Can you believe it’s been 10 years since the Global Financial Crisis? It was a huge event that shaped many lives. Ten years is a long time and a lot of things can change. That’s the focus of a new yearlong series at NPR’s Marketplace – Divided Decade. I listened to a few stories on their podcast and they are great. Those stories made me appreciate how lucky we were to grow and thrive through those difficult years. Other people had a much tougher time than we did. Today, I’ll share how I’ve changed over the years and how the financial crisis transformed my life.
By the way, Marketplace is a great show. That’s how I keep up to date with economic news. Do you have a favorite economic podcast you listen to? I’d like to find a few more good shows to subscribe to.
Let’s visit 2008
It’s difficult for me to reflect and think back 10 years. I like to live in the present and look toward the future. The past is gone so there is no point dwelling on it. Yes, I’m completely unsentimental. Mrs. RB40 doesn’t like that part of me, but my good sides still outweigh the bad. She can put up with a few of my flaws as long as I make good dinners for her. Let’s go back to 2008 and see how life was.
In retrospect, we were in a great position to weather the Great Recession. I had been working for about 10 years and my job was as safe as a corporate job come. I worked in the CPU group at Intel. That was Intel’s core business and they invested their capital there. I was getting good annual reviews and I didn’t feel threatened by the recession much. My mindset was that of a regular employee. I just wanted to keep my head down at work and stay employed. Layoffs became part of regular news, but I thought it didn’t affect me as long as I kept doing a good job at work. I was wrong about that as you’ll read a bit later down.
Mrs. RB40 had just finished her Master’s degree and she started a new career with a secure employer. She got her foot in the door before the recession so that was great timing for her. She would have gotten laid off if she stayed at her old position at Tektronix. Mrs. RB40 was an admin before she went back to get her advanced degree. Her old group is dissolved now.
We were very lucky that we didn’t have to worry about our jobs during the recession. Our combined income was good and our expenses were reasonable. We powered through the recession without any financial problems. It sounded like life was much more difficult for younger and older employees. We were very lucky to be in that sweet spot to endure an economic recession.
In 2008, we had 3 cats and no kid. Now, we have 1 cat, 1 kid, and my mom lives with us. That’s a huge change. Humans are a lot more troublesome than cats. Life was more carefree 10 years ago. That’s life, though. You just gain more responsibilities as you age.
Having a kid was a big point of contention for us. I wanted one (or two), but Mrs. RB40 didn’t want any kids. Luckily, I persevered and convinced her to try. It wasn’t easy, though. Mrs. RB40 was one stubborn lady. Now, she’s glad she listened to me. Our family life is much richer with Junior in it.
My mom came to live with us part time about 5 years ago. She is getting older and now she is showing signs of dementia. Starting this year, she’ll live with us full time because she can’t live independently anymore. That’s a tough thing to see. Like it or not, our kid will be more functional than my mom in just a few years. She used to teach math in college and now she can’t do simple arithmetic. Age gets us all. That’s why I think it’s a terrible idea to retire at 65.
We have always lived a moderate lifestyle and the recession didn’t change that. In 2007, we moved from our house in the suburbs to a 2 bedroom condo downtown. The house in the burb was too big for two people and we like the vibrancy of living downtown. Housing cost more, but we saved in other areas such as transportation and utilities. Our cost of living didn’t increase much. We turned our old house into a rental and got started as a landlord.
I was a new investor when the Dot Com bubble burst and I learned a lot in the process. I knew we’d most likely come out ahead if we kept investing through the Financial Crisis. We had good income and we invested as much as we could. We maxed out our 401k, Roth IRA, purchased stocks in our taxable accounts, and invested in rental properties. I hesitated and stopped investing after the Dot Com popped and I regretted it. The Financial Crisis was a chance for a do over. Luckily, we could invest through the recession because our jobs were secure and we had good income. It’s a different story today because my blogging income isn’t as dependable.
Back to 2018
My life changed so much over the last 10 years. It still amazes me. I wouldn’t have believed it if it wasn’t true. In 2008, I thought I’d keep working until I’m 65 and live the normal American dream. The Financial Crisis was just a small bump in the road to prosperity. Incredibly, I discovered FIRE and now I’m a stay-at-home dad/blogger. Mrs. RB40 is still working, but she plans to join me in early retirement by 2020. My wife isn’t quite ready to retire yet because she started her career later than I did and she still enjoys working.
Financially, we did very well over the last 10 years. Our net worth tripled since early 2008. If you look at our net worth chart below, you’d see that it went down for a year before it started to go back up. We kept investing through it all and that put me in a great position to retire early in 2012.
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Life on the home front is great too. We haven’t had a big argument since we had a kid. Sure, we have normal fights once every few months, but we get over them relatively quickly. Our relationship is good and we understand each other. Anyway, we don’t want to have a big fight in front of the kid. Being a stay-at-home is great for marriage too. It helps smooth out many domestic issues. I cook on the weekdays, clean occasionally, and deal with Junior’s problems. She doesn’t have to be a supermom when I’m there to pick up the slack. Home life would have been much more hectic if I was still working full time.
The Financial Crisis changed me
At first, I didn’t think the Financial Crisis changed me much because we got through it mostly unscathed. However, that’s not true. The recession changed my attitude about work. My job was secure, but many of my friends got laid off. My old boss was let go a few days before Christmas in 2010. He begged to stay a few more days so he could collect the year end bonus, but that didn’t benefit the company. That experience and other stories made me realize that we are all cogs in a soulless machine.
Anyone can be replaced. Even if your job is crucial to the company, they won’t hesitate to replace you if the numbers make sense. Corporations do not care about employees. If you’re loyal to your company because they’re nice to you, you’d better wise up. They’re only nice to you to increase your productivity. They give you free gourmet food, dry cleaning, workout facility, and an onsite clinic because they want you to stay and work late for no extra pay. Corporations only care about profits and losses. CEOs will pump and dump stocks if they can get away with it. Everyone has got to look out for themselves.
The Financial Crisis made me cynical. Once my attitude turned negative, an early exit from the corporate life was inevitable. Maybe I would have thrived as an employee again if I went to a small company that cared more about their employees. Who knows? But, I can’t complain. I love my life as a SAHD/blogger. Self employment fits my personality perfectly. I have total control of my time and I can follow my own agenda. Work politics suck. I’m so glad I don’t have to deal with that crap anymore. I actually liked the technical work, but it wasn’t worth it to put up with the rest of the BS. Boy, that escalated quickly. Anyway, I love early retirement and the Financial Crisis played a big role in shaping it.
Ten years is a long time and our lives will change a lot more again. In 2028, RB40Jr will be preparing to go to college. Once he’s gone, we’ll sell off our properties and move closer to Mrs. RB40’s parents. They are getting older and I’m sure they will need more help soon. Our investments should be more passive and more conservative at that point. I want to travel and not worry too much about the stock market and rental properties. It’d be ideal to live part time near Mrs. RB40 parents and travel the world the rest of the time. The cost of living is relatively affordable in the California dessert.
This is just me visualizing the future, though. Who knows what crisis is going to come up over the next 10 years. Whatever it is, I’m confident that we’ll survive as long as we work as a team. Life is great now and I’m sure it will get even better in a decade. What can I say? I’m a lucky optimist.
What about you? Did the Financial Crisis change you? How had your life changed over the last 10 years? Time really flies, doesn’t it?
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.