Back in 2017, when this blog was just a fledgling collection of articles, Millennial Academic Scientist (or MAS) wrote to us. What makes her story compelling is her background. Like me, she grew up in poverty, had a traumatic childhood, and developed a very fearful relationship with money. We all know that while money doesn’t always buy happiness, a lack of money can certainly cause misery. Lack of money can trap you into an abusive home, forced to endure the shackles of an abusive relationship (in my case, my mother) with no way to escape. I swear, as soon as I can afford it, I will leave this home and never come back.
MAS was in a similar situation, and like me, she saw academic achievement as a ticket to freedom. We are such “poor brothers”.
She excelled in school and was fortunate to have supportive teachers and counselors who helped her navigate the perilous path to college. She did it! Not only was she admitted and enrolled at age 16, she eventually earned five college degrees, including a Ph.D.
The only problem is, she now has $183,000 in student debt.
This becomes our first reader case where the math goes directly to how to manage such a large loan, and whether it makes sense to rely on debt relief programs like the Public Sector Loan Forgiveness (PSLF) program or seek private sector jobs to supplement your income.
We corresponded on and off over the years since then, and she updated us on her FIRE journey and we cheered her on and helped her whenever she had a question. Recently, she wrote to us as follows:
Finding your blog changed my life. I’m officially on fire. I sold one house and used the proceeds to pay off the other house. My student loans are gone and I have enough cash to pay off where my niece lives.
Wow. From $183,000 in student debt to fires, owning multiple homes and even being able to help family members financially! I love writing this blog, but being able to help people achieve FIRE, moving from a state of fear and financial scarcity to a state of power and abundance, is why I continue to do it.
However, she also wrote:
I should be happy, but instead I feel an overwhelming sense of fear and anxiety. I worry that the U.S. market and economy will go into trouble or worse. Is this normal? I realize I should probably talk to a therapist, but I was wondering if you’ve ever seen anyone else feel this way after getting out of debt.
Short answer: yes. All the time.
Poverty is not just a stage in your life. Once you get through this stage, you never have to think about it again. The experience of growing up in poverty becomes part of your identity and affects you forever. One of these lasting consequences is money anxiety.
No matter if you are popular or not, no matter how many houses you own, no matter how much money you have in the bank. You’ll always feel anxious, worried, scared, and no matter how far you’ve come, something will always happen to make it all go away.
If you feel this way, then there’s nothing wrong with you. You are not broken. This is a natural consequence of having experienced poverty because you know what it feels like. You know what it’s like to be scared every time the phone rings because it might be a debt collector, to have to make excuses for why your friend can’t come over, and to be trapped in an abusive relationship because you have no other choice.
You know what that feels like, and you really don’t want to be in that situation again.
So I wanted to talk to all you anxious FIRE fans out there from personal experience about how anxiety and FIRE go together (and don’t go together).
It makes you super practical
As you might have guessed, I really enjoy writing. In fact, I’ve wanted to be a writer since I was a kid. But when it came to choosing a career, I didn’t even consider writing because I knew it wouldn’t pay me enough.
Many people choose a career based on what they enjoy doing, or at least find interesting. Not me. My two criteria are 1) Is it enough to pay for? 2) Are my grades good enough to get in?
That’s it. Because at the end of the day, the only thing that matters to me in my future career is that it provides a steady paycheck so I don’t have to live with my mom anymore.
Our reader MAS thought the same thing. She firmly believed that education was her ticket out of poverty, so with the help of some very encouraging and supportive teachers, she studied to earn 5 college degrees.
Anxiety was my fuel for every long, sleepless night before midterms. Is it bad? Yes. Will I still have nightmares about going back to college? Maybe. But is it worth it?
Absolutely.
It makes our investments more resilient
Another thing that comes with my anxiety is that it changes the way I invest.
Most FIRE bloggers are pretty optimistic people. They put everything into the S&P 500 until they hit their target FIRE number, and then they quit with no worries.
That’s not how I roll.
When it matters as much as money, the overly simplistic 4% rule isn’t enough. A 95% success rate is not good enough because it means there is still a 5% or 1 in 20 chance of failure. I need it to be 100%.
That’s why our FIRE portfolio has multiple backup systems. Income Shield is designed to create passive income that is not dependent on stock market fluctuations. We added a cash buffer to protect against a range of return risks. We make life nomadic so we can use geographic arbitrage to lower the cost of living just in case.
Anxiety causes our brains to always be looking for things that could go wrong. If I could find a way to mitigate these risks without requiring me to save more money, I would. I write it down to teach other anxious investors how to do it.
Is this more complicated than simply putting all your money into the S&P 500? certainly. But all of this extra effort makes our portfolio surprisingly resilient to economic downturns.
When we first retired in 2015, the oil crisis in Saudi Arabia caused the stock market to plummet at the worst possible time, just after we all retired. But the use of a cash cushion saved the day. Likewise, when the stock market plummeted and the economy ground to a halt during the pandemic, we used geographic arbitrage to take advantage of declining short-term rentals to bring the cost of living back within our income shield.
So it’s normal when we turn on the news and worry that another recession is coming. Recessions are always coming. But we teach people to build financial systems that can handle it.
in conclusion
Anxiety is often thought of as a bad thing, but the truth is that like any other emotion, it’s neither entirely good nor entirely bad.
When you are forced to experience poverty, anxiety is built into your system whether you want it to be or not.
The trick is to learn how to turn anxiety into something positive. For me, it created an obsession with managing money and became, in a way, my superpower. The reason our retirement portfolio is doing so well is because I’ve always been obsessed with coming up with ways to protect against disaster.
So if you’re one of the many anxious FIRE fans, don’t think that your anxiety is debilitating or that it’s holding you back.
This could also be your superpower.
hello. Thank you for visiting. We use affiliate links to keep this site free, so if you believe in what we’re trying to do here, please consider supporting us with a click! Thanks;)
Build a portfolio like ours: Check out our free investing seminars!
Travel around the world: Get flexible global coverage for just $45.08 per month with SafetyWing Nomad Insurance
Multi-currency travel card: Get a multi-currency debit card when traveling to minimize foreign exchange fees! Read our review here or click here to get started!
Free travel with home exchange: Read our review or click here to get started. Please use sponsor code Christie-d61e2 Earn 250 bonus points (100 after completing your home profile + 150 after your first stay)!
Source link
