Financial Independence Update- March 2020

Wow, what year March was, huh? This was by far the craziest month of my life! Much has changed in the world, our personal lives, and our personal finances since my last update.

In my February update, I mentioned that I had reduced my equity exposure due to potential disruptions from Coronavirus in China, but it wasn’t until the beginning of March that I (and probably all of you) realized how big of a deal this virus was actually going to be in the United States. The virus rapidly spread around the world throughout March leading to hundreds of thousands of cases, thousands of deaths, and worldwide disruptions.

Up until the first week of March, we were still planning to go on our 5 month trip to South America. By the second week, though, it became clear that would no longer be possible. In addition to increasing cases, and the president closing US borders to China and Europe, South American countries began closing their borders and requiring quarantine periods for Americans arriving there. Unfortunately, we decided that it wouldn’t be worth the risk of getting stuck in South America, and we called off the trip. As sad as we were to have wasted thousands of dollars (much of it nonrefundable in a pandemic situation) and hundreds of hours of planning, we really had no choice. We’ve still been hoping that some of the end of the trip will be salvageable later this summer, but that is starting to look more and more unlikely at this point.

We spent most of March inside doing our best to comply with social distancing guidelines to slow the spread of the virus, and at the end of March an official “stay at home” order was issued by our Virginia Governor. Whitney spent a lot of time finishing uploading pictures from our trip to Europe last year to social media, and I worked a lot on our taxes for 2019. We also continued to keep up with our online business and tried to keep ourselves and our followers abreast of the situation as it was unfolding and how it was affecting the world of travel therapy.

Along with all the bad news, there was some good news for us in the beginning of March right before we were supposed to head out of the country. We finally sold our truck and fifth wheel! After so many trials and tribulations along this process (the subject of a future post) it felt wonderful to have that burden lifted. The original buyer backed out of the purchase, but luckily we were able to sell the truck and fifth wheel separately to different buyers and even got a higher price!

Income

Income in March from the websites (FifthWheelPT and Travel Therapy Mentor), was the lowest it has been in well over 6 months due to all the disruptions from the Coronavirus and some other factors affecting the travel therapy world. This was completely unexpected, but I certainly wasn’t alone in having my income impacted during this time. Tens of millions of people around the world lost their jobs in the last two weeks of March, so I feel very fortunate to have had any income at all during this time!

Expenses

Staying inside for almost the entire month made my expenses pretty low. We have been getting takeout dinners more than we probably should, as evidenced by our expanding waistlines, but besides that our day to day expenses are minimal. No longer having the camper and truck also decrease my expenses for insurance and personal property taxes, which was much appreciated at this time.

With the lower expenses and lower income, I ended up with a savings rate of about 35% on the month. I was happy with any savings rate above 0% during this crazy month to be honest!

Investments

As noted last month, I was very fortunate (read: lucky) to reduce my equity exposure by about 25% prior to the big market drops we saw at the end of February and beginning of March. This was before I understood the magnitude of the virus and the economic impacts that would accompany it and was based on speculation that we would see supply chain disruption due to the Chinese lockdown. Once it became more clear to me at the beginning of March that this wasn’t going to be a quick drop and recovery, and that it would have far reaching consequences for years to come, I sold the rest of majority of my remaining equities. I never planned to be someone that would “time the market,” but with economic uncertainty like never before, I felt it would be foolish to not take action. So far this has been a very good decision, but we’ll see how my timing is with getting back into the market now…

According to my investment tracking on Personal Capital (a great free resource for tracking your net worth and investments) my portfolio was down about 9.39% on the month. This leaves me with a total drop of about 12.4% since the end of January, while the market has dropped over 20%. That 8% difference is equal to over two years worth of expenses for me that would have otherwise been lost! I’m certainly not advocating that others attempt to time the market, but I’m very glad that I listened to my gut in this instance!

Financial Independence Progress

My net worth decreased by about 5.47% in March for a total drop of 7.53% since the end of January. This is definitely the only time in my life that I’m happy to have lost “only” over 7.5% of my net worth! That leaves my yearly expenses at 3.6% of my current total net assets. This is back to the level that I was at in the middle of October 2019. Again, this could be much worse given the circumstances, and it certainly is for many people around the world right now who are not only losing money invested but also their income sources.

Next Month

In April we’re taking everything a day at a time and doing our best to stay safe and healthy. We’re currently cancelling our South America trip month by month to try to see if anything will be able to be salvaged once this eventually calms down… whenever that ends up being. I think I’ll be able to continue bringing in enough income to at least cover my expenses during this time but probably no more big earning months for quite a while.

Hopefully April is much less eventful than March. Until next month…

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