal and you have cash reserves.

    Thank you!!

  • Mat Winner April 10, 2020, 8:56 am

    This ” crisis” is an opportunity to help us humans take some essential distances from the stupid, wasteful collective psychosis that we call our global economy. Get back to basics: a shelter you own, a capacity to feed your family and your community, Simple and sincere human relationships. The rest is BS.

  • Fibonacci5589144 April 10, 2020, 11:45 am

    After reading several of the “assumptions” made within the comments I do not recall anyone address the elephant in the room which is the velocity in the increase of our national debt. I support most of the basic tenants of the FIRE movement and this blog, work (very) hard, save (everything), what I cannot support is the assumption that “Buy VTI” or “VTI and forget it” is NOT reasonable advice based upon the future growth rates. Now, I do not hold a crystal ball and cannot tell you what markets WILL do going forward but I can tell you what they should do, this is based upon a 3o year career in capital markets and from examining the outcome of other countries who had debt levels near ours (Japan). Capital markets under normal conditions compensate investors for risk under normal market conditions where gravity (interest rates) are present. What does this mean? Well, a investor that purchases a basket of 10 securities is taking on more risk than a investor who purchases 500 (VOO) or 3500+ (VTI), thus this investor can expect to be rewarded with a greater return. This is what happens when markets function correctly, when you remove interest rates price discovery is removed from the markets, how so you ask? Well, the basic assumption in any financial model is a risk free rate (r), so if the risk free rate is zero or negative, it becomes difficult to accurately price risk, (30 day/1 year T-Bill rates briefly went negative two-weeks ago), now if we factor in the historic move by the FED price discovery becomes much more difficult.

    Getting back to our basket of securities, many of you have earned/built great wealth in capital markets since the GFC while taking minimal risk, I say this because a basket of 3500+ securities should return 4-6% before tax while the S&P 500 returns 8-11% before tax, last year the S&P 500 returned 30% and VTI returned slightly less than that. Over the past 10 years the VTI has returned 10.18% and the S&P 500 13.56%. Considering this you should understand two things, National Debt acts a gravity force to National GDP, and mean reversion is real. That being said, If you’re holding VTI I would expect you to receive a return of 1-3% over the next ten years, if holding the S&P 500 2-5% both pre-tax. Now, my predictions are just that, take them for what they are worth (that may be less than .02) however if you are basing your future financial well being off receiving 10% for holding a basket of 3500 securities you could be in for a very rude awakening.

    Take care,


  • Bob in Frankfurt April 11, 2020, 2:38 am

    Wow 314 comments people obviously have a lot more ti e on their hands, anyways fantastic article, Prepare for the ultimate gaslighting

    Here’s the money quote

    What the trauma has shown us, though, cannot be unseen. A carless Los Angeles has clear blue skies as pollution has simply stopped. In a quiet New York, you can hear the birds chirp in the middle of Madison Avenue. Coyotes have been spotted on the Golden Gate Bridge. These are the postcard images of what the world might be like if we could find a way to have a less deadly daily effect on the planet.
    What’s not fit for a postcard are the other scenes we have witnessed: a healthcare system that cannot provide basic protective equipment for its front line; small businesses — and very large ones — that do not have enough cash to pay their rent or workers, sending over 16 million people to seek unemployment benefits; a government that has so severely damaged the credibility of our media that 300 million people don’t know who to listen to for basic facts that can save their own lives.


  • Nick Bryant April 11, 2020, 1:21 pm

    I’ve been surrounded by increasingly depressed and doomer type of narratives for the past couple of years and this post really helps me feel better, so thanks.

  • Larry M April 11, 2020, 8:44 pm

    We are seeing the power of the media and government officials to create a panic in our country. When faced with real numbers the good doctors were forced to revise their wild predictions downward. Yet even the smaller numbers we have found the death numbers were fudged as the CDC has been caught advising the medical community that any death with any possible symptoms should be classified as Covid 19. The flu is real but the statistics aren’t.

    Yet the reality is that the market has become erratic and investors have to deal with it. The question remains where we will end. Will fear win out or will cooler heads prevail and allow us to get back to business. To put this in perspective, wd cannot view it as a choice between dollars and deaths as driving people to poverty has a dreadful cost as well… remember the window jumpers in the crash of 29. Yes we have decisions to make and it’s not as easy as the media would want us to believe. Unfortunately I don’t have a crystal ball to predict the psychology of the market.

  • Chris April 12, 2020, 3:26 pm

    A remark / question on this section:

    “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.”

    This is not ‘any recession’. With what the FED is doing right now (with the Unlimited Bond-Buying Plan), banks are encouraged to keep giving loans to companies that should have gone bankrupt long ago. As a result, those weak companies may survive. What is your view on that?

  • Tjo April 12, 2020, 3:38 pm

    I think it’s good that the stimulus package has been bolstered to help the newly unemployed, but I think it’s TOO generous.

    In my little corner of the business world (limited to only see emergency patients), I had to lay off 5 of my 9 employees and the remaining 4 are working at about 40% of their normal hours. My monthly payroll expenses in 2019 was approx $40k. Now, with the drastically reduced payroll and largely bolstered unemployment and stimulus checks, my 9 original employees will get approx $55k on a monthly basis. Not working or working reduced hours has increased their ‘income’ by over 30%. What?

    Can someone explain to me how this makes sense? Why are we paying our unemployed more to not work than when they were working? Why not funnel some of that money to the small businesses that will hopefully one day get back to a semblance of normal and employ these workers once the pandemic goes away?

    At some point very soon it will be a better financial decision to close my business since its losing money every day we aren’t able to work a normal schedule. That ‘extra’ 15k that my employees are receiving above their normal wages would go a long way in helping to keep me afloat.

    Seriously, how does this make any sense?

  • Pascal April 13, 2020, 1:00 am

    This was your best post yet! Thank you!!!

  • Gerard April 13, 2020, 11:00 am

    Love the optimism you spread! Any wise words for those of us who do lose their job / income in these times to come out stronger at the other end?

    I was debating this and came to some ideas:
    – Education (in either current field of expertise or something new)
    – Start a business
    – Enjoying the time off, money permitting
    – Volunteer work

  • Trip Seibold April 13, 2020, 1:39 pm

    Hi Mr. Money Mustache,

    I shared this post to my Facebook page within minutes of having received the email about your new content on April 2nd. I hadn’t even read your post yet. Having read dozens of your prior posts, I had this level of trust in what you have to say and write.

    I finally got around to reading this post today and it certainly didn’t disappoint. Definitely in your top 5 posts of all time!

    How are you and your family doing during this interesting and challenging time of opportunity? Do you have what you need?

    Peace and long life,
    Trip Seibold

  • Deborah Shepard April 14, 2020, 5:00 pm

    Hi MMM, you had asked for predication of when the next recession would be a while back. Did anyone guess correctly?

  • Stacy Mizrahi April 23, 2020, 9:35 am

    You can never lose money if you didn’t have it in the first place! My brother-in-law likes to ask me how much money I have right now in my retirement plans, and I always correct him by relaying the VALUE of the funds currently. It isn’t a bank account! I usually don’t even look unless he asks, and the only reason he asks is that he tries to treat it like a competitive sport. The value only matters to me when I have to draw down, and even when that time comes – I’m not selling it all at once, High or low, the market likely isn’t staying in that spot given our historical knowledge of fluctuation so the total value of my portfolio isn’t something I should spend much thought on.

  • greendave April 27, 2020, 9:57 am

    “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.”

    So far, indications are that a non-trivial proportion of people who recover have lasting lung tissue damage. There are no large studies yet of survivors, but to assume that those who do not die will recover fully seems overly optimistic.

    It is good to keep a level and head and not to panic, but given how quickly things have progressed, perhaps some caution is warranted.


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