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Facing our thoughts and feelings
In a recent post, I analyzed our decision to FIRE in November 2021—and whether it was the worst possible time to retire.
There was plenty to chew on in that post, so I decided not to delve into the topic I’m discussing today: our thoughts and feelings about our finances.
Why our thoughts and feelings are important
When it comes to money, how we think and feel can significantly impact our decisions. These decisions, in turn, could make or break our financial security.
That’s why I feel it’s so important to talk about the touchy-feely side of investing. In today’s post, I’ll share:
- Our thoughts and feelings about the financial challenges we’re facing.
- Soothing counterarguments.
- Our calming mindset.
I hope that by sharing my experience, you’ll take away some helpful ideas. Or, at the very least, know that you’re not alone in feeling as you do!
What’s happened since we retired
In Did We Retire at the Worst Possible Time? I detailed the crazy financial storm my husband M and I retired into. To recap, here’s what we’ve faced since M left his job in November 2021:
- Volatile markets.
- High inflation.
- Rising interest rates.
- Troubling world events.
- A lot of uncertainty.
In short, we’re dealing with not one, not two, but several threats to our financial security—all within six months of retiring. Needless to say, it’s been a rollercoaster of emotions! 🙃
My negative thoughts and feelings
Obviously, M and I would’ve preferred to retire into a bull market. But that’s not the hand we were dealt. Instead, we’re starting retirement in a volatile bear market. It’s not the worst-case scenario, but it’s certainly not great!
So, how does this make me feel? Well, 99% of the time, I’m calm and nonchalant about it. (There are many reasons for this—I’ll share more later in the post.) However, I’m only human, and I do have my moments.
Below are some of the not-so-happy thoughts and feelings I’ve had over the last few months:
“What if it really is different this time?”
I’ve caught myself thinking this a few times—what if it really is different this time? After all, we’re facing a lot of “unprecedented,” “worst-ever,” and “record-breaking” issues right now. With all that’s happening, it seems we’re on the verge of an apocalypse.
“What if this drags on?”
Another scary thought I’ve had is whether this bear market will drag on and on. For example, what if we see an extended period of little to no growth, such as the 1966–1982 sideways market or Japan from 1992 to today? Both those scenarios are frightening and could be very bad news—especially for retirees.
“Why can’t I have that too?”
This unhappy thought comes up when I think of other FIRE bloggers. We all know them—they’re the ones with portfolios that continued to grow even as they made regular withdrawals!
For me, that would’ve been the cherry on top of early retirement. It’s an incredible feat of mathematics and chance—the ultimate FIRE achievement! Who wouldn’t want that? Well, unfortunately for us, the stock market had other plans. 🙄
Well said, Hipster Finance 😕
Soothing counterarguments
I’m a worrier, so I tend to ruminate on negative thoughts. Plus, it doesn’t help that the 24/7 news cycle provides a non-stop feed of negativity and fear-mongering. However, I’ve learned it’s not helpful for me or anyone when I allow myself to sink into despair.
Instead, I’ve learned ways to ward off worrying and unhelpful thoughts. One tactic that’s worked for me is coming up with counterarguments*. These counterarguments help me to see things more rationally by balancing out the negative thoughts.
Below, I’ll share how I’ve done that with my recent worries.
“What if it really is different this time?”—counterargument
When I catch myself in this thinking trap, I remind myself of the adage, “History doesn’t repeat itself, but it often rhymes.”
This means that current events are different from anything that’s ever happened before. (In other words, they’re not “repeats” of history.) But when you step back, there are patterns and similarities (rhymes)—even when it comes to ‘unprecedented’ events.
So that tells me, based on historical patterns, we can expect that good times will eventually return. The recovery won’t be exactly like any other (it won’t “repeat”). But we will return to a new normal—just like we always have. (This is the “rhyme.”)
Whenever I start to fret about “this time being different,” I remember my counterargument. It helps to reassure me that we’ll be okay. And, each time I do this, it gets easier to put the worries aside.
“What if this drags on?”—counterargument
Yes, it’s possible that these troubling times could drag on. But I have faith in humanity’s resourcefulness. I believe we’ll find ways to get ourselves out of the mess we’re in (and any future messes we’ll make).
The solutions won’t be perfect, they will take time, and we will stumble. But I’m realistically optimistic that we’ll find ways to prevent prolonged suffering and stagnation.
I choose to hope for the best (while planning for the worst). In challenging times, these soothing thoughts go a long way in helping me to remain calm and optimistic.
“Why can’t I have that too?”—counterargument
I’m quite sure that I won’t achieve my “cherry on top” goal of an ever-growing portfolio this year. (Or even in the next few years.) But maybe that was a greedy goal to strive for anyway. After all, we not only have enough but more than enough.
My family lives a happy and comfortable life. We truly don’t need more than what we have. Sure, we’d be thrilled if we one day achieve the milestone of investments that continue to grow as we withdraw. But if it never happens, I’m at peace with that too.
M and I don’t need to be gazillionaires to be happy. We just need enough, and we’ve already got that. 👍
*Using counterarguments is a CBT (cognitive behavioural therapy) tactic I learned from my years of healing from postpartum depression. It’s proven to be a helpful skill that’s helped me in many situations.
Mindfulness to the rescue
There are days where even counterarguments don’t help to soothe me. That’s when I know my anxiety is running high. This could be due to not getting enough sleep, having too many things on my mind, or any number of other stressors.
When this happens, I step up my efforts to be mindful by:
- Meditating* more often.
- Noticing when I’m ruminating, then turning my attention to my breath.
- Walking Mika without listening to podcasts or audiobooks (and instead paying attention to the nature that surrounds me).
- Allowing myself to take the day slower and focus on each task at hand (no multitasking).
If you’re feeling overwhelmed by the doom and gloom in the markets, try a mindfulness practice such as meditation or box breathing. When it comes to anxiety, these techniques can be even more effective than trying to talk yourself down.
*I’ve been meditating regularly for over a decade now, so I can mostly do it on the fly, without guidance. However, I still enjoy following guided meditations sometimes. When I do, I use the free Insight Timer app. I’ve tried many meditation apps, and this one is, by far, my favourite. 👍
Our calming mindset
Throughout this recent turmoil, M and I have maintained a high level of confidence in our investments and financial plan. How have we done this?
The soothing counterarguments I’ve shared above help a lot, but there’s more behind my mostly-calm demeanour. A lot of our confidence is due to the practical steps we’ve taken to ensure a successful retirement. (I’ll share more about that in a future post.)
In addition to our planning, we’ve also learned to cultivate a mindset that’s conducive to successful investing. (In fact, I believe that having the right mindset is critical.) Below, I’ll share the thinking and beliefs that help us keep our cool and sleep soundly—even as chaos swirls around us.
We’re optimistic
“Optimism is absolutely necessary for financial success.”
–Ed Rempel
Even in the darkest of times, I remain an optimist. Our world may be facing troubling times, but I still believe in the goodness, ingenuity, and resourcefulness of *most* people.
Without optimism, there’s no light; no hope for brighter days and better times. Optimism keeps us going when the going gets tough—including the journey to financial independence (and beyond).
For those who are having a hard time staying optimistic in these turbulent times, this uplifting video from my favourite financial planner might be helpful:
We have a long-term outlook
If I only look at the last 1–6 months of returns, it indeed looks scary and ugly. But when I zoom out, it’s clear that our current volatility is just short-term turbulence:
In the chart, you can see all the major declines we’ve experienced since the 90s:
- The March 2020 COVID crash.
- The 2008 housing/banking crash.
- The late-90s/early 2000s tech bubble burst.
And yet, look where we’re at now—well above where we were even two years ago. Look back 30 years, and we’re miles above where we were then.
M and I plan to be invested for another 60-ish years, so it’s a near guarantee that we’ll once again reach new highs. Taking a long-term outlook helps keep things in perspective—and keeps short-term worries at bay.
Accumulators, it’s time to celebrate! 🎉
If you’re still in the accumulation phase, dry your tears. Instead, you should be THRILLED—you get to buy stocks on sale!
Now’s your chance to put this oft-repeated investing advice to use: buy low and (in the distant future) sell high. Train yourself to see downturns this way. They’re a very, very good thing for accumulators!
We’ve seen this before
As a 43-year-old Xennial, I’m no spring chicken. I’ve been through more than a few corrections and crashes since I started investing in 1999. My age, experience, and self-education in investing have taught me not to freak out when things get messy.
I know that:
- Volatility is normal and to be expected.
- I’m investing for the long-term; short-term fluctuations do not concern me.
- The markets will come back and reach new highs.
- Market declines generally don’t last more than 18–24 months.
- Staying calm and carrying on is the best course of action.
If you’re feeling shaky during these turbulent times, it may help you to learn more about investing and how the stock market works. (See FI School Lesson 6: Index Investing and Lesson 7: Investing for lists of helpful resources.)
We have faith in the stock market (and people)
We’re confident that the stock market will rebound as it always does. That’s because the companies that make up the stock market are run by people. And people constantly strive to grow and improve their companies—it’s human nature. Therefore, it’s not hard for me to trust that the markets will rebound.
Closing thoughts
We’re living through some unsettling times. Current events seem to be earth-shattering and impossible to overcome. We can’t help but feel anxious, scared, and frustrated.
But we don’t have to let the worries and negative thoughts carry us away. Instead, we can find balance and get back to calm by:
- Thinking of counterarguments.
- Planning ahead.
- Getting help or a second opinion on our finances.
- Setting up contingencies.
- Controlling the things we can control.
- Looking back on history.
- Finding reasons to be optimistic.
- Being optimistic.
As bad as things seem, this too shall pass. While it may feel “different this time,” humans always found ways to pull through and thrive—even after adversity. I have faith that we’ll do it again.
What about you?
In times like these, it can help to share with others. Have you had similar thoughts and feelings? Do you have helpful tips to stay calm? Leave a comment to let me know how you’re handling all this bad news and volatility. 💗
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13 Comments
Mr. Dreamer
June 22, 2022 at 9:56 amAnother awesome post, Chrissy. You described it very well “So that tells me, based on historical patterns, we can expect that good times will eventually return. The recovery won’t be exactly like any other (it won’t “repeat”). But we will return to a new normal—just like we always have. (This is the “rhyme.”)”
Chrissy
June 22, 2022 at 7:26 pmHi Mr. Dreamer—thanks for reading and for taking the time to comment. We can all help each other to stay calm and keep a positive outlook! I hope that, by sharing my experience, others will know there’s someone else out there who’s facing similar challenges.
FOMOTINA
June 22, 2022 at 11:05 am“Why can’t I have that too?”
This unhappy thought comes up when I think of other FIRE bloggers. We all know them—they’re the ones with portfolios that continued to grow even as they made regular withdrawals!
For me, that would’ve been the cherry on top of early retirement. It’s an incredible feat of mathematics and chance—the ultimate FIRE achievement! Who wouldn’t want that? Well, unfortunately for us, the stock market had other plans. 🙄
———
Since you mentioned you’re comfortable financially, it shouldn’t be a big deal. As much as this year has been a bit of a bummer, it’s still ok. Last year, my portfolio was up 21.70% (this is where I fist pump, lol) and currently, it’s at about -11% ytd. What’s important is that you have 2 fantastic options available to you even without being an accumulator. First, you have ongoing incoming dividends that aren’t really impacted by all these market gyrations. And second, even with being an accumulator since retiring, you still have the option of rebalancing. Rebalancing can give you the option of potentially having your portfolio grow, even in a down year. I actually just wrote about that and used 2020 as my case example.
https://www.fomotina.com/balance-and-diversification-part-2/
2022 isn’t over yet so it could still turn out that way. It might not but I’d rather keep optimism on my side.
Chrissy
June 22, 2022 at 7:32 pmHi FOMOTINA—you’re absolutely right, it’s really not a big deal. As mentioned in my post, it’s a greedy goal to strive for anyway! I think it was just my hope to experience that as a way of transitioning from having a regular income to living off of our investments.
You make excellent points about dividends and potential gains from rebalancing. I no longer DIY invest, but when I did, I almost looked forward to a correction so I’d have the opportunity to see where I could optimize things by rebalancing!
Thanks for the encouraging words and for sharing your post—I look forward to reading it. 👍
Teresa
June 22, 2022 at 12:13 pmAgain I have to say how much I admire how much you help me (and probably many, many others) with such great insight & advice on how to handle things as we experience the recent volatility of the markets as well as the situation in Ukraine & all the turmoil in the world. When I get that sinking feeling in the pit of my stomach, I always look at all the options available to me and think how lucky I am while so many have no options to fall back on. I have always been mindful and I appreciate how Chrissy sets it out because it makes it easier to follow and feel less stressed. Thank you again, Chrissy!
Chrissy
June 22, 2022 at 7:38 pmHi Mom—as always, you make me blush, ha ha! I’m happy to hear that my post helped to reinforce the calm mindset you’ve already mastered. You point out something that I forgot to mention in my post, and that’s gratitude. You’re right that we have many options to fall back to. Yet so many people, already squeezed thin, have nowhere else to turn. Thank you for the timely reminder. We must remember all that we have to be grateful for and then pay our good fortune forward however we can.
Marla
June 22, 2022 at 1:05 pmIf you were so confident as to both stop working at this young age with children and in HCOL, then your plan should have been solid such that these market movements should mean nothing to you.
If you need to calm yourself so much, might be better to check on your plan.
You can’t control the market.
Chrissy
June 22, 2022 at 7:50 pmHi Marla—thanks for your comment and for making an excellent point. You’re absolutely right that I can’t control the market. Anyone who believes they can is setting themselves up for a lot of frustration and pain!
I do indeed need to calm myself once in a while. That’s because I have anxiety and it rears its ugly head sometimes. However, as you’ve suggested (and as mentioned in my post) we have solid plans in place that I check in on often. That helps me a lot to stay mostly calm through all this turbulence!
Teresa
June 22, 2022 at 8:11 pmI think Chrissy and I have Ed Rempel to fall back on for reassurance which is a huge help because he has data that goes back 30 years or more and I refer to them when I am anxious. It helps me put things back in perspective.
Chantal Larochelle
July 6, 2022 at 5:20 amThanks for all these greats tips!
I would add something that I have heard on a podcast recently: look at your PRI instead of listening to bad news everyday. PRI is personal ratio of inflation and how you can play around to control your personal ratio of inflation. For example: we try to use our car only on weekends, buy mostly item on sales at the grocery and wait for our favorite item to be on sales the next week (or so). We also cut on buying new clothes ( we have too much anyway…)
So all little things to make a difference on our own ratio of inflation 🙂
All the best
Chrissy
July 9, 2022 at 10:37 pmHi Chantal—sorry for my late reply. Summers are a crazy time for me!
I completely agree with you about looking at your PRI and avoiding bad news. Each of us spends differently, and those differences could result in a PRI that’s very different from average inflation stats.
Your inflation fighting tips are great! For many people, they would be easy and painless to implement. Thanks so much for sharing.
Maria @ Handful of Thoughts
July 14, 2022 at 5:24 amAnother great post Chrissy and one that I’m just getting to now. One thing that helps me is just disconnecting from all the noise. As we are still in the accumulation phase the market doesn’t really matter to us right now. We just keep on investing and letting our money and the markets do their thing.
I also thing there is immense value in not following the 24/7 news cycle. Yes, I like to stay informed. But the fear mongering negative headlines can become too much. Sometimes it’s nice to just live in our bubble of what’s immediately around us. It’s not a long term strategy because I think it’s important to be mindful of others and help when we can. But disconnecting every now and then is a great mental reset.
Chrissy
July 15, 2022 at 1:28 pmHi Maria—you and anyone in the accumulation phase are a great position. I wish we could also continue buying into this dip. I feel like we’re missing out!
I agree about the importance of tuning out the news cycle once in a while (or, really, most of the time). As you’ve mentioned, there is a lot of fear mongering and negative headlines. That might help to bring in viewers and readers, but it’s certainly not helpful for long-term investors who are just trying to stay the course!
I’ve been pleased to see that the vast majority of FI seekers are doing the same as you—just staying calm, mostly ignoring the news, and carrying on.