Why staying invested in the stock market at all times is one of the most important things you can do: A journey of FIRE (financial independence retire early)…
Warren Buffett: “Successful investing takes time, discipline, and patience.”
The year 2025 has been a strange year so far. Stock market, which had been chugging along in early 2025, met some interesting turbulence right around the end of February, thanks to Trump tariffs placed on countries at that time.
Starting from that time, the S&P 500 index, the most watched stock market index in the world, dropped almost 20% the next few weeks. It wasn’t until June that the index recovered from this precipitous decline, scaring one too many investors in the process.
I also watched my investments drop close to 20% those couple of months. It’s never fun to see your hard earned money go down the drain. But it is in these exact moments when everything in your being screams “Do something!”, that we must do something that is really, really difficult.
That is, to do absolutely nothing…
I have lived through something like 5 different shocks to the stock markets since my early retirement in August 2020. Let me list them below:
- COVID-19 (2020)
- Russia-Ukraine War (2022)
- Raising of federal interest rates (2022)
- HAMAS-Israel Conflict (2023)
- Trump Tariffs (2025)
In every instance, the stock market dropped, only to recover few days/weeks/months later. It’s been a fairly predictable pattern of investors selling when something bad happens, only to jump back into the markets later on.
I wrote about this exact phenomenon in one of my earlier posts, and I’ll reiterate the point again: Most people who sell their investments will most likely miss the opportunity to regain their losses when markets inevitably bounce back.
Most investors, even the professional ones, cannot time the markets perfectly to figure out when to jump back in after markets have dropped. Some may believe there’s more room for the markets to drop, while others may believe the markets have already started their bounce back.
I mean, who knows? None of us have the ability to predict the future, so my guess is just as good as a professional, a genius like the “Oracle of Omaha”, Warren Buffett.
My point is this: If a genius like Warren Buffett can’t time the markets, what makes you think you can?
Like the quote by Warren Buffett above, investing takes time, discipline, and patience! Having the patience and discipline to ride out a turbulent storm is one of the most important aspects of investing successfully.
Here are my tips for successful investing, after living through 5 years of early retirement, and living through at least 5 different world events in the process:
- Stay the course, and do nothing
Don’t be like everyone and sell at the worst possible time. Don’t let your fears dictate your decision making process. In investing, it’s sometimes good to think in contrarian ways.
That is, when people panic and sell, buy. This will allow you to buy stocks at a discount, thereby making your goals to accumulate wealth, that much easier.
Throughout these last 5 years (and those 5 shocks to the economy), I stayed the course. I didn’t panic and decide to sell my stocks. I did nothing, and watched my investments bounce back eventually, only to go up higher again.
This concept is so easy yet hard to actually implement. Why? It’s because of our innate fear of losing our hard earned money (risk aversion). Nobody wants to lose money, right?
When the first sign of market turbulence comes, the inexperienced investor will panic, then sell at a lower price. What’s the first rule of investing? Buy low, then sell high.
If you’re selling at lower prices than you purchased them for because you’re panicking, then you’ve already given up on this first rule!
As a follower of the FIRE (financial independence retire early) movement, I understand the importance of staying put when markets crash. But what the FIRE movement also emphasizes is the importance of having liquid assets (cash, money market funds, etc.) on hand in case this happens. Think emergency fund!
In investing, it’s not if the markets will crash, but when. By having liquid assets, we can use that during these exact times. This is not too different than having an emergency fund during the accumulation phase.
If you understand that markets will always go through boom/bust cycles, then you can prepare for them!
Most inexperienced investors usually have all eggs in one basket (stocks), and therefore, they have to sell their stocks (at lower prices) to cover expenses, bills, etc.
This is not how you want to invest.
Always have emergency funds that you can tap into when markets crash.
- Investing takes time…
- Budget, budget, and budget
I can’t emphasize enough how important budgeting is during the accumulation phase as well as during the retirement years. You can’t possibly save/invest your money if you have no idea how much you’re spending every month!
By having a budget, you can figure out what you spend on, so you can figure out what to cut out, for example. There are always ways you can reduce your spending.
Embracing minimalism is one way that has helped us in our quest to retire early. By buying things that are needed and not buying things just because you’re stressed, or bored, you can then put a plan to save your money that would otherwise end up somewhere else.
Why pay someone else like the store you bought that item from, the credit card company, or any number of streaming services that you pay crazy amount of money on? All those things are making it less likely you’ll be financially independent.
Investing for your future should be your number one priority. It shouldn’t be to enjoy your life right now (YOLO - You only live once, or FOMO - Fear of missing out), at the detriment of your future retirement.
Sure, enjoy your life right now, but do it reasonably. Make sure you’re saving/investing every month first, then save up for your vacation. Don’t put that on your credit card.
Magic of compounding interest works wonderfully when investing, but remember that it also works the same way when you carry a balance on your credit card! With typically higher interest rates on credit cards, you can be sure you’ll be in a deeper hole each month you carry a balance.
That European vacation that felt so good to finally take, may take you years to pay off if you put it on a credit card. Do what we did, and travel within the United States!
Whatever happened to good old road trips to great destinations in our own country? From almost anywhere in the US, there are bound to be fantastic places within a day’s drive. Think national parks, monuments, state parks, anywhere where there is nature, but don’t forget about great cities!
You can get some free, healing therapy, complements of mother nature as you take in the scenery, and/or do some refreshing hiking. Visiting a nearby city is not a bad idea either for some culture. Both of these will still be much cheaper than taking a European vacation (or flying anywhere for that matter).
Think about all that’s involved when taking a flight to a destination:
- Cost of flight
- Cost of either parking your car at the airport parking garage or taking a taxi/Uber/Lyft to the airport
- Rental car or taxi/Uber/Lyft at the destination
- Cost of food and drinks
If you do a road trip instead, you can skip the flight, rental car/ride sharing, and you can also carry your own food and drinks in your own car. Having to buy seemingly innocuous items like waters, sodas, and meals really add up when you’re flying somewhere. And don’t get me started on prices of airport foods/drinks! They are absolutely ridiculous.
Potential savings of doing a road trip vs flying somewhere can be several hundred dollars to few thousand dollars.
I still think traveling within the US is cheaper than most international destinations after doing exactly that the last 5 years. Hotels/AirBnBs are still price competitive compared to almost anywhere in Europe, while there are still places you can still buy cheaper foods, especially at fast casual restaurants like Panera Bread, Chick Fil A, etc.
Why not spend the money within the US to help out fellow Americans and the US economy at large?
In conclusion:
Ever since the start of my own journey of FIRE (financial independence retire early), I’ve personally seen many stock market crashes. Those were: dot com bubble/crash, the Great Recession, Covid-19, couple of wars, and raising of interest rates.
Throughout it all, the stock market still managed to come back, only to march ever higher. One of the best ways you can become financially independent is through investing in the stock market.
Don’t be afraid to invest. Just understand that the markets will always crash. It’s your job to prepare for that inevitability by having an emergency fund.
With the right preparation, right mindset, with little bit of patience and discipline thrown in, you can also become financially independent. America has the greatest stock market the world has ever known.
Trust American companies to innovate, to create new markets, and trust in the free market economy. I myself are enjoying the benefits of living here, investing here, and so can you.
Thank you for reading and wish you luck in your own journey to become financially independent!
Jake
Wandering Money Pig
