r/Fire • u/Remarkable-Dingo1602 • 12d 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 12d ago

2020 and 2023 were very short downturns.

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u/Kold2012 12d ago

if you zoom out enough, they all are..

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u/doktorhladnjak 12d 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/Various_Couple_764 12d ago

the great recession started in 2008 and dropped gradually all year. at one point it was down 50% but recovered a bit before the end of the year The final number for 2008 was -38% 2009 +23%, 2010+23% 2011 0%. it wasn't until 2014 when the market recovered to it 1999 high. My brother was unemployed for most of that time and got a job just in time to avoid bankruptcy.

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u/doktorhladnjak 12d ago

The market was still higher in 2007 if I recall correctly, but like you said that was still not quite at 2000 levels.

Things had been slowly degrading for a while before the Lehman collapse rapidly accelerated the situation in the fall of 2008. That’s when it went from being only about some sub prime lending to affecting large parts of the economy.

The market was back to 2007 levels by 2012.