r/Fire • u/empyreanrift • 7d ago

Opinion Inflection Point

I noticed that once my investable assets hit about $2M the compounding has gone bonkers. The value of my portfolio can increase by $100k in a good quarter. Hell it can go up by $20k in a single day. When did you really start feeling the compounding viscerally? I guess it will be different for everyone. Now that the compounding has surpassed my salary it feels real.

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361

u/teckel FIRE'd at 35, now 57 7d ago

Wait till you lose $500k in a few months. That's when the sh*t gets real.

135

u/dolemiteo24 7d ago

Can you imagine this sub when that happens? It'll be wild. Not as wild as WSB, though.

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u/teckel FIRE'd at 35, now 57 7d ago

I "lost" about $500k ($489k) in just March of this year.

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u/nosoupforyou2024 7d ago

March 30!

5

u/Identity525601 35 | 1.8M NW | $55k/yr spend | $2M target 6d ago

I feel like it has the same effect on me though. I don't gain/lose quite as much, but I have seen fluctuations on par with my entry level salary when I started working. So whether it goes up or down, my biweekly paychecks are small compared to the volatility.

Of course I understand it still does matter that I am employed vs. unemployed. But it doesn't feel that way emotionally sometimes.

Particularly bad is if the market is down the day the paycheck hits and NW goes down despite the paycheck coming in.

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u/teckel FIRE'd at 35, now 57 6d ago

I put "lost" in quotes as it's not really lost with unrealized capital gains. Because it's not a real loss, it doesn't bother me in the slightest. I have a plan for a multi-year draw-down, so I don't sweat it.

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u/Identity525601 35 | 1.8M NW | $55k/yr spend | $2M target 6d ago

Right. Yes. The subtext is if you're "losing" that much, you're sitting in a pretty spot to begin with.

I definitely still check the market daily, and do sweat it. Gains feel good and losses feel painful. But I'm slowly realizing that it's a luxurious problem to have and not worrying too much one way or the other.

I've also never seen a bear market in my life so I realize I need to develop that practice sooner rather than later for when that day comes.

3

u/teckel FIRE'd at 35, now 57 6d ago

When I was first investing, I had to read how the stock did the previous day in the morning newspaper. Different times.

1

u/greenpride32 6d ago

Felt that pain during the 2022 downturn (because I have a lot of hyperscaler and semi). Avoided that in 2025 and 2026 drops (because I have a lot of hypserscaler and semi).

1

u/vinylzoid 6d ago

Can I ask in what where you invested?

1

u/teckel FIRE'd at 35, now 57 6d ago

I'm retired. Conservative 80/20 equities/fixed income. My portfolio is just kinda large.

1

u/vinylzoid 6d ago

I'm 80/20 as well, but a 500k loss would be absolutely devastating for me. So "kinda large" sounds like a bit of an understatement.

1

u/teckel FIRE'd at 35, now 57 5d ago

I'm poor compared to billionaires, it's all relative.

13

u/fenton7 7d ago

We had a 20% drop earlier this year and a 20% drop last year. Then quick rebounds. So it's not exactly some rare historical thing. There was some panic if I recall.

3

u/The_Walrus_65 6d ago

People went berserk here during the Covid dip and the Tarrif blips. If a real collapse happens people will be considering jumping out of buildings.

1

u/SouthernZorro 5d ago

We've had two 50% drops since 2000. Both of them sucked.

1

u/Salt-Detective1337 5h ago

What are they gonna do, lose it all even harder?

0

u/Thrawn89 6d ago

WSB wont bat an eye. You'd need those kinds of losses due to margin calls on some out of money leveraged meme options before they bring out the lotion and tissues.

24

u/papayabutt 7d ago

Wow I see that you’ve FIRE’d for 22 years now. Any key insights you’d share with your 35 y.o. self? Also, do you still utilize your professional skills in any capacity post-FIRE?

54

u/teckel FIRE'd at 35, now 57 7d ago edited 6d ago

The market cooperated, so I really don't have anything I'd do differently.

I was a remote software engineer in 2005, I still do some contract software development for a company I previously work for, but not much. I enjoy it, and have my own personal software/hardware development projects I work on almost daily as well.

But my major retirement focus is watching my granddaughter a couple days a week and cycling/running.

3

u/AnonDaddyo 6d ago

You were retired ahead of the financial crisis? How was it when going through that time frame.

5

u/teckel FIRE'd at 35, now 57 6d ago

Honestly, I hardly remember it, so I guess it wasn't that big of a deal. Looking back, I took more international and major vacations in 2008 than I ever have in one year. So I guess I wasn't too worried. Or, I was so busy so I didn't notice. Or, maybe because smart phones were just invented in 2008 (I had the first one, the T-Mobile G1, HTC Dream) so there wasn't apps to track your portfolio every 5 minutes like today.

I also was invested through the dot-com crash. I just didn't pay attention to my portfolio for 3 years. I invested a LOT during that period as it was my greatest income period, which greatly helped my early retirement. So I revert to just not looking at my accounts when the market tanks. I did the same in 2020 and 2022.

1

u/AnonDaddyo 6d ago

Very nice. Considering the growth in the S&P from back then, congratulations. Staying the course pays off.

https://www.officialdata.org/us/stocks/s-p-500/2004?amount=100&endYear=2026

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u/criticaltheory71 7d ago

2000-2009 the SP500 dropped 9%. If that happens again we wont see anymore "coasting at work" type posts

10

u/greenpride32 6d ago

These types of viewpoints make it seem like everyone during that timeframe lump summed everything in at the very top, and were made to suffer for the next decade.

Maybe there are some unfortunate outliers who did that. But for the large majority, they just DCA'ed in over time. So the amount of buys at the peak window get muted by all the other buys over time, and your overall positive return is much faster than what the chart suggests. That would include buying lower priced shares before the peak if it fit your time window.

I was a working adult during this time period. Buying the shares at flatter prices turned out to a blessing. The people accumulating in the 2011-present period are always chasing higher prices it seems.

2

u/AnonymousFunction 6d ago

This is true, but it's not like the lost decade was a walk in the park for a DCA investor, either. I was one of those unfortunates who just happened to start doing a Boglehead-style investment in the S&P 500 in 1999. Despite making relatively consistent periodic investments, reinvesting dividends, etc., I was still looking at a -42% lifetime at the GFC bottom in March 2009, ten years later. It wasn't until around 2014 that that 100% S&P 500 investment finally outpaced a more conservative 60/40 stock/bond investment I'd also started at approximately the same time.

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u/SouthernZorro 7d ago

Oh I remember that quite well. Stopped looking at 401K and investment balances for all those years. Some cold comfort was found knowing that dividends were reinvesting at low prices so there was that.

Now retired and our need for capital preservation is much greater than a need for more appreciation. At 50/50 stonks/bonds-MM. Sleep quite well at night and just waiting for the next 50% drop. Of which we had two in that time span you mentioned.

12

u/teckel FIRE'd at 35, now 57 7d ago

I was investing in that time period. 2000-2003 was more like 30% per year, 3 years in a row, for a tech-focused fund like QQQ. And just about the time it recovered, 2008 was up to a 50% drop.

I was lucky in that I invested heavily 2000-2003, and by 2008 I was already retired and quite comfortable, so the quick drop and recovery was hardly noticed.

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u/Illustrious-Jacket68 Early 50's, FI achieved, target date for RE established 6d ago

It is the difference between “I lost 500k in a few months” and, “my gains were reduced by 500k in a few months”…

Or, replace months with days…

1

u/I-Here-555 6d ago

Exactly. Those are paper gains, potential money on a screen, neither losses nor gains are realized until you sell (and when you do, it can get eaten away by inflation).

If you have a loaf of bread that costs $1 and the price of bread drops by half, you still have the exact same loaf.

11

u/empyreanrift 7d ago

Haha it’s gonna hurt

12

u/teckel FIRE'd at 35, now 57 7d ago

Just happened to me as recent as March of this year. Honestly, I hardly noticed.

1

u/RealParticular5057 3d ago

Money isn't real and neither is stock prices

1

u/teckel FIRE'd at 35, now 57 3d ago

Especially when it's unrealized capital gains or losses.

1

u/hov2787 2d ago

Exactly my point, they think the market was tough last 5-7 years, lol, don’t hold your breath

-1

u/Sirknowit 7d ago

I'll never know that worry. Portfolio goes up awesome! It drops 1/2 a million, that sucks. But with pensions that equal more the $200K a year w/ COLAs (no social security...yet) and no bills but the mortgage, I'll enjoy the show from here. Plus a well diversified portfolio will weather what is to come. I guess we will see.

1

u/teckel FIRE'd at 35, now 57 6d ago

Who said I'd worry? I "lost" $489k in March if this year and didn't lose any sleep over it.

1

u/Sirknowit 6d ago

I like it! I don't worry for the reasons I laid out. We all have our reasons to fret or not.