We bought a $2 million house right before the market dropped – now our net worth is down $1 million

There’s a reason I made a point not to check my portfolio once the stock market started tanking in early April. I knew that the number on screen would be shocking and upsetting, and I didn’t need to put myself through that torture.

A lot of people have seen their net worth plummet in the wake of the recent stock market crash. And the scary thing is, we don’t know how long this downturn will last.

In this Reddit post, we have a couple that’s feeling the strain of recent events. Their net worth has plummeted $1 million thanks to market activity. But what makes matters worse is that they recently bought a home for $2 million. Now, they’re stressed because they have the expense of the house on top of a battered portfolio.

I can sympathize with the poster, but they should know that their situation may not be all that dire.

It’s a matter of riding things out

There are a few things missing from this Reddit post to get a sense of the poster’s full financial picture. First, I don’t know their age, so I don’t know how many years they might be away from retirement.

I also don’t know the poster’s net worth. They say their net worth declined by $1 million, but I don’t know where that leaves them.

If their net worth dropped from $4 million to $3 million, that’s pretty significant. If it dropped from $12 million to $11 million, they may not need to sweat it as much.

I’m going to assume it’s more of the former situation, though. And in that case, the one thing I can tell the poster is that their best bet is to ride things out and try to stay calm.

They’re worried about the expense of the house, but they say its costs eat up one out of four monthly paychecks. Assuming those are equal paychecks, it doesn’t sound like they’ve taken on too much house.

Large expenses can get in the way of growing your net worth. But if the poster’s housing costs are about 25% of their household income, that isn’t unreasonable.

Of course, the poster does say they’re constantly looking to quit their job. And they may not be able to do that given the expense of the house and this recent stock market drop. But that doesn’t mean they can’t look for a different job that pays just as well, and leave once they have work lined up.

Try to stay positive

It can be very tough to see your net worth fall during a stock market event. It can definitely bring up feelings of “I did everything right and this still happened.”

If you’re feeling the strain, do try to remember that everyone is in the same boat, and that stock market downturns aren’t so uncommon. Also, the market has a long history of recovering from downturns, so what you may need to do at this point is be patient and wait things out.

That said, there’s nothing wrong with talking to a financial advisor if you’re worried about the impact of this recent stock market downturn on your long-term plans. An advisor may be able to offer some guidance or, at the very least, calming words to help you ride out the storm.