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The Best Way To Feel Better In A Bear Market

The Best Way To Feel Better In A Bear Market
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To get through the latest bear market, I thought it would be fun to go through an exercise that will surely make you feel better. The exercise is a gratitude journal for money.

Simply write down all the things you spent money on that could have been invested in the stock market instead. That is the amount of money that you spared from getting torn to bits by the big bad bear.



Hopefully everybody has been practicing taking some profits here and there to pay for a better life for the past several years. Money is meant to be spent. Otherwise, there’s no point saving and investing if we’re just going to hoard all our money until we die.

The period to record all your spending includes how far back in time the current bear market has reset to. For example, perhaps the S&P 500 has declined by 30%, bringing it back to a level not seen since three years ago. Therefore, count all your spending from then until now to see how much you’ve not only spared, but also enjoyed.

Ironically, the bigger a spender you’ve been, the better you should feel. Frugal minimalists get the short end of the stick during a bear market. Not only did they not spend their money to pay for a better life, but they also lost a lot of money on their investments.

Warning: If you are experiencing tremendous financial hardship and stress, the examples in this post might piss you off. If you still want to proceed, please focus on your own examples.



Your Money Gratitude Journal

Let’s review some of the nice things to have spent money on that wasn’t invested in the stock market. Write them down in your money gratitude journal.

1) An affordable home

Buying a nice home to enjoy for yourself or to raise a family is the #1 big-ticket item that should make you very happy. Not only does a home provide wonderful utility, but an affordable home is also a defensive asset if the economy doesn’t tank too badly.

Always practice turning funny money into real assets. We’ve seen time and time again that stock prices can plummet very quickly. A nice primary residence is one of the best real assets you can buy. It may be declining in value during a bear market, but you’re not as stressed because you’re too busy living life.

2) Home remodeling



The money spent home remodeling is a natural extension of owning a nicer home. Plenty of people appreciate nice kitchens, remodeled bathrooms, a balcony edition, and heated-seat bidets. You want to remodel the rooms where you spend the most amount of time.

Although most home remodeling does not recoup 100% of its cost, in some markets, they do and more. The key is to focus on expansion. It is almost always the case where the build cost is cheaper than the sales price.

A money gratitude journal

3) Fine Jewelry & Watches

Nobody needs fine jewelry & watches. However, they have an intrinsic value based on precious metal and precious stone prices. Gold, for example, is drastically increasing in price during the coronavirus bear market.

Some watches tend to appreciate handsomely due to artificial supply restrictions. A classic example is the Stainless Steel Rolex Daytona. The stainless steel isn’t particularly valuable. However, prices continue to rise due to a limited production.



Back in my younger days, I would collect a lot of fine timepieces. However, as a busy father now, I have no more time for such luxuries. My wife doesn’t care for jewelry or watches either. But if you do, fine jewelry and watches are a nice splurge.

A money gratitude journal

4) A nice automobile

A car is probably the most common worst purchase a typical American can make. But if the purchase follows my 1/10th rule for car buying, then it’s not so bad. It is nice to be able to drive in a comfortable car with all the special amenities.

With the large number of reckless drivers in San Francisco, I appreciate driving my Tata Motors SUV to shuttle my family around. Not only does the SUV look good and is a joy to drive, but it’s also safer than the Honda Fit I drove before having kids. Safety is my #1 concern as a father.

A money gratitude journal

5) Yummy food and drink

You can try and save money by cooking at home or you can have a good time by going out to eat. While there’s really no right answer, all those times you splurged eating and drinking at some of the finest restaurants in town are better appreciated during a bear market. Besides, with many areas under lockdown due to the pandemic, ordering delivery or pickup can really help your neighborhood restaurants.

A money gratitude journal

During times of celebration, go ahead and pick up a $40/lb American wagyu ribeye at the grocery story instead of spending only $12/lb for an Angus ribeye to cook at home. Perhaps pair it with a select bottle of Chateauneuf-du-Pape for $120 versus a bottle of Two Buck Chuck. Eating and drinking well is a big part of living well in most cultures.



If you’re going to get out of shape, you might as well eat and drink well! And if you’re going to lose a lot of money in the stock market, you might as well try and eat some of it.

Related: The Ideal Weight Pisses Me Off

6) Travel delight

Buying great experiences will always trump buying great things. Great experiences tend to appreciate in value. Traveling around the country and the world have always provided my wife and me the maximum amount of joy.

In the past, we’ve always flown economy, eaten conservatively, and stayed at middle-range hotels. If we ever get to travel again, we are going to live it up! We haven’t traveled anywhere together since going on our baby moon to Oahu in 2016 because we don’t want to travel with kids until they can remember their travels.

A money gratitude journal
Visting Budapest

7) Childcare & tuition

If you have children, you will agree that children are your most precious asset. During a bull market, you might have griped about paying $2,000 a month for childcare, $25/hour for babysitting, $4,500 a month for private grade school, or $70,000 a year for one year of college education. But given you’re losing tons of money in a bear market, you become thankful that you got to spend lots of money on your most precious asset!

The greatest gift we can give our children is our loving time. The second greatest gift is a solid education so they can grow up to pursue their dreams. No matter what happens to our children, so long as we know we gave them our time and a great education, I think we’ll rest easier knowing we as parents tried our best.

A Way To Instantly Feel Better After A Stock Market Crash


Related: Would You Accept $1 Million To Go To Public School Over Private School?

8) Giving

The chasm between helping someone in need and losing that money in a bear market is perhaps one of the single most tragic differences. What a waste to lose money in a bear market when the money could have been used to feed a hungry child, help fund research for an eye disease cure, or help support a homeless shelter.

When I think of how much money I’ve lost in the 2021 bear market that could have gone to helping other people, I feel saddled with disappointment. As a result, the worse the bear market gets, the more I will give.

If we have the capacity to give during difficult times, we should. We don’t have to just give money, we can give our time. One thing that keeps on driving me to write and record during this crappy period is nice feedback. Here’s one from Facebook. Mary just gave me the energy to write three more posts!

Mary Keenan-Sadlon: When times get tough, the tough get going. I’ve followed you a long time and you’re the best of the best, Sam. Thank you for sharing the negative considerations of this scourge. We retired at the end of February and it’s been tough sledding. Your recommendations are right on. Thank you for putting yourself out there. You’re a scrapper, a fighter, a toughie. . .and a winner. We WILL bounce back. We have to do so. What’s the alternative? God’s blessings on you and yours!

9) All the debt you paid off

You will likely never regret paying off any sort of debt, no matter how low the interest rate and no matter how much you miss out on investment gains. With each debt you pay off you will feel lighter and freer. Therefore, using the FS-DAIR methodology, I highly encourage you to consistently pay down debt while also investing.

Pay Down Debt Or Invest Framework - FS-DAIR

The very first significant debt I paid off was $40,000 in MBA debt. The interest rate was only about 3.5% at the time, but I didn’t care. I wanted that monkey off my back. Paying off student debt felt so good that I paid off my girlfriend’s $10,000 college debt soon after as well. If you have private student loan debt, you should at least consider refinancing given the interest rate is more closely tied to the Fed Funds Rate.



Over the past three years, I’ve paid off about $350,000 in mortgage debt organically. It also felt good to pay off ~$815,000 in mortgage debt in 2021 by selling a rental property.

A Big Picture Budget Of Gratitude

For a big picture overview, let’s look at a typical upper-middle-class family of four living in an expensive city. Their annual income is $350,000 and they end up spending about $208,000 if we exclude their $12,000 contribution to a 529 plan.

Living it up

Over a three-year time period, this family of four has spent roughly $624,000. We can consider this entire $624,000 spending total as a nice lifestyle win.

We can also compare the difference between the $624,000 spending total and a frugal spending total. If they were really frugal, they could probably live off $100,000 a year. As a result, we can calculate that this family enjoyed a $324,000 higher lifestyle over three years and saved themselves about $100,000 in stock market losses if the S&P 500 was down 33%.

This family got to live in a $1.8 million home to house their two children. They paid $160,000 in childcare-related expenses to protect their sanity and educate their children. They donated $10,000 to charity. They drove a nice car and went on some nice vacations. All-in-all, not a bad lifestyle!

My six-figure income and budget examples have faced a lot of criticism, especially the $500,000 one. However, the more you spent leading up to a bear market, the more you’ve benefitted.

Spend More Of Your Money On A Better Life



Consumption smoothing is important. You don’t want to be a miser and die with too much. To be able to consumption smooth properly, you should make an educated guess on the year you will die, make some pro forma calculations with a retirement planner on how much you will end up having, and adjust your spending accordingly.

Below is an example of a 41-year-old who wants to retire at 50 with roughly a $3 million portfolio. He wishes to spend $12,500 a month on average in retirement. Based on the results from Personal Capital’s Retirement Planner, it shows a monthly projected income of $18,416.

A $5,916/month estimated overage is massive. Therefore, this person should either spend more between age 41 – 50 or spend more than $12,500/month once he retires. Of course, having a nice bear market wipe out 30% of his portfolio also “helps” with consumption smoothing.

Personal Capital Retirement Planner Free Tool
Personal Capital’s Free Retirement Planner

If you’re able to leg into stocks during a bear market, you’ll probably be rewarded over the next 10 years. The deeper the bear market, generally the greater the returns.

Stocks are a tried and true way to build wealth over time. However, given stocks provide zero utility and tend to crash every 7-10 years, it is vital that you practice regularly taking some profits to pay for a better life.

Please add up how much money you’ve spent that would have been invested and lost in a bear market. It should make you feel better. And if it doesn’t, it’s probably because you were too frugal.

What’s great about having a money gratitude journal is that it forces you to budget and spend more purposefully. Please enjoy what’s left of your remaining fortune! But most of all, stay healthy and loved.



Related: Great Things To Buy With Your Massive Investment Gains

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