April 2020 Best of the Web

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I hope you’re all doing well physically and mentally through this challenging time. Things are pretty surreal here. 

The Best

In a one week stretch in mid-March we learned of the severity of the pandemic and watched the financial chaos along with the rest of you. On top of that, we experienced a 5.7 earthquake in Magna, UT. It shook us here (literally and figuratively), about 50 miles from the epicenter.

Since then I’ve been adapting to becoming a homeschool parent on the fly, increased uncertainty on all fronts for the foreseeable future, and with random aftershocks thrown in for good measure. I’m frequently finding myself anxious, distracted, and unable to be productive. 

Part of my problem is a new routine that includes far too much time on the internet. The one, and maybe only, upside of that is that I found a lot of great material to share this month. 

We start with some timely articles. Our selections address financial planning opportunities unique to this time. We also explore challenges faced by landlords and address the sudden practical challenge of getting groceries.

Articles explore reasons for optimism at the pandemic, economic, and personal levels. That’s balanced with a warning against naive optimism that can be harmful.

In response to last week’s post, many readers shared that they were concerned with the non-financial aspects of retirement. I share a couple of resources that resonated with me on that front.

Finally, in these trying times it’s important to remember that this too shall pass. We need to find light in the darkness. So I wrap up with a couple of fun articles that I hope will leave you with a smile.


Timely Advice

A lot has changed in the world in the past couple of weeks. Peter Mallouk addresses how changes in market conditions and new temporary changes in the law create unique financial planning opportunities. He writes 10 Important Financial Planning Moves to Consider Right Now.

Mike Piper addresses a question on a lot of retirees minds with Social Security in a Down Market: Does it Make More Sense to File Early?

One temporary change is that those who would otherwise be required to take required minimum distributions from retirement accounts won’t have to do so in 2020. Jeff Levine explains the process of Fixing Unwanted RMDs Taken Before the Cares Act Waiver.

A topic I’ve never covered in the past, and may never again, is grocery shopping. But in these unique times, this may be the most important and relevant article this month. Teresa Mears writes How to order groceries online: comparing services.

2020 Landlord Challenges

Our current economic situation makes this a challenging time for real estate investors. Many are waiting to see if renters will be able to pay rents each month as the crisis drags on. On top of this is a political movement of rent strikers, who feel that this is an opportunity for tenants to keep their rent.

Scott Trench, CEO of the real estate investor website Bigger Pockets, shared his thoughts on these challenges in a two part interview: Keep Your Rent: A Real Estate Investor’s Perspective (Part 1) and (Part 2)

Reasons for Optimism

Big ERN shares some signs of economic optimism with COVID-19: Some Empirical Observations and Reasons for Optimism.

The Peter Attia Drive Podcast has been in my rotation of podcasts for the past year. Over the past few months, I’ve been religiously following his efforts to learn and share as much as possible about the pandemic. I found his blog post COVID-19: What’s Wrong with the models? interesting and encouraging. I included this article primarily for direct insights into what we know, and still don’t, about this virus. But, it also has indirect implications for all of us planning for retirement. It illustrates the complexity of modeling complex situations with imperfect data. Small changes in inputs can drastically change outputs.

Many of us were shocked when the price of a barrel of oil went negative. Ben Carlson examines The Collapse of the Energy Sector. The article is fascinating on its own. But it also serves to illustrate a larger lesson. Seeing how far this once mighty sector has fallen from its high in the early 1980s should make anyone looking to make an easy buck buying up the most depressed stocks or sectors (cruise lines, airlines, restaurant chains, etc) take pause before being overly optimistic that they’ll ever fully recover. However, seeing how the overall market has continued to grow and prosper despite the massive decline in the once dominant energy sector gives me optimism. It shows the potential of a simple strategy of investing in the broad markets without trying to pick winners and losers.

Optimism vs. Wishful Thinking

Doug Nordman retired about 18 years ago. He’s been retired through the dot.com bubble bursting and the financial crisis in 2008-2009. Doug is optimistic about coming through this crisis as well. He writes Fear and Despair in the Time of Bear Markets.

Chad Carson is an optimist as well. However, he warns against The Danger of Wishful Thinking During Challenging Times (aka the Stockdale Paradox).

What’s Next (For the World)?

Whether you are optimistic or pessimistic about the future, it would be unreasonable to think that the future is going to look like the past. The next two articles provide interesting insight on where we go from here. 

Morgan Housel asks a question that’s on many of our minds amidst unprecedented government spending, Who Pays For This?

Kevin Sneader and Shubham Singhal write The future is not what it used to be: Thoughts on the shape of the next normal.

What’s Next (For You)?

We ultimately can’t control what is next for the economy and society in general. We can control what is next for us individually. That can be even scarier and harder to deal with.

Ryan Holliday asks and answers the question many of us have to wrestle with after becoming financially independent. He writes How Does It Feel To Get Everything You Ever Wanted?

James Hollis shared experiences from decades of counseling people who have struggled with major life transitions: Journeying From the First to the Second Half of Life.

Fun with FIRE Friends

Last month, at a very dark time I felt the need to end the March collection of articles with something light and funny. I was nervous to hit publish fearing it would miss the mark and come across as insensitive.

Instead, that humorous article was one of the most clicked of the collection. It garnered a few complimentary comments and emails for being exactly what people needed. 

So I’ll try again by sharing some fun stories from blogging friends within the FIRE community who got some major exposure outside of the FIRE, and even personal finance, community.

Jim, who writes at Route to Retire, left his career late in 2018. His family moved to Boquete, Panama last summer. Their story was featured on HGTV’s Househunters International. You can read all about it in Jim’s blog post House Hunters International (Panama) – Jim, Lisa & Faith. Check out their episode if you have a chance. My wife and I had fun watching and debating if Jim is the ultimate stereotypical FIRE person (His two repeated lines were: “How much is it?” and “That’s more than our budget.”) or if there was some creative editing to build a story arc.

Dave, who writes at Accidental FIRE, also likes to dabble in graphic arts. Last month he created a humorous meme titled “Relative Importance In 2020, So Far.” Many of you may have already seen it. It’s been shared on the internet countless times around the globe. Dave describes the experience of having his creation go viral (no attempt to be funny there!) writing It’s Okay To Laugh.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to chris@caniretireyet.com. Financial planning inquiries can be sent to chris@abundowealth.com]

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    1. You obviously don’t need my help to get the word out on that one, but I wanted to share anyway b/c it is such a fun story. Congrats!

  1. “Who Pays For This?” is one of the more interesting and informative articles I’ve read in a while. The historical perspective was something new to me and it’s very helpful. The article overall provides an important perspective on all the spending that’s occurring.

    Thanks for sharing. It’s a keeper.


    1. Thanks for the feedback Ken. I try to gage the topics that readers are interested in based on the # of clicks, but it is helpful to know what people actually like and get value from.

  2. Hi Chris, there’s always a nugget in your monthly round-ups. In Peter Mallouk’s 10 Important Financial Planning Moves to Consider Right Now, the one nugget I found valuable was the college refund and putting it back into the 529 plan rather than facing an issue at the end of the year. So for that, I say thanks!

    Also, sadly, I completely missed the news of the earthquake in Utah. Shows how I’m focused too much on the virus news to realize there’s still other important things going on in the country.

    Stay safe…stay distant!

    1. Thanks for the feedback on the article.

      Re: the earthquake, we’re from PA and honestly put little to no thought into the risk of an earthquake and what to do in the event one happens until our house started shaking that morning. So we tuned into the local news that night and even here it got little coverage as the local stations had a simulcast on COVID scheduled that they went forward with and the earthquake got little national coverage.

      Crazy times we’re living through. Stay safe as well.

  3. Thanks for the excellent monthly roundup, as usual, Chris. I agree with Ken in that “Who Pays for This?” was interesting and informative. That question has remained in the back of my mind since I first heard the word “stimulus” after the economy began shutting down. As for “Keep Your Rent,” Scott Trench made an excellent point that, I believe, goes right over the head of many tenants: A landlord is more willing and more likely to work with good tenants in times of trouble, and more willing and more likely to evict the bad apples once the moratorium on evictions is lifted. We’ve owned a 20 unit property for more than 7 years and have many responsible tenants who haven’t been late on their rent a single time. Would we be willing to cut them some slack during the COVID-19 crisis? You bet. On the other hand, the only tenant who proclaimed (incorrectly) that “we don’t have to pay rent” was the couple who has not paid rent on time all four months of the year and has difficulty following the property rules. Unfortunately, as soon as we’re able to evict them, we will – and it has nothing to do with the pandemic.

    1. Thanks for the feedback Mary. The fear of having bad tenants (and to a lesser extent the current challenge of finding good deals) has kept us on the sidelines with real estate, so I found Scott’s perspective enlightening and encouraging. It is very consistent with John Schaub’s idea that the key to finding good tenants is being a good landlord. Still, as your one bad apple shows, it seems like a numbers game that if you do it long enough you’ll have to deal with these types of people.

      Best of luck with everything.

    1. Thanks Luis. I think the article you share is generally in line with those that I shared which show as data emerges, this disease (while still very bad for vulnerable populations) does not seem to be as bad as we initially anticipated. Still, as explained in the Peter Attia article I shared, there is still a lot we don’t know and so any model will be imperfect at best. So we should be cautious drawing any definitive conclusions yet.

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