Hello, everybody. It's Sam from Financial Samurai. And the bad times are back again with the S&P 500 below 3,700. So it's down more than 20% from its high. The NASDAQ is closer to down 30% from its high, around 10,600. And the Dow is below 30,000. Now, obviously, things don't feel great right now.

Although the consumer continues to be spending, traffic continues to be high, travel continues to be high. And I think that's a product of revenge spending and people just cooped up and they want to spend their money and get on with their lives, right? But I think with a 70-80% probability, a recession is coming over the next 12 months.

And we actually might already be in one. We could. The first quarter GDP was down. Why can't the second quarter GDP be down as well? What's also concerning is that the Federal Reserve will likely continue to hike the Fed funds rate well into a recession. So it's really hard to stop once you've telegraphed you're going to start.

And it's really hard to stop exactly at the point, the tipping point. It's kind of like skating to where the puck is going. You've got to ease into that spot. Or it's kind of like snowboarding and going really fast downhill. You've got to ease into that slide to get to the exact point.

And more often than not, we tend to overshoot a little bit. And that's probably what's going to happen. The Fed is probably going to overshoot on their rate hikes after we already go into recession, after there's a ton of job losses, after the market has really given up a lot of its gains.

And that's just the way it is. But if you've been reading Financial Samurai for a while and you've been listening to this podcast for a while, we're all about trying to forecast our misery to be happier and to forecast our future so we can look ahead and be ahead of the curve.

We're definitely not always going to get it right. We're probably not going to get it right much more than 55, 60 percent of the time. If you've got a 55 percent to 60 percent hit rate in terms of investing, you're going to crush it over the long term. But hopefully we have our proper asset allocation for our net worth.

We're not over leveraged. We're not on margin. We don't have too much debt. And we're just taking our punches as we go down as we've experienced the glory of going up. Now, in this episode, I want to talk about one of the biggest benefits of being in a bear market.

And this benefit really changed my life for the better. So back in 2012, I did leave my day job behind, partly because I saw the return on effort decline. No longer was working hard at my day job going to provide me the wealth that I wanted, the income that I wanted.

No longer was working hard going to guarantee me the next promotion. Right. So when you're working, you're obviously want a raise and a promotion. And if you're going to work hard and not get that, well, then why bother? So the best thing about the bear market is that it allows you to look at what really, really matters.

If money was stripped out of the equation, are you doing what you are doing because you enjoy it or because you need the job to survive? Now, obviously, it's going to be a combination, hopefully, of both. But I think a lot of us, if we're really honest with ourselves, especially if we're working at the same job for 5, 10, 15, 20 plus years, we probably don't love our job as we once did.

And if that's the case, and if money is hard to come by, which it is now, what would you do differently? And so my answer to that was, I wouldn't work in the money industry. Because one, it's hard to make money. And two, if you spend your entire life focused on trying to make money and make other people money and other institutions money, eventually, that's going to feel pretty soul sucking.

And so what I did was, I decided to focus more on Financial Samurai, which is obviously a personal finance site to help people build wealth, but also do more of what they want and live the lives that they want to live. But since I left in 2012, there have also been plenty of ups and downs.

And I talk about this in one of the posts, 10 years of fake retirement later, here are the most important lessons learned. So even after I've stepped away, you would think life would be much more relaxing. But it's really a self imposed discipline that you need to exercise to feel relaxed.

Because when you're on your own, you've got to motivate yourself to get better to provide for your family and so forth. So now that the bear market has returned, I'm actually looking forward to taking things down a notch sometime around August or September of 2022. It's been a really difficult time since 2020.

When the pandemic started, to stay at home children, writing, managing everything, it's a lot of work. And I think a lot of working parents can empathize with this time period. And so if things are not doing well right now, if the stock market is going down, if the real estate market is going to start to fade, then the main thing you can do is really budget your finances, well, save cash, stack that cash and wait for better opportunities over the horizon.

Because these downturns can last one to three years easily. The average bear market lasts about 12 months and has a 35% drawdown. We're now about five months into this bear market, and we've drawn down a little over 20%. So in a way, you can see the next eight months mentally, as a time to relax, to rejuvenate, to think about the things that matter most.

At the same time, if you need that money, that financial security, then it's important for you to be strategic right now, by developing those relationships that matter by checking in on those people who actually have control over your future, so that you don't get let go during the next round of layoffs.

I believe the time to spend your money, if you have the money, is during a bear market because that can help soften the blow. And the time to work hard and to grind is during a bull market, because that is when you can get the highest return on your effort.

So if you're feeling burned out, as I'm feeling burned out, take this bear market as a positive signal, as a pause on your journey to financial independence, as a break time, as a three-day rest period between the games and an NBA final series. Eventually, the good times will return again.

And when they do, I hope everyone is well rested, well planned and well positioned to benefit. Thanks so much for listening, everyone. I'm still busy promoting my book, Buy This, Not That, How to Spend Your Way to Wealth and Freedom. It comes out July 19th, 2022. And I really thank you for pre-ordering a hard copy of my book.

And shout out to various podcasts, including Adulting is Easy, Crazy Money, Tropical NBA, Yelp, Google, the William & Mary Finance Club and so forth for listening to me speak. It's been a real pleasure and it's been really fun to talk about all the chapters and all the dilemmas in the book.

So if you're interested in having me speak to your company or to your organization, just shoot me an email and let me know what your proposal is. And I'll probably take you up on your offer. Take care.