Unless you have recently returned from Mars, you might have noticed our country and the world is going through unprecedented, Armageddon-type economic, personal and public health crisis that we have never experienced in modern civilization. The shutdowns of social gatherings and indoor commercial businesses, social distancing, and wearing protective breathing masks are as foreign to us as oxygen is to aliens. The stone-cold barren streets and restaurants give me the eerie feeling of watching 24/7 hour-after-hour of the T.V. episode the Twilight Zone, or more realistic recalling the nuclear annihilation WWIII movies during the 1950s.
One of the most famous of these movies was On the Beach, 1959, with Gregory Peck, Eva Gardener, and Fred Astaire. In the end, Peck and his love interest played by Gardener said their goodbyes. She lamented while embracing Peck, “I am so afraid!” Peck is the Captain of the only submarine, an American ship, that survived the conflagration.
They retreated to Australia where the deadly radiation had not hit yet, but time was running out there too. Being the Captain, he told her that he had to follow his men’s desires–every one of his shipmates wanted “to go home.” He had to leave Gardner and return to lead his men home on the submarine. The end of this monumental dark and sad film, the submarine submerged into the ocean returning to America to die. And those empty streets in Sydney, Australia, are forever itched in mind as I am reminded of that horrific movie once again just last Sunday.
Easter, 2020
Instead of joyous churchgoers around the world and the subsequent family celebrations of one of Christianity’s most important holidays, it was those poignant images on display. As you can see below, the major cities around the world were empty. Only this time the images are real, not in a fictionalized movie!
Those empty, but beautiful cities, restaurants, airports, and city parks brought back a reminder that no one…no society…no culture…no political party…no civilization…and no country is exceptional. Even the Pope held Easter Mass with an empty Basilica with a warning against selfishness during the pandemic.
The United States and the World Have Been Through Bad Times
The 20th Century is Marked by most Historians as one of the Most Bloodiest Eras of Human History
After WWII, the world lived through the absolute nightmare of the Cold War, which lasted from 1946 through 1989. On the Beach story never materialized thank goodness. Americans also lived through two World Wars, the Great Depression, Cuban Missile Crisis, the Vietnam debacle, 1960 Race Riots, Anti-War Demonstrations, the violence of the 1968 democratic convention, J.F.K., M.L.K., R.F.K., Harvey Milk and George Moscone assassinations, a corrupted Vice President and a disgraced President both resigning, 9/11, earthquakes, tornadoes, hurricanes, and massive fires, numerous school and public shooting from lunatic and sick individualists around the country, just to name some of the most severe challenges to our way of life.
I have Lived Through My Share of Health and Stock Market Crisis
My boomer generation and I have lived and vividly remember all the above crises, except the World Wars and the Great Depression which occurred before my generation was born (But my parents told me stories. My mother said that America came close to a revolution there were so many people out of work, during the 1930s). The great news is that we survived as a country and as a civilization. Since we did not have a health scare like this one, I will share personal experiences with several health-related stories. How I survived, as a cancer survivor myself, and a widower to my late spouse, Dan of 40 years, who died suddenly of his 2nd cancer. Finally, how I survived two previous massive stock market crashes, and am recovering with this latest crash (as of April 18, 2020 my portfolio is down only 3.6% year-to-date).
Personal and Academic History of Challenging (and scary) Times
Most Americans are practicing the stay-at-home policy. But we will work our way out of this pandemic. In the meantime, yes, this time can be scary and stark because many issues remain uncertain and unknowable. We are still not sure how the virus is spread, how many people carry the virus but never get sick, how many people got infected and sick in the past but recovered.
Stock Market history has more assurance and positive data for us than this COVID-19.
But history has assurance for us. Those of you who appreciate a little history of stock market bubbles and crashes might benefit from my experience to self-manage your own money. All my posts are about my personal financial experiences.
With decades of political observations/voting, investing experience, the author of two financial books, and just life, I share a lot of wisdom and knowledge I learned from my readings, study, and from what I learned from my mistakes. Subsequently, I have enough to share that I thought it would be a good idea to use my history to help others not make the same mistakes I did. So, I created a consumer point of view in which people get an additional strategy read what I did and perhaps discover how the stock and bond markets work for your benefit. Allow me to repeat what I have already written on my blog’s home page, I am NOT a financial professional, and I do NOT give financial advice, or recommendations to specific investments. As always, you must never take what I write here as face value and apply it directly to your situation. Never-the-less I have a ton of relevant health, financial and history experiences to share from an ordinary and regular American Citizen.
Knowing what has Happened will be Helpful Now
Finances: I have learned one thing, if you have your finances in order, that’s one massive stress off your mind, and that’s HUGE! It doesn’t matter if a natural disaster, pandemic, sudden loss of your spouse, job loss, or a recession strikes, you will be ready as your financial situation will allow you to focus on the immediate needs of the emergency. Every competent financial adviser will first instruct people to have six months of living expenses saved in case of an emergency. I agree.
Fire Your Financial Adviser, eventually. But learn how to invest from your adviser before letting him or her go.
I have had terrible experiences with so-called financial advisers. They were unethical professionals who never looked out for my best financial interests. They put me and my money into a nongrowth annuity contract, while they pocketed $6000 in commissions for two of those revolting retirement products. But that was 30 years ago, and since then, I am independent of professional advice. They are too expensive! If your adviser cannot or will not show you how to invest or using simple English to explain the returns and fees of your portfolio, fire him or her immediately and find somebody who will. My primary motivation for you is to begin to think of managing your money without an expensive financial adviser.
I practice what I preach, and it’s a good thing I do. Nobody does as good a job of managing and monitoring my money than ME! Pretty simple! I did very well over the years saving on investment expenses. I have a lot more money in my account as a result of controlling investment costs and by managing my money without an expensive adviser, I am more than ready for this pandemic and the economic tragedy that is happening right now.
Competent fiduciary advisers are expensive, too, when they charge assets under management (AUM) of up to 1.25%! Over the long term, that’s a lot of money for a task that you can do yourself with a little effort to discover and learn to construct a low-cost investment portfolio. If you can negotiate a lower AUM with your current fiduciary adviser to .50% or less, keep them and consider yourself lucky, but in return, you will most likely need to take more responsibility with overall management. If you are already a do-it-yourself, consider your very fortunate. Do you realize how rare do-it-yourselfers are?
Learn from My Investment Mistakes: Asset Allocation, stock/bond split, low-cost index funds from Vanguard, Fidelity or TIAA
I share what I do because I don’t want you to make the same financial mistakes I did. Furthermore, I invite you to become financially independent. Why become economically independent? My answer is another question, WHY NOT? You are a good person now, but if you are in debt and living from paycheck to paycheck, no matter what your income, those are negative distractions that keep you living with unhealthy and unnecessary stress. Work is stressful enough without the additional burden of car payments, mortgage for a house too big, saving for college, and trying to keep up with whoever. Besides, you will be able to do so much more with financial independence. There is a new movement, mostly young people who don’t want to go through what the older generations have endured, endless debt due to recurring new car payments, bigger homes than needed, buy expensive crap you don’t need.
F.I.R.E. and F.I. (Financial Independent Retire Early or Financial Independent)
These young people got it right, and they are living frugally, saving, and investing in low-cost index funds at a much younger age than most of us. They are doing what I discovered in my 50s. Invest in Vanguard or T.I.A.A. Furthermore, the strategies to get to F.I. is accessible to most people who work. Financial information is everywhere on the radio, T.V., thousands of blogs, newspapers, and magazine articles. All you must do is Google and get what you need to educate yourself. I have discovered from my mistakes to construct my portfolio to take advantage of bull markets with reasonable returns, which keep pace with inflation while maintaining my portfolio to an insignificant decline.
COVID-19 Is My Concern Because I have already taken care of my finances
In both the 2008 and 2020 bear market, my portfolio did what it was designed to do–keep me sleeping soundly at night. My investments are the least of my worries. This highly contagious dangerous COVID-19 is spreading, which has been on both my new wife and my mind for weeks.
Years 2000 and 2020
I was not so lucky because of the dot.com 2000-2002 crash. Both my late husband and I made a critical mistake costing all the dot.com gains we made, $1.1 million lost in that fiasco. By the end of 2002, our portfolio lost over 70%! We were so shocked we decided to revamp our portfolio, so this would not happen again.
New Year’s Celebration and positive anticipation for both 2000 and 2020 started great. Both my finances and my excellent health continued into both years. During the first quarter of both years, the stock market continued to reach record-breaking highs. Sound familiar? Especially for those of us who are old enough to experience the financial highs and lows during the dot.com bubble and stock market crash back in 2000.
2000 my first health-related crisis at age 53
On July 18, 2000, I was diagnosed with cancer. While the 2000 tech bubble crash started in March 2000 but did not get to the bottom until October 2002, my diagnosis was immediate, and I required surgery quickly. It was successful but the surgery recovery was painful and debilitating. However, my surgeon caught my cancer before it had spread. After several years of twice a year, blood tests to monitor if my cancer had spread, my doctor released me in November 2004 and declared I was “cancer-free.”
2020 COVID-19 Scare and Stock Market Crash
Record time to hit Bear Market Territory. This year, 2020, the stock markets fell into bear territory in record time from record highs to a 20 or more percent loss in just 19 trading days (02/12 to 03/11)! (The bear market is defined as a 20% or more decline in the Dow Jones Industrial Average). A historical speed record going negative would make one of the hottest racing cars on earth, the 2020 Tesla Roadster, slower than hot flowing lava. The rapid decline took everyone’s breath away. But there was a reason we all know. This year it’s not an individual’s health at risk with the COVID-19 but for humanity. 2000 and 2020 turn out to be a harmful year for both our portfolios and our health. The virus caused the stock market to crash after the longest bull market in history.
My Cancer, my Late Spouse’s Two Cancers, and COVID-19
I wonder if my cancer survivor experienced has helped me take things in perspective, so I would not be so afraid. I vividly recall the terror I felt with my diagnosis. I have a wide variety of feelings of 2000–the year my passion ranged from genuine elations to fear for my life. Financially, my late husband and I suffered a 33% loss from our portfolio by the end of 2000, as we all know now, the tech wreck bear market had two more years to go. But as it turned out we survived, Dan retired on his 59th birthday, and I retired when I just turned 61, and we had plenty of financial resources to support a marvelous retirement life.
1999 Was A Wonderful Year!
The Dow Jones Industrial Average Exceeded 10,000 for the First Time
Many might remember 2000 started with a bang of excitement and wonder as the anticipation of a new century with all the technology promises. The federal government for the first time since the 1960s the federal budget operated in the black! Furthermore, there was even talk both the annual deficit and the nation’s 6 trillion public debt could be paid off by 2010 (Weren’t the economic prognosticators wrong!). I remember celebrating New Year’s Eve at an Italian restaurant Dan, and I frequented with our long-time friend Bob. Dan and Bob were excited as they decided on one of life’s significant and positive events to retire by midyear.
I was in wonder of all the innovative computer and Internet technology. Our portfolio’s growth was real with my position as a computer lab teacher, and our investments surpassed the $1 million mark two months earlier, and it was still going up by New Year’s Eve. We had much to celebrate. The future looked bright. For years we planned to attain enough wealth to retire comfortably by learning to invest and manage without an expensive financial advisor. As educators, we got only a contract, not an investment, and it cost us to get out of those insurance contracts, aka annuities. But all was forgotten as we reached our financial independence, thanks to our targeted technology investments.
Our Life-Long Frugality Life Style Was Set Aside Briefly
Reward Yourself with Small Goals Accomplished! After New Year’s 2000, we spent $2000 on new clothes because the media talked ad nausea of the “wealth effect,” and we had it! Dan, my late hubby, and I decided to escape our frugal nature for this one spending spree. Our rare spending opportunity was so vivid, I still recollect driving to Beverly Hills to a high-end French men and women’s clothing store–Faconnable 20 years ago. $2000 on clothes! Here is the explanation of why this is so significant–clothes were never important for my life and livelihood. Feeling comfortable was primary to my values, not for style, not for an image, not to impress, nor in-vogue glam. But we thoroughly enjoyed our adventure to buy something different, and of course, we liked quality clothes too. We rewarded ourselves for our hard work, effort, and perseverance to stay financially and educationally disciplined for so long. We achieved a lifelong goal of amassing a comfortable nest egg.
2019 Was a Great Year Too!
2019 was a year full of house remodeling and traveling for us. We traveled to Morocco in March, Georgiana moved into the repainted and upgrading of my house in April. Then off to Long Beach to escape the heat from May to the middle of August. Then we flew to Massachusetts to vacation with Georgiana’s brother, her niece, and their families on Cape Cod. In September, we drove to nearby Williams, Arizona, to attend the Kadampa World festival, my Buddhist tradition, and saw the Grand Canyon. By the time the holidays came around, we were ready to settle down for the winter. Our New Year’s Dinner at Roy’s was as wonderful as our two previous New Year’s Dinners. We were engaged to be married and excited about planning for our formal wedding on March 21. My portfolio had one of its best years on record, returning a whopping 13.2% (here is my 2019 portfolio performance).
We had a fantastic 2019 holiday season with my family in Walnut Creek. Georgiana met the rest of my family, and on Christmas eve in front of everyone, I asked for Georgiana’s hand. She said YES! What an incredible ending of a beautiful year.
2000 Tech Bubble and Crash
Back to 2000. For 2.5 months after the New Year 2000, the stock market kept going up until we had amassed $1.5 million. Our portfolio increased by $500,000 in just four months. At the time, the stock market and the modern technological innovation and intrusion in our lives was the wonder of the contemporary world. How could it end? The technology was everywhere, the expensive and useless cold war was over, and people were spending money improving their lives, and using these new devices. The widespread use of Internet technology and email had recently celebrated its noticeably young 6th birthday with no end in sight.
But by March 10, 2000, it had begun its eventual slide. Dan had retired on June 29, on his 59th birthday. It was his lifelong dream to enjoy retirement. Since he earned his Ph. D. at age 38, he dreamed, planned, saved, and invested in living in complete financial independence. Finally, retirement happened. I was incredibly happy for Dan because I was going to follow him in my retirement in a few years too. We were not worried about a 33% decline in our portfolio. By summer, the market had a brief rally. We knew for years markets increase and decline in value. One does not lose any money until one sells at a lower price than when you bought it.
Cancer Diagnosis 2000
Then on August 18, I had my first colonoscopy at age 53, and a tumor was discovered! I was shocked, fearful, and angry. I was mad at my body for betraying me after all of my adult life of living and eating healthy, exercising, drinking wine once and while, and no smoking, maintain my weight, having a cheerful outlook, and living a stress-free life. I had a right to feel angry at my body–after all my work, time commitment and eating right to maintain a healthy lifestyle, I still got cancer at age 53. Wow!
I cried as I asked Dan if he was ready for this. He said no. But then he suggested we take a hike up the Arroyo Seco, a familiar hike we did for years. Dan grew up nearby this hiking trail, which goes right by the famous planetary robot builder, Jet Propulsion Laboratory, in Pasadena, CA. The hike and talk settled me down that we went to our friend’s wedding as scheduled and had an enjoyable time.
2020
Wedding Plans. During January, we heard about this new virus from our Chinese friend and thought nothing of it. In the meantime, we were working full time to plan our formal wedding with about 50 guests at a beautiful venue, Tumbleweed Sanctuary and Gardens, next door to the famous Joshua Tree National Park. We did all the work for any formal wedding, hired a wedding planner, food vendor, booked a D.J., contracted a photographer, formed our wedding parties, invited our guests, purchased our rings and our outfits, and even hired a photo booth. Stress was the name of the game during all this planning. But Georgiana did the heavy lifting as she wanted to exchange our vows in the middle of a Labyrinth, an ancient walking meditation symbol that resembles a maze, but it is not a maze. Thus, a good part of our wedding was untraditional. We forged ahead considering the growing concern of this virus, which started to make daily headlines as it spread beyond its Chinese border.
My Portfolio and the Broad Stock Markets Hit Record Increases for 1.5 months in early 2020.
My portfolio continued to rise until the middle of February. Like the beginning of 2000, my portfolio continued where it left off at the end of 2019. I had gained another $40,000! My portfolio and all three stock markets, DOW, S&P 500, and the NASDAQ continued to set historic records. By Valentine’s Day, I was incredibly happy with my finances and our upcoming wedding.
You know the end of this story. Not only did the market crash big time, but Georgiana and I were also forced to cancel our formal wedding. We began in earnest for plan B. It was a virtual wedding I had discussed already in a previous post. It’s been over four weeks since we tied the knot. Our honeymoon was right here at home, isolating and practicing social distancing right along with California and the entire world to help curtail the spread of the virus.
The Reality of the Stay-at-Home Policy Hit Home
I did something which I had never done in my adult life, I rationed. I ran out of goat milk for my coffee and breakfast cereal. We have been doing little shopping at the store and ordering online. The company which delivers groceries was on strike, and now they settled began deliveries. So, I experienced what my elders talked about during their tenure with rationing during WWII.
Every time the news reports an end of the economic and social shut down, the stock market goes up. Two weeks ago, my conservative portfolio was down over 12% from the February high. The broad equity markets were down about 33% at the time. Now, just during the last ten trading days, the markets and my portfolio recovered so much that my portfolio is down only 3.6% YTD. What a comeback. I still think it might be premature.
This To Will Pass
I have seen and experienced enough economic, social, cultural, political, and personal crises to believe this to will pass too. I know it’s an old trite saying, but it’s true. The world’s civilization will not collapse over a virus. Many smart people are working on a vaccine and treatments as we speak.
Perhaps it is premature to think we are going back to work like we just did a month ago, but eventually, we will. But we should not fear if our way of life will never be the same again. The past has not always been the best way to live anyway. Who doesn’t need a positive change right now? We might come out of this changed into something a little bit better than the past. The “good old days” were not that good. When it comes to economic, social, cultural, professional, gender, race, justice, and equality, we always have room for improvement.
Easter Sunday, April 12, 2020, a Beautiful Sunny Day
The rains have finally stopped after five days of clouds and rain! That’s enough gloomy weather for April. We live in the desert! Besides the “stay at home” policy is enough gloom.
Georgiana and I have isolated ourselves since Friday, March 6. We were thinking about staying healthy just from a regular good old fashion cold and the seasonal flu so we can get through our wedding without falling ill to anything, let alone the coronavirus. Little did we know it was a great thing we started before the official state government “staying at home” policy decided for us. Thus, every time we get a chill, a cough, or a sore throat, we know these minor health annoyances are just that—trivial, and a nuisance. We did everything to stay away from people, so we are less afraid of getting infected.
Today we are home and using Face Time, email, the phone, and Zoom.com just to stay in touch with family, friends, and spiritual and professional colleagues. The churches around the world practiced the same. We watched Andrea Bocelli sing at Easter from a beautiful Cathedral in Milan, Italy, one of several epicenters for the virus.
I hope we will be better human beings.
Those of us who have been through personal and sudden loss know that life is short, and this unfortunate incident could happen to us or anybody. Perhaps the issues that we thought were so important turns out to be petty when it comes to life and death. Our response to such dreadful and fearful situations is the most critical. If we turn bitter we will never discover how to live meaningfully again, and if we seek comfort and the assistance of family, friends, professional help, and from our spiritual teachers, we have a good chance of living a meaningful life again. We cannot go back to the old radical individualistic ways of how we conduct our business and politics when this is over. Yes, Easter was radically different this year with vacant churches and spiritual centers throughout the world, but who knows. We might discover that listening and relating to others a little bit more not only helps other people but helps ourselves too. Perhaps our differences might be reflected a little different. Nothing wrong with expressing a little more compassion and love as we come out of this pandemic.
Love is more potent than anything else on the planet. Our wedding and my portfolio show that when one is open for social and economic change and takes care of one major part of your life, and your family is your finances. Our wedding, marriage, health (so far), and finances are as reliable as ever.
Late Bloomer Wealth
Steve’s BIO
Stephen A. Schullo, Ph.D. (UCLA ’96) taught in the Los Angeles Unified School District (LAUSD) for 24 years and UCLA Extension teaching educational technology to student teachers. Steve wrote investment articles for the United Teacher-Los Angeles (UTLA) union newspaper for 13 years. He has been featured and quoted in many mainstream media articles about 403(b) plans, including the Los Angeles Times, NY Times, and U.S. News and World Report. He co-founded an investor self-help group 403bAware for teacher colleagues and wrote 7,500 posts in three investment forums since 1997. He testified at California State legislative hearings and honored with the “Unsung Hero” award by his teacher’s union for his retirement planning advocacy.
For the last 14 years, he serves as a volunteer on LAUSD’s Investment Advisory Committee as a “Member-at-Large” and former co-chair. The committee contains collective bargaining reps from the unions and monitors the district’s tax-deferred retirement plans, 457b/403b, of 55,000 former and current LAUSD employees, worth $2.8 billion in total assets.
He started this blog in 2012 to help all PreK-12 public school educators nationwide, especially his Los Angeles Unified School District colleagues. He belongs to a small national group of 403(b) advocates (mostly teachers) who want to bring closer attention to the 403(b). During the last 25 years, 40 newspaper articles have been published and each one says the same thing, TSAs (Tax Sheltered Annuities) are terrible 403(b) plans and the salesperson gets the benefit from lucrative commissions and high-costs. Nobody in educational leadership reads these articles NOR talk about the proper place for annuity products publically. We come together at 403bwise.com and 403bwise Facebook page https://www.facebook.com/groups/349968819000560/ Come on over if you want to join us so we can help our colleagues avoid these self-conflicted and high-cost Tax-sheltered Annuities (TSAs).
Steve is the author of two books, Late Bloomer Millionaires and Fighting Powerful Interests: Educators Challenge Tax-sheltered Annuities and WIN!, a story of how a handful of LAUSD educators struggled for years to improve the 403(b) to no avail. But we never quit! We were instrumental in LAUSD’s implementation of the new 457(b) plan and earned a very rare, but very precious “Plan Design” award.
For a copy of both books, email Steve at steve.schullo@latebloomerwealth.com and he will happily email you both books, FREE with no obligation except to read them and get informed, in a pdf file format.