No, You Didn’t Just Lose Half Of Your Retirement Savings

So here we are just a month later,  in a full-blown economic panic, and at the start of the most sudden recession ever.

The pandemic has spread much further and faster than most uninformed people (including me) would have ever guessed, and the whole world is on some form of lockdown. Nothing quite like this has ever happened before in the modern world.

What should we do?

On the financial side,  I’ve seen media stories about “The End of FIRE movement”, and a close friend even said to me, “Well, I’ve got to go back to work now because with all my investments down 35%, I’m not financially independent any more.”

And I’ve seen plenty of similar statements out there on the Internet:

Is it time to be worried like this commenter on my last article?

Even worse, some people are trying to time the stock market, selling off their investments at a discount in the hopes of “protecting” them, hoping to subsequently outsmart everyone else and re-buy them at an even lower price just before some future rebound.

On the human side, we have seen a death toll of thousands of people per day in the US alone with best-case forecasts of 200,000 by the time things calm down, which implies several million worldwide.

And so far, we have not been performing like a best-case country so these numbers will probably be higher.

This all sounds terrible, doesn’t it?

It makes sense that many people are fearful and pessimistic. So why is it that I remain as optimistic as ever, with the full expectation that you and I will come through this humbled but also wiser and better than ever?

It’s because I already know how this all ends.

The world will keep rallying and doing its best to slow down contagion. Caring people will keep helping each other. People will stay home and heal, hospitals will expand, nurses and doctors will do their best to save as many lives as possible, and the 80% of us in jobs that allow us to keep working, will keep doing our jobs.

Meanwhile, innovators are still innovating all over the world. People are staying up late working in labs, vaccines are being tested, genes are being sequenced and the current virus will end up beaten and then written up as a very significant chapter in the history books.

But apart from all of this, there is still way more going on out there, which just isn’t making it to the headlines. Engineers and scientists are still inventing things that will drastically improve the future. Solar panels are still streaming out by the trainload and being installed worldwide. Better and better batteries which will eventually displace all fossil fuel use are evolving. The most efficient factories in history are being built. Gene therapies are advancing which will eventually make a mockery of all of our current health conditions. Internet connectivity and education is becoming more widely available and cheaper which is allowing the next generation of brilliant kids to to grow up and learn faster and do more than you or I could have even dreamed. And all this will happen regardless of the course of the current pandemic.

If all that is true, then why is the world so Scary right now?

I get it – never before has something from the daily news come home to affect our daily lives so much. Grocery stores are cleaned out, people are wearing masks, and you probably have friends who are currently unemployed, or sick, or both.

But in this situation, it really helps to understand the big picture of what is actually going on. The world is not ending. The air outside your windows is not a swirling cloud of certain death.

All that has changed is that we are in a self-imposed economic slowdown that has been created purely to save the lives of our most vulnerable people.

Which is one of the most compassionate things our society has ever done. To me, this is a remarkable and wonderful moment and I would not have guessed that such a capitalist country would ever have the balls to do it.

To put it into a visual, we have decided to prevent the following worst-case scenario:

(IMPORTANT NOTE: The timing of these hypothetical deaths is not real medical data, just an illustration of my own personal guess – made with a mouse pointer rather than a spreadsheet. However the US background death rate really is about 2.8M per year per the CDC)

In the worst case, we might lose 1-2% of our people, biased towards the most vulnerable. There is some overlap because this accelerates some other deaths that would have happened this year, and pulls some future deaths into the present, which is why the death rate dips for a while afterwards.

And turn it into this:

With enough prevention, we cut the death rate by twentyfold, to about 0.04-0.06%.
200,000 is still an enormous number, but the existing death rate at least puts it into perspective.

In the worst case, our public officials would all downplay the risk of COVID-19, and we’d keep working and traveling and spreading it freely. We’d maximize our economic activity and let the disease run its course.

From the disease models I have seen so far, about 70% of us would eventually contract it. Half of those would have no symptoms or very mild ones, a smaller (but still huge) number would get sick or very sick, 10% might end up in a very overloaded hospital system, and in total about 1-2% of our population would die from complications – partly depending on how quickly we could put up temporary treatment centers to cycle through 30 million people in only a few years.

It would feel cruel and chaotic, but in reality we would still not be even approaching the conditions that people in the developing world deal with every day. Our world has always been cruel and chaotic in so many ways which affect a much larger number of people – we just happen to be used to them. And one thing that humans are exceptionally good at, is getting used to things.

List of causes of death by rate - Wikipedia

In the more compassionate case which we are currently following, we drastically reduce the amount of contact we have with each other for a few months, which cuts the number of deaths in the US down from 3-6 million, down to perhaps 200,000. In exchange, our economy shrinks by several trillion dollars (it was about 21 trillion in 2019) for a year or more.

Assuming we are preventing 3 million early deaths, this means our society is foregoing about one million dollars of economic activity for each person’s life that we extend and frankly, it makes me happy to know we are capable of that.

So that’s the big picture: we are cautiously and temporarily buckling down and making some sacrifices, in order to help other people.

To me, that is not a cause for panic or fear – it’s a chance to try even harder and be thankful for such a once-in-a-lifetime opportunity.

Meanwhile, some good stuff is happening as a byproduct:

  • We are driving around and polluting far less. The air is drastically cleaner everywhere.
  • People are out walking with their kids far more. The streets of my town are nearly free from cars, and are being enjoyed by (appropriately spaced) bikes and people for the first time.
  • Our expectations are being reset. Someday soon, it will feel like an absolute joy and privilege to walk into a store and see things fully stocked and prosperous again. And imagine the feeling of taking a vacation or attending a big event or a restaurant or a party!
  • People in rich countries may realize that we can afford to be helpful and compassionate after all – while actually increasing our long term wealth and happiness rather than compromising it.
  • And the world is getting a valuable “practice run” at handling a pandemic, with a relatively mild disease rather than something even more serious.

So How Does This Affect my Retirement?

Once you really get the big picture above, you can see that we are going to come through this better in every way.

Just as with any recession, weaker companies will go bankrupt, stronger ones will streamline their operations and get smarter, and the chaos and broken pieces will become the raw materials from which an enormous batch of brand-new companies will form.

Better ways to track and treat disease, more scalable and less bureaucratic hospitals, more options for remote medicine and more support for remote work and virtual offices and virtual learning in general. More home delivery services and fewer big box stores and wasted parking lots, more support for biking and walking, and a million other things that a billion other people will think of.

The end result will be a better, more resilient and richer world than ever. Yes, that will also eventually mean more money in your retirement account, but more importantly it means better and happier living conditions for every living thing on Earth.

While this all sounds like optimistic magic, it’s actually just a byproduct of human nature. We are a lazy and change-averse creature and we become complacent when our fearful and primitive brains think things are “good enough” for survival and reproduction.

So, oddly enough, we often need a good slap upside the head to get off of our collective asses and actually make some improvements. Observe the wisdom of our elders:

  • When the going gets tough, the tough get going.
  • Necessity is the Mother of Invention.
  • What doesn’t kill you, makes you stronger.

As old and repeated as these slogans might be, they stick around because they keep proving to be remarkably true. They are the real-world manifestation of a badassity that is built right into our Human DNA, which is why they are some of my favorite phrases in life.

Are things a bit hard right now?


See you in the inevitable and incredible boom-time that will result.


Other Interesting Things That Might Help You Feel Better:

The Simple Path to Wealth, by my longtime author/blogger friend JL Collins, explains long-term investing in the most simple and calm way imaginable.

Towards Rational Exuberance is a more technical and detailed (but still very fun to read) history of the stock market and how the Federal Reserve bank serves to stabilize our system. Although I read this book over fifteen years ago, it has underpinned my understanding and confidence in long-term investing ever since. I would love it if author Mark Smith would add a few chapters to cover the two most recent market crashes as well!

A Guided Meditation for when the Stock Market is Dropping, is Jim’s witty YouTube reminder of the same thing, which he somehow created long before any of this panic started – how could he possibly have known in advance??

Good News, there’s Another Recession Coming is my own magical forecast of the present moment, made over two years ago.

Why We are Not Really All Doomed, my 2014 take on why the world was (and still is) well positioned for many decades of future prosperity.

How To Retire Forever on a Fixed Chunk of Money gets into the reason why stock market drops like the present one don’t really hurt an early retiree (it’s because the vast majority of your shares will be sold several decades from now, when the present panic is barely a blip on the graph.

And finally, just for fun here’s an example of something that is not written to make you feel better. In recent weeks, I spent several hours writing out some interview answers for an article in the New York Times.

I was truly excited to share the details of why the Principles of Mustachianism are more useful than ever in times like these, and it’s quite the opposite of “The End of FIRE” that the silly and financially naive media have been peddling in recent stories.

I was disappointed in the end result. Most of my answers were cut out, and instead the article is focused on “hardships” that other early retirees are currently working through. And the clickbaity title sets the expectations wrong to begin with:

They All Retired Before They Hit 40. And Then This Happened.

(that link will take you to my Twitter post about it, where an interesting discussion has formed in the comments – what do you think?)

  • Jim Wang April 2, 2020, 1:44 pm

    One of the big reasons why index funds are so important right now, some companies will fail and some companies will succeed, having my money in an index means I don’t have to be right. I just have to be patient… which is really hard, but not complicated. I think going through the Great Recession, which didn’t threaten us medically, helps me keep my wits about me when it comes to investments. Stronger after that, hopefully stronger after this!

    • Mighty Investor April 2, 2020, 3:42 pm

      I agree that the survivors in the index will take up the business slack left by those companies that go under. Owning the whole market through a broad-based index really helps because of this.

  • JPMD April 2, 2020, 1:46 pm

    Here’s more wisdom: Nature ALWAYS bats last. I for one am appreciating this opportunity to slow down and feel gratitude for the wonderful people and privileges I have enjoyed in my lifetime. Lets all remember what’s really important. Consumer culture can go away and never come back for all I care!

  • Mike April 2, 2020, 1:48 pm

    Remember ‘Sell ’em Ben’, Bernard Smith the famous short seller in the 1929 crash. He had it right, it’s all worthless. Sell now quick while you still get out. I can’t believe how the market is holding up. The S&P500 is heading for 1200.

    • Drue April 2, 2020, 2:03 pm

      Yes, the S&P500 is going through a significant price correction right now. But it will come back soon (in terms of years). Thats the nature of the market. It builds, it declines, but then it comes back stronger than before. Those of us who hold out through this economic hard knock will see our wealth build back up better than ever. It will just take some time.

    • Mr. Money Mustache April 2, 2020, 2:41 pm

      What are you even talking about, Mike?

      “Sell ‘Em Ben” was completely WRONG as the stock market has been the biggest wealth creation engine in the history of humankind in the ninety years since he made that incorrect forecast, returning about 341,000%(!) over that time period, assuming dividend reinvestment.

      Similarly, you can make random guesses at the upcoming fluctuations in the stock market. On average, you will be wrong by the rate at which the world’s economy expands in the NEXT century.

      As always, I’m placing my bets on human ingenuity and productivity rather than against it.

      • Mike April 2, 2020, 5:02 pm

        It’s not a random guess. CAPE is now about 24. Average CAPE in normal times is 16x. In a recession it usually goes down to 10x. CAPE earnings are now $106, 106*10 = 1060. I’m being generous with 1200. 6.6m jobless claims in a week, and nobody seems to recognize we are already in a recession. Pay a high price and you will get lower future returns, but sure, you’ll do fine over the next 90 years if you live that long.

        • Drue April 2, 2020, 5:38 pm

          Dude, you’re just wrong. Even accounting for the fact that, yes, we are entering a recession, Pete’s point still remains. Yes, the index is taking a price hit. It will recover, and a lot sooner than 90 years. Heck, back in the 2008 crash, most portfolios were made whole after several years. As long as you stick it out and don’t sell, it will be just fine. It just takes persistence and patience.

        • Rob April 2, 2020, 5:40 pm

          The general trend in CAPE has been steadily upwards since data collection began in the late 1800’s, so the average is not a great way to predict what “normal” conditions are. For example, even in the worst parts of the 2008 financial crisis when the market contracted by nearly 60%, CAPE dipped briefly down to 15 or so before spiking back up to above 20 by 2010. We’ve spent about a year (2009) anywhere near that average of 16 in the last 30 years; and with the exception of the recession in the 80’s we’ve been above it for nearly 60 years.

          This is not a good measure for determining if the stock market is overvalued. If you disagree, feel free to buy puts or short stock now, but it’s very possible that 50 years could pass before we drop below 16, if it ever does again.

          • Mike April 2, 2020, 6:10 pm

            Well this could be true, but the implications of what you are saying is that you expect S&P500 margins to maintain the 10%ish average of the last decade, rather than the longer term 6%ish level. In the short term margins will collapse, and investors will have to guess what level they will recover to. What will they price in? Nobody believed in 2007 that the S&P500 would go to 700, just as nobody believes it will go to 1200 today. It will take time for the market to adjust down to the new reality, and if you are comfortable with a further 50% drop then hold on.

            • Drue April 2, 2020, 6:38 pm

              Again, your wrong. Mustachians figure on a 6-7% annual rate of return, not 10-11% like you are implying. That’s the whole basis of the 4% rule for retirement funds. You need to read up more on FIRE before you just start spouting numbers.

            • Gordo April 2, 2020, 8:14 pm

              He was talking about margins not rate of return on investment. He is right that margins should be cyclical and the near lifetime high valuations we had before the pandemic – also likely to mean revert at some point. It seems reasonable to expect a massive decline in earnings this year, not just the next quarter but the next year.

            • Lex April 10, 2020, 11:21 pm

              Love the enthusiasm Drue, but Mike, despite his pessimism, is referring to margins, not total return (which you are alluding to). Very different concepts in business ownership.

          • Married to a Swabian April 2, 2020, 9:08 pm

            So, here’s a question: with the entire global economy grinding to a halt like it never has before in history, where exactly are the Earnings going to be coming from? The denominator of P/E is going to look pretty tiny in the near term, isn’t it? Of course, things can recover long term. But the concern I have, is that this economy is already built on a foundation made of sand: we have been awash in a sea of liquidity for over 11 years now. How many companies can stay afloat if this pandemic drags out for months yet?

            • Mike April 3, 2020, 2:41 am

              Well, that is precisely why you have to take the ten year average of the earnings, which is $106 at the moment ( the 1 year E is around $160). In 08/09 we had 10 months when the CAPE (PE10, Shiller PE what ever you want to call it) was between 13-16. If the same happens again we would be looking at roughly 1300-1600 on the S&P500. I think this is bigger supply/demand side shock than the subprime crisis (plus it is global), so the valuation could get lower than last time. Any way you slice it the current 2520 does not look sustainable. We are still 50% more expensive than Dec08. Better opportunities will arise, just make sure to have a decent amount in cash to take advantage. For people already on a 50/50 equity/bond split it will be fine. The problem is that many are 80%+ in equities because they thought they were ‘risk tolerant’ and ‘the market always goes up in the long term’.

            • Jason Middleweek April 4, 2020, 10:07 am

              I guess I am choosing to be hopeful. A few things to note:
              – Previous pandemics hardly affected the stock market. Even the Spanish flu didn’t. This one has for sure.
              – there is no capital destruction like you had during the previous 2 world wars. Surely that means that the outcome must be more economically positive.
              – If we can find a way to “hibernate” economies during this self infllicked shutdown then it would be useful if it happens again in. Future. For instance deferring debt payments and making sure that tenants aren’t evicted so they can resume their businesses after.
              – Generally, the virus isn’t killing our workforce like the wars did.
              – Earnings will be terrible for a year or so making P/E ratios a meangless benchmark. However living costs are dropping too and so are rents. Think about all that money that won’t be spent on gambling and fancy overseas holidays and therefore diverted elsewhere.
              – Discretionary spending will take the biggest hit as well as the many companies and workers involved. Very sad and we need to help them mothball in anticipation for the huge party at the end of this., Science willing However many other sectors such as technology and staples will be chugging along regardless.

              It’s good to be optimistic

            • Lex April 10, 2020, 11:28 pm

              Absolutely agree. I don’t know a lot of rich pessimists.

            • Ben April 5, 2020, 10:22 am

              To anyone interested in offering their opinion(s):

              Would you recommend a ‘robo’ investor’s selected investment diversification based on risk tolerance and if so should i be trying to achieve a 60% equity 40% bond mix?

              Or a mix of etf’s like vti (50%), bnd (30%), and veu (20%)?

              Or does anyone advocate an ‘all in one’ balanced low cost mutual fund, ie. Vanguard’s Wellington or more conservative Wesley?

              Appreciate your insights and no disclaimers necessary.

            • Lex April 10, 2020, 11:25 pm

              The vast majority will stay afloat. However, liquidity has certainly fueled gains. When the tide goes out, you’ll see who is wearing their swim trunks and who is not.

        • JeffD April 3, 2020, 4:33 am

          Fair value for the S&P500 right now is around 1800. That said, the market can stay irrational longer than you can stay solvent, so not a good idea to short.

        • Anonymous April 3, 2020, 8:33 am

          A big principle in FIRE is dollar cost averaging. Ordinary investors can’t just time the market as you suggest and be successful with it. If you’re in for the long-term, most people have found success in continuing to invest regardless of current stock markets. It’ll recover, history proves it.

          If the S&P 500 tanks like you think it will, then stocks will be even more on sale than they are now. Unless you’re a very savvy investor that works closely with the market everyday (or have a DeLorean with a flux capacitor), then timing the market is pretty much gambling. For the rest of us, a DCA strategy works better.

          • Bart April 4, 2020, 2:39 am

            Actually, one of the most famous FIRE bloggers (JL Collins) has written a great article about why DCA actually is a form of trying to time the market, and that you’d be better off investing all you have at once: https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/. I was a fan of DCA (or Value Cost Averaging), but this article was pretty convincing for me :)

            • A Different Mike April 4, 2020, 10:11 am

              Most don’t DCA large sums of money in one go. It’s common for people to DCA through bi-weekly or monthly contributions to their accounts based on pay period. Which is why achieving FI through DCA is so popular during your working years. JL Collins is absolutely right with regards to lump sum investing, but access to that much cash is rare for people working a 9-5 towards retirement.

            • TO_Ont April 13, 2020, 7:10 am

              For most people it’s a moot point.

              If you suddenly inherit a large sum of money or something, then sure, it’s better to invest it all at once.

              But if like most people you are payed every two weeks or every month at most, then advising people to do DCA just translates to ‘invest some of every paycheck rather than waiting until the end of the tax year’ which is the best thing to do anyway for multiple different reasons.

      • Andrew April 3, 2020, 8:03 am

        The fun thing about holding your index funds through a correction like this is as follows:

        Before the last big dip in 2008 I bought my first ever index fund, $3000 of Vanguard total stock market at roughly the “top” of the market (happened to coincide with me having the money for a minimum buy-in for the first time in my life). I watched this $3k dip well below $2k, but I knew it was just a short term thing and held on. When the ticker price returned to where I bought it: voila I had closer to $4k because of dividend reinvestment!

      • Patrick April 3, 2020, 1:40 pm

        I’m thinking that with all the trillions being poured into the economy, inflation may be on the horizon, which could mean stocks will skyrocket, while savers cash dwindles in buying power.

        • Mike April 9, 2020, 4:30 pm

          They could skyrocket while going down in real value, yes.

        • Fibonacci April 10, 2020, 12:53 pm

          We are much more likely to see deflation. GDP will deflate, incomes will deflate… guess what follows… capital markets.

        • Lex April 10, 2020, 11:32 pm

          That is a guess, nothing more. The 70s and stagflation were not kind to equity investors. Hence the need to look past a decade.

      • Mister DS April 3, 2020, 2:03 pm

        To each their own.

        I switched my 401k contribution to 100% of my salary to buy while the S&P500 is on sale. The email response to this from HR was pretty funny :)

        Is this the bottom? I don’t know, but it sure doesn’t look like the top. A sale is a sale, and I”m not going to miss it in the hopes of an even bigger sale later! Even if the market does drop to 1200 before it’s inevitable rise, I won’t regret investing now.

        We’ll be living off savings for the next couple months until the 401k is maxed out for the year.

        Best of luck to all, and stay healthy!

        Mr. DS

        • Danny April 4, 2020, 1:35 am

          Please tell us what HR responded. I think it was pretty funny.

          I Didnt know you could add 100% of your salary. You must have a lot in cash savings.

        • Ed April 4, 2020, 12:31 pm

          Sounds like an excellent idea, with one caveat. Does your organization have a 401K match? If so, is it paid out per pay period? Or per year?

          With most organization’s that I’ve worked for over the years, it’s per pay period and roughly 6%. If this 6% is a dollar for dollar match and paid out per pay period, then you would be losing out on free money.

          Personally, I run into an “issue” ( #FirstWorldProblems ) where I receive a bonus in March which is calculated against my 401k. This directly impacts how much I can put into my 401K, and one year cost me 3 months of matching contributions.

          The reason I bring up this personal case study, is that I now calculate my remaining contributions after the bonus to determine what % I need to drop it to in order to maximize matching.

          Some quick math:

          First determine your matching contribution with the following calculation.
          [(Annual Salary) * (Matching %)] / (Yearly Pay Periods) = Matching Contribution

          An example: $60,000 Annual Salary with 6% match paid biweekly.
          [$60,000) * (6%)] / 26 = $138.46

          Now that you know your Matching Contribution (per pay period), multiply it by how many remaining paychecks are left in the year to obtain your remaining matching contributions available. (138.46) * 19 = $2630.74.

          Two-Thousand Six-Hundred Thirty-Dollars and Seventy-Four cents in this example is nothing to sneeze at, when it’s free!

          In order to realize this free money, subtract the “remaining matching contributions available” value ($2,630.74) from the 2020 Maximum contribution (19,500 if you’re under 60) and you obtain the amount you should max out to, prior to resetting your contributions to 6%. ($16,869.26) as of today. Of course reset the values in the calculation based on how long it takes you to reach that sum.

          The larger your salary, the more important this calculation becomes

          Salary | RMCA
          60,000 | 2,630.74
          80,000 | 3,507.78
          100,000 | 4,384.63
          120,000 | 5,261.48
          140,000 | 6,138.33
          160,000 | 7,015.37
          180,000 | 7,892.22
          200,000 | 8,769.26

          I’m sure you’ve already accounted for this Mr DS, and this post was more for everyone else who happens along the concept ;)

          Have a great weekend,

          • fehrevilo April 8, 2020, 6:28 pm

            How does any of this make sense when the $19,500 maximum is the maximum an *individual* can contribute? The maximum employer/employee contribution is $57,000, or $63,500 if catch-up contribution limits apply.

      • Nathan Bisonette January 9, 2021, 8:06 am

        Wow I would just like to say to the original Mike commenting way up there back in April, great prediction on the S&P 500 dropping to 1200. If people had listened to that bad advice they’d have lost thousands or millions depending on much they have invested in the markets. Panicking is always bad advice when it comes to investing. It sound like you’re a very skittish investor. My coworker said it best when he told his best advice was to “filter out the noise.” Meaning quite simply to ignore all the background noise going on that makes the market jump up and jump down on a daily basis and just focus on the long-term market trends. Sure, some may shift to safer investments as they close in on retirement, but I plan to remain somewhat aggressive in my investing strategies. I happily sat there during the pandemic scooping up thousands of dollars of shares of index funds in my 401K at a huge discount. By the time 2020 was over I had more than doubled my money from the base of the downswing and had a nearly 24% return for the year. I’m very proud of that as well. I don’t always expect that and I know full well before I retire there will be some rough years ahead where I likely break even or even lose 10 percent, but even in years where I lose money I will remain steadfast and not deviate from my investing goals and gleefully buy index funds at a discount knowing that by the time I retire they will be worth much more.

    • Mike K April 10, 2020, 5:08 am

      Meanwhile, in the last 5 trading days the S&P is up 11.5%.

    • Mack Winston July 23, 2021, 10:35 am

      Being from the future (precisely July 2021), it turns out that MMM turned out to be absolutely right and Sell ’em Ben’ of 2020 “Sell now quick while you can still get out” was absolutely wrong.

      My index funds have never done better over the last 18 months. The mistake is selling during a dip. That’s when shares are on discount sale.

  • Aaron April 2, 2020, 1:52 pm

    One thing you’ve left out – some portion of that 10% hospitalized will die needlessly in the do-nothing scenario, because there just won’t be a bed, ventilator, or qualified doctor available to care for them. After all, people aren’t being hospitalized because they are doing just fine – they are brought in because there’s a real possibility the disease will kill them without the life-saving technology that is modern medicine.

    None of the projections actually include those numbers, because they are unthinkable (and also very hard to estimate with any degree of accuracy).

    What this shutdown is really about is buying time. If we have better testing, expanded hospital capacity, more ventilators, and better understanding of the virus, we will be much better equipped to handle this going forward.

    • Tara April 2, 2020, 2:55 pm

      Not to mention the collateral losses of people with heart attacks, strokes, cancer, etc. who won’t get treatment because the hospitals and ambulances are all occupied taking care of Covid patients.

      • Gordo April 2, 2020, 8:19 pm

        Flip side – due to the opting to destroy the economy, hundreds of thousands will die from cancer due to lack of health insurance (this happened during the 2008 recession): https://www.telegraph.co.uk/news/2016/05/25/financial-crisis-caused-500000-extra-cancer-death-according-to-l/

        • Chris April 2, 2020, 11:00 pm

          I agree. There is much more to the flipside: mental health issues and suicide rates due to people being unemployed, not able to pay for their house etc., or in many countries early death due to underfunded health care systems when the state can’t afford paying for it after a severe recession.
          Also: The most vulnerable are not the old in the rich countries, but people dying all over the world due to lack of clean water , lack of health care etc. To fix this we would need much less than the $ 1000.000 cost per life saved mentioned above.

        • Andrew April 3, 2020, 8:14 am

          It’s not a simple choice of economy vs. fighting the virus. You can look at the heat-maps of people’s movements before and after their states declared shelter-in-place or social-distancing rules. If people are scared, you cannot force them to go about their days like normal.

          The economic-stimulus-during-an-expansion policies of the last 3 years have certainly contributed to the steepness of this current decline. The system was being tuned for maximum output rather than robustness. My personal opinion is to have your recessions early and often — they should be less severe, and people/businesses will learn coping skills.

          • Hallett April 3, 2020, 3:06 pm

            Andrew, some food for thought for you. Australia had a 40 year streak being recession free. We don’t need recessions at all, just sound fiscal and monetary policy.

            • Ann April 4, 2020, 12:56 am

              And lots of coal to sell to China

            • Jason Middleweek April 4, 2020, 10:14 am

              And a very high net annual migration rate to pump the gross GDP figures…

            • Darryl April 5, 2020, 8:39 am

              Have you seen consumer debt levels in Canada, Australia, the Netherlands, Norway, Denmark, and other countries that managed to avoid the worst of 2008? Off the charts.

              The countries that escaped 2008 relatively unscathed are in a much weaker position today. (Yes, Norway has that huge sovereign wealth fund, but Norwegian households are second-most indebted in the world after Denmark.) Those “solid fiscal and monetary policies” just papered over structural problems and led to massive housing bubbles in the above-mentioned countries, coupled with – in every instance – enormous household debts when measured against incomes. At some point there will be a reckoning. That reckoning may or may not be now.

              Here in Canada it is shocking how much debt everyone is carrying, mostly mortgage debt. It’s like nobody believed that eating tomorrow’s lunch today could have any consequences at all.

            • Locky April 5, 2020, 4:43 pm

              Consumer debt is relative to income though. Average wage in Australia for instance is much higher than US. Makes it easier to service debt.

            • Married to a Swabian April 6, 2020, 5:32 am

              Agreed, Darryl. I’ve been selling capital equipment for the auto industry to companies in Michigan and Ontario for the past seven years. When I’ve been in the Toronto area, and heard stories of 30 somethings flipping houses in the $600k to $800k price range, it makes me certain there is still a huge bubble there. Apparently 2008-2009 never caused much of a correction up there.

            • Darryl April 6, 2020, 7:55 am

              Consumer debt relative to income is precisely what I’m talking about. Consumer debt-to-income ratios in all the countries I mentioned are now higher than they were in the US in 2007.

        • Annamal April 3, 2020, 1:47 pm

          Wouldn’t it be great if your ability to be treated for an illness didn’t rely as heavily on your current job/income?

          I don’t see how the US emerges from this crisis without a ramped up public health system.

          • Betsey April 6, 2020, 11:28 am

            This this this. Americans generally don’t have the ability to pay for the level of medical care that will be needed over the coming months, and premiums are forecast to go up by 40%. If we don’t get some form of universal health care, the economic ramifications (not to mention the ethical ones) will be devastating.

        • James April 4, 2020, 1:01 am

          Fair enough. What is your number of dead that is acceptable to stay out of a recession?

          • Mike K April 10, 2020, 5:25 am

            It’s a bit more than a recession, if your one out of work or loosing your business. I propose that some deaths are acceptable, otherwise why would we allow 38,000 deaths and 4.4M injuries from driving. Or every year 10s of thousands die from the flu, we allow that and don’t shut down the economy to save those people.
            It’s time to get a plan going to get people back to work, while minimizing
            (not eliminating) the spread of Corona 19.

    • Joe April 3, 2020, 1:00 pm

      Also, the economy would crater anyway if 3 million people die. People would be afraid and stop buying stuff. Business would not go on as usual.

    • Susan May 18, 2020, 7:59 am

      Hi Aaron. Fast forward month and a half now, and so far your prediction about deaths due lack of medical resources in our country did not come true. Thankfully!
      In fact, the President sent a 1000 bed mobile hospital to the hardest hit city, NYC (The USNS Comfort). Only 182 patients were treated there! (most likely because they had to justify the expense so they sent some patients there)
      The Governor panicked, and these resources were mis-directed as a result of his panic, when they could have been used by a city with less resources and money than NYC. Panic is not good in crisis. That should be a financial lesson learned for all of us. Stay the course. Stay informed, take precautions, but stop the panic.

  • Dawn from UK April 2, 2020, 2:05 pm

    Common sense in the midst of global chaos.
    It’s what I was feeling deep down. MMM just put it into words.
    Thankyou sir.

  • Whizzo April 2, 2020, 2:14 pm

    These are just perfect words of calmness, wisdom and optimism. Enjoyed the read, as always.
    Stay safe and stay the course all the FIRE people out there!

  • Mihaela April 2, 2020, 2:17 pm

    Most people I know are simply working from home and taking a minor pay cut. They are also spending way less on restaurants, day care, travel and other activities, thus keeping more money. Most are also getting nice checks in the mail courtesy of the CARES Act. What a great opportunity to build savings and invest aggressively while the market is on sale. That’s what we’re doing (Plus scooping up rentals in the next 3 to 6 months).

    • Dan April 2, 2020, 6:17 pm

      Where I live, a huge % of the population is now out of work without “great opportunities to build savings.” They also happen to be the people — bartenders, restaurant owners, musicians, artists, characters — who make this city the most culturally interesting place in the US. While I continue to earn $120k, max out my 401k and live frugally, I can’t help but feel increasingly disgusted by the society we live in. Yes, there are touching acts of compassion, impressive innovation and opportunities for us vultures in the know, but there are far too many losers in the game for any of us to accept. The folly of late-stage capitalism is increasingly clear.

      • Buffalo April 4, 2020, 2:43 pm

        Caronavirus will post Rookie numbers as far as a kill count compared to communism and other authoritarian governments in the 20th century. There is no perfect system besides the natural ones that we cannot comprehend, and nature makes no special effort to preserve the weak.

      • Mihaela April 5, 2020, 12:49 pm

        Many people are indeed struggling. However, the US government is pumping in $2 trillion in aid. In my state, the weekly unemployment check is around $500 depending on the number of dependents, plus an extra $600 from the federal government. We have compassionately put our economy on ice to save the most vulnerable. We’re pumping in massive amounts of money into research to develop a vaccine. Does not sound like an extreme capitalistic response to me. And not investing now is unlikely to make anyone’s life better.

    • Deirdre April 2, 2020, 8:56 pm

      Since we’re lucky enough to have jobs, we’re going to give our checks to charities and people who need the money more than we do..

      • Em April 3, 2020, 5:54 pm

        That’s awesome, Deirdre! Thank you for doing that. I hope that many others will do the same.

      • Debbie M April 4, 2020, 1:21 pm

        I’m selfish. So even though my income is not falling due to the pandemic, I’m keeping half and giving away the other half.

        My expenses aren’t falling, either, because I’m trying to do my part to keep my favorite restaurants in business and I’m giving bigger tips (kind of a hazard pay). And I’m giving more business to the self-employed, such as buying books, art, and face masks.

        Some of my give-away money is going to my mom, who has added expenses due to this. And my current plan for the rest is a local food bank, but I’d rather contribute to prevention and cures rather that treatments (i.e., things that reduce the problem rather just help people get through the problem after it’s too late). For example, is there a way to help start-ups making ventilators? A way to help hospitals buy/rent temp buildings?

      • Andrea April 15, 2020, 1:03 pm

        I feel you there. I’m in one of the best situations I could be in, and feel like I don’t need the money. I’ve not completely decided on where to give it to, since I’ve never really researched that before. But I think I’m going to give at least half to PBS, for being invaluable source of education for me my entire life (I didn’t realize when I was younger how fortunate I was to grow up without cable, so I didn’t have the history channel, all I had was PBS), and since Trump has come into office has been under threat. I know they will someday make a great documentary on the pandemic. It feels good giving some money Trump “signed” back to PBS :]

        • Debbie M April 15, 2020, 5:18 pm

          Great idea! I’m going with the CDC Foundation.

  • Sam April 2, 2020, 2:19 pm

    MMM, I appreciate what you’re trying to do here. I’ve been reading the blog for years and always really enjoyed your perspective. I’m not an engineer, but I really identify with the way you examine data and think about things analytically, provide fresh perspective, and buck a lot of societal/social norms that often go unchallenged. But on this particular topic…I just can’t do it. I can’t leave out the human component of all of this.

    15 months ago I was diagnosed with Hodgkin’s Lymphoma. I’ve been through four treatments, two of which damaged my lungs. I just got done with something called a stem cell transplant. I received high dose chemo that wiped out my white blood cells and my bone marrow. My immune system won’t be normal again for about a year. I try to be rational about it, but frankly I’m fairly terrified of contracting coronavirus. I know there are thousands or millions more of Americans out there like me.

    So yes, most or all of what you’ve said in this post is true. 200,000 deaths are a fairly small blip when put into historical context. But some of those deaths may be FIRE proponents, maybe even readers. They’re also grandparents and parents and aunts and uncles and friends. I don’t know, it know it’s driven by my own personal situation, but I just can’t set aside the human side of this and focus on the cool, rational side of all this.

    • Mr. Money Mustache April 2, 2020, 2:30 pm

      Right, I definitely hear you Sam. I’m not setting those things aside at ALL. Every life is a precious thing and we all have loved ones that we don’t want to lose. And we’ve all lost some already. This is why I am so impressed that the world is willing to go so far to preserve lives even at great cost.

      But when I write articles like this out to the internet, they are not directed to any one person, and they are not just my own opinions about what’s going on in my own life.

      By definition I am writing to a big, random statistical sampling of people in all different situations. On average, they are in the average situation for readers of a US finance/tech blog.

      So each time I have to ask myself, “If you have the privilege of saying one thing to that demographic of people and trying to nudge their behavior, what would you try to get them to do?”

      In this case, it’s to realize that we are going to come though this so they should keep working on improving the world and being nice to each other. The last thing I want anyone to do, ever, is either give up or give in to fear.

      • Sam April 8, 2020, 5:36 pm

        MMM, thanks for taking the time to respond. I understand that you’re in a difficult position, and I of course don’t believe that you’re setting aside the personal side of things. I can also appreciate that it’s very challenging to put death in statistical terms while trying to achieve the right tone.

        Setting all that aside, looking at the other responses to my comment, I think it’s fairly clear that your message and work has attracted a pretty fantastic slice of humanity. Considering how much of a cesspool the rest of the internet can be, that’s quite the accomplishment.

    • Wayne Whitworth April 2, 2020, 2:30 pm

      God bless you Sam. I always enjoy MMM’s articles and I enjoyed this one as well, but I appreciate your perspective as well. Praying for you and hope all will be well with you. https://www.biblegateway.com/passage/?search=Psalm+91&version=NLT

    • wendy April 2, 2020, 4:03 pm

      Hey Sam – I’m hoping that everyone reads your comment and it reminds them to show compassion and patience with each other… and spurs folks to start or continue to help each other.

      Every life is valuable to us as a society (if not to nature) and many folks are in danger from this virus – either directly or due to the cascading impacts (delay of care, food insecurity, domestic violence – the list is long).

      Some folks respond to emotion, some to a ‘punch in the face’, others to logic, some to only direct experience, etc…
      Hopefully for the general MMM audience, this post will reinforce why they should do what they can to flatten the curve, not freak out, think long term, be positive, be productive, and help each other out.

      Hang in there!

    • chc4444 April 4, 2020, 12:38 am

      Sam, I really understand your concern. My husband was diagnosed with Multiple Myeloma last September. We moved up to Seattle in mid-February for his scheduled stem cell transplant. We started through the process but stopped after his cells were harvested when we could see what was happening with the coronavirus. So we’re taking the chance that he will survive this pandemic and can have the transplant in two years when this is over. Now we are back home an hour south of Seattle. He isn’t as vulnerable as he would have been with the full transplant but just the multiple myeloma alone makes him unlikely to survive the virus if he gets it. So we’re in deep quarantine (he never leaves our property) with no one coming onto our property and me scrambling to figure out the best way to obtain some fresh food every couple of weeks. Right now I’m thinking as this gets worse that we may dig into our earthquake kit so that I don’t have to have any contact with anything that might be contaminated- I figure we could get by for 8-10 weeks with the food we now have and the worst of it should be over by then. It’s a lot to worry about when you love someone and are afraid that you might loose them. The bright spot is that stocks are on sale and I’m having fun, with the cash I foolishly pulled out of the market when Trump was elected, picking up some stocks I’ve been yearning to buy for years. Good luck Sam- I’ve watched a lot of videos and I think it is possible to avoid the virus when your life depends on it. Claudia

      • Sam April 8, 2020, 5:41 pm

        Thank you Claudia. That sounds about the same as my life right now. Not leaving the house other than to stretch my legs for very brief periods with an N95 mask on. Best of luck to your husband; I hope you guys are able to get the stem cell transplant soon. I’m very grateful the timing worked out on mine like it did. I would not have wanted to be in the hospital even 2 weeks later.

    • Danny C April 4, 2020, 8:49 am

      Hi Sam,

      I’m an oncology nurse. We will not forget you and are working hard to keep you safe. (Pete, I understood the context of your post and know you meant no harm to any individual)

      Thank you so much for sharing your perspective. Hang in there!


      • Sam April 8, 2020, 5:38 pm

        Every single oncology nurse I’ve had has been amazing. From the other side of the ledger, thanks for all you do!

    • Nancy nurse April 5, 2020, 8:55 am

      Sam, I am so sorry you have the added layer of fear that an immune compromise in this situation brings. Please stay home and be safe, stay out of waiting areas and grocery stores – ask others to run errands for you. Speak up if people get too close or aren’t washing their hands. Drink enough water. Use telemedicine appointments if you can to follow up with doctors. Hopefully by the time this is over your immune system will be strong again. And just to point out – a year, yes, a year is a reasonable timetable for both Sam AND the Corona. There is no sugarcoating this. The care we have resorted to giving in NY is battlefield care. Please everyone stay home, stay healthy, and stay away from the hospital- I wish I could :(

      • NurseFILife April 9, 2020, 2:43 pm

        Nancy, sorry to hear about your situation. I haven’t heard any direct reports from other nurses, but hearing the term battlefield care is certainly not encouraging. Keep yourself safe and healthy. The more sick nurses our country has, the less ability we have to control the situation.

  • Tass April 2, 2020, 2:25 pm

    “Flu” is short for influenza, a family of viruses that is not closely related to the coronavirus that causes COVID-19. This illness is not a flu. The distinction is scientifically important, and it’s also important to push back against claims that the current moment is “no different from the seasonal flu” (though thankfully, those denials are getting quieter).

    • Mr. Money Mustache April 2, 2020, 3:15 pm

      Thanks Tass – I just took your advice and changed it to “virus” to avoid that confusion.

      • Stephanie April 2, 2020, 4:50 pm

        and still you perpetuate the falsehood “purely to save the lives of the most vulnerable people”

        If by “most vulnerable” you refer to deaths among people in their 20’s to 50’s who were perfectly healthy (including people I personally know) then I agree. It is too late for you to save face, but you can try to save your reputation. The medical information on this virus is developing quickly and neither you (nor I) are qualified to interpret it. Swim in your lane and stop perpetuating false information that is likely to cause harm, perhaps great harm, to your readers. Some of them do little independent thinking.

        • Mighty Eyebrows April 2, 2020, 5:24 pm

          Stephanie, you are clearly angry and scared. That is a very normal reaction.

          However, you should really go back and read the article again without assuming what is really being said. There is nothing here that “interprets” medical information. It is a heartfelt comment on the goodness of humans when faced with a crisis.

          • Stephanie April 3, 2020, 5:57 am

            No, I am a rational person who seeks accurate information so I can be informed about the best ways to help myself and others. News articles and commentary that misleads people about the nature of this virus encourages reckless behavior and thus should be corrected. MMM’s original post referred to this as a “mild flu” (inaccurate, and he did edit this original text) but he continues to paint this as a virus that is not-so-harmful to younger people who do not have health problems – a view that was widely held weeks ago but which we know now to be false. Numbers of reported deaths we know to be inaccurately low, as well as number of reported cases, in the US, China, and other countries. MMM created charts based on information which surely will evolve as we learn more, and charts like his create a sense of false accuracy.

            Even worse, in the comments here, he dismisses advice to wash hands, saying this only kills germs. Yes, germs like…COVID-19. Good respiratory hygiene can save lives and is to be encouraged. Time to mask up America.

            • Jon April 3, 2020, 6:09 am

              If you look at the data that NYC put out yesterday, they listed 1397 deaths and only 81 of them were under 45 years old. And of the 1397, only 18 did not have a serious pre-existing condition. Only 5 of the 45 and under detaths did not have a serious pre-existing condition. So yes it is highly skewed to older and vulnerable.

            • Stephanie April 3, 2020, 6:47 am

              Yes, I live in NYC and am looking at these data every day – and we know with certainty that these data are underestimating all aspects of this virus because our EMTs and hospitals are overwhelmed. 911 has multi-hour backlogs for responders to arrive. MMM’s revised text still puts in larger and bolded text that this is about the “most vulnerable” without acknowledging that plenty of younger healthy people are also affected, sometimes gravely. I do need to give credit to Mighty Eyebrows about my feeling some anger — people who perpetuate scientific falsehoods do make me mad.

              And MMM’s comment about the air not being poisonous, well, I invite him to ride in an elevator or subway car in NYC with an unmasked person who coughs or sneezes (of course, we probably don’t know if they have COVID-19 because testing is so hard to get here). Our understanding of the degree to which this virus is airborne is evolving.

            • Jon April 3, 2020, 7:22 am

              Stephanie – It does seem like you’re doing a good job of holding up under the circumstances. And your comments about hand washing and “most vulnerable” make sense. Good luck to you in NYC.

              Your point about masks is good and has many facets. First, in public places like elevators and subways, people touch everything, so certainly it is highly likely transmitted in those locations by physical transfer. For the poisonous air, I appreciate you pointing out that it’s unmasked coughers and sneezers that would be the reason. A mask probably doesn’t stop you from getting it, but it certainly stops someone with it from projecting it everywhere.

            • Dharma Bum April 4, 2020, 11:58 am

              Yes, you can mask up, if it gives you comfort.
              Also, if you are really seriously concerned about your health, you can: eat less, eat healthier, stop drinking too much booze, stop smoking, quit drinking soda, reduce your sugar intake drastically, stop consuming cow’s milk, exercise regularly, cut down on weed, eat more fruits and vegetables, boycott McDonald’s, look both ways before crossing the street, learn self-defense, watch less TV, sit less, go for a brisk walk, take the stairs, ride a bicycle, avoid toxic relationships, pet a dog, and just chill the fuck out. Doing all of the above will go a hell of a lot further to save our lives than sticking a mask on our snouts. The death rate from unhealthy living and poor habits in general is far higher than what the virus causes. Why do people dismiss that and continue living crappy lives while remaining idle and consuming garbage? Walking around in NYC and seeing the junkies, boozers, winos, fat slobs, smokers, and perpetually massive lineups at McDonald’s and Burger King is the real pandemic.

            • GONZO April 4, 2020, 12:39 pm

              Dharma Bum – I loved that response. It is good advise for me to remember as I sit hear munching on cheese flavored popcorn. I’m getting a little tired of dealing with scared humorless people wearing masks.

            • Ron April 9, 2020, 11:26 pm

              Well said. In the end, we’re all part of the solution. Eating well, living a frugal debt-free lifestyle to the extent possible, and sheltering in place for a while is today’s reality.

            • Man Ta April 16, 2020, 6:46 pm

              NYC and other hot spots have 2 other miserable things in common, public transportation and high density living.

              The data about most vulnerable is clear. So the emotional response Stephanie is uncalled for. Sure there are a few young people with no known health issues dying, but as a percentage from overall deaths it is marginal. Some people are simply not cut out for logical reasoning…

            • Buffalo April 4, 2020, 2:57 pm

              I am one of 7 young healthy people I know who have this caronavirus and it hasn’t been bad for any of us. Just a little tired and lost sense of smell. No cough, just kind of a tickle that makes you feel like you have to clear your throat more than normal. It will kill some young healthy people, but then again so will driving to work, airplanes, and the occasional proverbial lightning strike.

              The thing that gets me is that everybody is freaking out about this source of death while nobody seems to really care that over half the population is fat. I would like to see a tally of years of life lost to obesity and related health issues vs unmitigated caronavirus infection in America. Somehow I think obesity would win by an impressive margin, but nobody seems to care about that.

              “Safety is an illusion, being obsessed with safety is an illness.”
              Laurence Gonzales in “Deep Survival

              The real pathology is our society’s inability to deal with death. We hide it away and are now freaking out that it is unavoidably present (like it has been for most of human history)

        • Mark M April 2, 2020, 5:52 pm

          Yeah Stephanie that is a little harsh. I thought MMM was very fair in his assessment of the virus and it mostly attacks vulnerable people you can’t dispute that. In some places I have seen statistics of over 97% of deaths currently had hypertension. I know we are early in analyzing everything about COVID-19, but almost all the statistics point to being over 65 and/or having a preexisting condition as having a much higher chance of death from this. Just like anyone can die of a heart attack, including young people, you would also say older people are much more vulnerable to having one.

        • chuck April 4, 2020, 1:26 pm

          This, 100%.

          And some of the comments here seem to show that people are taking the post very seriously. Eg. “This is the best breakdown of the numbers I’ve seen so far.”

          We should all be wary of people without domain expertise offering quantitative analyses of the pandemic. Consider this recent cautionary tale:


          As it is, certain areas of the country like the Southeast are likely to experience a significant increase in deaths because of COVID-19 skepticism and a refusal to implement CDC guidelines.

  • Bryan April 2, 2020, 2:32 pm

    I told Jocko we didn’t get approved for the mission. “GOOD”. “More time to train and get better.”

    • Dawn April 4, 2020, 10:21 am

      I read that ”GOOD” in Jocko’s voice too!

      • Sean April 7, 2020, 10:32 am

        Mr. Money Mustache now a confirmed Jocko fan. Makes sense! Get after it.

  • Vince April 2, 2020, 2:32 pm

    @sam Agreed. There’s a time to look on the bright side and talk about how things will be better than ever when all this is over.

    That time is not when our deaths are doubling every few days.

    • Lisa April 3, 2020, 10:21 am

      When things look darkest is EXACTLY the time to look on the bright side. That’s exactly what that phrase means – you can’t look on the bright side when things are already sunny. Deaths are doubling every few days – and that means we’re close to the peak and the numbers will start declining soon. Or do you think they will double continually until the human race is wiped out? If you don’t think that will happen, then you recognize things will improve. Focus on that.

      Optimism isn’t the same as being in denial. Optimism is recognizing the facts when your lizard brain wants to focus on emotions like fear or anger or sadness.

    • Mike April 4, 2020, 9:43 am

      What would you like us to do? It seems everyone wants us all to behave as if this is never going to pass and that we’re all doomed for eternity because of this. Why not try to bring some sober but rational perspective, not to diminish the gravity of what is happening, but to help those of us that might be contemplating terrible financial decisions such as moving all your money to bitcoin or gold?

    • chuck April 4, 2020, 12:46 pm

      Agreed. I’m a longtime fan of MMM but this post struck me as embarrassingly out-of-touch. I actually wonder how calm recently-retired-30-year-old-with-a-wife-and-infant MMM would feel in this situation, having to drastically reduce his withdrawals in the face of a global pandemic and massive economic uncertainty. Pretty easy to tell everyone else to relax while sitting atop a multi-million dollar portfolio and passive income in the multiple six figures.

      Many people, especially in hot spots, know someone who has died or become seriously ill from the virus. The “remember, poor lifestyle choices are responsible for poor health” line is especially galling. A 30-year-old former college classmate of mine has COVID-19; she’s currently on a ventilator.

      And this:

      “Are things a bit hard right now?


      Really? I’m all for building a greener, healthier, and more resilient society. I have no doubt that the markets will recover from this disruption within a few years and I have no intention of selling my holdings. Doesn’t mean it’s appropriate to frame the pandemic as a “challenge” that’s going to make those of us it doesn’t kill Even Stronger. Suffering is suffering. Loss is loss.

      It would be awesome if MMM could demonstrate a little more compassion and gratitude. Especially since, as a very wealthy and retired person, he is pretty much as invulnerable in this situation as anyone could possibly be. Meanwhile other people, many of them parents, are getting up every day and reporting to their jobs as doctors and nurses. As vaccine researchers and hospital administrators. As software and network engineers who build critical communication systems. As garbage collectors. As farmers. As business owners attempting to navigate the crisis with compassion for employees while remaining financially solvent. As truck drivers transporting food and other goods hundreds of miles to grocery stores so that MMM can pat himself on the back for riding his bike the next time he needs to pick up some organic salad greens.

      I really, really, really wish MMM had used his considerable platform to urge his readers to follow CDC recommendations. This is a national emergency. We have an ethical obligation to socially distance. Anyone who doesn’t is (1) risking spreading the virus to someone vulnerable and (2) negating the sacrifices of all the people who are enduring furloughs and pay cuts and layoffs and bankruptcies. This very simple message is having a hard time cutting through all the noise.

      • ianforreal April 6, 2020, 1:28 pm

        This website has many recurring themes, two of which are compassion and grattitude. Just because in this moment he’s not saying what you want to hear the way you want to hear it doesn’t mean he is lacking these qualities.

      • Edward April 8, 2020, 11:37 am

        I agree with this. (I think CDC was stupid for not recommending masks and not implementing travel bans sooner though.)
        My Facebook is littered with lots of “on the bright side of a whole bunch of people getting sick and/or dying, at least….”, type of messages. Yikes! Bloody yikes!
        As you outlined, it’s very fine and dandy for white collar salaried professionals and academics to stay home and pretend it’s a holiday but a totally different situation for many, many people.
        And God, while I don’t like “compassion contests” think of humanity–all the people scared to have to go to the hospital for regular treatments, all the people who already have anxiety disorders, the guy who just now opened his own little business and sunk his saving in, the couple who has to go to the hospital because the wife just went into labour, the grandparents who won’t be able to fly to see the baby, the Olympians who trained ruthlessly for a decade, the girl who’d been looking forward to her first dance competition in another town, the retired senior at home who just wants a beer and hasn’t been able to get one delivered, the kids with cancelled birthday parties, the small town festivals gone…. This is all just goddamn tragic. There’s not really any two ways about it. And this, coming from me, a guy who shoots himself with the optimism gun every single day. Yeah, the markets will make a comeback. GOOD.

  • S3 April 2, 2020, 2:34 pm

    I really like the Jocko style, “GOOD.” there at the end.

    We will adapt and overcome no doubt as we always do. It won’t be easy but humanity will surely come out better off for many reasons stated above.

  • Colin April 2, 2020, 2:41 pm

    Thanks for recognizing that you underestimated the impact this would have. A whole lot of us did and we can only get better by recognizing our mistakes and incorporating into how we think about this in the future. Has this changed your thinking on anything? For me, it’s made me realize that I need to give more attention to the people in the EA community that focus on X Risks, even though Global Poverty work is more personally interesting to me.

  • Matthew T Guidry April 2, 2020, 2:48 pm

    I am not sure if your worst-case scenario is correct. If the disease is unchecked (we do nothing) the death rate could rise about the ~1-2% range. This comes from lack of medical system capacity. And we’d likely see a much higher incidence and death rate among medical staff specifically since they would be on the front lines, and PPE reserves would be depleted. There are examples in Italy of towns which have seen large (4x) spikes in all-cause fatality rate although the Coronavirus fatality rate could not be established due to lack of testing. I think we will not know confidently what the true risk is of an unchecked spread is until much later when more much data is available and more model analysis can be conducted.

    Also, an unchecked Coronavirus will kill many young and healthy people, not just the elderly and young people who are e.g. immunocompromised. I think this would have a significant emotional impact on society which your model does not account for. The impact on productivity could also be severe simply if more people get infected at once because critical business may not even be able to keep running while too many people are sick, and a very sick person cannot work from home.

    Just as a one-off example in my California County which has not seen a substantial breakout (thankfully) 20% of positive tested cases are in the ICU. And our local ICU’s are already 20% filled just with Coronavirus patients, plus whoever else is hospitalized for other reasons. If the stay at home order had been delayed by 10-15 days we can expect that the local ICU’s would be full, we’d need to be turning other spaces into alternative ICUs, and we’d be stretched heavily, if not already beyond capacity, for medical personnel, PPE, and ventilators. I think that our County will be fine, but if we did not stay at home I’m not sure this would be true. Look to places like New York and Italy to what happens merely if a group of people react too late – and it would be even worse than that if people continued with business as usual throughout the entire outbreak!

    • Paul April 3, 2020, 5:44 am

      We could also question whether the 70% may be closer to 40% who ultimately contract it, or that more than half have mild/no symptoms, which is currently the case, and is likely to grow as a share with broader testing capturing even more of the mild/no symptom population. I think the idea is that this is a serious disease, we should be reasonably impressed with the sacrifices people are making, mostly on a voluntary basis, but it is not something which is threatening the species or long-term prospects of our society. Yes, some people who are under 40 and healthy will ultimately succumb, but it will be a fraction of a fraction of a percentage of those people. Take Polio, which had a horrific mortality rate with high contagion and disproportionately killed children (pre-vaccine)- families still let their children play together and went to community swimming pools. Even in the face of risk, we can focus on maximal happiness in the times we are alive… and we can be happy for a while boarded up in our homes to protect our and others’ loved ones… and happier and wealthier still a decade hence.

    • James Bowen April 3, 2020, 3:37 pm

      Nearly everyone, young or old, who dies of coronavirus has a preexisting condition. Of the 1000+ deaths in NYC so far, less than 20 had no serious preexisting conditions. So, yes, it does kill young people, and it does kill healthy people, but healthy and young people have a near-zero mortality rate from this illness.

  • Mark April 2, 2020, 2:52 pm

    Thank you MMM for the perspective and positivity. Given all of the talk about emergency funds, I know in the past you were of the belief that they aren’t really necessary when you can always sell shares or use a HELOC. Has this event changed your opinion on emergency funds? What in your opinion is the optimal emergency fund? I’ve typically been aggressive with investing, and have just been thinking this over. Thanks again for the insight!

    • jimbo April 3, 2020, 12:02 pm

      I myself take the Nassim Taleb viewpoint that chasing the last bits of efficiency leads to lack of robustness (this is what is going to bite a lot of the companies that listened to MBA types who told them it made economic sense to spend all of their free cash (plus a lot of debt) on stock buybacks over the past decade) I must admit I was looking at the 50K+ I had in t-bills last year and wondering if I should “put it to work” Now I am glad I have it…

      • Mark April 3, 2020, 7:29 pm

        Definitely makes sense

  • Tara April 2, 2020, 3:01 pm

    I am nervous about possibly contracting the virus and becoming severely ill or dying, but one thing I am not worried about is my portfolio. I structured it in such a way that I have enough funds in non-equity instruments so that I don’t have to sell my stocks when they are low and have funds available to buy more while they are on sale.

  • Roger April 2, 2020, 3:12 pm

    Great analysis!

    I rebalance my portfolio once per year which I did a few days ago. As a result, I purchased about $250K more in stocks.

    I always rebalance my portfolio, even when it is a uncomfortable (selling when the market is high and buying when the market is low). I did the same thing back in the 2008 Financial Crisis and the following gains are what allowed me to retire early over 8 years ago.

    I try to always remember Warren Buffet quote: “Be Fearful when others are greedy and greedy when others are fearful.”

    • Saad April 2, 2020, 8:07 pm

      What’s your portfolio asset allocation? What percentage is in bonds and what percentage is in stocks?

      • Roger April 3, 2020, 6:37 am

        44% stocks, 44% bonds, CDs, and cash, 12% REIT

        Everything except CDs and cash are Vanguard funds.

        My stock allocation is divided among domestic and international with a value and size tilt.

        My bonds include Short-Term TIPS, Total Bond, and International Bonds.

        • Roader April 3, 2020, 7:46 am

          Roger, that’s very similar to my allocation, with a tilt towards small caps and low price-to-book ratio. The past few weeks has been an excellent time to rebalance. Fama & French recently updated their research in the paper: ‘The Value Premium’, available free online.

  • Robert Lovell April 2, 2020, 3:40 pm

    In addition to your quotes I’ll add one from my father: “If you can do something about it, do it. If not, don’t worry about it.”

    What we CAN do is wash our hands or use hand sanitizer frequently; be aware of where our hands are, DON’T TOUCH OUR FACE and maintain social distancing.

    Worry won’t help the situation. It may increase your stress level and weaken your immune system.

    I’ll be taking long walks, working out at home and riding my bike, spending more time cooking and enjoying more time with my wife.

    • Mr. Money Mustache April 2, 2020, 4:11 pm

      Yeah Robert!

      And I especially agree with your last paragraph – far too much of the health advice out there is about washing our hands, which does nothing for your health aside from killing germs.

      Much more important statistically is improving your overall health, which (as I always say) means bikes, barbells and salad every day. It will protect you from the Coronavirus by boosting your immune system, but also eliminate the much larger risks of heart disease, stroke, diabetes, hypertension, stress… basically all of our biggest problems.

      If you are lucky enough to be home from work and yet still healthy, that’s several hours per day that you can now devote to improving your health, taking care of the house, creating a garden, learning new things, reading books – an amazing opportunity to practice some of the benefits of early retirement in advance.

      • Katie Camel April 2, 2020, 7:11 pm


        I love this post, but please do NOT spread misinformation regarding the importance of hand washing. While I agree that hand washing will not provide the same overall benefits of eating a primarily whole foods-based diet or negate the effects of a sedentary lifestyle, washing one’s hands is the easiest, most surefire way to help stop the spread of this otherwise potentially deadly disease, ESPECIALLY for someone who’s immunocompromised and/or has multiple comorbidities, i.e., hypertension, diabetes, coronary artery disease, COPD, etc. Given how extraordinarily difficult it is to change the overall American lifestyle that has created all the issues we health care workers treat day in and day out, hand washing is about the easiest task we can assign to people to help improve their health, especially now. It is possibly our single best way to minimize transmission at this point.

        We’re not going to cure diabetes or hypertension overnight. Nor will we cure coronavirus overnight. But getting people to wash their hands will do a heckuva lot more for the general population at this point than will eating a salad. And I say all of this as a nurse, who works in a major academic hospital and walks the walk. I don’t ask anything of my patients that I don’t already do – I eat at least 5-9 servings per day of fruits and veggies, plenty of whole grains, some meat, mostly extra dark chocolate, very limited soda, very rare fast food consumption, and nearly always home cooked meals. I walk everywhere, run, do weights, yoga, pilates, and hike. And even I’m terrified of coronavirus at this point because some of my HEALTHY, young colleagues are intubated in my hospital’s ICU. Surprisingly, some of the less healthy ones have milder cases and are convalescing at home. Go figure.

        I’ve certainly amped up my workouts and made my meals even healthier (if that were possible) to ensure my immune system is as strong as possible, but there are no guarantees. Consistent hand washing and never sharing pens has consistently saved me from colds and flus. Never underestimate the power of reducing germ exposure through these simple techniques.

        Perhaps I’m misinterpreting your comment, but I don’t believe I am. While I agree that lifestyle fully dictates one’s overall health, this isn’t the time to downplay the effects of the importance of hand washing. The stakes are too high here to be dismissive at this time.

        Anyway, stay safe and thanks for another great post! I agree that we still have a fundamentally strong economy and that we will rebound sooner or later. I’m still buying, buying, buying, even though I have no plans to retire yet. I enjoy my work. And my patients are a gift. :)

        Stay safe, all!

        • Lex April 11, 2020, 12:37 am

          I agree with both Pete and Katie. Be optimistic, live a healthy lifestyle that includes bikes, barbells, and salads, but do not underestimate this virus. She is someone on the front lines who sees even young colleagues getting seriously ill, and I can appreciate her perspective. A heartfelt thank you to Katie and all others in the healthcare battlefield at this time. And thank you to Pete for the optimistic attitude and reminder that even greater risks exist long term for a sedentary lifestyle.

      • Clare Rockenhaus April 3, 2020, 7:06 am

        I love the optimism in your post. But please do not downplay the importance of hand washing in improving health. All the bikes, barbells, and salads will not change anything if you forgo hand washing and infect yourself or someone else with a disease (and I’m not just talking Covid19 here). I have worked in a clinical microbiology lab for over 25 years and I see the results of not washing hands every day. Wound infections, gastrointestinal illnesses, respiratory infections…the list goes on. The only upside is job security for me.

        • Jane April 3, 2020, 2:07 pm

          I’m confused. Where did Pete say to stop washing hands? Where did he say that it doesn’t kill the virus?

          Oh right, he didn’t say either. He’s saying to go beyond that. The absolute vast majority of us will not die with SARS-CoV2, but instead go on living as the most metabolically unhealthy people that continue to overuse the healthcare system. He’s resisting the complacency of washing your hands, patting yourself on the back, and then sitting on your bum all day at home.

          I’ve treated multiple patients with COVID, and I will say that even the “young healthy” patients were largely not healthy. Like most Americans, they showed signs (even in their 30s) of significant metabolic disease. The patients I treated will survive and live normal lives, likely going on diabetes and blood pressure medications by the time they reach 40. There is absolutely nothing wrong with saying that we need to do more than just wash our hands.

          • Ms Blaise April 4, 2020, 1:31 am

            Great points, Jane. Thank you.

      • dfcaruthers April 4, 2020, 8:23 am


        Hi all, there really seems to be a deep denial that this pandemic may alter some fundamental assumptions about how we live our lives. This is not just a question of the stock market and death toll and working out in your spare time. From where I sit, it appears an increasing toll will be taken on truth and equality (battered as they are!).

        The graphs MMM made are not information, they are just pictures he made up. Should be noted accordingly.

    • MikeW April 2, 2020, 5:01 pm

      Robert, your father must have known my father, a military man here in the UK: he often told me the same phrase!

      Thanks to MMM: this is a great reasoned piece, at a time when the news (certainly ours in the UK) is so often looking for the bad stories rather than the good.
      Every death is painful, and this awful virus, as you say, will accelerate those for some time….but the actions of most Countries to reduce that initial load on our health services is giving many of us time to reflect & spend time with loved ones, and the planet a time to heal. This is not a time to be worrying excessively about the fall in savings: they will rebound….it’s a chance to remember that money isn’t everything.

      We had a second week here where people stepped outside at 8pm to applaud our NHS and carers, which was wonderful to hear and join in with.

      Thanks again for the sane words, & take care all…..now please wash your hands!

    • Rum Tum Tugger April 2, 2020, 9:47 pm

      Another way to put it: If worrying will solve your problems, then worry like hell. Otherwise focus on what you can control 😉

  • Bastiat April 2, 2020, 3:44 pm

    The problem with your analysis is that you are forgetting the economic misery that this depression will impose on billions of people, the suicides caused by financial hardship and the death of children from malnutrition and other disease in developing countries due to lack of resources. You are not trading money for lives as you put it. You are trading lives for other lives. Those deaths won’t be shown on news channels but they are no less real.

    • Mr. Money Mustache April 2, 2020, 4:04 pm

      Yes, that part is true as well Bastiat – in most of the world, increased wealth correlates almost perfectly with increased health so if we make people poorer, we cost them a lot of life.

      That makes the present situation even trickier to navigate – we are trying to thread a very imprecise needle in hopes of maximizing overall wellbeing (deaths versus money), and I am sure there will be plenty of mistakes made – as with any human endeavor. We’ll see how it goes.

    • full of pikachus April 2, 2020, 8:12 pm

      On the flipside, one has to consider the *economic* impact of letting 3 million people die while hospitals and morgues overflow. I like MMM’s post here, but he makes the same simplifying assumption that many outlets have made: we have a choice between 200,000 dead and a horrible recession, or an economy that somehow keeps spinning along perfectly with three million dead. It seems plausible that we’d wind up with an economic depression anyway and three million dead.

  • Ann April 2, 2020, 3:52 pm

    Mostly this was an uncomfortable read. It SEEMED like you were discounting the human toll. But by continuing through I think the summary is – the world has taken an optional, temporary, not-so-huge financial hit to save vulnerable people’s lives, there is great potential for good things to come out of this. Yes there is suffering (financial and emotional), and yes it has not been equally distributed but here we rely on our elected officials to at least attempt to equalize things. I do not envy them.

    • Dharma Bum April 4, 2020, 9:11 pm

      Once this is all over, we can have a nice public hanging of our useless respective elected officials. I’ll start constructing the gallows.

      • Lex April 11, 2020, 12:44 am

        That’s a bit harsh. If you were put in their shoes, I’m sure many would question your own executive decisions. We’re all excellent Monday morning QBs (and we’re not even close to Monday yet).

  • Al April 2, 2020, 3:54 pm

    Can we see the uncut version of your NYT interview?

    • Mr. Money Mustache April 2, 2020, 4:01 pm

      Yeah, maybe I will publish the full email question-and-answer session here as an in-betweener article or something.

      It could be interesting to show how much can get left out in the conventional media, due to a variety of stuff I don’t really agree with: space constraints, a possible profit motive from the paper (from deliberately trying to flare up emotions), and the super lame practice of journalists having their work butchered up by a separate editor who often slaps an entirely different headline onto something.

      To me, writing is just another art form, and just as we don’t bring sharpies and spraypaint to an art gallery to make “corrections” to the exhibiting artist’s work, we also don’t fuck with people’s interview answers by quoting them selectively or rearranging the flow of the conversation.

      • Jen G April 2, 2020, 4:47 pm

        I had a good laugh at this! We got ourselves FI (I think we’re still FI? I haven’t checked our portfolio for a couple of weeks) mainly through your advice AND my husband’s job as a newspaper editor….for many years at the New York Times. So, thank you, MMM ?!?!

        • Ms Blaise April 4, 2020, 1:36 am

          Love the NYT, Jen. I subscribe online from here in New Zealand to that and the Washington Post, as well as the Guardian and my local newsstreams. Big thumbs up to your husband.

      • Reb April 10, 2020, 12:45 pm

        MMM, I hope you do publish the Q&A!
        It seems that various publications look to promote the emotional angle too much and the positive information is lost– thus discrediting the person quoted. You have years of verifiable as well as anecdotal evidence you have continuously published here. Not to mention others who have achieved FIRE.
        I am glad you still maintain your positive and encouraging attitude.

  • Echaffer April 2, 2020, 4:06 pm

    The other thing that needs to be factored in, is that during worst case scenario, there will be an economic impact. Things would not have continued on as they had been.

  • Steve April 2, 2020, 4:08 pm

    Thank you for the optimistic post! Very well said, and this is why I always look forward to your writings.
    From an Emergency Medicine physician’s (that’s my) viewpoint, I wrote my own reflections on this pandemic here…

  • Blue to Bliss April 2, 2020, 4:11 pm

    I am so glad you wrote this post! I feel like I have been saying these same things for the last few weeks. I took a huge hit to my retirement accounts like everyone else, but I am not worried at all. Like you said, the world will keep moving, people will keep inventing, and technology and medicine will continue getting better all the time. I thoroughly enjoyed reading your optimistic magic and wish more people could see the world the way we do.

  • Agnieszka April 2, 2020, 4:11 pm

    I just want to say thank you for posting this. I know the words you write are true but in this difficult times we lose sight of it and get scared and I just needed that reassurance that I’m on the right path: stay alive and keep moving forward. I’m on the front lines as an ER nurse so I’m blessed to have a job and a distraction from watching my net work plummet. Stay the path!

  • Ross Williams April 2, 2020, 4:11 pm

    The past is no proof of the future. While it may be likely the market will recover, it is by not means certain. Japan has had a market for years that has never achieved its previous highs with long periods where it did not even keep up with inflation.

    The last 75 years have been driven by the post-World War II baby boomers. We have been building for the future, buying for the future and investing for the future. That is now over. We are just husbanding our resources to last a few more years. That means everything we consume has to be produced by someone else. The same is true for FIRE adherents living off their investments.

    In the short run, you need to have enough in cash to cover your expenses for the next few years. If you don’t, you should be selling off in small increments until you do. Its possible the market will rebound, but its more likely it will continue to shrink.

    What we should learn from this is that life is uncertain. And anyone who thinks they clearly understand the present, much less can see clearly what the future will bring, is deluding themselves. We don’t how many people are getting sick, how many are deaths or how to treat prevent them. We don’t know whether social distancing will reduce ether one. We don’t even know whether people can get the disease more than once. We have no idea how long the disease will disrupt our lives or how severe the disruption will be.

    But uncertainty is one of the things that makes life interesting. May you live in interesting times.

    • JeffD April 3, 2020, 5:09 am

      Your comment does bring up an important overlooked point. Starting in 2020, for the first time in US history, the percentage of working age population relative to total population will be shrinking. This creates a strong headwind to growth that the US has never had to deal with in the past. I’ve often wondered if, fundamentally, it was because Japan went through this transition that their economy/markets fell into a hole and never recovered.

      • Mike April 8, 2020, 10:49 am

        “It’s possible that the market will rebound, but it is more likely it will continue to shrink.” What is this assertion based on, exactly? Japan is not the United States. Their demographics skew much older than ours do, and their population is actually shrinking.

        Long-term, the US will be fine – as long as it doesn’t restrict immigration too much, since that is a major source of population growth.

    • Lex April 11, 2020, 12:53 am

      Ross is right that we need to have an emergency fund to cover a few years of expenses. Ross is also contradicting himself by stating the market is more likely to shrink than rise from here, only to state later that someone who thinks they can predict the future is deluding themselves.

  • Anonymous April 2, 2020, 4:16 pm

    Top notch both intellectually and vis a vis optimism. Everyone in the world should read this. I was shocked when I first heard the 200k death count forecast, but then got my wits about me and easily discovered that in 2018 600k people died due to cancer, which is largely caused by poor lifestyle decisions. That is very sobering! The problem is trying to convey this perspective to others, who often seem attached to their fear and negativity.

    Anyways, cheers and good luck to all!

  • Bill April 2, 2020, 4:28 pm

    Thanks, MMM. Would you still add more to VTSAX during this period? Or hold off for a bit?

    • Ron April 2, 2020, 6:17 pm

      My asset allocation was 70/30 stocks/bonds and I am buying more VTSAX and rebalancing slowly into the downturn. I have a ways to go but I don’t want to miss this buying opportunity. This is a good article about the philosophy:


      • Bill April 5, 2020, 9:45 am

        Thanks, Ron & Agent. I put the order in! take care -Bill

      • Andrea April 15, 2020, 1:25 pm

        Hey Ron,

        I’ve just started and have 100% in VTSAX, was wondering what your bond mutual fund is through vanguard? Thanks!

    • Agent April 3, 2020, 5:52 am

      Bill, just follow ABC: Always Be Contributing

      Now is a better time to contribute to vtsax than anytime in the last 2-3 years.

  • Mark Rush April 2, 2020, 4:28 pm

    I have read your blog for several years now and I credit your work for vastly improving my financial life, especially when it comes to frugal living. I’ve always appreciated your investment advice, but am very glad I’ve balanced it with other perspectives. Having my investment portfolio hit hard in 1987, 1999 and 2008 (40-50% each time), I finally realized how long it can take for an employee 401K to recover from such hits. Now, that I’m semi-retired, I am not in a position to take a haircut like that (maybe that’s why I now sport a ponytail!).

    When the corona virus started to close China down, I knew it was just a matter of time before this thing went exponential. Its growth was accurately calculated way back in January. Around February 20th I liquidated nearly all my stock positions. I am very glad to have done so! Following your advice would pretty much have decimated my portfolio, and exactly at the worse time.

    I think you have maintained a rather nonchalant view about the seriousness of the virus. I would remind you first, that this thing is just getting going and second, that Italy’s death rate is 10% and Spain’s is rapidly approaching that. Just today, Fauci said he expects the U.S. to follow the Italian trajectory. That does not imply a 1 – 2% death rate. We don’t know yet how this will play out. Your feel good post seems at the very least premature. The models cannot predict the success, or lack thereof, of mitigation.

    On another point, I think your view regarding the positive future for innovation should be tempered with an acknowledgement that the neoliberal policies of globalization, financialization and unfettered corporate malfeasance have badly damaged the system. Innovation is not so easy when profiteering supersedes investment in R&D.

    Where I absolutely agree with you is that this is a wonderful opportunity to recreate the world we live in. I am absolutely amazed by the clean air, the lack of traffic, the strong sense of neighborly community and the growing awareness that our modern life is a very fragile affair that might better be designed. These are true positives. Of course, you already do many of the likely solutions. This a great time for a reset on how we choose to inhabit the planet.

    • YoopaKazam April 2, 2020, 10:27 pm

      Mortality rates in the media are extreme over estimations. Don’t get me wrong, this is a serious disease. But if you do your homework, you’ll find that (dead/infected)*100% = 1% at the very most and likely somewhere between 0.3-0.7%. Still pretty high compared to the seasonal flu.

    • Jon April 3, 2020, 6:58 am

      Hey Mark – I took the same path on investments. When China started locking down, I got out (mostly). As much as I like buy and hold, after 2000 and 2008/2009, I was sure that I was going to be prepared “next time”, so I implemented that strategy. When you see a freight train coming, it’s best to get off the tracks.

      Regarding Italy, they made some catastrophic mistakes. Of course the US may be doing the same. They have Covid and regular patients in the same hospitals. That was a bad idea. Each large metro area has many hospitals and they need dedicated ones for Covid-only.

      Italy also transferred patients to other facilities such as nursing homes during recovery after the hospitals filled up. Obviously this was a disaster.

      The 3rd mistake was not forcing hospital workers to be isolated. With their exposure and the lack of visible symptoms in many, they need to all be living in a dedicated location and not be in public places or even in their own homes with their families. If the majority of us are locked down and not interacting with others, yet the spread is continuing, then there’s a good chance that those not locked down are the vectors for the continued spread.

      And 4th, it didn’t seem that they were doing much contact tracing from positive Covid patients to their families and other contacts. South Korea traced everyone’s phone location and quarantined not just the person testing positive but their recent contacts also.

      • Annamal April 3, 2020, 2:00 pm

        Forcing medical personal into a dedicated location seems very likely to amplify the effects of the disease through the one population we can’t afford to lose en mass.

        Allowing them to live at home with subsidised accomodation if their home includes vulnerable people is probably a better idea

      • Lex April 11, 2020, 1:16 am

        Jon, if you got off the tracks anytime you thought a freight train was coming, your eyes would have fooled you more often than not. What looks to be a freight train at a distance usually ends up being a wind-up Thomas or Percy. Since we don’t know until the train passes, it’s best not to guess, and more dangerous still to infer you “knew.” BTW, how many rail cars need to pass before you get back in? You need to be right twice to properly time the market.

        P.S. You should never be standing on the tracks in the first place. Better to own the railroads and their future earnings and dividend payouts.

    • Quez April 3, 2020, 8:33 am

      Hi Mark;
      Congratulations for your success on timing the market, although I’m almost certain you have lost more money than what you’re currently saving, taking the same approach in other situations that ended not escalating nowhere or will lose on future threats not going anywhere.

    • Lex April 11, 2020, 1:04 am

      Mark, you did not know, you merely guessed. We never know. Did you also know the market would bounce 20% off its lows? Did you get back in before that bull left the gate? And what about any upward or downward moves from here? Timing the market is a futile exercise as you must be right twice (on the way out and the way back in). Curious what else you might “know.”

  • Cary April 2, 2020, 4:34 pm

    Hey Sam…I’m with you brother. I am 53 and had a liver transplant 4 years ago. With the drugs I take my immune system is messed up too. For life. I am more concerned for myself now than I was just before my transplant. listen to your docs..try to stay indoors….and wash your hands!!

  • Jon April 2, 2020, 4:44 pm

    I loved the perspective of this article. Thanks for writing it.

    Several people have pointed out that your “do nothing, worst case” scenario might not model in enough deaths. (That it doesn’t account for all the virus and non-virus deaths from an overtaxed medical system.)

    Likewise, I think we should remember that the “do nothing, worst case” scenario also holds large economic costs. The Coronavirus itself is a large part of those several trillion dollars being stripped from the economy, so even if we tried to downplay it’s threat and continue economic activity as usual, there surely be a big economic fallout from the ensuing chaos.

    Therefore, I bet the $1 Million per life saved estimate is rather high.

    • Justin April 2, 2020, 11:17 pm

      Agreed, the choice as MMM suggests is not between money or lives. As you say, if we pursued the “do nothing” strategy the economic impacts would be as much or more than we are seeing now. Businesses still would have shuttered or slowed down dramatically as people stay home sick or out of fear of contracting the disease or passing it on to at risk family members. Most people would still be avoiding public spaces, forgoing travel, and putting off big purchases. So really, the choice is not so altruistic, it’s really pragmatic:

      1) Do nothing, million+ people die, economy craters
      2) Bend the curve, 100-200k die, economy craters

      I also think the 1 million per life saved is high because it does not take into account the economic benefit of saving the life recouped over the remainder of that person’s life (e.g., workforce and tax contributions, consumer base, volunteerism, no need to train and educate replacements, etc.).

      • Jason Middleweek April 5, 2020, 3:40 am

        Hey Justin

        I think early on the UK modelled each scenario and ruled out the do nothing approach for the reasons you explained.

        There was a fairly left leaning economist on the radio the other day emphatically pointing out that governemts putting their economies into lockdown are making an ethical choice to spend money to save lives. As MMM pointed out even the most right wing governments (except Bolsonaro alone) are making this choise which we should all be proud. However this economist also said that the choice to freeze the economy will cost more and more the longer maintained and there will be a point at which governments will have to accept a certain level of COVID19 deaths to avoid our economies becoming so badly damaged that more lives are lost and destroyed via the economic destruction. Hopefully politicians can be saved from making these ethical decisions because of a scientific breakthrough. We must remember that there have been 123 suicides per day in the US and maybe 1000 attempts per day. Extended recessions and depressions take a massive toll on human life for a range of reasons.

    • Jon April 3, 2020, 7:35 am

      I guess there are two of us who posted in this thread as “Jon”. If anyone hates anything I say, I’ll just tell them it was the other Jon.

      • Lex April 11, 2020, 1:20 am

        The other Jon is now being referred to as Nostradamus.

  • Adam P April 2, 2020, 4:54 pm

    I believe your “worst case” of 3 million early deaths is an optimistic estimate for a situation where society didn’t react, because of the much worse mortality rates when healthcare workers run out of PPE and hospitals run out of space.

    It’s not just about saving the lives of our most vulnerable. Young, healthy people are also susceptible, particularly healthcare workers. If we didn’t do anything, it’s easy to imagine a complete breakdown of the healthcare system.

    I also want to suggest that pandemic deaths are worse than many of the usual deaths (for both the dying person and their loved ones) because of the isolation.

    I think it’s in poor taste to cheer this sort of disaster when it is bringing so much suffering to so many people. (“Are things a bit hard right now? GOOD.”)

    All that said, I am still bullish in the long term, and I have not sold my index funds.

    • Debbie Fodor April 2, 2020, 6:59 pm

      ‘I also want to suggest that pandemic deaths are worse than many of the usual deaths (for both the dying person and their loved ones) because of the isolation.’

      I don’t know what is happening in American hospitals, but where I live in Australia, visiting to any hospital patients, regardless of their illness, is severely restricted and nursing homes are allowing no visitors. The strict visiting restrictions also apply to dying patients, regardless of what they are dying from. My mother was in a palliative care unit and restricted to 1 visit by only 1 family member for a maximum of 1 hour per day. 23 hours of lying in a bed with no visitors is a long time. She had hoped to spend her dying days surrounded by family and friends, but coronovirus put a stop to that.
      I do not believe that pandemic deaths are worse than many of the usual deaths. Everyone is suffering the affects of isolation, not just those dying from coronovirus.

      • Adam P April 2, 2020, 7:57 pm

        I’m very sorry to hear of that situation for you, your mother, and the rest of your family. I didn’t mean to minimize the gravity of any death.

        When I referred to “usual deaths” I meant the background deaths (pre COVID-19) that MMM was comparing the number of COVID-19 deaths to. The tragic situation you describe is yet another way in which MMM’s post undercounts the impact of COVID-19.

  • Heidi Engelhardt April 2, 2020, 4:55 pm

    Thank you for being you. You are always a calm voice I love to hear.

  • Paul April 2, 2020, 5:03 pm

    My favorite article of all time. Thanks MMM for taking the time to write an encouraging and well-thought post.

  • OP April 2, 2020, 5:08 pm

    I love your brightness in trying times MMM and appreciate that there is light at the end of the tunnel. I got a smile out of watching some people’s renditions of Disney characters singing about self-quarantine and a funny mariachi song about people going a bit loco at home ha-ha.

    The numbers don’t lie alas and it likely going to 9 million cases in 30 days based on the Elms graph. I read that half of Canadians are insolvent and in the United States and around the world significant large bailout packages are being made.

    What we are experiencing is quite the mentality shift. However, every shift brings about opportunities whether it is starting a new career, finding time to pick up something new at home or spending time with close ones.

    I feel more people will be joining the FIRE movement, many people in the past used to stockpile cans of food like our grandparents in case there was nothing because of their own experiences.

    Similarly, many people will now start to stockpile assets in a way to get them out of this duress and it may be a life-changing moment for many.

    Some will find that financial freedom of time is what they seek having tasted it a bit, others will learn they like remote work. I feel that the impacts to be measured have not been scaled out yet and that new habits are forming right as we are looking at this pandemic.

    Similar to what I read in r/finance and others teaching individuals what to do and what not to do at this time.
    We are all in this together lets hope for the best while preparing for the worst.

    We are in a self-imposed economic slowdown that has been created purely to save the lives of our most vulnerable people.

    Which is one of the most compassionate things our society has ever done.

    Beautiful MMM just beautiful.

  • KAT1809 April 2, 2020, 5:08 pm

    re: “Our world has always been cruel and chaotic in so many ways which effect a much larger number of people – we just happen to be used to them.”

    Sad but true.

    • MKE April 6, 2020, 8:39 am

      That’s right! Just wait until those tanned and pretty news anchors can get back to gleefully reporting deaths in car crashes.

  • Michael April 2, 2020, 5:35 pm

    Thank you Pete, that was another thoughtful and articulate article. Not overly impressed with some FIRE people (and not FIRE people as well) saying “my life is ruined because I’ll need to go back to work”. There are worse things perhaps; for example, the loss of a job that precipitates a look around for a nice upscale dumpster in which to sleep, with good neighbours and schools, of course. Or how about the death of an immediate family member? There’s a certain level of affluence above which it’s easy for people to become detached from the harsh realities of daily life for many of their fellow humans. I have, and probably still do, suffered from a lack of empathy for the less fortunate and it’s not a good look. The engineering types that are so attracted to the FIRE movement would benefit from a discussion of the virtues of empathy

    There are billionaires that could use some help with empathy as well:

  • Sylvain Leroux April 2, 2020, 5:37 pm

    Great article! It’s crazy how I relate to your way of thinking. Just curious on your comment on 80% of people being able to work from home…how accurate is that?

    • Rich April 4, 2020, 7:24 am

      A Newsweek article I found from March 17th states one in five americans either lose their job or have their hours reduced. Surely that is much higher now that much of the country is in shelter in place and only essential services and businesses remain physically open? I would be interested in further data on that as well.

      That being said, I’m still 100% onboard with Pete’s message, and kudos for releasing new posts during this time of fear and uncertainty!

  • Kira Stoops April 2, 2020, 5:47 pm

    I agree that there are bright spots in this pandemic. But there is missing information in this post that does darken things a bit.

    For starters, this isn’t “training” for a worse pandemic, as it really couldn’t be worse. I know, I know, Station 11! And Stephen King novels! But that’s not how it works. Viruses don’t want to kill their hosts; they need them to spread. Viruses that kill everyone don’t last long, especially now that we understand how they spread. This IS the crappy pandemic. The one where “healthy” people infect one another, the one where just enough people die to be scary, but plenty live to continue spreading it.

    Also, while some people certainly experience truly mild symptoms, please note that symptoms categorized as “mild” in most studies and especially in Wuhan were simply the cases that didn’t demand ICU care. You could have some pretty aggressive pneumonia but if you could breathe on your own, you were “mild” by statistical standards.

    While I am not an economist, I respectfully disagree that plenty of industries are spared and forging ahead. The economy is a web and when one part is cut or dragged down, it weakens and sinks the entirety—at different levels, sure, but also, surely.

    Finally, while I am heartened by the people you speak to, staying home and doing the right things, I am horrified by the ignorance I have seen first hand in my liberal-leaning town. Quite simply, plenty of people aren’t helping. And that mucks up our progress for everyone.

    • Mr. Money Mustache April 3, 2020, 5:27 pm

      Yeah, your point is well taken about the sneaky disease being the worst one. But I was just reading about the history of Tuberculosis this morning and MAN was that ever way worse!

      It was sneaky in the sense that it was airborne and contagious, but took a LONG time to show symptoms – like sometimes years. But then when it did get you, there was no cure and an 80 percent death rate. And it just hung around for DECADES – even in the 1960s it was still a big deal.

      So it was estimated that over one BILLION people were killed by that disease. We should all be so grateful that we are dealing with such a pleasant beginner bug right now.

      Here’s the article where I got all of these tidbits.


      • Brian Lackey April 3, 2020, 10:50 pm

        Yep! Former tuberculosis epidemiologist here. Agree with all of that. Plus! Turns out it’s STILL an incredibly bad disease to this day… One of the worst, actually.

        Once we sort of got a handle on HIV/AIDS and those death numbers started to go down globally, TB actually popped back up to the number one infectious disease by death in the world a few years ago, with about 1.5 million deaths annually! And unlike most viruses, we can treat most TB cases with a pretty extreme course of antibiotics over 6-24 months. Even so, it’s such a complicated disease that disproportionately affects the poorest of the poor, that it just isn’t really a global priority any more.

        On top of that, we still do see a nontrivial amount of TB cases in the US and other rich countries. About 10,000, give or take. Most here are cured, of course, and epidemiologists like me will do wide-reaching contact investigations to try to identify anyone who might have had a concerning amount of contact with the patient since that’s not a disease that we want spreading around our communities.

        Pretty wild stuff…

      • Ann April 4, 2020, 2:02 am

        Er…and smallpox.

  • Jerry m April 2, 2020, 6:02 pm

    Why do you say the US is saying 200,000 deaths is best case when article you link to gives a 100,000 to 200,000 range and when the task force says it could be even lower if behavior improves?

    • Mr. Money Mustache April 3, 2020, 5:22 pm

      That’s a fair question and I admit that I have some editorial bias because of the White House’s apparent misunderstanding of the pandemic so far and their preposterously non-scientific testing strategy.

      I mean, we already have 274k confirmed cases and it’s quadrupling every week. So, 1 million next week unless we have substantially flattened the curve, which I do hope is true.

      But this is a DRASTIC under-counting, because we are only testing people who have confirmed symptoms. (We should be conducting random sampling of the general population like Iceland – what’s the value in testing someone when they are already extremely sick, when what we really need to know is the overall infection rate of the population?) So really, we probably have over one million cases out there.

      So anyway, working backwards to keep it to 200k deaths with a 1% death rate, that means we would have to keep the total infection under 20 million people, or 6% of the population. Or we need to have the death rate under 1%.

      Is that possible? Yeah, I guess so. It just sounds optimistic to me since we are flying completely blind with no population testing.

      Also, for the purposes of this article I wanted to brace people for the high end of the government forecast and then contrast that against an even HIGHER number, and even that 3 million number is only equal to our background death rate.

      And then my hope is that we will all be pleasantly surprised at the outcome in the end. Because setting your expectations right really help you avoid panic and just get back taking care of each other and keeping the world going.

  • Jeff April 2, 2020, 6:06 pm

    Wow. This has to be the most comprehensive, single breakdown of realistic numbers on COVID I have seen yet.

    I am a firm believer of the line between complacency and panic. I’m not sure if we as a country are balancing it well or not, but we personally are willing to make the sacrifices everyday to help lower the casualty numbers and return the world to “normal” faster…..whatever that may look like.

    From the finance side, I’ve always counted my number of shares as my real value. It just prevents panic when that big number drops. I mean, when my car loses value I technically lost money but I still have my car. We don’t freak out then, see freaking out over stock market value just as silly.

    Anyways not that it’s much coming from me, the little guy in the blogosphere, but this is a great write up and killer on all dynamics of COVIDs impact from finances to the mental state. We will be stronger, better, and more ready for the next pandemic. Tempering the sword.


    • Mark April 4, 2020, 8:11 am

      Jeff, I agree with you about the number of shares I own remaining the same. The value of each little green army man expands and contracts all the time, every day,, as if they were on auction on eBay.. So do interest rates, the inflation rate, exchange rates, oil prices and the value of your house. What’s not noise is that you still have a little plastic army ready to CHARGE as soon as dawn breaks.

  • John April 2, 2020, 6:08 pm

    I really like your blog and I share some of your optimism. But, let’s be serious, you can’t replace oil (the best source of energy ever know by manking) by batteries (a way to stock energy… that takes a lot of energy and dangerous chemicals to make and that is usually dead after 10 years) or even by batteries and solar panels.

    • Mr. Money Mustache April 3, 2020, 5:02 pm

      Well, it has definitely been proven to be a great idea so far with cars (a gigantic 7-passenger Tesla luxury sedan will drive about 400 miles on a single charge of ten bucks of electricity), and electricity generation (solar + storage is now cheaper to deploy than coal or gas even without subsidies), which is why the majority of new power plants worldwide are now solar or wind – even if you neglect the biggest elephant in the room, which is the fact that climate change is our most enormous looming problem.

      Batteries, now over 250 wH/kg and 700 wH/liter of energy density, have recently overtaken diesel fuel as the cheapest way to do long-haul trucking, and are also viable for short distance air travel up to about 100 miles.

      But you’re right that batteries don’t have enough energy density to replace kerosene for long-haul air travel – YET. There are already technologies in the works that will do this, and now that the electric car and power generation markets are tens of billions of dollars per year, there is enough R&D money flowing into battery development that it is happening at a speed that is actually fun to read about.

      It sounds like battery technology research might not be your favorite thing to do at the breakfast table as it has been mine for the last few years, so I don’t mean all this with any sort of sarcasm. But I WOULD encourage you not to spread this 5-years-out-of-date misinformation around on the internet any more.

      • Sue April 10, 2020, 3:14 pm

        Big fan of your blog and once again a great post. I’d genuinely love to read about the progress with solar batteries over my breakfast. :) Any chance you could post some links to the developments you’ve mentioned?

    • MKE April 6, 2020, 8:41 am

      Yup, John. When all you have is a hammer, everything looks like a nail.

  • The Vetducator April 2, 2020, 6:33 pm

    This whole time I have been thinking about your post, “What if everyone became frugal?” I desperately hope that this experience makes people realize they don’t NEED to eat out and buy new cars and go to the mall.

  • Alex April 2, 2020, 6:34 pm

    Great Post Mr. Money Mustache! Going to forward this to all my coworkers, family, and college peers who are screaming about the end of the world! I love your realism (which others see as optimism) and honesty. Saw an article about the weekly death rate in the US DECREASING due to Americans reducing their risky behaviors during this. Sitting here singing Walt Disney’s “Carousel of Progress” song looking forward to our bright future!

  • Chris April 2, 2020, 6:45 pm

    I’m a long time reader, this is the first time I’ve felt compelled to write. By far, your most accurate and inspiring post to date. I think you hit the nail squarely on the head. I’m such a firm believer in the resilience and ingenuity of the human race. Look at all we’ve accomplished thus far. The doom and gloom espoused by mainstream media fails to take into account our innate desire and instinct to survive and thrive when faced with adversity. It makes me think of one of my favorite old adages, people are like tea bags, you never can tell how strong they are until you drop them in some hot water. Bravo Pete, and thanks.

    • Ellie April 20, 2020, 5:57 am

      I totally agree. Both a commonsense and uplifting post. We are experiencing an horrific death toll here in the UK and all the political squabbling that goes with it. This post is like an oasis in a desert.
      Ellie xx

  • Irfan April 2, 2020, 6:47 pm

    Another excellent article that makes me feel better. I love how you are thinking long term rather than the next 1 to 3 months.

    I do think this phrase may rub people the wrong way. “All that has changed is that we are in a self-imposed economic slowdown that has been created purely to save the lives of our most vulnerable people.

    Obviously this is meant to mean the old, those with underlying health conditions but my thinking is that this virus could be affecting people with specific genes that we do not yet know. Taking action is the right thing to do. Any other option would be very cruel.

    Everything that you have been preaching since I’ve read your articles has helped with this crisis. Eat healthy, move your body, live frugally, and understand they you live in a country that is very privileged. I am using this opportunity to get creative with the cooking and clean out the cabinets!

    That being said, it is good to identify the things that are bothering you during these troubled times. For me it is, my elderly parents, my vacation plants being postponed, and not being able to go to my local gym.

  • Brooke April 2, 2020, 6:48 pm

    If I hadn’t discovered Mr. Money Mustache and the FIRE movement (less than 3 years ago thanks to the Tim Ferriss interview!), then today I would certainly still be in debt , with virtually no savings, and 2000x as stressed in this current crisis. But thanks to the “Your Debt is an Emergency!!” post (which I read so many times I could probably recite it by heart) I paid off all credit card AND student loan debt in 18 months (about $35K worth), I got myself a WAY better paying job than I had previously (thanks to the “Great News There’s a Recession Coming! ” post which taught me to ‘make hay while sun shines’), and I learned to save most of the excess (thanks to any post that talks about how damn ridiculous our spending rate is in America). Savings save lives. This blog saved my life. I won’t be retired tomorrow, but I’m doing absolutely fine SOLEY because I was introduced to this idea just a couple years ago. Thank you, MMM (and all you other crazies). We will get through this.

    • Cameron April 7, 2020, 7:50 pm

      Nice comment, and couldn’t agree more. The stuff on this blog is life changing and not a single day goes by that I don’t remember one of his articles or quotes. You’re never quite the same after a MMM face punch… thank goodness!

  • mike April 2, 2020, 7:24 pm

    John Ioannidis from Stanford has an interview on youtube about covid19 ; well worth watching

  • Larry Roth April 2, 2020, 7:34 pm

    As someone who was part of an earlier FI movement in the early 1990s (and even wrote some books on the topic that are really cheap on Amazon these days), I can tell you my experiences with the media were all similar to those you ran into. The approach I encountered was: Aren’t these people really silly? I finally figured out the media were generally opposed to frugality because they have advertisers who would not approve of articles encouraging people not to spend, and businesses generally do not approve of workers leaving the workforce because that reduces the pool of workers.

    I retired twenty-five years ago this year and have never been sorry. Keep the faith!

  • College Student April 2, 2020, 9:00 pm

    I’m a current college student who has dreamed about early retirement since I was a freshman in high school. I’m really thankful to have been financially conscious for so long! Because of my savings, I know myself and my entire family will be fine for the next year or 2, even with all of us currently unemployed.


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