Facing our thoughts and feelings
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!
- 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. 🙄
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.
“Optimism is absolutely necessary for financial success.”
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!
- 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.
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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