The coronavirus pandemic has rocked the economy, put millions of people out of work and left an impact on nearly everyone across the globe in some way.
To understand how the pandemic has affected the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire in your 30s or 40s, CNBC Make It spoke with early retirees and those on the path to early retirement.
Here's how their financial lives have been affected and what they're doing differently in response to the pandemic.
They're revisiting their portfolios
Most financial advisors say to leave your investments alone in times of uncertainty and when the market is volatile. But that doesn't mean you should ignore your portfolio completely. It's a good practice to rebalance at least once a year, which is when you sell some holdings and add to others to make sure that your investment portfolio still lines up with your goals and long-term plan.
Grant Sabatier, early retiree and author of "Financial Freedom," decided to revisit his portfolio in March 2020 when coronavirus panic sent the markets into a tailspin. He sold some stock and diversified his portfolio a little more, he says. He wasn't planning on doing any rebalancing at the time, "but I was a little overexposed in individual equities," he adds.
In general, though, he's keeping his hands off of his investments and sticking to his long-term plan. But ignoring the urge to panic and pull out of the market is easier said than done. "I have to keep reminding myself that you only lose money when you sell, so the losses themselves haven't been realized," he says.
Steve and Courtney Adcock, who saved enough to quit their jobs a few years ago and "retire" in their 30s, also shifted their investment strategy by freeing up cash to buy more stocks. "We are now automatically reinvesting all of our dividends into buying more stocks," Steve tells CNBC Make It. "Before the pandemic, we took our dividends as a part of our living expenses, but not right now."
Steve and Courtney Adcock hiking the Valley of Fire State Park
Courtesy of Steve Adcock
Rather than living off the dividends, they're putting that money back into the market and drawing down from their emergency fund for everyday expenses. They're optimistic that the market will rebound over the next few months, as are other money experts. If it does bounce back, "we're hoping to have enough stock in the market to enjoy a nice recovery," says Steve.
They're cutting expenses
In times of uncertainty, it never hurts to trim your budget. For now, the Adcocks have eliminated nearly all of their non-essential expenses. "We don't go to restaurants, mainly because they are closed. We buy less alcohol. We aren't ordering as much stuff on Amazon," Steve says. "We keep our expenses to what we need and save the rest for later, once things get back to normal."
While they would normally spend between $45,000 and $50,000 a year, "our current budget puts us more at $30,000 a year, or $2,500 a month. We anticipate this lower budget going forward until things change for the better," he says.
They're focusing on earning
Kiersten and Julien Saunders are the married co-founders of the blog Rich & Regular.
Courtesy Julien Saunders
"Naturally, we've cut back. We're not driving nearly as much and because our son's daycare was closed for a bit, we saved a little there," says Julien. "But we're actually less focused on budgeting and saving a few dollars here and there and more concerned with driving income."
In times of uncertainty, it's helpful to have multiple revenue streams, instead of just a single paycheck, adds Kiersten, who recently left her marketing job to work on their business and blog, Rich & Regular, full-time. Julien quit his job in 2018 and also works on the couple's blog and business full-time.
"Paychecks teach us that money comes in this straight-line, linear way: Every two weeks, it's the same amount of money," Kiersten says. "But entrepreneurship showed us that money doesn't have to come in that way."
As entrepreneurs, they earn six figures from a variety of sources, including generating revenue from their blog, which they launched in 2017, and by working with brands to tell creative stories about money. They also recently signed a book deal.
They're not regularly checking their accounts
Sabatier used to check his net worth every day. It was a way to monitor his financial progress and stay motivated to reach his goals.
While he has a substantial cash cushion and isn't worried about his financial situation right now, "I'm human, so when your net worth drops 30% in a matter of 10 days, it sucks and that hurts and you feel it."
That's why he's putting the habit of looking at his account balances on hold: "I know things are going down." He's accepted that, for the time being, he's in "a preservation phase, not a growth phase," but trusts that the markets will bounce back. When they do, he'll start checking his net worth again. But in the meantime, he doesn't need the stress and anxiety that comes with seeing his numbers drop.
They're thinking long-term
Early retirees Justin and Kaisorn McCurry
Source: The McCurry family
Since they're not planning on using the money they have in the market for the next few decades — they live off of dividends from their portfolio, plus revenue that comes in from their blog — and have a comfortable cash cushion, "we're not forced to sell everything," Justin explains. "We have about seven years of bonds in our portfolio and about a year of cash, so as long as the market recovers within the next seven or eight years, we're not going to end up having to sell anything at a loss."
That's why the couple is keeping their hands off of their investments and focusing on their long-term plan, rather than dwelling on the current state of the market. "Overall, I'm playing the very, very, very long game, so it's multiple decades of patience, perseverance and sticking with what has worked historically for the last 100-plus years: investing in stocks, watching it go up, watching it go down and not worrying about it too much," Justin says.
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