[Kimmy]

For those who are already FIRE or close what would you do to deal with the declines in market?

I know market ups and downs are expected and it’s scary as hell to me seeing balance dropping by many thousands of $ in a day while not even sure about the next days.

[J.C.]

We retired right ahead of the ’08-’09 Financial Crisis. Our initial portfolio when we retired in Jan ’08 was $1.51M.

We bottomed out at $864K at the end of Feb ’09.

One of the reasons why we were able to weather this downturn is because I had set up a 12 CD ladder of $10k CDs that were maturing quarterly.

That and we took on Workamping jobs (we were full-time RVers) that saved us $400 per month in diesel fuel costs and $600 per month in campground fees.

That and the jobs we took on paid us $8.50 per hour.

So, between the maturing CDs and the lower costs and the hourly pay we were able to weather that downturn without needing to sell any of our equities.

By the end of ’09 our portfolio was back over $1.1M.

Today, 16+ years later, it is north of $1.92M…

[Golden]

Hold several years in cash. Market will do what it normally does. So, basically, nothing.

[Aaron]

Scared is a normal feeling. For most people the net worth at retirement represents the most amount of money that they’ve ever had before.

It’s understandable to have feelings when it drops.

What does the balance look like in your cash account?

That’s the money that you need to live off.

What does your bond balance look like?

That’s the balance that you need to sell to refill your cash if equities are down?

Stocks are 5+ year out money.

5-10% market pullbacks will happen every year.

It’s important that you get comfortable with the idea that they’ll happen.

[Cris]

Don’t look daily. You’re in it for the long haul (decades), not days or months.

[Mary]

You worrying wont fix anything and will only cause you a lot of stress. Have some cash and bonds in your portfolio.

If the market is down spend less, if up spend more.

[Brad]

but yeah, it’s not the world’s greatest feeling to lose four, five or six figures in one day (on paper), but it’s just part of the 50-year process.

The short answer is you do nothing

[Felisa]

I don’t even watch the market anymore. You know your numbers and have enough cash reserves to play the long game.

[Jonathan]

What market dip?
Everything‘s automated so I don’t care. I’ll do the same thing today as I did yesterday and a year ago.

Keep buying.

[Brad]

Stop looking. You should have 1-2 years of cash in the first bucket of FIRE.

So temporary dips are irrelevant.

[Chris]

I pull some money out in chunks when market is up. Then hold in MM until needed.

I try to avoid selling during drops.

I just Roth converted 552 shares of $SMH that processed Monday.

Wish it would have gone through today instead.

So, get to pay taxes on an extra $20K that evaporated this week.

Fun times.

[Mariama]

I try to ignore it. If I notice it when updating NW, I zoom out on my time horizon to multiple months or years.

Zooming out always smooths the ride.

[Lynne]

But you also see days where you see it increase thousands of dollars overnight too right?

It’s ebb and flow.

We’ve just come through a world wide pandemic and the threat of a massive recession.

Probably one of the worst things we’ll experience and we came through.

Just try to relax and appreciate what you’ve accomplished compared to most people.

[Dan]

You can’t look at days. You will go crazy. VTI is up 11% this year and it is only August!

[Nicholas]

Consider market declines as major sales for stocks. In bear markets I keep buying and focus on share count.

Conversely in bull markets I change my approach and I track balances.

[David]

You simply have to ignore it but more so truly believe in the long term of the market and how the math plays out for your SWR.

Because it goes both ways.

Some days you see big gains and must realize that you need to stick your SWR you planned.

[Bobby]

Sequence of return risk is something that should be built into your plan.

If the market tanks in your first 3 – 5 years then live off of some of your cash and bonds to let your stocks recover.

But that should already be built into your plan so, yes, I wouldn’t do anything different.

Just let it ride and enjoy life.

After you’ve been FIRE’d and truly living off your assets for a couple+ years you start to trust the plan.

There’s a definite leap.

We made it about 3 years ago and couldn’t be happier.

[Rick]

If you have an IPS, days like today are a great time to add an adhoc note on your emotions.

It’s great to track these things even if the goal is to do nothing with it.

[Ron]

There exists no investment that both provides good returns and is low risk, in the short term.

Investing in VTI in the long term, based on history, always has provided positive returns.

But you can’t get those great returns without unexpected and short term pain.

Just don’t look at your portfolio regularly.

Don’t follow the financial news.

[Kristin]

Make sure you have a couple of years in HYSA so you aren’t forced to pull anything out when the market is down and throw off your sequence of returns.

Meanwhile, keep on buying.

[Michael]

Ensure you have money split between short/medium/long term, and appropriate asset allocations for each.

[Rob]

I watch percentages rather than the actual number… I FIRE’d 6 years ago (july 31, 2018) at 57.5 with a 10 year plan I pretty much devised on my own to make it to FRA without touching my retirement accounts …

I lived thru the y2k crash, the 2008 crash, but the scariest one was 2022…

I didn’t make any rash moves, but still felt the anxiety of it…

Sometimes you just gotta trust your plan.

[April]

I have specifically been watching the dips (and peaks) for 20 years now to become used to volatility and make sure I can manage my own accounts without doing something desperate and stupid.

I also have my asset allocation where it needs to be so I can sleep at night.

Note- I am still working, but could have FIREd a couple years ago, but I love my job, and now we are upgrading our lifestyle.

If I were LeanFIRE, could not cut down my budget, and could not go back to work, then I would be worried.

[Author]

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