I have been investing since I was 19 years old. Yet I really never paid attention and between 2005-2015 I only saved up $20,000 during that time. Yup, I was young and uneducated back then. So yes I went through the 2008-2009 crash yet can’t say that I really did as I was not paying attention back then.
The Crash Of 2020
The crash in the stock market it hard and fast in March of this year. This was my first major down word trend in the market since my FIRE journey started. I knew this day would eventually happen I just had no clue when. I also had no freaking clue what I would do as an investor. Would I stay and hold my ground? Would I sell at the worse moment? I heard so many people always say you can think you know what you will do until it happens.
I truthfully always was curious about what I would do in those moments. Did I have to stomach for this big day? These were questions that always seemed to haunt me so to speak. Like a light scratching at the back of my brain always on my mind. I was educated, I knew the math, I had a stable career so I was as prepared as I think anyone could be for this type of situation.
Was This Crash Different?
I don’t think this crash was any different than any other crash we have seen. In fact, crashes are a very normal and routine thing in the market. Everyone who invests should be aware of this. It’s not a matter of if, It’s a matter of when will the next one happen.
The only thing different is the thing that caused this crash kills people.
My Steel Balls!
So I hit a new high in my liquid net worth on February 18. At that moment I had $239,285 and It felt so good to have that much money. I was on the path to Financial Freedom and nothing could stand in my way. Or so I thought lol. As you can see below right after that day the market started to tank.
The market kept tanking till It hit the bottom sometime in late March. At that very moment, I was at a liquid net worth of $166,466. I must admit it was not what I expected. Here I was at all-time highs and 30 days later I’m in the deep black hole.
This was the moment I had been waiting for to test my knowledge and to really see how I would react to such an event. At that moment I was down $73,000. That is more than most people make and way more than most people have saved up. To my surprise, I felt no reason to do anything at all. I really think having the Financial Literacy side and education before having this event happen to me helped me tremendously.
Instead of selling or freaking out, I simply stuck to my plan and kept investing. I truly believe using the Buy and Hold strategy to be a true Wealth Hack. It does take Balls of Steel as you have to not let fear guide your choices. Instead, I made a logical decision and stuck to it and it paid off big time for me. Because of this, I am now seeing new heights for my liquid net worth. As the market as started to correct its self and gain ground so has my money. I’m now sitting at over $260,000 as of August 2020.
In fact, my thought was “Wow I can’t believe I still have $166,000 that is a lot more than most people have, and I could live for at least 6 years before needing money”.
I will keep investing like It’s going out of style with my simple buy and hold strategy. I’m listening to the math more often and it’s been building me more wealth at an insanely quick pace. I am seeing the rewards of years of staying the course and not listening to all the noise around me.
The graph below is exactly why I’m so confident in my strategy and why I stay the course. Like I have said before I am very much about using a logical approach to my strategy vs letting fear guide me. This strategy might not be for everyone yet the math will show it to be the most optimized approach.
I can’t say enough how much I love the math behind the path to FIRE! I truly believe in this era we have so many ways to approach Financial Independence and it is so easy with all the resources at our fingertips with a few clicks we can research anything and learn so much.
As of this week, I am now at an all-time new high! I’m now over the $270,000 mark and hopefully will keep seeing these sweet gains. This is exactly why my simple yet powerful strategy is so fucking perfect. My net worth just keeps growing. Even after a crash it just gets stronger and bigger. This lowers my risk in life.
Without a doubt, in my mind, I know there will be another crash someday. I will use the same strategy to keep wining in my long-term game.
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