In the last six years since retiring at the age of 35, Steve Adcock has been prepared for the possibility of an economic downturn.
With stocks falling and a potential recession threatening, Adcock’s careful preparation pays off. Although he and his wife Courtney, who is also retired, make almost exclusively money on the growth of their investments, they are able to get through the current market turmoil without making major changes to their spending or their portfolio. This is thanks in part to their strategy of always having two years of expenses in their savings account.
It’s also possible because of the couple’s minimalist lifestyle, says Adcock, now 40. They live off the net in the Arizona desert; their homes are powered by solar panels and they get water from a well installed on their property. As a result, their budget is largely discretionary.
“People thought we were crazy about living so minimally in a bull market where everyone makes money. [They said] we should live big, “says Adcock.” But we did not. Now we make almost no changes, and everyone else does. “
Since the market began to slide from its heights in December and January, Adcocks has barely adjusted their spending at all. They have tried to “eat a little less out” and not buy bottles of liquor on the top shelf quite as often, but even a runaway inflation has not put a damper on their spending.
“If your expenses are low, you will not feel inflation like everyone else is. It’s just that simple,” Adcock says. “You are not exposed to the same level of inflation as someone who spends significantly more money than necessary.”