After saving over $1 million in 10 years, Justin McCurry quit his engineering job in 2013 and retired at 33. His wife, Kaisorn, left her 9-to-5 a few years later and joined him in early retirement.
Ever since, the North Carolina-based couple and their three kids have been living on a lean budget of about $40,000 a year. Their portfolio, which hit $2 million for the first time in January 2019, had been growing steadily — until the coronavirus pandemic sent the markets into a tailspin, that is.
In March 2020, their net worth dropped by $298,000, says McCurry, who posts monthly financial updates on his blog, Root of Good.
He was relatively unfazed by the massive dip. "It was kind of a non-event," he tells CNBC Make It.
Since McCurry, now 39, is not planning on using the money he has in the market for the next few decades — they live off of dividends from their portfolio, plus revenue that comes in from his blog — and has a comfortable cash cushion, "we're not forced to sell everything," he explains. "We have about seven years of bonds in our portfolio and about a year of cash, so as long as the market recovers within the next seven or eight years, we're not going to end up having to sell anything at a loss."
That's why McCurry is keeping his hands off of his investments and focusing on his long-term plan, rather than dwelling on the current state of the market. "Overall, I'm playing the very, very, very long game, so it's multiple decades of patience, perseverance and sticking with what has worked historically for the last 100-plus years: investing in stocks, watching it go up, watching it go down and not worrying about it too much," he says.
Sure enough, the average annualized total return for the S&P 500 index over the past 90 years is 10% before adjusting for inflation.
I'm playing the very, very, very long game, so it's multiple decades of patience, perseverance and sticking with what has worked historically for the last 100 plus years.Justin McCurryself-made millionaire, early retiree
The early retiree hasn't adjusted his investing strategy yet and is sticking to his "90% equities plus 10% bond asset allocation," he says. The traditional balanced portfolio is made up of 60% stocks and 40% bonds, but McCurry is comfortable with a higher-risk portfolio since he has time on his side and has a substantial emergency fund.
If you have a long timeline to play with, now is a good time to invest if you can afford to, McCurry says. "Especially for young people, this is going to be one of the best buying opportunities that they're ever going to see in their investing lifetimes," he says. "Things are cheaper. Stocks are on sale."
Experts agree that periods of volatility can be a good time to dip your toe into the stock market. But make sure that you already have an emergency fund that will cover three to six months' worth of expenses and can keep up with your other bills, including debt repayment, first.
When you're ready to invest, you'll want to contribute consistently by investing a fixed sum regularly over a long period of time. It's a strategy called dollar-cost averaging and ensures that you won't sell low and buy high when the market is volatile. You'll also want a balanced, diversified portfolio, which means having your money invested in different types of assets, like stocks and bonds.
Read more expert-backed advice on how to best manage your investments amid the coronavirus downturn.
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