How Has Covid-19 Affected Your FIRE Journey? Part 1

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One of the biggest criticisms of FIRE is that it only works during bull markets. Before 2020, we’d been in a bull market for the past decade, so of course when FIRE stories hit the media, the response is a derisive snort followed by the inevitable “wait until there’s a recession, all you FIRE people will be eating dog food and living under a bridge!”

Ok, first of all, everyone knows that cat food is WAY cheaper and WAY more nutritious. Duh. And secondly, I’d much prefer the Chinese medical waste heaps of my childhood over a boring old bridge. Can you find heaps of free elastic bands under a bridge? I don’t think so.

Anyhoo…

So with the covid-19 lockdowns freaking everyone freaking out about the economy, are FIRE devotees screwed?

To find out if FIRE is, in fact, just as resilient in bear markets, I’ve decided to interview people in the FIRE community—those in different parts of their FIRE journey—to see how this pandemic has affected their plans.

First up is Clover from SimplyCloverLiving, a flight attendant who is in the beginning part of her FIRE journey.

Those of you who’ve been following this blog for a while will know that I introduced her in this post:

How to Travel the World Before Becoming FI

As someone who doesn’t earn a 6-figure salary, Clover is an inspiration for those who are interested in FIRE but don’t believe they can do it unless they are an engineer or earn a big fat pay-check.

She also learned how to Math Shit Up, and as a result sold her condo to downsize into a room. I wanted to follow up with her to see how that decision has impacted her and what it’s like for a flight attendant right now during this shutdown.

 

1) At Chautauqua where we met, you mentioned you’d discovered the FIRE movement not long ago. When and how?

I discovered the FIRE movement in January 2018, when I was contemplating on what to do with my condo that I purchased two years prior. I was going to rent it out and go travel the world on my days off from my flight attendant job. After discussing this plan with a friend, she recommended me to check out your blog! Upon mathing shit up, I realized it made more sense to sell it instead of renting it out. I also examined my values and realized I am not the type of person who wants to deal with the headache of being a landlord. That saved me a considerable amount of money, to use towards travelling and increasing my saving rate.

Clover’s condo

 

2) What were your personal finances like before discovering FIRE?

Pretty bad! I didn’t really track anything. I went on A LOT of vacations. (Like 7 times a year a lot). Plus, I’m a huge personal development junkie, so purchasing seminars, courses, etc. wouldn’t even make me think twice! I’d still saved about 15% of my paycheque to invest in robo-advisors, but other than that, I had very little knowledge in anything personal finance related. I owned my condo and lived there alone at the time.

 

3) What do your personal finances look like now?

Before the whole lockdown situation, I’d travelled 5 times a year and still have a 40% saving rate. I am a lot more mindful of how I spend my money. I focus on splurging on experiences that give me the most value, instead of buying materials that don’t ultimately give me long-lasting satisfaction. Plus, I only live in a room and travel with a carry-on backpack, I’ve got no room for stuff!

Looking out over the mountains and rice fields in Bali, Indonesia

 

Serene in Santorini

However, I am currently on hiatus from work, but receive government subsidies. But due to my dramatic drop in expense, with nowhere to go, I still have a 50% saving rate. I’m still investing until I can’t. I’m also completely debt-free. Not even credit card or car loan. I also have one year of emergency funds saved up. This will tide me over to almost January 2022.

The equity from my condo is completely invested into index funds.

 

4) You mentioned that our investment workshop changed the way to see investing and how you invest. Can you tell us a bit about that?

I was very intimidated by personal finance and investing. All these “smart-looking” people throwing out jargon sounded so confusing. Math was pretty much my worst subject. I was going to study Science but ended up doing Kinesiology just to avoid Math! This is how much I shy away from it. After investigating further into your investment workshop, I found it actually quite simple to follow. It is really empowering to take matters in my own hands and not get screwed by banks and advisors. Also understanding your finance as a woman is crucial for peace of mind that you got your own back, no matter what happens.

 

5) How are you coping with the economic shutdown? Has your job been impacted?

I was supposed to be 12 years away from my FI number, but with the current uncertain times, that might be delayed. Like I said previously, I am temporarily on hiatus from work, and I might be potentially laid off. But thank goodness that I discovered FIRE and your blog. Since I have enough emergency funds, I have time to pursue my passion on the side without having to worry about income. Not to say that I’m not stressed about the whole thing. Not having income is still a scary feeling!

I am currently working on my youtube channel called Unconventional Asians.

Since my passion is self-development and vulnerability, it will be based on interviewing Asians who live an unconventional life, to show how they overcome their struggles and openly talk about the taboo topics that we usually shove under the rug. Of course, Kristy and Bryce will also be on the show. By the time you read this article, their interview will be up on the channel, to talk about how to invest during this scary time.

Working on my project really gave me a sense of purpose. That made all the difference. Time also flies by a lot quicker. I’m also picking up a lot of skills along the way.

 

6) What would your personal finances look like now if you had never discovered the FIRE movement?

If I have kept my condo, I better pray that I’d have a good tenant! Otherwise, I’d be living in that condo and be net negative. The payment of the condo alone is the entire amount of the subsidy! Selling it would also be difficult at this time, so I’d be pretty much in trouble!

 

7) What are your FIRE plans going forward?

Since not having an income is still quite uncomfortable for me, I might have to look for a remote job that allows me to pick up more skills in my field of passion. I want a remote job because I still want to travel and live in different parts of the world. I might lose my travel privilege after one year, but it’s time to learn credit card hacking!

Otherwise, I will see how well Unconventional Asians does and hopefully turn it into a business one day.

 

8) Do you have any advice for those who are coping with the economic shutdown?

If you are affected by this economic shutdown, my heart goes out to you. I know it’s a very difficult time to navigate. There are so many unknowns and almost every part of our lives is impacted.

As much as we talked about being productive and learning something new. I want to also acknowledge that things ARE hard and it’s OK to take time to process those emotions.

Strangely enough, the lessons and experiences I have learned since my divorce 6 years ago also prepared me for this, because it’s usually in crisis that we deeply reflect on the inner workings of our lives and adjust accordingly. When we completely overhaul our lives and look back at this time, it MIGHT just as well be a blessing in disguise.

Stay safe out there everyone!

***

Thanks, Clover! It’s incredible that she’s still able to save 50% of the government subsidy even though she’s on job hiatus. Not only that she has a full year of emergency living expenses. Well done. Hopefully all this will blow over soon and she won’t have to worry about a lay off. That’s a tough situation to be in.

If you want to know more about how to cope with financial stress during covid-19, read her perspective here.

Also, if you’re an Unconventional Asian and want to learn about others, who break the mold, subscribe to her channel now. 

Stay tuned for our interview of a FIRE couple who are in the middle of their FIRE journey to see how covid has impacted them.


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37 thoughts on “How Has Covid-19 Affected Your FIRE Journey? Part 1”

  1. Thanks for the perspective. Due to a buy out I am also facing a layoff and its good to know Im not alone. Im also kind of glad my goal of securing a place to live in a state I want to live in didn’t pan out due to the pandemic As the thought of being in that much debt again is really unappealing as a former home owner. Maybe things do work out for the best. Best of luck!

    1. I hear you on the housing issue. I look into real estate occasionally as a way to reach FI, but always seem to come back to not wanting to be in that much debt. It is such a massive commitment of resources and time. The worst part is that your needs and wants will change over time. The house you want now probably won’t fit your needs ten years from now.

      1. “The house you want now probably won’t fit your needs ten years from now.” Yup. That’s why we liked Airbnb. Can rent exact what we need whenever we need it.

    2. Oh no, sorry to hear about the potential upcoming layoff :(. And but at least you didn’t end up in debt again. Hope everything works out for the best.

    1. It’s a typo; it should read “One of the biggest criticisms of FIRE is that it only works during bull markets.”

  2. Hah! All those anti-FIRE people must be crying in their dog food right now!
    Quiet a few people I know who used to be on good salaries and no emergency fund or investments apart from a house have called to moan in the lockdown. It’s taking all my self control not to gloat and say I told u so!!

    1. As tempting as it may be to recite the fable of the ant and the grasshopper to them, I would encourage you to hold your tongue. People are in real pain right now, and what they need is comfort and support, not judgement. Consider that people whose financial lives are currently in freefall are just not ready to hear a lecture about what they should have done to prevent it. When times are good again, or when/if they ask you for advice, that’s when you can bring it up. But lead with compassion.

    2. Hopefully some will take this as an opportunity to re-assess their financial situation. And yes, it’s good to have self control and not tell him “I told you so”, because they likely won’t be ready to hear it anyway.

  3. I think I walked by this lady when she was setting up her camera at YDS back in March (?). I had no idea she was part of the community!

  4. Hey Greg
    Lighten up ok. If I was going to be insensitive I would not be trying to hold my tongue and commenting about my feelings here but blasting them over the phone. Judgement it seems is coming from you at this moment.

    1. There are Canadian government subsidies for employees of eligible businesses affected by the covid shutdown for up to 12 weeks. Since Clover is as flight attendant, she qualifies.

  5. Totally agree with you, Greg. Two thumbs up!!
    We, FIRE people, are not only financially savvy, but also compassionate.
    That’s the way to go.

  6. It’s VERY early days to claim all is well – the fat lady is just tuning up for the main event – hang on to your hats, geo-arbitrage and all – let’s re- examine events in 12-18 months. Not saying fire is dead but don’t get you arm out of joint patting yourself on the back quite yet.

    1. “get my arm out of joint?” Joint eh? Hmmm…I could go for a joint. Excellent suggestion, my good sir/madam.

  7. Good job Clover. Happy to see you put into practice what you learned from the investment workshop from this site. You may still have some time to go before you hit your final FIRE target but I’m sure you’ll get there. You’ve got lots of entrepreneurial spirit. I watched the youtube video you did with Kristy and Bryce and it was well done.

    As for fatlady above talking about how things will be 12-18 months out from now, I always get a good laugh at the pessimism. Buddy, if I thought like that and had a Chicken Little mentality, I wouldn’t currently have $1,147,000. And yes, It’s almost all ETFs. Currently, I’m sitting at -2.47% YTD so this massive downturn that everyone’s talking about hardly impacted my portfolio and the dividends keep rolling in. I had a 60/40 portfolio when things went South and as things hit the bottom and started going back up, I rebalanced to a 72/28 portfolio instead and I came back up faster than if I would have stayed 60/40 on the upswing.

    Lastly, Kristy and Bryce, really love how you’re always positive and you help out those who are willing to help themselves improve their financial situation.

    1. Aww thanks Dave. I’ll let Clover know you like her video. And don’t worry about fatlady, it’s clear by his/her/their comment, they just need to smoke a joint 🙂 We have lots of those in Canada.

  8. I’m 4 and 1/2 years into the saving phase of F.I.R.E. I had just made $400k net worth before the stock market plunge. This weekend, I’m back to $400k. I didn’t change anything about my investment strategy at all. A high savings rate is a powerful investment strategy.

  9. Thanks for starting this interview series, Kristy! This should be a very interesting one.

    As for having the opportunity to meet Clover, I know that her positive attitude and outlook on life will help us to ride such difficult times. Having an emergency fund is already putting her above many other folks that are struggling to pay their mortgage. I also like that Clover is already seeing (& seizing) opportunities in this crisis. Hopefully things will only go up from here.

  10. All financial plan are nothing more than personal theories that requires a financial crisis to make it applicable.

    Globally, every 10 years time frame going forward, a financial crisis will come into reality and test all FIRE plans.

    Embrace the opportunity to twig, modify and refine the plan to work better for you going forward.

    The litmus test for any FIRE plan is the low disruption to the everyday living for at least 1 years to 3 years time frame.

  11. I love the sound of Unconventional Asians. It’s hard to break free of your parents’/society’s expectations and maintain a roof over your head. Looking forward to tuning in for MR and everyone else.

    Congrats on staying on track, Clover, and good luck with everything!

  12. This site saved my a**. I was let go in March but had saved over $125k in RRSPs and $80k in cash saved up over the past four years because of this site. I knew I could get by for a number of years without working so that was great comfort to my mind.

    Funny thing though is that I found a job. Recruitment all virtual. 4 interviews all in a week- and upon hire they sent me a laptop and cell phone to my home. I haven’t physically met my coworkers yet, but we have Teams meetings often. It’s rough out there for a lot of folks, but it can be done.

  13. Nice job with saving. It’s time to tighten the belt. Who knows how long this crisis is going to last. I like her positive attitude. Good luck!

  14. Cool, it’s nice to see I’m not the only cabin crew here. My bet is that we work for the same airline, too.

  15. It sucks to have this downturn impede the process for those of us who are still working towards our FIRE goals. But times like these are the 2nd main reason we pursue FIRE..

    1st reason being to tell a boss to pound sand and begin eating and traveling our way around the world, of course.

    Lots of take away’s and lessons to be learnt from this experience, hope everyone comes out the other end better than before!

  16. Hi all,

    This is a test of adversity in such time. This blog and Clover as well as other blogs such as RB40 etc shows the positive feel and pros on the FIRE journey. Some of the provided tips in the FIRE journey enable one to have the positive headcounts during the journey. I personally benefit from such sharings from these blogs. Kudos to all of you and the postive aura of energy from such sharing

    WTK

  17. Ugh !! I hit my FIRE $ last year, and I was quite literally going to give notice at my job the week that the “shelter in place” order went into effect (I’m in California) !! Needless to say, I hit the “pause” button and am in a holding pattern for a little while.. At a minimum I’m adding another year of living expenses to my cash horde (‘will take a couple more months at job). Mathematically I’m still able to FIRE, but I’m extremely conservative financially and I want to be 1000% confident that quitting my job will be a one-way trip.

    For those of us who were on the verge of FIRE’ing, the C-19 situation might actually be a blessing in disguise in that it’s the ultimate “stress test” for our FIRE investment strategy. If your strategy had a weakness, you’ll know soon enough.

  18. You might want to one day talk to American FIRE folks how they compare against Canadian FIRE folks, especially in the area of health care.

    I do believe Canadians take our public health care system too much for granted. That said you might want to cover dental work (which is not free), etc.

  19. The giant drop is why I don’t invest like most do, instead preferring dividend growth stocks over capital gains. When my portfolio dropped from $192,000 to $129,000 practically over night, I couldn’t have possibly cared less because my dividends barely took a hit. Actually, it seems that the two dividend cuts I had were cancelled out by a few increases, because my expected dividend income has actually INCREASED! Personally, I put very little value on portfolio balance and capital gains, measuring my portfolio’s performance instead by dividend income. That’s just me, and what’s great about investing is that there’s so many ways to do it (dividend growth investing, index investing, etc).

    I’m glad to see that you interviewed Clover, and that she’s doing well. I’ve checked out her blog here and there after I first saw you mention her some few months ago. Beautiful girl that’s traveling the world, blogging, and a FIRE proponent? Not gonna pretend she isn’t stealing my heart.

    …….Don’t judge me.

    Sincerely,
    ARB–Angry Retail Banker

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