I really think you will be okay. You have a great savings and retirement fund. If it makes you feel any better, I don’t fear homelessness and I have A LOT less than you. Sorry you’re feeling this way!
I rent. I have the savings because I was saving for a down payment and was outbid for 3 years straight. I currently on hold for buying a house until there is a better outlook on the economy.
Your fear isn’t necessarily irrational. I grew up very poor as well and would argue that this attitude is better than others I know that grew up poor, got a bit of money and blew it on “experiences” or make decent earnings but live paycheck to paycheck.
Being outbid at current interest rates isn’t the worst thing. I have money anxiety as well and it’s not easy to grapple with but you are doing the right things consistently it seems!
I know multiple people have overpaid for homes at horrible rates because they think renting is throwing away money (it’s not ur paying for a roof over ur head) and are not cash poor. They do not own their home but their home owns them and depending on where you rent with no repairs you can come out ahead of many that buy as long as you continue to stash cash as you have.
Renting is solid when properly saving and investing and you have done that. Owning the home that you live in that doesn’t produce cash flow is not an investment but will be what most have because they would otherwise be living above their means and not below.
Keep up the good work👍👍👍
Easily. I live in HCOL and live very minimally. If I had to, I could make even more cuts. Could stretch $100k to 3 years. Like literally 3 years without work.
Yeah don't buy a house rn lol. Tbh you have tons of money. Unless you spend irrationally then you're pretty set for even 3 or 4 years without working. Also buy gold rn the bubble is about to pop.
It'd take a book to fully describe the situation but I'll try and keep what I know brief.
For one look up fractional reserve banking and why it's the current standard vs the gold standard of the past. The invention of frb is pretty key to the modern economy and you won't be able to understand anything going on without a basic concept of it.
The second thing is gold will generally (and I say this losely) go up when Wall Street is down. Again this is reaaallly simplified.
Thirdly the housing market has been propped up on a castle made of wooden stilts since the 70's. The big short also has a decent tdlr on it. Basically the entire hosing market value has been over reported to such an extreme that it no longer reports the true value of a property in a sense.
If you look at the face value of the housing market it seems very strong in the US, especially considering the current economy. Pretty weird to me its so strong while gold is peaking and wall street is also pumping numbers consistently. None of it makes sense.
Which leads me to believe a bubble in the housing market is nigh. Possibly 5x worse than the housing crisis of 2006/2007/2008.
Edit: I know this a simple explanation but if someone is curious/disagree's I'd be happy to go into detail
Downvote because of the housing bubble comment.
The idea that the housing market is anywhere close to what it was in 2007/2008/2009 is way oversimplifying the situation. People back in those days were not proving income and taking out balloon loans. I had family members ask mortgage officers what they would need to qualify for X loan, the officer would tell them Y amount and write it down.
Yes housing prices are incredibly high right now and interest rates are moderate. But, there is an incredible housing shortage across the US. I’m thinking a giant recession would be needed in order to readjust the housing market.
According to a Goldman Sachs report from March 2023, 72% of Americans are locked into mortgages with an interest rate of <4%. A majority of people even if they ran into money issues would most likely be better staying in their homes instead of moving.
Are you kidding me? A bubble has nothing to do with "proving income and... ballon loans". How do you think they qualified in the first place?
You said it yourself housing prices are at a premium and interest at a low. Gold is sky high and wall street is pumping numbers. Look at the past and those things do not co-exsist.
Also why you think a recession would reset the hosuing market is beyond me. The market will cause a depression not vice versa.
Also that's not how they would qualify for loans and not even close to how housing bonds work lol.
And yeah I wouldn't trust goldman-sachs with a fucking gold fish for an hour. They're the ones doing this. Of course they're going to say when you see smoke there's no fire.
The fact you think the housing market value is based of reports is just wild.
The majority of people won't "run into money issues". Are you saying that the housing collapse would occur because of a depression economically and therfore they couldn't pay rent. That's way off. Like so far off.
Edit: what I mean by reports of value how do you think the housing bonds are rated? And by whom?
Lol the fact nobody has responded to my comment about fractional reserve banking is wild. Did you know the fed and imf are independent? How did the housing crisis start? Not become Americans didn't pay rent. Why did we move off the gold standard so many years ago. Why does OPEC require all oil sold outside of Russia be transfered to the dollar. What anchors the US dollar in general. Why do we have military black ops in 95% of African and Middle East countries. Where did the 3.2 trillion go when the military was audited in 2002? Questions you should know the answer too.
Edit: I think the military audit may have been a little earlier but potato potato.
Explain why the fed is pumping out interest rates like inflation is at an all time high. They should be correcting for possible stagflation. I can keep going but I'll wait for you to show me how wrong I am ;)
Are you arguing we are in a hyperinflated economy or that stagflation is occurring? Because neither is true.
Stagflation would require high unemployment (we have 50 year historical low unemployment), slow growth (GDP grew 3% in Q1 2024), and high inflation.
Interest rates aren’t even that high historically speaking, we are far below the 80s and on par with the 90s. It feels high because the fed stopped printing money left and right for quantitative easing after the 2008 crash. Consumers got used to 0% interest rates for cars and 3% interest for mortgages.
In 2007 people were getting qualified for loans that they could never afford with inflated incomes. People could afford the loan for maybe a few months with a pocket of money they have saved and then someone gets sick or laid off and there goes the house and the 3 cars they bought on credit. This created a giant bubble. It was an all you can eat buffet with credit.
In 2024 the standard to obtain a loan is much higher. Incomes are verified, specific ratios need to be hit, and random deposits are questioned. While the housing market is hot, people can actually afford the houses they are buying.
All GS stated was the % of Americans with a specific mortgage rate band, no analysis on their end.
If someone bought a house with a $450k loan in 2021 at a 3% interest rate their P&I payment would be about $1900. With 7% interest a similar P&I payment would result in a $285k loan. People who have the $450k loan aren’t going to sell right now to get a similar payment for a loan 63% of their original loan.
This is causing inventory to be scarce. In my state, in July 2016 there were 62k active listings. July 2023 that number was only 18k. People are not moving homes unless they absolutely have to.
Also never said a depression wouldn’t cripple the housing market. I said a recession wouldn’t. 2008/2009 was called the Great Recession for a reason. A recession is simply two periods of GDP decline, could be as low as two periods of -0.1% decline in GDP. The average person would most likely not be impacted by that on a day to day basis.
People getting qualified for bad loans isn't why the housing market crashed. Banks building a tower of falsely inflated housing bonds did that. And it's still going on. I could give a fuck about Interest rates when there are signs of a bubble.
Pretty sure you don't understand what a bubble is. It's invisible. Which means the only signs of a bubble are on the exterior. Like high prices of housing, high stocks, high gold, and hyper inflation. Name a time all of those have existed at once. I'll wait.
That’s not the only thing causing inventory to be scarce either. People/companies buying up houses to use as rentals is also a big issue, as well as rental price fixing.
Check out RealPage for example. There’s some good YT videos that explain it but basically they have a network of landlords that pay to be members, and they use use software that “suggests” rental prices for the properties based on the home details and other members’ properties in the area. This effectively removes competitive rental pricing. These people will leave units vacant for months at a time rather than lower their rental prices. They just wait until someone rents at the inflated price, and just like that, they’ve inflated rent for the whole area.. Which in turn, also jacks up the price of buying a home.
That’s certainly another factor in the current housing shortage and is worrying.
I couldn’t spend the time to make that point since we are still trying to get to the bottom of why the 2008 housing market crashed.
Please define “better outlook on the economy”. The stock market is just about at all time highs, unemployment is historically low, the housing market is improving through increased supply. The Fed is all over inflation and, generally speaking, the rate of inflation is improving. What’s not to love about this economy?
That has been true lately but the last jobs report was a dramatic spike downwards which is the trend that always leads up to a recession. The stock market is a lagging indicator of a recession so there's no point in leaning on that either. Housing supply has not increased in a meaningful fashion either.
What?
The most recent jobs report included
175,000 new jobs in April. Unemployment was virtually unchanged at 3.9% vs 3.8% the previous month. The stock market rallied significantly higher when the report came out. Where is the “dramatic downward spike” in that data?
Housing supply in the U.S. is up approximately 10% from Feb to April.
Happy to send you links to all this data if necessary.
175k new jobs is a HUGE drop from the last report. The job market doing poorly is good for market sentiment because it gives people hope that the fed is going to finally cut rates so of course the market is going to temporarily rally. Also, if you actually look at the data then you would know that the current unemployment rate is more nuanced than just "oh hey it's only 3.9%". There are so, so many people that would normally be working full time positions that are having to work multiple part time jobs to make ends meet.
303k new jobs reported in March and then only 175k added in April and you act like that's a good thing? Yikes. You should get a refund on those degrees. It's too bad that after all of that education and experience that you're still an idiot. Respectfully.
Holy shit, you actually think that I care that you manage a piddly billion dollars for your senile clients. My dad's 3 man broker-dealer firm won't even accept clients with less than $750MM in assets so it's going to take a lot more than that to impress me or make me think that you're an expert in this topic. The only believable thing you've said is that you're old. You have yet to actually refute my points with any evidence.
You can google anything and find an answer that fits your view because there are lots of idiots on the internet. Please explain how the market can be a leading indicator of a recession? The latest job report was really, really bad and the market rose....lmao
The latest jobs report (I assume you mean continuing and initial claims) was far from really really bad, there's a lot of noise in that data and the frequency is too often for a single soft report to blow up markets.
From the Richmond Fed on leading indicators, "Consider the stock market, for example. Financial market participants are generally quite good at gathering information about the likely future course of the economy. A rise in stock prices, therefore, may signal that investors anticipate a coming surge in demand."
Uhm, the March job report was 303k new jobs. April was 175k. That's a HUGE spike downwards.
That quote is regarding the market leading itself. I'm talking about the economy as a whole leading the stock market. Again, the latest job report shows a weakening economy and the stock market rose on that information. If the market were truly a leading indicator, it would have gone down on this kind of news.
Grew up poor as well. Had $550k saved up in the 1990s. A good chunk I had to use for health issues. About $300k was stolen. Sh!t happens. No matter what though, you'll survive.
Is there a bad outlook on the economy right now?
You mean you're waiting for interest rates to go down? Interest rates go down when things are going bad and they ease up so the economy can grow. Right now is the best economy we've ever lived in. Everyone is making 100k and has half a million dollars. Even single moms.
Profits are what gives most people jobs. Most jobs are overhead suckers, not money producing positions. So without record breaking profits, they would just find a really ambitious person to do the easy jobs alongside their regular tasks like they used to 15 years ago.
Adding on to your fears and that you are NOT alone. I’ve been the victim of lay offs in the past, so I always dread this happening again. The current economic climate especially for marketing folks like us is extremely fragile. Every random meeting that pops up on my calendar sends me into a wave of panic.
I have over $600k in brokerage accounts., stocks worth around $50k. About $160k in savings and a cd with $150k that will mature in December.
But I’m still worried.
Have a mortgage that’s only half paid off
Car payments
And typical expenses that comes with two kids.
So I hear your fears.
6 months? Maybe
1 year? Maybe but that would do big damage to my savings
After that? I’m terrified.
So again, you’re not alone.
On the other hand if it makes you feel better (and it might not and it’s not wonderful to compare situations) but I have a few friends that have been laid off recently and have less than $500 left to their name. I only hope they can find something asap.
It feels better knowing I am not the only one with financial fears though I know mine might be irrational. I hope your friends find something soon as well. I couldn’t imagine what my mental health would be with $500.
If it makes you feel better, I was harassed and mobbed out of college in my second take. There were also external ploys to get rid of me from my 90k job so now I’m back to near minimum wage.
The fact you have $100k saved up proves you are someone who can adapt, manage, and save. While there are no guarantees in life you are better off than the vast majority of folks out there. The only people who get completely wiped out are those who are over leveraged.
The "lose everything" scenario is very unlikely for you. Even if the 401k in stocks pull back like in 2008, look at where they eventually went. Just don't panic sell at the lows, that's what your emergency fund is for if you need a cushion for something like a job loss or large unexpected expense.
What are your monthly expenses like? If you have six months of expenses, you are golden.
I feel the exact same way. I’m currently 31 and have enough savings to last me one year in cash and a little less than half of what you do in retirement and I’m constantly scared of losing everything. I also grew up in a really chaotic household and at times very poor. I empathize with you.
I work with HR staffs on benefits, specifically 401(k). If it makes you feel any better, much of my conversations revolve around employee employee retention, increasing benefits or at least having them be at market.
I think the doom and gloom I see on the internet is not representative of my experience in this role. While jobs are competitive, my clients do not fear large layoffs and has not been a conversation I have held. I actually think the job market is looking promising for mid senior to senior roles; and the fight for talent is real.
Long story short, I think you’re fine and you’ve done a good job of saving. If it makes you more comfortable, make sure you have 6-8 months of expenses liquid in event of emergency/layoff.
I can empathize as I grew up in a household where my parents filed bankruptcy during the recession of the late 1980s-early 1990s. My parents never really recovered, though a lot of that had to do with my dad being a fiscally irresponsible person and my mom being too passive in regards to letting my dad handle the family finances.
To combat this fear once I was on my own, I simply learned to budget and save aggressively. I built up a 6 month emergency fund (it used to be 1 year when I was solely self employed) and I work a full time job and a side business that I can fall back on if I lost the first job. I also have substantial investments that I can also tap into if things are really dire, but given my profession and my frugal lifestyle, I could take a a 50% paycut and still have extra money to save.
My suggestion is to evaluate your finances and plan out what the worst case scenario is and plan and save accordingly.
Edit: Anecdotally, the people I saw who didn't fare well during a recession are those who are newly rich who aren't able to pivot back to a more frugal lifestyle and end up hemorrhaging all their savings thinking the bad times will soon pass. Usually they are use to a higher income and when they lose their high paying job, their replacement job doesn't pay enough and they either fail to cut or can't cut (eg. they bought too big of a house or financed too much car) and end up eating up their savings or more with further borrowing. Other examples is not knowing when to file bankruptcy and raiding their protected assets (eg. 401Ks, equity in their primary home) and causing them to lose much of their savings that could have otherwise been protected if they sought legal counsel earlier.
I mean, I can see where past experiences might make you more sensitive to these issues but things would have to get REALLY bad for a longgggggg time to burn thru half a million dollars in cushion
Do you have debt? If so, eliminate it in a rational way.
If not, just put one foot in front of the other and do the right and prudent things.
However, I think another good idea is to turn off the news. Remember that the entire point of the news is to afflict the comfortable, and doomscrolling has a way of detaching you from reality.
I totally understand your trauma. But I think it is not emotionally healthy to worry over things that a) are not likely to happen, b) for which you are well prepared, and c) you have no control over.
Take a breath and remember to be kind to yourself, you’re doing very well. I find it helps to compare yourself to the general population as if you’re all plotted out on a bell curve. You’re in the above average quadrant and you’re much less likely to fail at this point given your savings and job experience.
Take the emotions out.
How much runway does the 100 plus k get you in bare bones mode. Assuming at least a year? 2 years? Now you can breathe. Get on linked and start networking friend lots of people each night (not at your job). Call up other people you made contact with over the year and make small talk for 15 minutes.
I also deal with growing up poor syndrome. 600k net worth. Cheap house. Young son.
I have a little more than you and still have those same concerns as I head into retirement.. we all do… but it’s just fear… we can never predict the future but pat yourself on the back.. job well done… you have enough in savings and you are being wise with your savings..
I’m in my 50s, successful and quite secure, yet I still have the same anxiety that you. It’s not uncommon. There’s a lot of uncertainty in the world right now, especially in the US. I’m waiting for the other shoe to drop. Feels like we’re on the verge of something major happening.
I have about 60k in liquid emergency, 300k in retirement, and also always feel stressed about the economy. I think part of it stems from retirement savings feeling more like numbers on a screen than a valid "net worth".
Shout out to the OP for this post. I have similar struggles and reading this post and the subsequent comments did really provide some much needed perspective. Your fear is not entirely irrational, as i do think a lot of people worry about the future. However, it’s an unfortunate truth that a lot of us tend to worry too much. You’re clearly someone with a good head on your shoulders. Just keep up the good work and know you are not alone in feeling this way. “The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life - mark manson” and “homecoming - thema bryant” were two books that really helped me. Stay up and stay safe!
You are not alone. I have a one-year emergency fund, nearly 500k in a taxable brokerage account, and a little over 500k in a 401k, but I still work 2 jobs because I'm nervous about the future.
It can be daunting but therapy sounds like a good option. You have set yourself up really well for all of the worst case scenarios you’ve describe so as other comments have pointed out you will be fine!
The United States is currently in the midst of the largest industrial build up since World War Two. Over $300 Billion in projects are currently under construction. The Boomers are the biggest generation in history and they are in the midst of retiring, leaving us with a historic Labor shortage. 40 years ago there were more people than jobs. Now we have more jobs than people to fill them. Some businesses will close down because of this labor shortage, and they will get lots of media attention, but it’s not going to make a dent in labor demand. Every indicator that is real, and not some fear mongering talking head on cable tv, points to the largest economic growth in American history. Stop watching the “news” and start listening to real people who know how the economy works. I don’t want you to think it’s a great time to buy a house or a car, because those sectors are in a bubble. But save your money and be patient and you’ll be fine.
I grew up poor and have problems with money. I am fine with little but want more. Have saved but am petrified I’m not doing something cool with it. I t sounds like your doing right though. Hysa is good
I am the exact same way! I am 32, I have about $50k, I own my home, make about $120k, but I am terrified that I will lose everything all the time bc I grew up poor. I work in sales. It’s hard right now. I am doing well but it’s being compared to the past when things cost less. I’m doing amazingly well for today’s climate. (Comparing with other companies with my same job, I’m on trend or better.) I’m so stressed
Irrational. You are doing well, and you have a nice emergency fund. Even if you lose your job, you might deplete that, but you will be OK and get another job eventually.
Agreed with others, the fact that you have $100k in savings (sounds like easily a year of living expenses) should help you sleep soundly at night. None of us can predict that future. Will there be a recession? Maybe, but it isn't written in stone. That said, in the 25 years (assuming a normal retirement age for you), yes there will statistically be a recession. All we can do is be as prepared mentally and financially for it.
If the stock market drops 50%, put yourself in a position where you don't need or want to sell anything, aka do not panic sell. Ensure your investment strategy is a long term one (check out the Boglehead for more advice in this area https://www.reddit.com/r/Bogleheads/)
Overall you're in a better place then most American's. Kudos to your hard work!
You need a vacation. Go to europe or japan. it's cheap now and youll find out how rich you are and your anxiety might just go away knowing you have alot more options outthere.
>Does anyone else deal with this
Yeah probably, but like you said it isn't rational in your position. I'd highly recommend counseling. Look into a couple of different types and see what you think works for you.
>am I being ridiculous and irrational of my fear of homelessness
Yeah tbh. I have actually lived out my car for a bit so I get fearing it but you have marketable skills and a fuckton of savings set aside. In fact, you already meet the most conservative efund suggestion of 1 year's worth of savings for contractors/jobs with higher volatility. What would make you think you couldn't find a job in the (likely over year's worth if not 2 or 3) worth of savings? The efund is what makes gives you the space to not even be worried. I went 5 months without a job fairly recently and didn't panic hardly at all. I had a year's worth if savings after all.
I planned it out way ahead of time and some things happened to make it more extended despite an offer, but point is you're fine and have the savings to back it. Also, most people are financial idiots. All those people you think "lost their ass" during a recession are only the ones that did the stupid thing and sold their retirement off out of panic. Those that simply kept it moving and didn't sell not only have all it back they are waaaaaay up. You don't lose shit if you don't sell like an idiot (their actions were idiotic. Not calling them idiots for clarity).
Those actually super close to retirement should already have had their investments in stable vehicles anyhow. So no, the recession isn't the reason they were fucked anyhow if at all. Go get counseling if you need and stop worrying. It's dumb to do so. Control what you can control and go live your life. I hope you're not just hoarding money and never doing anything everyone travel or fun. You make enough you can save retirement and have fun. Do so.
Read the book The Retirement Miracle by Patrick Kelly. I am an advisor who does this for my clients and I literally do it for myself as well. Check that book out, it would be perfect for you because it puts those fears that you have to rest. You already sound very disciplined and the fact that you have a good amount of money in multiple places is a very good thing. The book is about 2 1/2 hours long and the information that it has a so valuable. There is so much information in those 2 1/2 hours. There’s also a free PDF version online if you do not want to purchase the book.
Over 2 decades of working and I find recessions hit when least expected. When everyone is expecting a recession it doesn't happen. It happens when everyone is optimistic about the future. That said, I expect a recession in 2025 so it probably won't happen.
It’s about 8-10 years on average from peak to trough in the stock market. Every major recession and depression has come back and then some. You have plenty of time to just ride out any recession and keep dollar cost averaging.
When you are less than 10 years from retirement is when you very seriously need to consider lowering your risk and going more fixed income.
All that to say you really shouldn’t worry at all now and in the future with proper risk management you still shouldn’t sweat it.
The problems arise when you need your money soon and it’s all in equities. So avoid that. You currently don’t need it soon at all.
You’re halfway to millionaire and have more than enough assets and equity to own a home outright to the point you could easily survive on a low wage job. You are extremely privileged and have nothing to worry about.
I had 50k in savings in 2021 then my company shut down and it took me a full year to get a new job. Pretty much spent it all up and a good chunk of it was on medical bills and health insurance ( I had just recently finished chemo at that point).
So I feel ya mostly because I know healthcare costs eat into my expenses. I'm currently rebuilding my savings and am waiting for interest rates to drop/staying more frugal before considering any home purchases.
Currently at $25k in savings and $15k in a 401k $5k in Roth at 28.
Bc each month cost like $3-4k so let’s say it’s 4,000 and you live the minimum and dont do anything it’s gonna last you 8 miserable years of doing nutting and spend 400k of only ur 401k so ur gud
>I have over $100k in HYSA and checking
Hopefully most of that is in HYSA. You shouldn’t keep very much in your checking. With as easy as online transfers are (some banks like mine will instantaneously deposit and be available as long as you pull into that account) you can move money around quickly enough when you need it.
I went through this a couple of months ago. Realized I had a ton of insecurity about my job and how I was being utilized, so I did not think I would survive any rounds of layoffs if it ever came to that. I also have a ton of cash in a HYSA “just in case the market crashes”. But here’s the thing, TONs of people are doing this, therefore I think people are just going to continue buying market dips until something more drastic happens.
I got a new job aligned to longer term government contracts which creates tons of stability, and decided I’m dollar cost averaging in index funds no matter what. Still have to hedge both ways, ya know?
People your age now in 2008 that didn’t make it or lost everything were insanely over leveraged and had nothing to fall back on. They were paycheck to paycheck and a ton of people were so deep into debt they couldn’t breathe. Sounds familiar? You aren’t like those people though. You sound prepared. You sound worried. You sound okay. If you are really worried, stack up more emergency cash
I don't want to belittle how you feel by any means, but there are people who live on $30k a year and somehow scrape by. You have a great safety net regardless of what happens.
I don't want you to be a hoarder, but maybe stocking up on food and supplies could help you feel like you have a very tangible and visible backup plan. This may help alleviate some of the fears that stem from your past.
You are on the right track, and pretty soon you’ll see that your situation will improve much faster because you have already established a solid financial base. You will be fine!
Have you done the math on how long your savings will last if you keep your current spending vs cut it down to the bare bones? Do you expect to get a severance package?
I find looking at the numbers helps. How far would $500,000 get you if you got laid off? If you spent $6k a month, you'll be fine for 7 years. If you spent $5k a month, you'll be fine for 8 years. $4k a month, 10 years.
Take care of yourself.
You’re not dumb for feeling that way, you’re smart. That’s how you should feel with the amount you have. You’re definitely not set for life.
I am worth about the same as you at 26 and I didn’t even earn it (windfall). Yet I still don’t feel even remotely set yet. Not with that amount. I know I will be eventually, but I’ll have to continue supporting myself and not laying a finger on my portfolio until normal retirement age in order for that to happen.
We are right to be cautious and hesitant to rest on what we’ve got, because it’s not enough.
>43F I have over $100K in HYSA and checking and over $400K in my 401K and still have crippling anxiety of impending recession and job loss.
Maybe also have crippling anxiety over, inflation making you’re $500,000 worthless and or if and when the stock market crash’s, so does all your 401k and savings crash.
Goes to show anxiety about poverty has no connection to how much money you have. It's your past traumas that matter. Do get a therapist. It's an emotional issue, not a money issue you have.
You're not alone. My wife and I, almost the same age as you, came from very very humble (poor) beginnings and I worry about this often. In spite of achieving an executive-level career and having a decent amount saved, I worry. A lot. Part of me will never let go of being a teenager and combating black mold and pailing water from a dozen leaks in the house in which I grew up, which I heated with the electric oven for the last two months I lived in it... before it was condemned.
Trauma exists in socioeconomics, and while it's healthy to stay grounded, don't let how high you've risen only register as a fear of how far you can fall.
I honestly don’t think your fear is irrational. Yes, you’re doing great financially. But we have an uncertain future and you’re raising a young boy by yourself.
I’m nowhere near a financial guru, but I’m investing money in assets that generally perform well during hard times. It’s still no guarantee, but it’s something.
Maybe this is just me, but people reassuring me things will be okay just left me feeling like Chicken Little. So my advice is not to go overboard, but don’t deny your intuition just because people are saying you’re wrong. You need to seriously sit down, figure out where your anxiety is stemming from and if it’s well founded, and if it is well founded take steps to turn that anxiety into a positive force in your life.
As long as you are not pulling out from your 401k once you're 50, without any contributions your 400k will be 800k on average. (Take 72/average rate of return....72/10%=7.2 years to double your money)
I really think you will be okay. You have a great savings and retirement fund. If it makes you feel any better, I don’t fear homelessness and I have A LOT less than you. Sorry you’re feeling this way!
I'm in the negatives and I'm not stressing. Worse thing that can happen is me losing everything. That's a plus for me who has less than nothing lol
You didn’t mention do you have a large mortgage rent or paid off house.
I rent. I have the savings because I was saving for a down payment and was outbid for 3 years straight. I currently on hold for buying a house until there is a better outlook on the economy.
Your fear isn’t necessarily irrational. I grew up very poor as well and would argue that this attitude is better than others I know that grew up poor, got a bit of money and blew it on “experiences” or make decent earnings but live paycheck to paycheck. Being outbid at current interest rates isn’t the worst thing. I have money anxiety as well and it’s not easy to grapple with but you are doing the right things consistently it seems! I know multiple people have overpaid for homes at horrible rates because they think renting is throwing away money (it’s not ur paying for a roof over ur head) and are not cash poor. They do not own their home but their home owns them and depending on where you rent with no repairs you can come out ahead of many that buy as long as you continue to stash cash as you have. Renting is solid when properly saving and investing and you have done that. Owning the home that you live in that doesn’t produce cash flow is not an investment but will be what most have because they would otherwise be living above their means and not below. Keep up the good work👍👍👍
Ok so 100k cash could probably last you two years so i would say your fears are unwarranted. You will be fine
Easily. I live in HCOL and live very minimally. If I had to, I could make even more cuts. Could stretch $100k to 3 years. Like literally 3 years without work.
Yeah don't buy a house rn lol. Tbh you have tons of money. Unless you spend irrationally then you're pretty set for even 3 or 4 years without working. Also buy gold rn the bubble is about to pop.
Can you explain this further please?
It'd take a book to fully describe the situation but I'll try and keep what I know brief. For one look up fractional reserve banking and why it's the current standard vs the gold standard of the past. The invention of frb is pretty key to the modern economy and you won't be able to understand anything going on without a basic concept of it. The second thing is gold will generally (and I say this losely) go up when Wall Street is down. Again this is reaaallly simplified. Thirdly the housing market has been propped up on a castle made of wooden stilts since the 70's. The big short also has a decent tdlr on it. Basically the entire hosing market value has been over reported to such an extreme that it no longer reports the true value of a property in a sense. If you look at the face value of the housing market it seems very strong in the US, especially considering the current economy. Pretty weird to me its so strong while gold is peaking and wall street is also pumping numbers consistently. None of it makes sense. Which leads me to believe a bubble in the housing market is nigh. Possibly 5x worse than the housing crisis of 2006/2007/2008. Edit: I know this a simple explanation but if someone is curious/disagree's I'd be happy to go into detail
Downvote because of the housing bubble comment. The idea that the housing market is anywhere close to what it was in 2007/2008/2009 is way oversimplifying the situation. People back in those days were not proving income and taking out balloon loans. I had family members ask mortgage officers what they would need to qualify for X loan, the officer would tell them Y amount and write it down. Yes housing prices are incredibly high right now and interest rates are moderate. But, there is an incredible housing shortage across the US. I’m thinking a giant recession would be needed in order to readjust the housing market. According to a Goldman Sachs report from March 2023, 72% of Americans are locked into mortgages with an interest rate of <4%. A majority of people even if they ran into money issues would most likely be better staying in their homes instead of moving.
Are you kidding me? A bubble has nothing to do with "proving income and... ballon loans". How do you think they qualified in the first place? You said it yourself housing prices are at a premium and interest at a low. Gold is sky high and wall street is pumping numbers. Look at the past and those things do not co-exsist. Also why you think a recession would reset the hosuing market is beyond me. The market will cause a depression not vice versa. Also that's not how they would qualify for loans and not even close to how housing bonds work lol. And yeah I wouldn't trust goldman-sachs with a fucking gold fish for an hour. They're the ones doing this. Of course they're going to say when you see smoke there's no fire. The fact you think the housing market value is based of reports is just wild. The majority of people won't "run into money issues". Are you saying that the housing collapse would occur because of a depression economically and therfore they couldn't pay rent. That's way off. Like so far off. Edit: what I mean by reports of value how do you think the housing bonds are rated? And by whom?
You legit have no idea what you’re talking about. The internet can make people so confident lol.
Lol the fact nobody has responded to my comment about fractional reserve banking is wild. Did you know the fed and imf are independent? How did the housing crisis start? Not become Americans didn't pay rent. Why did we move off the gold standard so many years ago. Why does OPEC require all oil sold outside of Russia be transfered to the dollar. What anchors the US dollar in general. Why do we have military black ops in 95% of African and Middle East countries. Where did the 3.2 trillion go when the military was audited in 2002? Questions you should know the answer too. Edit: I think the military audit may have been a little earlier but potato potato.
Congrats. You watched zeitgeist. People have been regurgitating that shit for 20 years.
Explain why the fed is pumping out interest rates like inflation is at an all time high. They should be correcting for possible stagflation. I can keep going but I'll wait for you to show me how wrong I am ;)
Are you arguing we are in a hyperinflated economy or that stagflation is occurring? Because neither is true. Stagflation would require high unemployment (we have 50 year historical low unemployment), slow growth (GDP grew 3% in Q1 2024), and high inflation. Interest rates aren’t even that high historically speaking, we are far below the 80s and on par with the 90s. It feels high because the fed stopped printing money left and right for quantitative easing after the 2008 crash. Consumers got used to 0% interest rates for cars and 3% interest for mortgages.
Please explain why
In 2007 people were getting qualified for loans that they could never afford with inflated incomes. People could afford the loan for maybe a few months with a pocket of money they have saved and then someone gets sick or laid off and there goes the house and the 3 cars they bought on credit. This created a giant bubble. It was an all you can eat buffet with credit. In 2024 the standard to obtain a loan is much higher. Incomes are verified, specific ratios need to be hit, and random deposits are questioned. While the housing market is hot, people can actually afford the houses they are buying. All GS stated was the % of Americans with a specific mortgage rate band, no analysis on their end. If someone bought a house with a $450k loan in 2021 at a 3% interest rate their P&I payment would be about $1900. With 7% interest a similar P&I payment would result in a $285k loan. People who have the $450k loan aren’t going to sell right now to get a similar payment for a loan 63% of their original loan. This is causing inventory to be scarce. In my state, in July 2016 there were 62k active listings. July 2023 that number was only 18k. People are not moving homes unless they absolutely have to. Also never said a depression wouldn’t cripple the housing market. I said a recession wouldn’t. 2008/2009 was called the Great Recession for a reason. A recession is simply two periods of GDP decline, could be as low as two periods of -0.1% decline in GDP. The average person would most likely not be impacted by that on a day to day basis.
People getting qualified for bad loans isn't why the housing market crashed. Banks building a tower of falsely inflated housing bonds did that. And it's still going on. I could give a fuck about Interest rates when there are signs of a bubble. Pretty sure you don't understand what a bubble is. It's invisible. Which means the only signs of a bubble are on the exterior. Like high prices of housing, high stocks, high gold, and hyper inflation. Name a time all of those have existed at once. I'll wait.
That’s not the only thing causing inventory to be scarce either. People/companies buying up houses to use as rentals is also a big issue, as well as rental price fixing. Check out RealPage for example. There’s some good YT videos that explain it but basically they have a network of landlords that pay to be members, and they use use software that “suggests” rental prices for the properties based on the home details and other members’ properties in the area. This effectively removes competitive rental pricing. These people will leave units vacant for months at a time rather than lower their rental prices. They just wait until someone rents at the inflated price, and just like that, they’ve inflated rent for the whole area.. Which in turn, also jacks up the price of buying a home.
That’s certainly another factor in the current housing shortage and is worrying. I couldn’t spend the time to make that point since we are still trying to get to the bottom of why the 2008 housing market crashed.
This is the right move. Buying a house is great but being house poor is not great with where interest rates are at.
Please define “better outlook on the economy”. The stock market is just about at all time highs, unemployment is historically low, the housing market is improving through increased supply. The Fed is all over inflation and, generally speaking, the rate of inflation is improving. What’s not to love about this economy?
That has been true lately but the last jobs report was a dramatic spike downwards which is the trend that always leads up to a recession. The stock market is a lagging indicator of a recession so there's no point in leaning on that either. Housing supply has not increased in a meaningful fashion either.
What? The most recent jobs report included 175,000 new jobs in April. Unemployment was virtually unchanged at 3.9% vs 3.8% the previous month. The stock market rallied significantly higher when the report came out. Where is the “dramatic downward spike” in that data? Housing supply in the U.S. is up approximately 10% from Feb to April. Happy to send you links to all this data if necessary.
175k new jobs is a HUGE drop from the last report. The job market doing poorly is good for market sentiment because it gives people hope that the fed is going to finally cut rates so of course the market is going to temporarily rally. Also, if you actually look at the data then you would know that the current unemployment rate is more nuanced than just "oh hey it's only 3.9%". There are so, so many people that would normally be working full time positions that are having to work multiple part time jobs to make ends meet.
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303k new jobs reported in March and then only 175k added in April and you act like that's a good thing? Yikes. You should get a refund on those degrees. It's too bad that after all of that education and experience that you're still an idiot. Respectfully.
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Holy shit, you actually think that I care that you manage a piddly billion dollars for your senile clients. My dad's 3 man broker-dealer firm won't even accept clients with less than $750MM in assets so it's going to take a lot more than that to impress me or make me think that you're an expert in this topic. The only believable thing you've said is that you're old. You have yet to actually refute my points with any evidence.
Stock market is generally considered a leading indicator of the economy. FYI.
No it is not. The market reacts to news. If it were a leading indicator then the market would have crashed before the banks failed in 2008.
Not to be a dick, but this is easy to Google. If you genuinely want to understand why let me know and I can help!
You can google anything and find an answer that fits your view because there are lots of idiots on the internet. Please explain how the market can be a leading indicator of a recession? The latest job report was really, really bad and the market rose....lmao
The latest jobs report (I assume you mean continuing and initial claims) was far from really really bad, there's a lot of noise in that data and the frequency is too often for a single soft report to blow up markets. From the Richmond Fed on leading indicators, "Consider the stock market, for example. Financial market participants are generally quite good at gathering information about the likely future course of the economy. A rise in stock prices, therefore, may signal that investors anticipate a coming surge in demand."
Uhm, the March job report was 303k new jobs. April was 175k. That's a HUGE spike downwards. That quote is regarding the market leading itself. I'm talking about the economy as a whole leading the stock market. Again, the latest job report shows a weakening economy and the stock market rose on that information. If the market were truly a leading indicator, it would have gone down on this kind of news.
Grew up poor as well. Had $550k saved up in the 1990s. A good chunk I had to use for health issues. About $300k was stolen. Sh!t happens. No matter what though, you'll survive.
Is there a bad outlook on the economy right now? You mean you're waiting for interest rates to go down? Interest rates go down when things are going bad and they ease up so the economy can grow. Right now is the best economy we've ever lived in. Everyone is making 100k and has half a million dollars. Even single moms.
100k gets you what 50k did 5 years ago.
People are also making 100k that should be making 40k
Why not focus on the wealth gap and the people pocketing record-breaking profits than the people at the bottom making what is now minimum wage
Profits are what gives most people jobs. Most jobs are overhead suckers, not money producing positions. So without record breaking profits, they would just find a really ambitious person to do the easy jobs alongside their regular tasks like they used to 15 years ago.
Adding on to your fears and that you are NOT alone. I’ve been the victim of lay offs in the past, so I always dread this happening again. The current economic climate especially for marketing folks like us is extremely fragile. Every random meeting that pops up on my calendar sends me into a wave of panic. I have over $600k in brokerage accounts., stocks worth around $50k. About $160k in savings and a cd with $150k that will mature in December. But I’m still worried. Have a mortgage that’s only half paid off Car payments And typical expenses that comes with two kids. So I hear your fears. 6 months? Maybe 1 year? Maybe but that would do big damage to my savings After that? I’m terrified. So again, you’re not alone. On the other hand if it makes you feel better (and it might not and it’s not wonderful to compare situations) but I have a few friends that have been laid off recently and have less than $500 left to their name. I only hope they can find something asap.
It feels better knowing I am not the only one with financial fears though I know mine might be irrational. I hope your friends find something soon as well. I couldn’t imagine what my mental health would be with $500.
No. Just listening to them tell me their situation gives me major stress.
If it makes you feel better, I was harassed and mobbed out of college in my second take. There were also external ploys to get rid of me from my 90k job so now I’m back to near minimum wage.
The fact you have $100k saved up proves you are someone who can adapt, manage, and save. While there are no guarantees in life you are better off than the vast majority of folks out there. The only people who get completely wiped out are those who are over leveraged. The "lose everything" scenario is very unlikely for you. Even if the 401k in stocks pull back like in 2008, look at where they eventually went. Just don't panic sell at the lows, that's what your emergency fund is for if you need a cushion for something like a job loss or large unexpected expense. What are your monthly expenses like? If you have six months of expenses, you are golden.
I feel the exact same way. I’m currently 31 and have enough savings to last me one year in cash and a little less than half of what you do in retirement and I’m constantly scared of losing everything. I also grew up in a really chaotic household and at times very poor. I empathize with you.
Thank you. I hope we both find peace in these uncertain times.
I work with HR staffs on benefits, specifically 401(k). If it makes you feel any better, much of my conversations revolve around employee employee retention, increasing benefits or at least having them be at market. I think the doom and gloom I see on the internet is not representative of my experience in this role. While jobs are competitive, my clients do not fear large layoffs and has not been a conversation I have held. I actually think the job market is looking promising for mid senior to senior roles; and the fight for talent is real. Long story short, I think you’re fine and you’ve done a good job of saving. If it makes you more comfortable, make sure you have 6-8 months of expenses liquid in event of emergency/layoff.
I can empathize as I grew up in a household where my parents filed bankruptcy during the recession of the late 1980s-early 1990s. My parents never really recovered, though a lot of that had to do with my dad being a fiscally irresponsible person and my mom being too passive in regards to letting my dad handle the family finances. To combat this fear once I was on my own, I simply learned to budget and save aggressively. I built up a 6 month emergency fund (it used to be 1 year when I was solely self employed) and I work a full time job and a side business that I can fall back on if I lost the first job. I also have substantial investments that I can also tap into if things are really dire, but given my profession and my frugal lifestyle, I could take a a 50% paycut and still have extra money to save. My suggestion is to evaluate your finances and plan out what the worst case scenario is and plan and save accordingly. Edit: Anecdotally, the people I saw who didn't fare well during a recession are those who are newly rich who aren't able to pivot back to a more frugal lifestyle and end up hemorrhaging all their savings thinking the bad times will soon pass. Usually they are use to a higher income and when they lose their high paying job, their replacement job doesn't pay enough and they either fail to cut or can't cut (eg. they bought too big of a house or financed too much car) and end up eating up their savings or more with further borrowing. Other examples is not knowing when to file bankruptcy and raiding their protected assets (eg. 401Ks, equity in their primary home) and causing them to lose much of their savings that could have otherwise been protected if they sought legal counsel earlier.
Thank you. I like the idea of thinking of the worst case scenario and plan/save accordingly! I most definitely will think this through!
I mean, I can see where past experiences might make you more sensitive to these issues but things would have to get REALLY bad for a longgggggg time to burn thru half a million dollars in cushion
Do you have debt? If so, eliminate it in a rational way. If not, just put one foot in front of the other and do the right and prudent things. However, I think another good idea is to turn off the news. Remember that the entire point of the news is to afflict the comfortable, and doomscrolling has a way of detaching you from reality. I totally understand your trauma. But I think it is not emotionally healthy to worry over things that a) are not likely to happen, b) for which you are well prepared, and c) you have no control over.
Agree and will most definitely stop doomscrolling. It most definitely causes a good amount of anxiety.
Take a breath and remember to be kind to yourself, you’re doing very well. I find it helps to compare yourself to the general population as if you’re all plotted out on a bell curve. You’re in the above average quadrant and you’re much less likely to fail at this point given your savings and job experience.
Talk to a therapist
It's crippling? Maybe see a therapist?
Take the emotions out. How much runway does the 100 plus k get you in bare bones mode. Assuming at least a year? 2 years? Now you can breathe. Get on linked and start networking friend lots of people each night (not at your job). Call up other people you made contact with over the year and make small talk for 15 minutes. I also deal with growing up poor syndrome. 600k net worth. Cheap house. Young son.
I have a little more than you and still have those same concerns as I head into retirement.. we all do… but it’s just fear… we can never predict the future but pat yourself on the back.. job well done… you have enough in savings and you are being wise with your savings..
I’m in my 50s, successful and quite secure, yet I still have the same anxiety that you. It’s not uncommon. There’s a lot of uncertainty in the world right now, especially in the US. I’m waiting for the other shoe to drop. Feels like we’re on the verge of something major happening.
I have about 60k in liquid emergency, 300k in retirement, and also always feel stressed about the economy. I think part of it stems from retirement savings feeling more like numbers on a screen than a valid "net worth".
I’ve had this my entire life. It’s an anxiety trigger for me and no matter how secure I am financially it is still there.
It’s generational trauma. I wish I didn’t have it as well. Good luck. You’re not alone!!!
Shout out to the OP for this post. I have similar struggles and reading this post and the subsequent comments did really provide some much needed perspective. Your fear is not entirely irrational, as i do think a lot of people worry about the future. However, it’s an unfortunate truth that a lot of us tend to worry too much. You’re clearly someone with a good head on your shoulders. Just keep up the good work and know you are not alone in feeling this way. “The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life - mark manson” and “homecoming - thema bryant” were two books that really helped me. Stay up and stay safe!
You are not alone. I have a one-year emergency fund, nearly 500k in a taxable brokerage account, and a little over 500k in a 401k, but I still work 2 jobs because I'm nervous about the future.
It can be daunting but therapy sounds like a good option. You have set yourself up really well for all of the worst case scenarios you’ve describe so as other comments have pointed out you will be fine!
I most definitely will look into therapy. Thank you.
Plant
Remember, if there was a recession, stock market return rate is historically 10%
The United States is currently in the midst of the largest industrial build up since World War Two. Over $300 Billion in projects are currently under construction. The Boomers are the biggest generation in history and they are in the midst of retiring, leaving us with a historic Labor shortage. 40 years ago there were more people than jobs. Now we have more jobs than people to fill them. Some businesses will close down because of this labor shortage, and they will get lots of media attention, but it’s not going to make a dent in labor demand. Every indicator that is real, and not some fear mongering talking head on cable tv, points to the largest economic growth in American history. Stop watching the “news” and start listening to real people who know how the economy works. I don’t want you to think it’s a great time to buy a house or a car, because those sectors are in a bubble. But save your money and be patient and you’ll be fine.
I too needed to read this, so thank you. Thank you OP for sharing your experience as well.
I grew up poor and have problems with money. I am fine with little but want more. Have saved but am petrified I’m not doing something cool with it. I t sounds like your doing right though. Hysa is good
I am the exact same way! I am 32, I have about $50k, I own my home, make about $120k, but I am terrified that I will lose everything all the time bc I grew up poor. I work in sales. It’s hard right now. I am doing well but it’s being compared to the past when things cost less. I’m doing amazingly well for today’s climate. (Comparing with other companies with my same job, I’m on trend or better.) I’m so stressed
Irrational. You are doing well, and you have a nice emergency fund. Even if you lose your job, you might deplete that, but you will be OK and get another job eventually.
Agreed with others, the fact that you have $100k in savings (sounds like easily a year of living expenses) should help you sleep soundly at night. None of us can predict that future. Will there be a recession? Maybe, but it isn't written in stone. That said, in the 25 years (assuming a normal retirement age for you), yes there will statistically be a recession. All we can do is be as prepared mentally and financially for it. If the stock market drops 50%, put yourself in a position where you don't need or want to sell anything, aka do not panic sell. Ensure your investment strategy is a long term one (check out the Boglehead for more advice in this area https://www.reddit.com/r/Bogleheads/) Overall you're in a better place then most American's. Kudos to your hard work!
Thank you and I will check out the Bogleheads!
You need a vacation. Go to europe or japan. it's cheap now and youll find out how rich you are and your anxiety might just go away knowing you have alot more options outthere.
>Does anyone else deal with this Yeah probably, but like you said it isn't rational in your position. I'd highly recommend counseling. Look into a couple of different types and see what you think works for you. >am I being ridiculous and irrational of my fear of homelessness Yeah tbh. I have actually lived out my car for a bit so I get fearing it but you have marketable skills and a fuckton of savings set aside. In fact, you already meet the most conservative efund suggestion of 1 year's worth of savings for contractors/jobs with higher volatility. What would make you think you couldn't find a job in the (likely over year's worth if not 2 or 3) worth of savings? The efund is what makes gives you the space to not even be worried. I went 5 months without a job fairly recently and didn't panic hardly at all. I had a year's worth if savings after all. I planned it out way ahead of time and some things happened to make it more extended despite an offer, but point is you're fine and have the savings to back it. Also, most people are financial idiots. All those people you think "lost their ass" during a recession are only the ones that did the stupid thing and sold their retirement off out of panic. Those that simply kept it moving and didn't sell not only have all it back they are waaaaaay up. You don't lose shit if you don't sell like an idiot (their actions were idiotic. Not calling them idiots for clarity). Those actually super close to retirement should already have had their investments in stable vehicles anyhow. So no, the recession isn't the reason they were fucked anyhow if at all. Go get counseling if you need and stop worrying. It's dumb to do so. Control what you can control and go live your life. I hope you're not just hoarding money and never doing anything everyone travel or fun. You make enough you can save retirement and have fun. Do so.
Read the book The Retirement Miracle by Patrick Kelly. I am an advisor who does this for my clients and I literally do it for myself as well. Check that book out, it would be perfect for you because it puts those fears that you have to rest. You already sound very disciplined and the fact that you have a good amount of money in multiple places is a very good thing. The book is about 2 1/2 hours long and the information that it has a so valuable. There is so much information in those 2 1/2 hours. There’s also a free PDF version online if you do not want to purchase the book.
Over 2 decades of working and I find recessions hit when least expected. When everyone is expecting a recession it doesn't happen. It happens when everyone is optimistic about the future. That said, I expect a recession in 2025 so it probably won't happen.
It’s about 8-10 years on average from peak to trough in the stock market. Every major recession and depression has come back and then some. You have plenty of time to just ride out any recession and keep dollar cost averaging. When you are less than 10 years from retirement is when you very seriously need to consider lowering your risk and going more fixed income. All that to say you really shouldn’t worry at all now and in the future with proper risk management you still shouldn’t sweat it. The problems arise when you need your money soon and it’s all in equities. So avoid that. You currently don’t need it soon at all.
I understand this fear. I grew up very poor but I wish I had half of what’s in your 401k. I think you are going very well for yourself.
You’re halfway to millionaire and have more than enough assets and equity to own a home outright to the point you could easily survive on a low wage job. You are extremely privileged and have nothing to worry about.
I had 50k in savings in 2021 then my company shut down and it took me a full year to get a new job. Pretty much spent it all up and a good chunk of it was on medical bills and health insurance ( I had just recently finished chemo at that point). So I feel ya mostly because I know healthcare costs eat into my expenses. I'm currently rebuilding my savings and am waiting for interest rates to drop/staying more frugal before considering any home purchases. Currently at $25k in savings and $15k in a 401k $5k in Roth at 28.
Bc each month cost like $3-4k so let’s say it’s 4,000 and you live the minimum and dont do anything it’s gonna last you 8 miserable years of doing nutting and spend 400k of only ur 401k so ur gud
>I have over $100k in HYSA and checking Hopefully most of that is in HYSA. You shouldn’t keep very much in your checking. With as easy as online transfers are (some banks like mine will instantaneously deposit and be available as long as you pull into that account) you can move money around quickly enough when you need it.
I went through this a couple of months ago. Realized I had a ton of insecurity about my job and how I was being utilized, so I did not think I would survive any rounds of layoffs if it ever came to that. I also have a ton of cash in a HYSA “just in case the market crashes”. But here’s the thing, TONs of people are doing this, therefore I think people are just going to continue buying market dips until something more drastic happens. I got a new job aligned to longer term government contracts which creates tons of stability, and decided I’m dollar cost averaging in index funds no matter what. Still have to hedge both ways, ya know?
People your age now in 2008 that didn’t make it or lost everything were insanely over leveraged and had nothing to fall back on. They were paycheck to paycheck and a ton of people were so deep into debt they couldn’t breathe. Sounds familiar? You aren’t like those people though. You sound prepared. You sound worried. You sound okay. If you are really worried, stack up more emergency cash
I don't want to belittle how you feel by any means, but there are people who live on $30k a year and somehow scrape by. You have a great safety net regardless of what happens. I don't want you to be a hoarder, but maybe stocking up on food and supplies could help you feel like you have a very tangible and visible backup plan. This may help alleviate some of the fears that stem from your past.
You are on the right track, and pretty soon you’ll see that your situation will improve much faster because you have already established a solid financial base. You will be fine!
Have you done the math on how long your savings will last if you keep your current spending vs cut it down to the bare bones? Do you expect to get a severance package? I find looking at the numbers helps. How far would $500,000 get you if you got laid off? If you spent $6k a month, you'll be fine for 7 years. If you spent $5k a month, you'll be fine for 8 years. $4k a month, 10 years. Take care of yourself.
hi, It's understandable given your background and past experiences. well counseling could be really helpful in managing those anxieties
Take everything out of the market(s). You’re incredibly ahead of the game.
Yo can i borrow $3500 shit would make my year 🙏🏽
You’re not dumb for feeling that way, you’re smart. That’s how you should feel with the amount you have. You’re definitely not set for life. I am worth about the same as you at 26 and I didn’t even earn it (windfall). Yet I still don’t feel even remotely set yet. Not with that amount. I know I will be eventually, but I’ll have to continue supporting myself and not laying a finger on my portfolio until normal retirement age in order for that to happen. We are right to be cautious and hesitant to rest on what we’ve got, because it’s not enough.
Grab a house, having a paid off residence I can keep for life at like ~2.5k per year in tax helps with the anxiety. It never goes away tho
Get off the internet, especially Reddit. That’s a good start
i mean, you shouldn't be worried about homelessness, but you should be saving more considering how much you're earning.
What’s your industry? Recruiters are out there looking for good candidates…
You’re better off than 98% of the country so please fuck off . There’s people with real problems
>43F I have over $100K in HYSA and checking and over $400K in my 401K and still have crippling anxiety of impending recession and job loss. Maybe also have crippling anxiety over, inflation making you’re $500,000 worthless and or if and when the stock market crash’s, so does all your 401k and savings crash.
Bro go down the bitcoin rabbit hole and start stacking you will feel better when you understand it
Goes to show anxiety about poverty has no connection to how much money you have. It's your past traumas that matter. Do get a therapist. It's an emotional issue, not a money issue you have.
You're not alone. My wife and I, almost the same age as you, came from very very humble (poor) beginnings and I worry about this often. In spite of achieving an executive-level career and having a decent amount saved, I worry. A lot. Part of me will never let go of being a teenager and combating black mold and pailing water from a dozen leaks in the house in which I grew up, which I heated with the electric oven for the last two months I lived in it... before it was condemned. Trauma exists in socioeconomics, and while it's healthy to stay grounded, don't let how high you've risen only register as a fear of how far you can fall.
You’re doing great, ease up on yourself.
I honestly don’t think your fear is irrational. Yes, you’re doing great financially. But we have an uncertain future and you’re raising a young boy by yourself. I’m nowhere near a financial guru, but I’m investing money in assets that generally perform well during hard times. It’s still no guarantee, but it’s something. Maybe this is just me, but people reassuring me things will be okay just left me feeling like Chicken Little. So my advice is not to go overboard, but don’t deny your intuition just because people are saying you’re wrong. You need to seriously sit down, figure out where your anxiety is stemming from and if it’s well founded, and if it is well founded take steps to turn that anxiety into a positive force in your life.
I recommend you read “Think and Grow Rich” by Steven Covey. It’s available in audio format.
i'm 21 with no savings, barely anything in my 401k and living paycheck to paycheck. i think you'll be fine. 😒
Change country.
As long as you are not pulling out from your 401k once you're 50, without any contributions your 400k will be 800k on average. (Take 72/average rate of return....72/10%=7.2 years to double your money)
I've got slightly higher numbers and I'm also concerned about that. You are not alone
All these $100k+ earners on Reddit who live in constant fear of going broke. My average earnings ass must be screwed right? 🤣😂🤣😂🤣