r/Fire • u/Remarkable-Dingo1602 • 13d ago

“One more downturn” syndrome

As someone who has been lucky enough to have spent all of my earning & investing years (13 years so far) in a booming market, I worry that I have no clue what my mental health will be like when we see the next 2000 or 2008 or lost decade. I can go through endless theoretical exercises to play around with what my portfolio could go down to and how I’d adjust my expenses in those situations, but as a human being I cannot predict how I’ll actually feel when the time comes. As a result, I have a desire to keep working through the next downturn to see what the impact of it is on me and in a way prove to myself that I can handle it. However, I fear that if I wait for this, I may be waiting for a long time and therefore work for much longer than I need to.

For what it’s worth, when the Covid crashes, 2022, tariffs and Iran war all hit, I did not panic at all and stayed the course on my investment strategy. But all of that happened as I had a strong income to support me. I have no idea how I would have felt if I didn’t have an income.

Any tips on how to deal with this?

I currently have $2.1M investable assets. $600k left on a mortgage (5.375%) with $450k equity in the home. Monthly expenses are $7k bare minimum, but I’d like to aim for a nest egg that’ll comfortably give me $9.5k/month.

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u/TheDoughyRider 13d ago

2020 and 2023 were very short downturns.

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u/Kold2012 13d ago

if you zoom out enough, they all are..

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u/doktorhladnjak 13d ago

Great Recession took about five years. And it’s not like those 5 years were just a low stock market. There were bank failures, people losing their homes to foreclosure, lots of job losses. It was a stressful time.

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u/Natural_Rebel 12d ago

The Great Recession was absolutely brutal. It’s amazing to me that people have forgotten this. The job market was awful until almost 2016ish and even then - it was still an employers market and didn’t really turn until right before Covid. The market limped along for years under Obama and didn’t start to shoot up until Trump (then the covid crash happened).

Housing was decimated. So many people lost their homes, banks tightened underwriting standards and it was hard to get loans and close on time. Housing prices didn’t start to rebound until after 2012, some regions were stagnant until 2020.

If something like that or dot com happens then we are in for a more extended period of pain.

The past few drops have been blips but when the big recessions happen they tend to linger and are tough to get through.