Hello and welcome back to Mortgage Advisor on FIRE. This week, I take a look at the recent market volatility. Also, the basics of FI.
This week’s title comes from a post I saw on social media where someone was complaining about Trump crashing the economy. From what I could gather, they were a former Trump supporter. Someone commented;
“Thoughts and Tariffs, my guy… Thoughts and Tariffs.”
There’s an old saying in investing circles: Markets hate uncertainty. It doesn’t matter whether the news is good or bad; what matters is knowing what you’re dealing with. But when it comes to Donald Trump’s approach to tariffs and trade, uncertainty isn’t a bug, it’s the whole system.
Now into his second term, Trump has picked up right where he left off by doubling down on tariffs, reigniting trade tensions, and bringing that same erratic, improvisational style that rattled markets throughout his first presidency. If investors were hoping for a more stable, strategic approach this time around, it’s become clear: that’s not on the menu.
What we’re seeing instead is a return to form with trade wars by tweet, off-the-cuff policy shifts, and a general disregard for the global consequences. For those of us on the path to financial independence and early retirement, this raises some serious questions. Not about politics, but about planning. How do you invest in a world where the rules can change overnight?
The Strategy (if we can call it that)
Tariffs, in theory, are a tool to protect domestic industries by making imported goods more expensive. The idea is to give local producers a competitive edge, support jobs, and shrink trade deficits. In practice, they often lead to higher prices for consumers and retaliatory measures from other countries, escalating into full-blown trade wars.
Trump’s use of tariffs doesn’t follow the usual playbook. One week, China is the enemy; the next, it’s all smiles and handshake deals. Mexico, the EU, even Canada – no trading partner is safe from being strong-armed, sanctioned, or suddenly declared “very unfair.”
This erratic approach creates what economists dread: a climate of policy uncertainty. And uncertainty, as any long-term investor knows, corrodes confidence, slows growth, and warps decision-making from the boardroom to the building site, all the way down to the individual investor watching stocks behave like a rollercoaster.
The Global Ripple Effect
Trump’s renewed trade manoeuvres are already sending ripples, if not outright shockwaves, through the global economy. Supply chains that only just recovered from the COVID-era disruptions are now facing new tariffs, higher costs, and renewed geopolitical tension.
It’s not just about the US and China, either. Europe, Latin America, and Southeast Asia are all caught in the fallout.
For investors, this means more volatility, possibly more inflation, and more uncertainty over earnings, growth, and even central bank policy. The impact is systemic, not isolated.
The Cost of Playing Chicken
One of the most damaging aspects of Trump’s trade approach is the lack of consistency. Markets can price in bad news. They can’t price in constant U-turns or chronic dipshittery.
What we’re seeing now feels less like economic strategy and more like theatre with a price tag. Announce a sweeping new tariff plan, watch markets nosedive, then walk it back, or replace it with something even more chaotic, and watch the rebound.
For businesses trying to plan capital expenditure, hedge currency risk, or secure long-term contracts, this unpredictability is toxic. For consumers, it means rising prices, and for investors? It’s a wild ride, and not in a good way.
In FIRE terms, this creates three major challenges:
Asset volatility: Markets react violently to policy noise. If your portfolio is heavily equity-based, this kind of instability can throw off short-term returns and long-term projections.
Inflation uncertainty: Tariffs fuel inflation. Higher prices mean your target FIRE number may no longer stretch as far as you’d planned. That’s a big deal for those who’ve already left traditional work behind.
Geopolitical risk in global holdings: International diversification has always been a hedge. But now, entire regions are becoming politically riskier as trade deals collapse or get rewritten on a whim.
What Can Investors Actually Do?
It’s tempting to tune out the noise and stick with the basics, and honestly, that’s what I’m going to do. That doesn’t mean you should just ignore what is going on in the world. Use this as an opportunity to refresh your memory on the basics of FIRE investing and go back over your plans, your budget, and your projections.
The Bottom Line
Trump’s second-term tariff playbook isn’t much different from his first; it’s just louder, faster, and arguably more reckless. Whether or not it serves his political base, it’s a destabilising force for global markets and a thorn in the side of long-term investors.
For those of us building towards, or living off, the fruits of financial independence, the lesson is simple: don’t count on the adults being in the room. The Orange Menace will not be in office forever, and to some degree, it’s just about surviving his term. He’s a bit like a storm passing through; it’s not intelligent, it’s going to destroy things at random, it’s mostly hot air, and everyone is glad to see the back of it.
Transfer of Wealth
I would honestly love to see the trading records of some of the very wealthy for the past few months because the way the market has behaved is ideal for those looking to make some serious money. The only thing is, to make that money, you need to either be very good at predicting things or you need to have advanced knowledge. Let’s take a look at recent events…
Trump announces a series of tariffs that cause the market to drop. When prices drop, it’s a great time to pick up more units as they are being sold for less.
Trump posts on social media that it’s a great time to buy stocks. Shortly after, he suspends some of the tariffs, which causes the market to surge.
Buy low, sell high, and make money.
It’s one thing when you do this through hard work and analysis. If you can exert massive influence over the market, and you then boast in the Oval Office about how much money your friends made, it just feels a bit dirty.
All this is just another example of how wealth is accumulated by the already wealthy. They will not have been selling whilst the market was dropping. Instead, they’ll have been snapping up more and more units before selling them following the rebound.
Weekly Update
I don’t have much to report from the first part of the week, as it was just the normal daily routine of work, dinner, sleep, and repeat. On Friday, I finished early to go to a FI event with a good buddy of mine. It was the Financial Freedom Tour presented by Alan and Katie Donegan. I didn’t really know what to expect from this, as I’m not that familiar with their stuff. I arrived at the venue a little early and waited for my friend outside. As I waited, I was surprised by the types of people walking in. I had expected a younger crowd made up mostly of those in their 20s, 30s, and 40s. The age profile was much older, though.
We had a quick chat with Alan and then approached a table with a few people already seated. We said hello and joined them: three middle-aged women and an older gentleman. It was a bit awkward for me and my mate because these people were not as nerdy as we are, and it was pretty obvious they were not as invested in the FI journey. There’s nothing wrong with any of that, but we had hoped to be amongst people who were as nerdy as we are and who get as excited by a well-crafted spreadsheet as we do.
Disappointing
The event was, I’m sorry to say, a bit disappointing. The Donegans’ story is cool, and they’ve done well to get to where they’re at. It just felt a bit too much like an opportunity for them to flex in public while lapping up the adulation.
The older man who sat with us was new to this scene, and he asked why, if the process of investing is so simple, do we feel the need to keep reading about it, listening to podcasts about it, and attending events about it. It’s a great question. I explained that while the mechanics of investing are extremely simple, the psychology of it is more nuanced. Investing over the long term is as much about psychology as it is about knowing the facts. When people panic as the market drops, it’s not reason that makes them panic; it’s emotion. Whether we like it or not, much of our decision-making is emotional. By immersing ourselves in the material and the community, we keep ourselves focused and on track.
There was one part of the event where I was just thinking “what the actual shit?” One of the women at our table was talking about her kids and how they don’t want their investments moving around “because they’re autistic.” I don’t see how one impacts the other. I mentally debated whether I should point out that I’m autistic and that I found her whole tone a little insulting, but I couldn’t be bothered to engage.
More Walks
On Saturday, Oana and I went for a long walk. We started by heading to the Botanical Gardens and then walked down to Sharrowvale, where we stopped for a bit of food. We bought some donuts from a little bakery and then went to a place called Urban Pitta. They do, as you might expect, pittas and salads. We both ordered a salad with chicken, tzatziki, and a few other bits. Once the food was ready, we took it over to Endcliffe Park, where we sat and demolished the salads; they were incredible.
After eating, we walked up to Forge Dam, and up to Ringinglow, where was paid a brief visit to the alpacas and pigs. Then we started the journey back home. It was a long, long walk but very enjoyable. As much as we enjoy walking with our friends, it’s nice to have some time with just the two of us.
After six hours of walking, having covered 16km, we were spent. Oana’s knee was hurting as her foot got caught in a hole, and it twisted the joint. Shortly after, I rolled my ankle a little on some loose rocks. We decided it was the right time to call an Uber.
When we got home, we were absolutely exhausted, but we still had things to do in the apartment. Being an adult is just a never-ending cycle of dishes, hoovering, cleaning, and cooking.
All in all though, it was a nice day.
What I’m Doing
Listening: Dust by Hugh Howey.
Watching: YouTube channels; In Deep Geek, Side Projects, Mega Projects.
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Financial Update
Assets
Premium Bonds: £30,500.00.
Stocks and Shares ISA: £93,077.31
Fuck It Fund: £0.00.
Pensions: £86,229.60.
Residential Property Value: £239,368.00.
Total Assets: £449,174.91.
Debts
Residential Mortgage: £183,840.69.
Total Debts: £183,840.69.
Total Wealth: £265,334.22.
The markets have bounced back a little, but I’m still some way off my all-time highs. I invested a further £9,000 in my ISA, but it’s still a few grand short of where it was around Week 260.
I’m not overly concerned about the recent slump because I’m still a few years from FI. Whilst prices are low, I can snap up more units. It’s just a shame I don’t have readily accessible funds to max out my ISA now.
The index valuation of our property increased in the recent update. My lender typically updates their valuations at the start of each quarter, and ours increased by a couple of thousand.
A Quick Refresher: The Basics of Financial Independence
For readers new to the concept, let’s take a moment to zoom out. At its core, financial independence isn’t about beating the market, outsmarting economic policy, or living like a Victorian monk on a diet of lentils and candlelight.
It’s simple:
Spend less than you earn.
Invest the remainder.
Repeat until work becomes optional.
That’s it. No fancy algorithms or crypto hype. No “hacks.” Just a commitment to living below your means and channelling the surplus into income-generating assets, typically low-cost, globally diversified index funds.
Why index funds? Because they give you market exposure without the extortionate fees or the need to pick individual stocks. You’re buying a slice of the entire economy and betting that, despite recessions, political nonsense, and the odd tariff-fuelled tantrum, capitalism will keep doing what it’s always done: grow.
If you want a back-of-the-napkin way to understand how long it’ll take your investments to double, you can use the Rule of 72. Just divide 72 by your expected annual return. If your portfolio returns 8% a year, it’ll double roughly every 9 years. That’s the power of compounding, and it’s why time in the market beats timing the market every single time.
So when Trump torpedoes the S&P 500 with a random tariff announcement, the FIRE mindset isn’t to panic-sell. It’s to stay the course, maybe even buy a bit more while it’s on sale, and remember that we’re playing the long game.
DISCLAIMER
The views and opinions in this blog are my own, and do not represent the views or opinions of my former, current, or future employers, nor should they be considered advice.
If you want personalised financial advice, seek an appropriate professional. If you are in financial difficulty, seek advice via the resources below:
Biolink
You can now find all my social media pages by checking out my Biolink:
bio.link/davidscothern.