Author Topic: 2008  (Read 11846 times)

Bartleby_the_Scrivener

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2008
« on: January 08, 2018, 07:58:36 PM »
I'm curious to know how 2008 affected people on this board. (Not from an investing standpoint, but from a larger picture.)

Me first: I graduated in 2009 and managed, mostly through luck, to find a decent-paying, full-time position. Many of my friends were not so lucky, getting stuck with low-paying part-time or contract work. Some of them were also clobbered by large student loan payments or job loss in the next few years. My employer eliminated or nearly eliminated my position twice.

I developed a deep abhorrence for debt during those years, started saving roughly half of my income, and concentrated on building an emergency fund. Doing some reading on the Interwebs on those topics led me to MMM. In that sense, I learned a lot from the experience. On the other hand, I worry pretty much every day about going through another prolonged and nasty recession.

Regardless, though, I think 2008 has shaped my worldview similar to how the Great Depression affected my grandparents (granted, the Great Depression was worse).

How about you?

FrugalSaver

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Re: 2008
« Reply #1 on: January 08, 2018, 08:47:44 PM »
I'm curious to know how 2008 affected people on this board. (Not from an investing standpoint, but from a larger picture.)

Me first: I graduated in 2009 and managed, mostly through luck, to find a decent-paying, full-time position. Many of my friends were not so lucky, getting stuck with low-paying part-time or contract work. Some of them were also clobbered by large student loan payments or job loss in the next few years. My employer eliminated or nearly eliminated my position twice.

I developed a deep abhorrence for debt during those years, started saving roughly half of my income, and concentrated on building an emergency fund. Doing some reading on the Interwebs on those topics led me to MMM. In that sense, I learned a lot from the experience. On the other hand, I worry pretty much every day about going through another prolonged and nasty recession.

Regardless, though, I think 2008 has shaped my worldview similar to how the Great Depression affected my grandparents (granted, the Great Depression was worse).

How about you?

Did you go hungry and stand in a soup line?  My grandfather was working 60 hours a week building ships at the age of 12 and got a potato and some soup every other day.

After the banksters created the Great Recession we all made fortunes and very few if any stood in soup lines.  doubtful 12 year olds were working 60 hours a week.

I get what your saying though.

Gimesalot

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Re: 2008
« Reply #2 on: January 08, 2018, 08:59:29 PM »
I understand where you are coming from, and as a matter of fact, I was discussing it with a former coworker this afternoon. 

I finished college and get my first professional job in the summer of 2007.  I did have student loans, but the payments were manageable.  I had already met my husband, so I was part of a two income household.  Before the crash, I was trying to pay down debt and save some.  I started reading about stocks and investing just a few months before the crash happened.  I remember sitting in a hotel room on the bed, as they were closing the market due to the volatility.  Soon after, I knew that stocks were "on sale" so I tried to live on as little as possible, and buy as much as I could.  I was lucky,  I never lost my job, although I was close a few times.  I rode through the recession, the worst thing that happened was that I got pigeon-holed into a regulatory field.

My takeaways...  During the recession I lived on a very low budget to invest and have an emergency fund, I didn't see any need to stop after the recession.  I realized that my job was not a permanent thing, it could disappear at any moment, I should be prepared.  I am very financially conservative, in most ways, as a result.  A few years of living like that, and I realized that I don't really like my job, and that thanks to my frugal habits I didn't need it any more. 

TheWifeHalf

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Re: 2008
« Reply #3 on: January 08, 2018, 10:19:37 PM »
Jan 10, 2008 was the day I had a traumatic brain injury and life as I knew it, changed.
But, I counted my blessing and moved forward.
Other than that, 2008 was like any other year.
Financially we were not affected, out house went up in value, as did our net worth, TheHusbandHalf kept working at the place he has for 30 years now

Helvegen

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Re: 2008
« Reply #4 on: January 08, 2018, 10:35:24 PM »
I was pretty poor in 2008, so I guess it could have been a lot worse if I had actually had a bunch of money to lose. But I didn't. I didn't have any money in the market because I had no money to put in it. I had trouble keeping jobs (due to layoffs), but never getting them. The most important lesson I learned is that every job is temporary and to save like every day is your last. My husband and I also watched a lecture around that time by Elizabeth Warren  on YT that strongly influenced our views on personal finance. We vowed to NEVER become dependent on being a two income household. To this day, despite making way, way, way more money then we did then, we don't. We bank all of my income and at least a 1/4 of his.

Zikoris

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Re: 2008
« Reply #5 on: January 08, 2018, 10:40:37 PM »
No big deal. I was working for a collection agency at the time, and business was booming if I remember correctly. My expenses have always been low enough that literally any job could cover them, so I never had the job stress that a lot of people did. I didn't have any investments yet.

EscapeVelocity2020

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Re: 2008
« Reply #6 on: January 08, 2018, 11:04:52 PM »
Not posting here too often anymore (I guess I said my peace, so the mods tell us when it is time to go out to pasture), but this one is dear to my heart.  I threw my back into the market in 1996-2000 and got rewarded with tech stock collapse disillusionment.  Bought Yahoo, Amazon at IPO, Broadcom out the wazoo...  Made lots of fast and easy money, only to see it disappear even faster than the run up.  I honestly thought that the market was rigged and hated myself at one point for being duped, but I did keep up my passive 401k index investments and salvaged my E*Trade account.

By 2008, I was just at a millionaire (my number), so I dialed back risk and *only* lost 200k.  It sucked, but I also had a strong income at the time and couldn't believe stocks were so cheap.  I bought in across the board (US small cap, emerging market, individual stocks, banks, Europe) in 2009 and quickly recovered to my number and then some.  From then on, it has been pretty amazing but FI is FI.  Extra money doesn't really matter as much as playing the game.  I don't want to lose too much and I don't care if I 'win', other than I don't want to miss out too much on the easy wins.  Fortunately I have youth on my side, so I'm still heavy in equities, but paring back the longer this thing goes.  Maybe I'll get one more chaos / opportunity like 2000 or 2009 and double my money. 

Or maybe the whole thing will actually collapse due to allowing options on Crypto or whatever.  Not knowing is how the game works.  The real worry I have is that there is another 'lender of last resort' bailout (like GM, Fannie and Freddie, etc.).  One of these days, the public will get tired of watching powerful, rich people bail each other out at the expense of those that want to work and succeed.

PhilB

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Re: 2008
« Reply #7 on: January 09, 2018, 01:57:18 AM »
I didn't know much about investing at the time, so the biggest impact was the interest rate on my mortgage reducing massively.  I used the extra money to pay down the mortgage faster.  With hindsight this may have been an error...
Then in Feb 2009 I was diagnosed with Leukaemia so I had more important things to worry about for the next few years.

soccerluvof4

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Re: 2008
« Reply #8 on: January 09, 2018, 02:57:30 AM »
Even though I was in my early to mid 40's and" Self-Employed that was a High Income earner I didn't lose anything in "financial investments" because I barely invested. I had money saved in savings accounts. What hurt me was Real Estate and my business never returned to what it was though fairly good for many years before I fired. What I did get out of it was to start investing because it was low so we started to Max out the DW's and My 401k and pounded the money away in Vanguard. Also my money was in the company cash flow and I had said that was part of my retirement since no business debt. In my mind the day I would have to touch it to try and keep the business running was the day I was done. Well that day was coming as well as I was just hating the business so I closed it, took my cash flow and invested it and sold all my assets. The take away for me is Is having been old enough to go through several downturns and survive many in business I feel like the next one is always lurking around the corner. Though fire'd and historically it always bounces back I do say to myself alot "but what if it doesnt this time or we have a Japan situation". End of day as I get older I just worry less about it and know I will figure out away because what other choice do you have. I do try to keep my portfolio balanced and stay on top of it.

debbie does duncan

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Re: 2008
« Reply #9 on: January 09, 2018, 09:18:11 AM »
2008. Not much. But  1992....OMG yes! As you can tell I am older. Graduated in 92......no job.
Sent out 100 resumes......by snail mail got one nibble.
Took the nibble , moved 4000kms.
It was not easy the first few months but it turned out OK.
 In 1994 I was in a perfect position to take the only F/T job for the next 5yrs .
I am happy to report living on Vancouver Island is awesome.

FireHiker

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Re: 2008
« Reply #10 on: January 09, 2018, 09:59:28 AM »
2008 was actually a wonderful year for me. I re-married in 2008, and we are both engineers, still working the same stable jobs. I moved into his duplex which had a microscopic mortgage, and even though we were super spendy and didn't track anything we saved crazy money without even trying. I sure wish I'd been smart enough to have my 401k maxed out and live frugally then; we'd be retired now! We decided to buy a bigger house a couple months after got married, but because of the whole collapse we waited months for a short sale then ended up not being able to get a mortgage and backing out. Worked out well though, because that house eventually sold at an even lower price. In 2009 we bought a modest 3 bedroom/2 bath short sale and fixed it up, selling in 2012 for a respectable gain (although we bought a clown house in 2012...too much house and I look forward to ultimately downsizing, but damn has it gone up in value like crazy since then).

Looking back there are a few things I really wish we had done differently: kept the duplex as a rental like we originally considered, found a smaller 4 bedroom instead of our 5 bedroom monstrosity in 2012, maxed 401ks back then when it would have been easy, tracked spending, traveled more. Overall though we fared much better than most and I certainly can't complain. For reference, I will be 40 this year and my husband is 50, so we were already well established in our careers by 2008.

hadabeardonce

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Re: 2008
« Reply #11 on: January 09, 2018, 10:52:17 AM »
Born 1982 - My Crash History

2001 - Sept 11th was my first day working full time at a small tech company. That was a very strange experience overall, but in terms of the business, sales dropped progressively to the point where the company went from five to three people. I was still living with my parents, making $15/hr and going to college at night. The tech industry was shedding jobs and desktop support guys were a dime a dozen, so I saw my earnings potential drop, but I did manage to keep that job for six years and move from 30k/yr to 50k/yr. I graduated in 2003 with a 2-yr A.S., bought a condo in late 2005, and changed jobs in late 2007...

2008 - The environment was very positive at the school I was working at until six months into 2008 when we were told there would be budget cuts. I was a new guy, part of a union, so I didn't think I would make it long. My wife was still going to school and working part time, so my income was the biggie. I made 76k that year and made it out unscathed. Our condo went underwater, but we didn't sell. I refinanced once or twice to get lower rates, always had a 30yr-fixed and kept up with the payments. Saving any amount of money was tough for many years. Part of it was due to our spending and part was due to our income. Once my wife started working full time in 2015, we were off to the races and jumping into retirement investing.

I feel fortunate to have been largely unaffected by the crashes, other than lost earnings potential, but I've been working full-time since 2001. I regularly recommend work in industries like government and healthcare to those I meet. The job stability and benefits in those industries seem like some of the best. Looking back, I wish I would have invested more and been in a better position to take advantage of the low housing and stock prices during the crash years. The best thing I did during all those years was invest in my wife. She's working in a better environment where she's appreciated monetarily and in general.

Worldview, lessons learned:
Don't sell your house when you're underwater.
Busts make the booms better, if you are prepared.
Find employment in an industry that provides an essential service.
If you're part of a two income household, manage your expenses to where you only depend on one income.

dude

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Re: 2008
« Reply #12 on: January 09, 2018, 11:39:27 AM »
Couple things. First, watched my account drop by 28% and didn't do a damn thing. So I proved to myself that I could weather a big drop and not panic. Only regret in hindsight is not doubling down and buying the index on the cheap (or at least re-allocated at the end of that year).  Second, the drop in interest rates was a huge boon for us.  We'd bought in a HCOL area with just 5% down with an 85/15 first and second mortgage at 6% and 8%, respectively. We were able to serially refinance 3x down to 3.25%. That resulted in a $1,000 difference per month! That money went right to savings/investments, which was a serious boost to the bottom line. Hard to overstate it. It paid handsomely after the Crash to have Tier 1 credit.

RedmondStash

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Re: 2008
« Reply #13 on: January 09, 2018, 12:24:33 PM »
First, watched my account drop by 28% and didn't do a damn thing.

Same, though we lost probably 1/3 to 1/2 of our investments' value, on paper. At the time, we were using a financial advisor, so we were somewhat buffered from thinking about it. Spouse & I were both working, and our jobs were unaffected -- although spouse's entire team was laid off in early 2009, so if you count 2009, it did affect us.

But we already had FU money, so we took some time off (I was doing on-and-off contract work), relaxed, and ignored the market. Our investments came back strong. I'm glad we didn't panic, and I'm glad we've had that experience to show us that we can ride out uncertain times. It makes me feel more confident that we won't panic-sell during the next correction or recession.

I think of the market as being like weather: maybe it's sunny a lot of the time, but sometimes it rains, and since weather is a chaotic system, you can't predict when rain will come with any real accuracy. Both sun and rain are necessary. And the sun always comes back eventually, even in the gloomy Pacific Northwest.

Gyosho

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Re: 2008
« Reply #14 on: January 09, 2018, 12:45:41 PM »
Value of stock market investments on paper:

November 2007 - 360000
November 2008 - 276000
November 2009 - 371000
November 2010 - 441000

I ignored the crash, kept shoving money in my investment accounts at the same rate, and kept enjoying my life.

Bicycle_B

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Re: 2008
« Reply #15 on: January 09, 2018, 01:30:44 PM »
+1 to RedmondStash's remark about crashes are like the weather.

Was early 40s in 2008, recently obtained a stable job after a desultory haphazard "career".  2008 cost me $55,000 but helped me toward FIRE. 

Invested 30k of cash into stock on the way down in 2008, finishing shortly before the real crash of Oct-Nov.  That eliminated cash.  I distinctly remember one account dropping from 44k (it had previous investment as well) to 27k.  I held.  Poured all funds left over from casually inflated lifestyle into Vanguard (a little over $1000/mo), using 401k to get tax breaks...should have done that sooner.  Those investments helped me reach a modest FI by 2017.

The 55k mistake wasn't in 2008, but was caused by it. After TARP/bailout, concluded in 2010 that stocks had had their bounceback but auto manufacturers were desperate.  (Any market timer's a bad market timer...)   Couldn't find a price I like for used cars, so I bought a brand new one for the first time.  A fancy one, on sale for 29k instead of 40k - my only obviously extravagant purchase in decades.  Of course it depreciated over 75% of its value since then.  Had I just bought a 3k vehicle for 5k, I'd be ahead at least 55k by now.

Roughly speaking, the extra allocation toward stock and the foolish car expense balanced out, so 2008 was a wash for me besides my modest savings rate of the day.  Lesson learned:  after a crash, lifestyle inflation is deadlier than ever.

mathlete

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Re: 2008
« Reply #16 on: January 09, 2018, 01:43:13 PM »
I was just out of high school at the time and the place I was renting had cable. And I had a lot of afternoons off thanks to a schedule of mostly night classes and night/weekend shifts at work.

I found myself watching a LOT of CNBC during the day, when the markets were open. I can't say I learned a whole hell of a lot from CNBC itself, but watching everyone go crazy made me think that I'd better learn about this stuff. CNBC led to Suze Orman's book "Young, Fabulous, and Broke", which led me to getting my credit going. And getting a brokerage account. Then I ponied up $10 to join the Something Awful forums so I could post in the Business, Finance, and Careers board. And then, about 10,000 steps later, I'm close to a 50% savings rate and on track to be financially independent in my mid-40s.

So I think it is fair to say that my personal finance journey was very much started thanks in part to 2008.

KTG

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Re: 2008
« Reply #17 on: January 09, 2018, 03:33:07 PM »
2008 had a profound impact on me. I did great during that time, and through the whole mess was only out of work for about 3 months I think? Anyway, regardless of how well I did, I could see how terrible it was for many others, and it left a lasting imprint on me. Mostly everything I do is influenced by that time period. I will just never forget it. And as crazy as it seems, it seems so many have, and are repeating a lot of the same mistakes I saw running up to the recession (upgrading homes, burning through equity, spending lots of money, etc etc).

Retire-Canada

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Re: 2008
« Reply #18 on: January 09, 2018, 04:54:21 PM »
How about you?

I was bummed and slowed my new money additions to my investments. I wish I had sped up my additions, but at least I didn't pull my $$ out. My work was related to Gov't contracts so no change there at all. No real impact on my day-to-day life.

The Fake Cheap

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Re: 2008
« Reply #19 on: January 09, 2018, 07:51:46 PM »
I was working at a bank, dealing with a lot of people who were worried about their investments, and wanted to pull them out.  I only had a few years of working at the bank under my belt at that time, so most of the people I saw had investments of anywhere from 0-50K, and many who were making ongoing contributions from their pay cheques.  I would say about 1/2-2/3 of people I saw wanted to pull their investments out of the market immediately because of all the money they had "lost".  I manged to talk maybe 20-30% of those people who wanted to pull their money out into staying invested, and not panicking.  Maybe talked a few more into speaking with someone else.  In the end of course, the only ones who had lost money were the ones who pulled out at the bottom of the market. 

Basically, it taught me to always stay invested. 

FIRE Artist

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Re: 2008
« Reply #20 on: January 09, 2018, 07:55:18 PM »
I learned to appreciate the Canadian banking system. 


nancy33

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Re: 2008
« Reply #21 on: January 09, 2018, 08:09:06 PM »
I'm almost 50 now. Such an interesting question! In 2008 budget cuts made my government job unbearable so I quit and started my own business. I was in a job that I had believed would be my last job until I retired. So I was forced way outside of my comfort zone and took some big risks. Oh yes we knew retired people who lost their company pensions. I can't remember but I think it was GM? Got to see how corrupt our government is, bailed out the big corporations and not the working people. I am still very angry about that. Husband's company let so many people go his job was no longer sustainable so he eventually went into a new better career. He had to go away for four months to train for the new job. Kid's public school went to hell so we discovered private school. In laws who live large begged us for money and we sent them some and now they are living very large once again and never paid us back. Our house value went way way up then way way down but we still came out ahead and never underwater. Saw lots of people scam the system by staying in their foreclosing houses or even renting out their houses without making payments for a couple of years and pocketing the difference. Realized it wasn't below me to do the same if circumstances present themselves in the future so I think It changed my personal moral standards and beliefs. Was too afraid to invest in any dirt cheap foreclosed houses because our jobs were falling apart and you never knew what the bottom of the market would be but in retrospect kick myself for not buying one of those houses. You needed to have CASH to take advantage of the real estate. Not many people had cash. I learned the term "cash is king". I had a couple hundred dollars in a bank stock and the bank was going under and I walked into Edward Jones to ask if they could sell it for me so I could get a little money out of it and I learned that Edward Jones is useless. Ok just writing this I'm getting anxious about all of our money in the stock market and thinking about buying gold and hoarding cash. Oh there was one day I went to the bank to withdraw a few thousand in cash at my mom's and aunt's urging. Things were very bad and it was TENSE and the bank teller whispered to me that "everybody is in here withdrawing their money". I learned how the government confiscated gold from safe deposit boxes during the Great Depression. I realized even a safe deposit box isn't safe! I experienced a new type of anxiety, just like I experienced a new type of anxiety with September 11.
2008 wasn't  like the Great Depression I don't think. My grandma and mom taught me all about that. We weren't eating wild rabbits and feeding hungry traveling unemployed men soup on our back porch.

Bruinguy

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Re: 2008
« Reply #22 on: January 09, 2018, 08:55:14 PM »
I'm almost 50 now. Such an interesting question! In 2008 budget cuts made my government job unbearable so I quit and started my own business. I was in a job that I had believed would be my last job until I retired. So I was forced way outside of my comfort zone and took some big risks. Oh yes we knew retired people who lost their company pensions. I can't remember but I think it was GM? Got to see how corrupt our government is, bailed out the big corporations and not the working people. I am still very angry about that. Husband's company let so many people go his job was no longer sustainable so he eventually went into a new better career. He had to go away for four months to train for the new job. Kid's public school went to hell so we discovered private school. In laws who live large begged us for money and we sent them some and now they are living very large once again and never paid us back. Our house value went way way up then way way down but we still came out ahead and never underwater. Saw lots of people scam the system by staying in their foreclosing houses or even renting out their houses without making payments for a couple of years and pocketing the difference. Realized it wasn't below me to do the same if circumstances present themselves in the future so I think It changed my personal moral standards and beliefs. Was too afraid to invest in any dirt cheap foreclosed houses because our jobs were falling apart and you never knew what the bottom of the market would be but in retrospect kick myself for not buying one of those houses. You needed to have CASH to take advantage of the real estate. Not many people had cash. I learned the term "cash is king". I had a couple hundred dollars in a bank stock and the bank was going under and I walked into Edward Jones to ask if they could sell it for me so I could get a little money out of it and I learned that Edward Jones is useless. Ok just writing this I'm getting anxious about all of our money in the stock market and thinking about buying gold and hoarding cash. Oh there was one day I went to the bank to withdraw a few thousand in cash at my mom's and aunt's urging. Things were very bad and it was TENSE and the bank teller whispered to me that "everybody is in here withdrawing their money". I learned how the government confiscated gold from safe deposit boxes during the Great Depression. I realized even a safe deposit box isn't safe! I experienced a new type of anxiety, just like I experienced a new type of anxiety with September 11.
2008 wasn't  like the Great Depression I don't think. My grandma and mom taught me all about that. We weren't eating wild rabbits and feeding hungry traveling unemployed men soup on our back porch.
Thanks for your story.

mozar

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Re: 2008
« Reply #23 on: January 09, 2018, 08:58:39 PM »
Quote
Quote
Quote from: FrugalSaver on January 08, 2018, 08:47:44 PM
My grandfather was working 60 hours a week building ships at the age of 12 and got a potato and some soup every other day.
And I'm sure your grandfather's grandfather was standing over his shoulder reminding him of how lucky he was that he wasn't living through the Panic of 1873.

And my grandfather's grandfather was born a slave so...

Quote
We weren't eating wild rabbits and feeding hungry traveling unemployed men soup on our back porch.

I would like to learn trapping when I get around to it.

My 2008 was fine. I accepted the only job offer I got while I was in grad school. 2009-2017 I was laid off a bunch of times. The job I have know is the first time I don't feel like I'm just waiting to get fired.

accolay

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Re: 2008
« Reply #24 on: January 10, 2018, 02:17:54 AM »
I didn't really have problems with 2008. I wasn't working any dream jobs to get fired from and was still working through school.

2008 eventually allowed me to buy my first house, a foreclosure fixer upper for really cheap in 2011. It's still cheaper than rent.

Bateaux

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Re: 2008
« Reply #25 on: January 10, 2018, 03:38:12 PM »
2008 was the low point of our life.  Our 14 year old son got cancer (survivor)  my wife wasn't working and I had fears of losing my job.  Watched our stash drop 50%, had forced travel expenses and gasoline was over $4 gallon.  Things started improvement in about 2010.

aspiringnomad

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Re: 2008
« Reply #26 on: January 10, 2018, 07:33:21 PM »
I was two years out of grad school and overseas on a work trip when the news of Lehman's failure hit. My hot take was something like "Good, no more moral hazard." Shortly after, I realized it was not necessarily a good thing and that we might be looking at tent cities if the policy response wasn't aggressive enough. I pulled what little money I had invested at the time into Treasuries around October after the market had already melted down considerably. It was somewhat lucky market timing, as the market still had a ways to melt, but I knew people with a front row seat to the abyss and I remember thinking that if this thing continues to spiral out of control then a complete reconfigure of our market-based system was not out of the question. Citi and BofA's common equity capital buffer was almost completely decimated. AIG and the GSEs were insolvent absent intervention, not to mention the daunting problems facing the auto industry.

Any one of those financial institutions failing would have been a tsunami, with Lehman just a 5 foot wave in comparison. Around that time, I followed the news and reputable blogs like Calculated Risk closely, sifting through the data for green shoots indicating stabilization of the financial system (not the economy more broadly, because this was triage). Eventually in early 2009 I gained enough confidence to get into some serious stock picking. Volatility was insane and I did extremely well with playing it for awhile.

Since I had started with so little, it did help to jumpstart my investing a bit, but over time, I slowly realized those results weren't at all replicable on a sustained basis. I took a couple lumps and eventually transitioned to indexing and now 90% of my stocks are index ETFs with the exceptions of a few holdovers from my stock picking days. The financial crisis changed my life and career though, as I decided I wanted my job to be more directly involved in the financial world. Lots of people were leaving it at the time, voluntarily or otherwise, opening up some interesting opportunities.
« Last Edit: January 10, 2018, 07:35:49 PM by aspiringnomad »

SachaFiscal

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Re: 2008
« Reply #27 on: January 14, 2018, 08:59:09 AM »
Well 2008 made me grateful that I didn’t buy a house at the end of 2006. I almost did buy a house then but chickened out at the last minute after finding a blog called Professor Pigginton’s eco almanac for the landed poor. It was a guy predicting the housing crash. https://piggington.com

I lost my $4000 deposit but so glad I didn’t buy that thing.  Bought a condo after the crash for a deep discount.

I didn’t know much about investing so I wasn’t too worried about my investments. I had randomly chosen funds and maybe one or two target date funds. I don’t think I ever checked them and didn’t even know how much I lost in the crash. I didn’t start paying attention to my investments until 2014 when I found this site.

I was lucky to have kept my job. There were a few small layoffs but I dodged them.

Travis

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Re: 2008
« Reply #28 on: January 14, 2018, 09:35:33 AM »
I was wrapping up my second deployment to Iraq.  I was offered an exchange-student slot at another service's professional development course which doubled the amount of time I got to spend at home.  That year was the first time in 6 years of marriage I was with my wife for an entire year.

I had only the vaguest notion of what the economy was doing.  I had a ridiculous amount of money saved, but almost none of it invested in anything larger than a money market.  The biggest indication was the following year when we bought a house that only came on our radar because the owners cut the price in half of what they bought it for.

markbike528CBX

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Re: 2008
« Reply #29 on: January 14, 2018, 11:31:41 AM »
Due to my financial advisor ( a high school friend ) moving companies, and me wanting to index, a lot of IRA money was sitting in cash in 2008.   According to THE PLAN (my IPS) I was to get all VIASX on 20% down S&P500.   I did so in September 2018.  My only " regret" is that I didn't  procrastinate 5 weeks to miss the big drop off.   It gave me confidence that I followed my plan, despite all the negativity, another 25-30% drop and the associated fearmongering "news".

I worry a bit about newer investors who have never experienced the puckerfactor of 2008.
I'm sure some will succeed(hold) and some will panic(sell).  I hope our stories will increase the success rate. 


Wintergreen78

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Re: 2008
« Reply #30 on: January 14, 2018, 11:35:34 AM »
I started my first professional job in 2005, with a government agency. Around 2008 I thought about moving to the private sector, but decided keeping a more secure job was a better decision. I didn’t really pay close attention to the markets, but always tried to contribute as much as possible to my IRA and 457. One of those years I realized I had less invested at the end of the year than at the beginning, because of losses. I tried to ignore that and keep saving and investing.

Overall, I didn’t personally experience negative impacts, but I was definitely aware of it, and saw friends experiencing stress and financial losses.

2Birds1Stone

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Re: 2008
« Reply #31 on: January 14, 2018, 08:57:03 PM »
I was an oblivious student, who had no idea the market was crashing.


BeautifulDay

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Re: 2008
« Reply #32 on: January 14, 2018, 09:45:32 PM »
Worked in lending for a small bank.  The bank itself fared well but it was a tense time.  I did a lot with real estate loans and those took a huge hit.  We had a lot of builder loans and the builder couldn't sell.  Lots of foreclosures.  It was an ugly time to be in lending.  I wasn't going to lose my job, but lost my taste for the industry. 

Went back to grad school to gain new skills. Looked for jobs in the area.  But there just weren't any jobs. We decided to relocate/change professions in 2010. But house was still underwater. Good thing our new job came with housing so we could still afford to carry the existing mortgage. Tried to wait it out and kept the house a few years. Rented it for a while. But the upkeep became too much. And we thought we were going to lose our free housing at work due to a change in position. No way we could manage 2 mortgages (or mortgage plus rent). Ended up selling at a loss and cashing most of my old 401k -that I kept invested thru the crash- to cover the 20k loss.  I guess I was too proud to do anything else (Foreclosure, short sale, etc.). I feel that I'm responsible for my own debt so paid it off and lost $. Too bad the government feels companies should be held to a lesser standard.  They are too big to fail and individuals like me don't matter.

Honestly 2008 was a rough ride and the hits kept coming for a while. Hard life lesson. We made some mistakes and a few good decisions. But it led us to a better situation.  Ya we took a big hit.  That helped me look for a different path. And with less than 1 year of mmm I recouped the loss. It changed the way I look at house values, gave me a new career. We survived and could survive another in much better shape.

*Edited to add details.
« Last Edit: January 15, 2018, 09:13:21 PM by BeautifulDay »

Acorns

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Re: 2008
« Reply #33 on: January 14, 2018, 09:56:34 PM »
I was gainfully employed in 2008 with no chance that I would lose my job. In college I had had a professor who would tell the class, "A paper loss is only a paper loss until you sell, then you really lose money, so don't sell when you are down." I lost, on paper, nearly 50% of my savings at the time, but I didn't sell, and in 2009 I actually maxed my 401k and IRA for the first time and kept doing that until I quit working f/t. My only regret about that time is that I didn't put more into the market.

CoffeeAndDonuts

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Re: 2008
« Reply #34 on: January 15, 2018, 03:20:43 PM »
Round 1 - Job loss
It was an interesting time... My wife, married about 9 mos, was laid off from her position as an Architect (mainly multi-family residential/condos) in the 3rd round of layoffs spanning 2-3 mos in fall of 2008. The first round people managed to all get jobs but by the 3rd round, no one could find jobs. In total, her firm dropped about 70% of the staff that fast.

Thankfully, we were already pretty frugal and we were able to maintain saving via her unemployment plus my consistent income. There was stress but a lot less than there could have been were our spending levels not already frugal.

After about 9 months, we moved to Louisiana where she found a job in about the only place that was building. It was nice getting her earning income and feeling valuable again. It also presented an opportunity for a career shift that she'd been trying to make (still within architecture).

Oddly, my company set a record revenue in 2009 and was stable. We stopped hiring, expanding but all appeared well...

LESSON: Frugalness let us avoid any lasting damage during the layoff, funded our move across country, and let us buy a home in a down market even while not selling our prior home.

Round 2 - Trying to sell a condo in 2010
At the end of 2009, we bought a new home despite having not sold or even rented our condo we'd been living in previously. That condo was in downtown Minneapolis and bought in 2004 prices.

During 2010, things started well and we listed the condo. We were back at 2 incomes but now supporting two homes. Still saving but at a diminished level. We basically attracted tire kickers but little realistic interest.

And then, in fall of 2010, we could see that the pipeline for my company was getting pretty meager as our large enterprise software projects wound down. Before it got too bad, we got the condo rented at a price that was slightly cash flow negative but was creating positive value if you factor in the equity we were building. Not a great rental property but better than being forced to sell in a down market.

LESSON: Frugalness gave us the flexibility to market the condo and to even accept renting it as cash flow negative to let the investment recover.

Round 3 - My company tanks in 2010-2012
As mentioned, we saw our pipeline drying up... Thankfully we had some state work that was reliable but low rate and occasional other small work.

Revenues fell quite a lot. We burned some cash but prior experience led us to act reasonably quickly. Employees took a 12.5% paycut. Shareholders dropped pay to ~$2,000/mo with any profits being distributed separately monthly. Overall during the 18-24 mos we were in this mode, shareholders probably gave up an average of 30%-40% of total compensation.

BUT... we retained nearly all employees, kept the balance sheet positive, and came out the other side leaner and as a survivor.

Since then, we've been nearly continuously profitable and doubled in staff size with revenues in 2017 approximately 350% higher than 2010 with historically high profit margins.

LESSON: Frugalness let me take a large pay cut for a sustained period to survive the recession with the company relatively unscathed which aided in a speedy recovery while also creating opportunities to buy out other shareholders so not only is our company quite a bit larger now but I also rose from a 31% shareholder to 50% shareholder and our bank account is well funded.

A couple other thoughts
Throughout everything, dual income with a savings rate that was probably on the order of 30-40% (if all was going well), and some cash enabled us to weather ups and downs with less stress and to take advantage of opportunities we'd not have been able to otherwise.

One thing I regret was not having maxed our retirement accounts throughout the downturn and the recovery. We could have done better and, in hindsight, maybe taking a loss on our condo would have been worth it to spare the cash flow for market investments. Nonetheless, we didn't sell equities at all and did continue to put new money in as we were able to.

We also left with a stronger marriage I think - A nearly continuous flow of financial strain for 3-4 years plus a move to a city that was new to us almost immediately after getting married tested us a bit but we still built our new life together and came out stronger and didn't want for anything.

Final acknowledgement... It's worth noting that our nominal incomes throughout this period were around $70k each on average. DINK's with $140k nominal but often more in the $110k is not that great a challenge. On the other hand, fixed lifestyle inflation that we couldn't undo could easily have exacerbated bad outcomes or closed doors we otherwise took.

lexde

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Re: 2008
« Reply #35 on: January 15, 2018, 04:21:18 PM »
I was an oblivious student, who had no idea the market was crashing.
Same here. Senior in high school/freshman in college. Had just lost a parent, so I was not thinking about the market at all, was just focused on getting good grades.

MayDay

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Re: 2008
« Reply #36 on: January 15, 2018, 07:09:59 PM »
We graduated and bought a house in 2005. Had a kid in 2007. Between 2007 and 2011 we had five or so laupffa between us. One came when kid 1 was less than a month old. The other came when I had just gotten pregnant with kid 2.

It was very traumatic. We spent all out extra funds for seven years paying down our mortgage so we weren't underwater. We were forced to move to get work and sold our house at a loss of 70k. We were trying to save, had two young kids, and unstable jobs.

We were never truly in dangerous of losing our house but it got close and that was this us saving probably 50% when we had work. So you can imagine how bad it was for people who weren't saving. We repeatedly killed ourselves to save 20k, then got laid off and spent it all.

Throughout it all we put 10-15% of our income in 401ks and put money in Roth IRAs sometimes depending on if we were working.

It sucked. People on here who are all"tra la la stocks are on sale" piss me off. Those on sale stocks came with massive layoffs. Just because you kept your job doesn't mean your cheap stock is the end of the story.

nancy33

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Re: 2008
« Reply #37 on: January 15, 2018, 07:57:12 PM »
We graduated and bought a house in 2005. Had a kid in 2007. Between 2007 and 2011 we had five or so laupffa between us. One came when kid 1 was less than a month old. The other came when I had just gotten pregnant with kid 2.

It was very traumatic. We spent all out extra funds for seven years paying down our mortgage so we weren't underwater. We were forced to move to get work and sold our house at a loss of 70k. We were trying to save, had two young kids, and unstable jobs.

We were never truly in dangerous of losing our house but it got close and that was this us saving probably 50% when we had work. So you can imagine how bad it was for people who weren't saving. We repeatedly killed ourselves to save 20k, then got laid off and spent it all.

Throughout it all we put 10-15% of our income in 401ks and put money in Roth IRAs sometimes depending on if we were working.

It sucked. People on here who are all"tra la la stocks are on sale" piss me off. Those on sale stocks came with massive layoffs. Just because you kept your job doesn't mean your cheap stock is the end of the story.

I posted earlier in this thread but just reading your story realized my 12 year old's friend who is here at our house right now lost his house in the 2008 ordeal and yes there was so much suffering and it continues

seattlecyclone

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Re: 2008
« Reply #38 on: January 16, 2018, 11:04:14 AM »
I graduated in 2009. I was fortunate to have enough scholarships and teaching assistantships and paid internships and general frugality that I was able to graduate with no debt and even a bit of savings in my Roth IRA and 403(b) from grad school. The company I had an internship with the summer before I graduated basically stopped hiring. Most companies did. I was pretty bummed about that, since I got pretty good reviews from my work that summer and would have really loved to have been invited back. The career fairs really dried up that year, but I managed to land a decent entry-level job with one of the only big tech companies that was still growing.

I had a bit in the market at that time. Seemed like a lot then, but it was a tiny amount compared to my current net worth. I didn't pull a penny out and kept investing in my retirement accounts on the way back up. My wife and I bought a small house in 2010, not too far off from the bottom of the market. We sold it last year for twice what we paid. We did aggressively pay down the mortgage, which in retrospect cost us at least $100k compared to if we had invested the extra payments instead.

I remember there being lots of uncertainty at that time. Plenty of my peers had a much worse time of it than I did.

Hula Hoop

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Re: 2008
« Reply #39 on: January 16, 2018, 12:46:51 PM »
My first child was born in 2008 so life as I knew it changed forever that year.

jrbrokerr

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Re: 2008
« Reply #40 on: January 16, 2018, 12:56:30 PM »
I just graduated from a career in finance in the summer of 2007; I was investing since late 2006 with my life savings, so I was just in CFDs of stocks.

My investments were leveraged, so you can imagine the pain I felt when the deep financial crisis in 2008 was in full. My job was involved in the markets so I had to watch how there were days when the market seems like it will end positive one day, just to watch it crash on the final 10 minutes of trading. I was deep underwater, so I did some math and another 10% from the market bottom will wipe me out, so I just stayed the course and what I learned is that markets always come back, and I also learned to be careful with individual stocks, because I owned CITIGROUP, and we all know how that went on. I was LUCKY

BTDretire

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Re: 2008
« Reply #41 on: January 24, 2018, 08:22:09 AM »
 I had $380,000 in VTSAX on 1-1-2008, I had VTSAX losses of $198,000 on 2-28-2009.
 I may have had a little money elsewhere, but Vanguard is easy to look up.
 I Finally got back to $0 losses on 12-28-2010, three Years later.
Then it was one more year before the market started it's upswing.
 During that time I was continuously adding funds to the account,
in those four years (1-1-2008 to 12-31-2011) I added $135,000.
 I don't have any strong feelings about that time and the losses,
we were very busy with our business and we were making double and triple
the money we ever had, even though that was still only in the upper $70 thousands.
 But so much better than the $20 and $30 thousands we had been making.
 So, I think the business took my mind of the market, I will add the economy also
lowered our business gross income, but not some much that it was any problem.
 I might add, everything is easier when you don't have debt!

Knapptyme

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Re: 2008
« Reply #42 on: January 24, 2018, 08:39:43 AM »
The market had pretty much already crumbled in Michigan, and we had moved out of that state to a new, long-term teaching gig that I had until I semi-retired early this past year to become a SAHD. (I may never go back, but my wife still teaches.) We did buy a house in September of '08 right before the national collapse and saw its value plummet 40% in the next couple of years. Because we wanted to stay there, had jobs, and could still afford the mortgage, it was nice that the taxes went down, too.

We didn't have enough liquid assets to really take advantage of the down market, but we still contributed to retirement accounts. Overall, the boon from having a much better job (both salary and environment), 2008 is a marked turning point for our futures regardless of national financial catastrophe.

StarBright

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Re: 2008
« Reply #43 on: January 24, 2018, 09:01:07 AM »
I was pretty poor in 2008, so I guess it could have been a lot worse if I had actually had a bunch of money to lose. But I didn't. I didn't have any money in the market because I had no money to put in it. I had trouble keeping jobs (due to layoffs), but never getting them. The most important lesson I learned is that every job is temporary and to save like every day is your last. My husband and I also watched a lecture around that time by Elizabeth Warren  on YT that strongly influenced our views on personal finance. We vowed to NEVER become dependent on being a two income household. To this day, despite making way, way, way more money then we did then, we don't. We bank all of my income and at least a 1/4 of his.

+1 on Warren. I read the Two-Income Trap when now-DH and I were dating and it was absolutely formative in how we set up our finances once married. We lived on one salary from the day we combined finances (even though we both worked) and it set us up for success.

As far as 2008, I landed my job at the end of 2006 and rode out the recession and got to buy lots of stocks on sale when I was in my mid 20s. I learned to save a lot because we saw our friends and families losing jobs and homes and stressing like crazy (rightfully). I feel really thankful that I was young enough to learn to plan for major economic upheavals (There but for the grace of God, etc etc) - though I'm probably too conservative for my age.

The way it affected us the most was that my DH started his PhD program in 2008. There were 140 Tenure Track Positions in his general field that year. The year he completed his PhD (2013) there were 75 TT positions. This year there have been 50 TT positions posted (only 1 in his specialization). The Great Recession sped up the corporatization of Academia in a big way.

DH has landed a full time position with benefits and (fingers crossed) he is about to be put on a 3 year contract but because he isn't covered under a tenure line he does significantly more work, for less pay, than his tenured colleagues.
« Last Edit: January 24, 2018, 09:08:18 AM by StarBright »

Caoineag

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Re: 2008
« Reply #44 on: January 24, 2018, 09:04:05 AM »
I had graduated in 2005 so by 2008 I was investing what spare cash I had, paying off debts and saving up cash for a down payment on a house. Towards the tail end of 2008 we bought a house under a short sale contract since cash was king and very few people had any. We bought a cheap fixer upper with a 15 year mortgage because we believed in living on one income and had DH quit his job at the beginning of 2009 to avoid anxiety attacks (we had waited until we bought the house). He worked temp work, got hired on just before my firm laid me off in 2010. I did temp work and got hired on in less than a year. During 2009-2010, survival was the sole goal and we did very good but I helped people rewrite their resumes, moved a friend into my basement in case she got laid off and watched a lot of people struggle to stay employed.

On the investing front every contribution dropped in value but I contributed what I could. 2010-2011 I really couldn't contribute much because of my employment situation but the market contributed on my behalf. My DH had left an old 401k in cash for 3 years so I took over our investments made sure our money was working as hard as we were. 2008 laid the groundwork for our success but we really didn't see the progress until 2012.

acroy

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Re: 2008
« Reply #45 on: January 24, 2018, 09:09:40 AM »
Work slowed but no big layoffs or anything. Food industry, people are gonna eat.
401k took a big hit in the short term.

But it was positive overall: I shoveled the max into 401k the whole time and bam, those shares have gone up a lot.

Selfishly I'd like to have one more 2008-level event... I'll be set as long as the whole dam' thing doesn't melt down from 500 trillion in debt and derivative fiat money!

Samuel

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Re: 2008
« Reply #46 on: January 24, 2018, 09:49:42 AM »
I was a couple years into my first real "professional" job as a contractor at a big ol' company that was at the same time arranging to source much my group's work to a supplier. I somehow managed to stay on as they first let contractors go, then laid off several employees. Not sure how I was the only contractor that survived, but it was a super tense time. I knew a lot of people struggling (and yes...many that weren't).

I didn't have any real assets to watch tank, but luckily I had just finished clawing my way out of debt so I was better positioned than a lot of my friends to weather the storm. It was mainly just really stressful wondering if I would keep my job. 

I had flirted with buying a condo the year before, but decided against it. I would have been underwater for probably 4 years if I had done it, along with enduring a lot more stress. I rented a unit in a condo building and on my floor alone 4 of the 12 units had foreclosure papers on the doors at the height of the trouble. Who knows what that meant for the condo association (I assume those folks aren't paying dues either)...

In retrospect I wish I had gotten my financial life together a bit sooner so I could have made some moves during that time (although who knows if I would have had the guts to). At one point in my building there was a bank owned top floor one bedroom unit listed for $99,000, cash only offers. That unit is now worth $330,000 (or more) and I could have spent the last 10 years living mortgage free in a cool area of a cool city.

2008 was very important in teaching me that A) money stress is evil, B) living way below your means is how you minimize money stress, and C) spending nearly all your income is a crappy long term plan. I don't think I would have found this place without that stressful wake up call.

Zola.

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Re: 2008
« Reply #47 on: January 24, 2018, 12:52:07 PM »
Back in 2008 I was just out of university and getting drunk or high most weekends, partying hard and blowing ALL my money.

I had a great time, but I have matured a lot since then haha.

I dread to think of the money wasted.

Warlord1986

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Re: 2008
« Reply #48 on: January 24, 2018, 01:30:06 PM »
I graduated two months after the Great Recession hit. With a degree in Communications.

(Engineers, stop laughing!)

I was fortunate enough to find a job with a small government contractor making $25k a year. I lived at home and invested a good chunk of my money (not as much as I could/should have, but still quite a bit). When my job was eliminated I went to work for JC Penney's and for a standardized test scoring company. I saved some money and used that to go to grad school. Graduated in 2013 without any debt. (See, not all of my life decisions were terribad).

Just Joe

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Re: 2008
« Reply #49 on: January 24, 2018, 03:34:22 PM »
I was working in an engineering gig connected to the auto industry for several years before '08 and the Great Recession. Company slowed down and the company laid off some "dead-wood" as my boss called them. I was still a junior level employee and was feeling very insecure. As it turned out I would have been safe b/c the company never eliminated that position.

I began looking and found several better jobs (with dubious futures in retrospect) in my region but they all required some relocation - except one. And it was the best of the options we had. I applied, interviewed and got the job (and continue to work here today) and stayed at the same home address.

Received a significant pay raise in '08 with the job change when it was all doom and gloom on the evening news. So, good. We live in flyover country so perhaps our local economy didn't stumble as badly as the coasts?

My DW however was struggling. Her career track was changing and/or drying up thanks to the recession. After waiting for her turn to advance as people retired or moved on at her employer, these same opportunities/positions were being eliminated. She was forced to tread water, return to school for an advanced degree, job hop, etc. She landed in a good place after we took on $50K worth of student loan debt.

It all worked out in the end but for a while everything led to questions rather than solutions. We were poor and feared we would stay that way if the markets changed in some fundamental way that reduced the USA to some has-been economy due to the massive collective debt in our economy. No real investments to worry about. Just CC debt, student loan debt and a mortgage.

'08 made us get serious about financial planning, long term outlook, and to try to define the world around us a little better. No more passive living. We needed to do more than follow the well worn path from HS to college to job.

MMM forum discussion has helped us hugely since those days. On the social circle/family front there wasn't really anyone to learn MMM style strategies from. Folks we knew were either spenders/debtors or people who never discussed finances. Thank goodness for the internet. We paid off the student loans early and lived cheap while we did it. No more car payment. No fancy vacations. No big house YOLO (we're in the same house today). Our success was part luck, lots of hard work, and tons of patience.

A health scare since then reinforced for us that we made the right choices for us - good insurance, paid sick leave, flexibility at work, friends and family - were all there to help us. Its also left us with the feeling that everyone needs access to these sorts of things in the USA so its shaped our politics a bit. Its also shaped our financial outlook as well. A paid off mortgage is still high on our list in case the healthcare problem should return and lead to disability.

What does a low income person with few external resources do in time of sickness and employment insecurity? The American safety net needs to be better designed, further developed and immune to the politics of the day.