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How Did The Financial Crisis Change You?


How did the Financial Crisis changed you? 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.

Professional Life

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.

Family Life

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.

Personal Finance

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.

RB40 net worth

*Sign up for a free account at Personal Capital to help keep track of your net worth. I log in almost every day to check on my accounts and cash flow.

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.

How the Financial Crisis changed me

Visualizing 2028

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?

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he couldn't stomach the corporate BS.

Joe left his engineering career behind to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle. See how he generates Passive Income here.

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 DIY investors analyze their portfolio and plan for retirement.

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{ 78 comments… add one }
  • Mr. Tako February 1, 2018, 2:50 am

    I had a pretty tough time during the financial crisis. Like others, I got laid off and had difficulty finding more work. It was a difficult situation and we really had to cut back on our spending.

    Overall though, I think it made us more cautious people, and more frugal. We invested as much as we could during the downturn, and that’s transformed into multiple millions of dollars over the last 10 years.

    • retirebyforty February 1, 2018, 9:01 am

      Right, you never know how you’re going to react unless you’ve been through it. A lot of investors think they could stomach it, but the next downturn going to be really tough.
      I think we got a bit more frugal too. We were a lot more careful with our money during the recession.

  • Caroline February 1, 2018, 3:30 am

    That’s when you realize money is not everything at all. I am sure I got affected by the financial crisis but all I can remember is what a wonderful life I had 10 years ago and how it changed drastically because of my husband’s depression. At least with money, you can always fix or try to fix money setbacks!
    So while you plan for the future, don’t forget to enjoy the present! You never know what the future holds.

    • retirebyforty February 1, 2018, 9:02 am

      I’m sorry to hear that. Hopefully, it’s better now. I had a bout with depression and it was tough to think about anything else. I agree that you’ve got to relax and enjoy the present. You never know

  • Chris Urbaniak @ deliberatechange.ca February 1, 2018, 3:32 am

    2008 certainly WAS a long time ago. No kids, new-to-us house, still new-ish job and career. All bright-eyed and bushy-tailed! The financial crisis didn’t really affect us too much, thankfully, largely in part due to several solid contracts at work to keep us going.

    I do remember seeing and reading about the carnage in our general area (Southern Ontario, Canada). We are (were?) heavily into automotive and heavy truck manufacturing, which took a big hit. Many companies shuttered their doors and/or moved to other jurisdictions. That helped to emphasize my need to have a solid financial position.

    Interesting comment you made, Joe: “Once my attitude turned negative, an early exit from the corporate life was inevitable.” I’ve felt that way periodically throughout my career. Fortunately, I’ve been able to move around to new roles at work, meet new people and enjoy new challenges 🙂

    • retirebyforty February 1, 2018, 9:05 am

      You guys got through the recession very well. I assume it didn’t affect Canada as much as the US.
      Yeah, the attitude problem wasn’t good. I was able to improve my attitude in the past, but this time it was different because I had another option. Financial independence made a big difference.

  • Dave @ Married with Money February 1, 2018, 4:40 am

    I was in college back in 2008. I’d just gotten back from London where I did a study abroad semester, and had a ‘meh’ job. I didn’t save a dime; in fact I was on my way to getting into about $10k in credit card debt over the next few years.

    But such is the life of a college kid who worked at a low paying, part-time job I guess. I got by but barely.

    In the investment world, I hadn’t even dabbled in a considerable way. It’s sad actually because I’d have loved to get in on it…but at the same time i’m somewhat glad I didn’t have to deal with that uncertainty and the short-term sting at a young, relatively uneducated age. I wouldn’t be surprised if I’d gotten turned off to the idea altogether if I had. I picked a good time to start caring about money more.

    Fast forward to 2028…who knows? I would love to be in the same house, working the same industry (or blogging full time, wouldn’t say no to that!), with a dog or two. I love my life right now, but some extra income would definitely be nice to help our investments. I expect we’ll probably have another downturn before then; my primary focus will be making sure we’ve got enough to live (tbh I wouldn’t be shocked if my wife got laid off due to her industry at some point within the next 10-15 years) and then enough to hit our goals.

    But who knows. I didn’t think a year ago that I’d be starting a financial blog.

    • retirebyforty February 1, 2018, 9:07 am

      Thanks for sharing. Your generation had it a lot tougher than us. I was very lucky to be established in my career when the recession came along. It sounds like you’re doing very well now. Keep at it! 🙂

  • Ms. Frugal Asian Finance February 1, 2018, 4:43 am

    I don’t know why, but I feel like this post is speaking directly to me ahh. The financial crisis had a huge impact on my life. I graduated in 2009 with a degree in Econ, and finding a job wasn’t easy, so off to grad school I went.

    It’s really sad to see my colleagues being let go. It makes me feel so scared and helpless. Sometimes people just leave for better opportunity, and I hear some colleagues criticizing that decision. I just don’t think being blindly loyal to a company is a good decision either. People change and evolve.

    Love this post!

    • retirebyforty February 1, 2018, 9:09 am

      Grad school is a good place to hide out. Some of my friends graduated in 94 and it was tough for engineers to find jobs then. The aerospace industry was cutting back and the internet was just ramping up. Grad school was a great place to hide for a couple of years.

  • Lazy Man and Money February 1, 2018, 4:51 am

    My big memory of the collapse is September 2008. My wife and I took a month to visit Australia and Thailand. I didn’t realize I was really going to the “upside-down” (to borrow a Stranger Things term). The financial quickly collapsed with my presence in the US. Tom Brady got injured for the season. Basically, by leaving, I caused so many problems for so many people ;-).

    Ten years changes a lot of things. 10 years of a bull market changes financial lives a lot. We’ve a little more than tripled our net worth too. That’s fairly significant because I was a blogging was my main income for most of those 10 years… and I didn’t focus on making money, but just helping out readers.

    • retirebyforty February 1, 2018, 9:11 am

      Maybe it’ll be a good time to travel for a year when the next collapse arrives. The tourism industry will be down and maybe we’ll get some discounts. Great job with your net worth!

      • jp February 3, 2018, 8:12 am

        my husband and I were just discussing travel might be a great option for the next collapse…apparently Italy is selling houses for $1.25, as long as you renovate it within 1 year. Slow travel, a new property, a bit of renovation…sounds like a great opportunity!

  • Tom @ Dividends Diversify February 1, 2018, 4:56 am

    Joe, It was a very stressful time watching our investments melt down and visions of financial independence shatter. We got through it, and even profited by adding to our investments at low prices. It made me more conservative as an investor and as a consumer. At this point, I would rather forgo some upside than take on to much investment risk. Why? There will be another downturn for sure, but hopefully not as severe. Tom

    • retirebyforty February 1, 2018, 9:13 am

      That sounds really stressful. When you’re right at the cusp of success. At this point, I’d rather forgo some upside too. The market keeps going up, though. If it doesn’t slow down soon, we’ll have a huge correction.

  • [email protected] February 1, 2018, 5:11 am

    From an investing perspective I was lucky of the timing of the financial crisis. I had very little invested and we were just starting to grow our income to the point of making large investment contributions. I never felt that hurt from a crash. I keep preparing myself by setting a plan of what to do when one comes.

    I also learned “we are all cogs in a soulless machine.” The financial crisis was my first time seeing layoffs. It’s hard to watch good people lose their jobs. This was especially true when our business was not really hurting directly.

    we are all cogs in a soulless machine.

    • retirebyforty February 1, 2018, 9:15 am

      You guys were very lucky. Nice job investing through the downturn. It’s really difficult to keep investing when the market kept dropping.
      I saw layoffs after the dot com bubble too, but the financial crisis was a lot worse. It was probably my attitude too. During the dot com bubble, I was younger and more naive.

  • Lily | The Frugal Gene February 1, 2018, 5:31 am

    “That’s life, though. You just gain more responsibilities as you age.”

    Whaaaaa scam is that! Nooo stop it. We have a dog and sit another dog and that’s enough. I sometimes lean towards not having kids and swing back and forth. Jared does too. It’s like we’re undecidedly decided.

    10 years ago, I was in highschool haha. The crisis changed funding and financial aid but it was a way of hiding out too.

    • retirebyforty February 1, 2018, 9:16 am

      Kids will make you grow up. 🙂

    • Mike Roberts February 1, 2018, 10:13 am

      Having kids is not easy. It’s definitely a lot of work and can be stressful at times. But I wouldn’t trade being a parent for the world. Yes, you lose some of your independence and can’t go on trips or out to the movies on short notice anymore. You add a whole host of new expenses and responsibilities, but being a dad is a really awesome thing. Every day is filled with wonderful little moments that you treasure forever. You may trade away old blessings like low expenses, low responsibilities, and some freedom, but you replace them with new blessings that are so much better.

  • DocG February 1, 2018, 5:59 am

    The biggest change for us from the financial crisis is that we became landlords. We bought three units in foreclosure and they have been rented since. When you are cash heavy, a downturn can create all sorts of opportunities.

  • Adam February 1, 2018, 6:20 am

    I’d just onboarded with a startup in July 2007. Come January 2008 we were acquired by a venture capital group, and a typo in my new offer letter meant I was eligible for immediate contributions and vesting in the 401(k) plan. Vanguard was the administrator — doubly lucky! So I started shoveling money into it. I remember some colleagues sharing what percentage of our salaries went to that account and everyone was amazed that I was dumping 20% into mine. That timing was inadvertently perfect; when the economy dropped I remember watching the overall value pretty much negate my contributions every two weeks, but I figured down the road it’d be well worth the headache.

    Several acquisitions later, I’m still with the same ‘startup’. My tenure means six weeks of annual paid vacation, so that’s real nice. I might well be one of the first on the chopping block if the economy tanks. We can get by easily on just my wife’s salary, though, and Flagship State University within walking distance means I could maybe land a job with a 457 plan (no early withdrawal penalties!). Twelve and a half years to FIRE…

    • retirebyforty February 1, 2018, 8:43 pm

      That’s pretty cool about your start up. Nice job. Six weeks of paid vacation is a great benefit. Good luck on your FIRE journey.

  • JP February 1, 2018, 6:35 am

    Your comments about corporations are right on the money. I was overseas for Thanksgiving; I spent it working, of course, being an American holiday. When I got back I got canned. Soulless is about right.

    Somehow, because I was not born in this country, I never believed the “don’t worry, you’ll land on your feet BS”. So I always put a premium in having my mortgage paid off. We always lived on small homes. The crisis hit on 2008, on 2009 I ended up disable. By 2010 we paid off our mortgage; and we have been churning along pretty nicely.

    • retirebyforty February 1, 2018, 8:45 pm

      Corporations are so cold. They don’t care about the human cost at all.
      Sounds like you adapted to life’s challenges pretty well and came out ahead. Nice job. Keep at it!

  • nicoleandmaggie February 1, 2018, 6:43 am

    I think we’d have more in the stock market and would have paid our house off later and we’d have less in cash right now. During that long spell it seemed easier to just prepay the mortgage than to figure out how to invest more for retirement (we were required to contribute 12%, but could contribute more to a 403b and a 457 on top of that), and then after we’d figured it out, it seemed less risky to do some additional retirement saving, but also some cash/prepayment savings and not just max out retirement.

    Fortunately for us, we were in multi-year contracts when the bad times hit, so at least we didn’t have to worry so much about unexpected unemployment. We did go several years without raises which is seriously annoying. (Also did not get a raise last year which is annoying.)

    • retirebyforty February 1, 2018, 8:46 pm

      Now seems like a good time prepay the mortgage. Seems like everything is overpriced.

  • Dividend Growth Investor February 1, 2018, 6:43 am

    The crisis was tough for me, but it confirmed my core principles of frugality and having multiple streams of income.

    I lost my job in 2009, but was able to bounce back by being paid to get my masters, and ultimately increasing my earnings potential because of it.

    I also had saved up a lot of money before that, by living frugally.

    The thing that really helped though is that I had developed multiple streams of income ( dividends, side gigs, interest etc), which covered my expenses, so the loss was not that bad.

    The best part was that I even had some leftovers to invest. When I got back to work about 18 – 24 months later, I really grew my networth exponentially, since I was saving my whole work income, but living on the side incomes.


    • retirebyforty February 1, 2018, 8:48 pm

      That’s a great story. We have multiple streams of income now, but I don’t think they are dependable when we get a recession.
      I suspect most of our income will drop quite a bit. We’ll probably fall back on frugality if we need to.

  • Steve @ familyonfire.org February 1, 2018, 6:49 am

    10 years ago I had just accepted an assignment to India, it was the money from this that really kickstarted our path to FI as we were able to invest a lot near the bottom.

    We were also quite decoupled from everything going on so never really saw the effect.

    • retirebyforty February 1, 2018, 8:49 pm

      That’s a good way to escape the chaos for a few years. There were tax benefits too, right?

  • freebird February 1, 2018, 7:55 am

    Maybe a little. Before 2008 I had never invested in financial companies, but when the bottom fell out, that’s where it seemed to me discounts were steepest, so in I went. Timing wasn’t good, my first wave of bank investments mostly wiped out, but the second wave starting late 2009 has done spectacularly well.

    On the job front we were shocked to be awarded unusually large bonuses in 2008 even though everyone knew a collapse was coming. We got past the trough without layoffs, but then we had some rounds over the past few years. This past decade I became a remote employee on a pre-retirement track; this allowed me to move out of silicon valley to live near family in Socal.

    It was much easier to buy the big dip because I had wage income and the super-sized bonus coming in. Had I ER’d in 2003, I’m not sure that I would have re-balanced in 2008-2009, I might have even sold a bit. I think my employer’s been good to me over the decades.

    Which brings up another change– after 2008 I opened new FDIC-insured accounts despite the low interest rates. I’m up to over a decade of living expenses there, hopefully it can help weather the next storm (and I realize it might not). Of course I still contribute to our 401k to get the employer match and keep 100% of that in equity. My time horizon is longer than typical for my age because of the cash balance.

    • retirebyforty February 1, 2018, 8:50 pm

      That’s great. It sounds like you’re doing very well now. The pre-retirement track sounds good.
      You’re right about buying the dip. It was easy for us because we had good income. It will be a lot more difficult the next time.

  • FullTimeFinance February 1, 2018, 8:10 am

    Thankfully I was never in layoff danger as my division was in a growth phase. The rest of the divisions were not as lucky. Still my company cut all employee pay by ten percent a few weeks after I got a promotion of three percent. Nothing like a pay cut as a reward for taking on more responsibility. As a result I had to cut back 401k contributions to match level. Still I met my wife that year and I had a job so I was lucky. Key learning was even if I was relatively secure a down turn will impact my ability to save. So take advantage of the savings you can do when times are good. Either you might not be able to save during the next crisis or worse you could need that money to live on due to a lost job.

    • retirebyforty February 1, 2018, 8:53 pm

      Yeap. Make hay while the sun shine. I think the next one will be tougher for us because we don’t have good income anymore. Our net worth should carry us through, but we won’t be able to invest much.

  • Jim @ Route To Retire February 1, 2018, 8:16 am

    I’m probably pretty unusual in this, but that period of time didn’t make too much difference for me.

    I work as a manager at a smaller IT company (around 40 people) and my boss had actually positioned our company in a way to be strong during both good and bad times. In a nutshell, we sell a lot more hardware during the good times, but in the bad times, we sell a lot more services (because other companies lay off people and need help). Not much really changed on my end at work. The raises weren’t great, but very lucky for us, they did continue.

    That’s also the time when I started to get a lot more serious about saving so I was able to ride the wave of buying low as the market recovered.

    I consider myself very lucky.

    — Jim

    • retirebyforty February 1, 2018, 8:54 pm

      That’s really great. Most businesses had a lot harder time than that. Nice job buying the dip.

  • WealthyDoc February 1, 2018, 9:17 am

    Yes, time flies! I didn’t get burned in 1987 or 2000 because I saw them coming. In 2007 I was starting a new practice and I took my eyes off the ball. The crash took me from being a millionaire to not being a millionaire. Scary stuff. Fortunately, although I shifted to a more conservative asset allocation, I didn’t abandon stocks altogether and so I more than recovered financially. As with you I more than tripled my wealth since.
    My lessons include:
    Even when the sky is falling: this too shall pass.
    Don’t panic and sell.
    Never again put a big chunk of money into individual small value stocks. Duh.
    Work, save, and invest no matter what the market is doing. DCA rocks.
    Build multiple streams of income. Make them diversified. Don’t depend on your job alone to be able to live.

    • retirebyforty February 1, 2018, 8:56 pm

      Good point about individual small stocks. I don’t think they do well in a big downturn.
      DCA is a great way to invest.

  • MissSaraBee February 1, 2018, 10:42 am

    I was still in school when the recession hit. Totally unaware of what was going on. Since finding the FIRE movement, I wish I had been able to invest something, anything, in the stock market during the crash. Then again, I’m happy I didn’t need to worry about job security during that time period.

    Life is pretty good now. I’m employed, and making regular contributions to savings while paying off the rest of my debt. Nothing to complain about.

    • retirebyforty February 1, 2018, 9:05 pm

      I wouldn’t worry too much about the past. You’ll have a chance to buy the dip soon. It’s going to be super scary, but you just have to power through it. Good luck!

  • Felipe February 1, 2018, 10:43 am

    It’s good to look back to help you map the future.
    Personally we did fine, even with paycuts. But had I been in my 20’s it might have been harder.
    I think employers got used to getting more hours from salaried employees, and got used to demanding more skills than they were having to pay for. I’ve watched that dynamic slowly change as the employment market has tightened, but I still work easily 5-8 more hours per week than I used to have to prior to the downturn. Taking lunch is so 2005.
    I wonder if the current trend of people staying in their houses and not upsizing is a result of the downturn. Personally I think it’s healthy for us to stay put, making our neighborhoods stronger and our families more stable. But realtors hate it. They need constant churn to make money.
    Young people are renting longer, having seen their parents hemmed in with houses they couldn’t sell when they had to move for a job. Renting can make you more nimble to respond to changes quickly.
    I hope we learned lessons from what happened ten years ago, but we often have short memories.

    • retirebyforty February 2, 2018, 1:45 pm

      I think you’re right about employers. It was that way for engineers for a long time, but I think it spread to other industries now. No more 9-5.

  • Adam and Jane February 1, 2018, 11:15 am

    Joe, very interesting post. At first I thought there was no impact since we had NO money in the stock market but there was a huge impact.

    Prior to the financial crisis, we figured we can live off 5% CDs.

    CD rates were dropping to 2-3% and the bulk of our savings were in CDs.
    Our Max passive taxable income was 25K from CDs.
    401Ks – our money has always in fixed and was paying over 6% for several more years. Gradually dropping to 5% in 2015. By 2016, it was paying over 4%.

    CDs rates dropped to 0.5%
    Our Max passive taxable income was 4K from CDs. Arg!!!!
    Rumours of future laidoffs and a re-org that affect me negatively forced me to be jobless was a stong possibility. Thanks to a family friend for recommending Municiple bonds. These muni bonds are life changing for us.
    Low interest rates caused issues for our company and they need to save money by having future laidoffs.

    Because we prepped for laidoffs and dooms day, we used our life savings in 2009, yearly future savings and all bonuses to buy more bonds each year until we were FI in 2014. From 2012 to 2017, 1000 IT workers were laid off and we had no financial stress because of the passive tax free income from the muni bonds.

    Muni bonds will generate 87K tax free this year.
    Jane was laid off in 2016. she has a 52K pension and is happy as can be.
    Our Networth doubled.
    We will have passive income 2-3X expenses.
    I will reach 31 years of service this summer in the same company. Just 20 more months until reach 55 to retire.

    I did change after the laidoffs. I still did my job but I cared less. I took things less personally. I was no longer gung ho at work since the company did not care about us anymore. Fear of laidoffs made us FI.

    We totally agree with you that retiring at 65 is a bad idea since your health may fail but many people won’t be able to retire early. Many need to reach 65 for Medicare. Even retiring at 55 is not really early since health can start failing. I would have loved to retired in my 40’s but back then I did not know anything about being FI. It is great that you, Sam and the many many PF bloggers retired in your 30’s and 40’s from stressful jobs. Time is priceless.


    • retirebyforty February 2, 2018, 1:48 pm

      It sounds like you discovered Muni bonds at just the right time. That’s great.
      I just talked to a reporter about FI. The Financial Crisis woke a lot of people up. We can’t just depend on employers.

  • Eric Van Haaften February 1, 2018, 11:37 am

    We’re older than you are, but we were fortunate not lose our jobs as well.
    We took a hit in the market during the recession, but made it up and then some. If everything goes well…
    4 more years.

  • Frieda February 1, 2018, 12:26 pm

    The financial crisis didn’t have a huge direct impact on us. We had just gotten married, had secure public-sector jobs, were renting, and had little in the way of investments. We were eventually able to buy a house after the Southern California housing market cooled off, but that still took a few more years. Still, the past decade has been one of tremendous personal transformation in terms of kids, career, and aspirations.

  • Mrs. Picky Pincher February 1, 2018, 1:13 pm

    I’m sorry to hear about your mom. That can’t be easy for her or for you guys.

    I was in high school during the Great Recession and it definitely shaped my view of the world. I’d already weathered the tech bubble burst and saw my parents try to make ends meet.

    The recession showed me that I had to get a job that was profitable and marketable. I followed the “do what you love!” advice and majored in theater. Once I realized I had to make a living wage, I switched to marketing and haven’t regretted it once.

    • retirebyforty February 2, 2018, 1:53 pm

      Yeah, it’s hard to see the gradual decline. She’s not too bad now, but it will only get worse from here.
      I think it’s great you learn from the recession. You can do what you love later. 🙂

  • Lady Dividend February 1, 2018, 1:57 pm

    Awesome and unique post!

    In 2008 I was also getting interested in finances. I saw how poorly my investments were doing and switched over to an index fund (back when the bank had only one index fund)!

    I worked for a hedge fund administrator and they were doing phenomenally as people were pulling their money out of mutual funds and into hedge funds. They said we were not getting bonuses in 2008 because of the recession and they wanted to hoard cash, in a presentation a few slides after depicting this growth. It was then that I knew I had to leave this evil company.

    • retirebyforty February 2, 2018, 1:55 pm

      I just had lunch with my old work buddies and they have a similar complaint. The company is doing well, but the employees are getting very little raises. What will happen when the market crashes? I see your point about the evil hedge fund. Employees should benefit too, not just the executives.

  • Bernz JP February 1, 2018, 2:06 pm

    I remember in the spring of 2007, wife and I were really seriously looking for a condominium to buy around Chicago downtown area. A friend of ours purchased one in the winter of 2006 and his property valuation was really unheard of. We were so convinced back then that the exact same thing will happen to us. Real Estate was really booming at that time. Long story short, we were about to sign a contract but for some reason (maybe we chickened out) my wife and I was sitting at a restaurant dinner table and we started seriously thinking about our situation. Kids, our house, and our jobs. We both realized that internally we both were feeling reluctant about the possible purchase. Just like that and we called the agent and told her that we’ve decided not to go ahead with the deal. Two years later and we were so thankful for our decision. Our friend ended up giving up on their property for they were unable to meet their mortgage payments.

    • retirebyforty February 2, 2018, 1:56 pm

      Whew! That was lucky. We purchased out condo in 2007. The value is just about back to the purchase price now. At least, our place wasn’t that expensive so we could afford the mortgage.

  • Accidental FIRE February 1, 2018, 3:20 pm

    I can honestly say it didn’t change me much at all. It was the second big downturn I experienced as an investor and I just held everything. I even bought a little more, but only after things stabilized and started coming back up. In the end, I guess it solidified my “this too shall pass” attitude.

  • Pennypincher February 1, 2018, 3:25 pm

    What a fascinating post, Joe. Very insightful. The crash hit, then we lost our jobs. Right when the kid was entering college! Fun! We basically froze, stopped all necessary spending until we figured it all out. Lived below our means anyway, so no great loss there. Just rode it all out.
    You are so right about the BS of the workplace. But I too loved the nuts and bolts of the work itself. Today career coaches tell you-the workplace is a revolving door, be ready to search for a new one, once you are in the door at your current job. Hindsight=20/20.
    Very sorry about your mom, you are not alone. So amazing she used to teach math. Cool!

    • retirebyforty February 2, 2018, 1:57 pm

      Yikes! I’m glad you guys got through it okay. When did you find a job?

      • Pennypincher February 2, 2018, 10:05 pm

        After the job losses, we looked at each other and said “That’s it, we’re done, retired.” We were thrilled.
        Parents should have any college savings in stocks, out of the stock market by the time high school starts. We were negligent (lazy), didn’t do this, and pulled money for college from other funds (pots) until the market recovered. I do not recommend this-ha,ha!

  • Chris @ Duke of Dollars February 1, 2018, 6:49 pm

    Hard to believe how fast the 10 years have gone by, my goodness.

    It changed the way I think about money and helps to make sure I’m as prepared as I can be if it happens again.

    Thanks for sharing !

  • Financial Orchid February 1, 2018, 6:59 pm

    I was in college right before graduation. I went to Hong Kong after I graduated because literally nobody in North America was hiring. The government in Hong Kong even offered 50% subsidies to companies for hiring new grads to aid employment for the year’s graduating class. Training programs at large companies were frozen. For people at 22/23 at the time, they really had nothing to lose. I started investing after I got my first big company big girl full time job and bought basically bought the top 10 S&P companies I could roll any extra dollar into after rent including yes the big FANGs. I still remember HSBC trading @ $7 and was front page news in Hong Kong. Yes, I haven’t experienced a major correction after that, so it’s a good time to shore up cash now after a 10 year bull run. 2018 definitely has all of us reflecting on the last 10 years. For early retirees and GenX-ers out of work now, or people living off of investments, I can understand their stress. Higher interest rates traditionally erode dividend returns since higher returns can be sought through risk free T-bills.

    • retirebyforty February 2, 2018, 1:59 pm

      That’s really cool. I bet you had a great time in Hong Kong. It sounds like a very vibrant place to live.
      Good luck with your investment. I’m nervous about FANG now.

  • [email protected] February 2, 2018, 3:00 am

    The problem with 2008 is that a lot of things that we took for granted, was not as safe and sound as it seems to.
    So people that lived that crash, to this day question every increase in the stock market.
    My opinion: With all this “easy” money floating around, I don’t anticipate any major crash. Unless of course, interest rates increase dramatically. In that case, all bets are off.

  • Cubert February 2, 2018, 4:25 am

    Best with your mom, good sir. And you know, it’ll make Junior a better person for observing how you’ve prioritized taking care of her. So many in our society choose to put our loved ones in homes where God-knows-what can happen to them.

    Thanks for the thoughtful retrospective. Interesting to think that the crisis is the real kernel of new FIRE movement. Particularly among millennials.

  • David Michael February 2, 2018, 9:24 am

    Great posting Joe about the Great Recession.

    My wife and I were on our 12 year trip of freedom (2003-2015), traveling and teaching in the Middle East (five years) and then RVing in the USA and Canada. We sold everything before we left in 2003 so the Recession did not affect us much. However, we started working seasonally for three months a year to add to our funds around 2008 so we ended up working for Amazon during their peak Christmas Season (Oct-Dec) as a Senior Workcamper. There we met seniors from all over the nation in a Nevada warehouse that was seven football fields long. It was a difficult time for about 50% of the seasonal workforce, many of whom not only lost their job but their business and house as well. Some were sleeping in a bare van at night with a sleeping bag exhausted from the demanding physical work of 10 hour days. One lost his life in the first week driving a forklift. Another senior, a friend of mine, had a heart attack as a Picker, walking 15 miles a day picking up packages to place on the conveyer belt.

    My wife and I were age 72 at the time and I remember some of the workers were 80 and above. About a third were there to augment their income for cruises and travel. All in all, it was an eye opener for me. My boss, who was a Filipino American, was a great woman, wise beyond her years. Most of my fellow workers were first or second generation immigrants. Many of the younger workers lasted a week or so because of the demanding work schedule, not showing up on time, theft, or poor attitudes.

    What I really remember besides the hard physical work and fast pace, is the depressed expressions on the faces of those who lost everything at age 65, knowing they had to start all over again. They were good, hard working people from all backgrounds including teaching, the military, and corporate. The USA is a country of “survival of the fittest”. I suspect the next Recession will be worse as the number of homeless are increasing in major cities every day. If I was a young man I’d head for Canada where there is a decent support system, universal healthcare, education and retirement. I’m afraid our country is in a rapid decline of the Middle Class much like Rome and Great Britain before us. You and the readers are right to be scared. In my 81 years I have never seen this country in such a fragile state with 2% owning 40% of the wealth. I’d prepare for another Great Depression in the next five years.

    • Adam and Jane February 2, 2018, 6:14 pm

      David Michael,

      As always, thank you for sharing your experiences! You are one of the main reasons why I did not just quit and will work until 55 to double my pension and to get money for retiree company medical. Our company laid off 1000 workers from 2012 thru 2017 and replaced them with Indian workers from TCS. It is the destruction of middle class in America. Live will be tough without financial security.


    • retirebyforty February 5, 2018, 9:28 am

      Thanks for sharing your experience. It’s great to hear a different perspective.
      It seems to be more difficult everyday in the US. I hope our kid can become prosperous too, but he’ll have to fight hard. It’s not easy anymore.

  • jim February 2, 2018, 11:07 am

    “Humans are a lot more troublesome than cats.”


  • Revanche @ A Gai Shan Life February 2, 2018, 11:12 am

    I was already cynical before the recession because I was working in a really toxic job, but the recession shouldn’t have affected that particular job. It got me when the toxic terrible people that I worked with sank that business. Job searching in a recession was awful, and the next job I got paid at least $15,000 less than it should have, but I needed the job after being on the hunt for a year.

    It gave me a foot in the door where I could build a great reputation and earn lots of raises, which led to being in a position to even contemplate FIRE someday, so even though I missed a lot of investing momentum, we’re in an ok place.

    Starting to think about what we want ten years from now – I hope we’ll have made similarly dramatic and good changes in our financial positions and improved our health enough to enjoy life more.

  • Sean @ Frugal Money Man February 2, 2018, 11:41 am

    Thank you for sharing all of this!

    Fortunately for me, I was around 15-16 years old during the Global Financial Crisis back in 08-09. I never asked how my parents did during that time, but it never came across that it hit them hard.

    Honest stories like this though have benefited me GREATLY in terms of my personal finances and investing. I already know that for the rest of my life, their will be ups and downs in the market. All I do is invest my $$$ into Total Stock Market Index Funds (Vanguard), and consistently do it every month/year. I understand the history of the market, and the effect that compound interest has on money.

    You also raise a great point in that YOU are in charge of YOU in terms of your finances. Your company isn’t worried about your financial future, and you need to understand that now. You are the only one who will determine how your financial future will be.

    Great post!

  • cannew February 3, 2018, 7:50 am

    Your mother is lucky to have family that cares enough to understand her difficulties and are willing to provide the care she now requires. My wife is in her sixth year and she has undergone may changes in mood, abilities and mental problems. She does not understand her condition and it’s often hardest on the caregivers to adjust to the changes.

    • retirebyforty February 5, 2018, 9:26 am

      Thanks for the encouragement. My mom isn’t bad right now. She can still do most of the routine things. Hopefully, she doesn’t deteriorate that fast. It’s tough.

  • Everyday Benjamin$ February 4, 2018, 10:38 am

    Very lucky indeed and it never hurts to sit back and remember that. I know I’m getting a little spoiled seeing that net worth line continuously go up and up and up. Hopefully we’ll all be mentally (and financially) prepared for whenever the next pause in the upward trend comes.

  • timeinthemarket February 4, 2018, 2:46 pm

    I was just starting my career so it was a bit of being worried about getting fired since I was the last man in before the crap hit the fan. I had some money invested and it tanked but my contributions were making that number go up faster than it went down that year so I wasn’t worried about anything.

    It did impact my raises though as it was a flat 0% for that first year and probably in 2009 as well(I don’t recall that far back) which probably had a somewhat negative impact on my earning power.

  • gofi February 4, 2018, 3:37 pm

    I’m so glad I came across your site – How, if you did, did you change your allocation in 08 as the market fell?

    • retirebyforty February 5, 2018, 9:25 am

      Our allocation was 100% equity in 08. I didn’t change it until a couple of years ago. I’m a bit more conservative now.

  • fin$avvypanda @ finsavvypanda.com February 5, 2018, 2:29 pm

    Hi Joe!

    I enjoyed reading your personal story very much! I feel like I could relate to you in so many ways. I was still in school back in 2008, so I didn’t feel anything at that time since I was just having fun as a student (sigh). But when I read about your feelings towards corporations, I felt like I was reading one of my own journals, lol! Exactly how I feel!!

    “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.” I love how you said “you’d better wise up.” Although I’m still working at a day job, my fiance and I are saving and investing as much as we could, and taking advantage of any free money available, so that we can reach financial independence sooner.

    You mentioned that the financial crisis made you cynical. I become cynical after realizing how most people are and behave in the corporate world.

    Just like you, it’s not the job itself that I dislike; rather, it’s the work politics and BS that we have to take. And yah, I can totally relate to that meme as well, LOL! $hit never escalates… the cycle is endless haha!

    When I first graduated and got my first FT job, I was so naive about corporate jobs. It took me about 5-6 years to realize all of this… I have to say the experience I’ve encountered in many corporate jobs has shaped me today. It’s affected how I think and who I am now.

    My attitude, too, turned negative (I’m gulping as I say that) and that’s what motivates me to reach FI, so that I can do what I love without having to worry about shortage of funds. I can see that you’re really happy being a stay home dad and blogger, which is fantastic! 🙂

    Like most people striving for FI, I hope one day I’ll get to do the things I love and say the same thing as you, “I’m so glad I don’t have to deal with that crap anymore.” 🙂

    Thanks for sharing this post! I also read your Jan. 2018 financial update. I have to say EXCELLENT job!

    P.S. I noticed you mentioned rental properties. Have you ever stumbled upon really bad and nasty tenants? I also noticed that you mentioned that you plan to move in your duplex and sell off the rest…

    • retirebyforty February 6, 2018, 8:48 am

      Thanks for sharing. It took me a long time to become that cynical. My old job was pretty good and I liked the technical work. It was only when they wanted me to take on more leadership role that the relationship went sour. Good luck!
      I haven’t had a nightmare tenant yet. I hope we never will. I’d rather have a vacancy than renting to a questionable person.

  • Jake @ unFinanced Life February 9, 2018, 5:14 pm

    Great post! I graduated with a Finance degree in 2008. The downturn saved me from a life I probably would have hated and put me on a path toward financial independence. I learned there’s more to life than just making money and that I’m happiest thinking of money merely as a tool to provide me with more freedom in life. I came out of school making a fraction what I thought I would because of the recession, but in the process learned to get creative, started house hacking, etc. In a roundabout way, it also resulted in meeting my spouse!

  • Stephen A. Schullo June 18, 2018, 10:18 am

    Sorry to comment so late but I just ran across this article. 2008 did not change me one iota. But the tech bubble crash did change me big time, which helped prepare me and my late hubby for 2008.
    Here is what we did and learned during and after the 2000-2002 tech crash:

    One of the most important aspects of a successful marriage is supporting each other through crises. We never quarreled or blamed each other for financial mistakes. Furthermore, the following skills and knowledge helped us to avoid a worse financial disaster:
    • we cooperated and felt bad together
    • we thought long-term
    • we knew bear markets change into bull markets
    • bought and held
    • learned from mistakes
    • stuck with our ill-conceived plan no-matter-what
    • we knew that to panic and bail out of the market, in anger, would make our situation worse
    • We did not take out a home equity loan to buy more stocks
    • I kept contributing to my 403b technology stocks. I knew I was purchasing cheaper stocks through the crash.
    What we learned from the now historic Technology Bubble and Crash:
    Our mistakes and missed opportunities are common among new investors who get lucky right-out-of-the-gate, like the few slot-pulling seniors at the casinos or many lottery winners, only to lose it.
    We didn’t recognize a bubble. Because our timing from annuities into white-hot technology sector was impeccable, we thought we were different. We had the touch; anointed, in a way.
    Dan and I committed three primary errors, one psychological and two strategic:
    1. Psychologically, we were overconfident, too excited and, yes, greedy.
    2. Did not have a goal of how much is enough.
    3. We failed to recognize the bubble because we believed what everybody else was saying that “this time is different.”
    Because of our mistakes, we did not realize the following opportunities:
    1. Any chance to pay off our house mortgage early is always a good idea.
    2. The Los Angeles Times financial adviser is right. We had not diversified our holdings among other asset classes including international stocks or bonds.
    Time to Move On: What’s Next?
    The media pundits abandoned tech recommendations during, and after, the crash and opted for rock-solid companies with good balance sheets and earnings. The bubble or the crash didn’t matter to the financial industry. They make money either way. By 2003, the tech bubble became an event of the distant past.
    While the financial media moved on, we couldn’t. The greed label hit us hard. If $1.5 million wasn’t enough, what was?” We had won the game. But why did we continue to play into two or three overtime periods?
    We bathed in the high excitement of being great investors in the 1990s. During those painful years (2000 – 2002), we were stunned, sadden and sometimes angry. For months, we stopped looking at our portfolio on Morningstar. It did not matter that we experienced and passed with flying colors previous market losses1.
    Our risk tolerance was tested, and Dan and I earned an equivalent of an A+ because the markets recovered in 45 days–it was no big deal. But the dot-com crash proved fatal. The technology sector as reflected in the NASDAQ didn’t fully recover from the year 2000 high until 16 long years later.
    By the fall of 2002, our portfolio declined to where we began, six years earlier in 1996—about $450,000!
    Dan and I wondered long and hard how is it possible that hundreds of technology company stocks could fall all at once. We asked ourselves, were all our eggs in one basket? With each prolonged reflective moment, we ended up with the same question if what we had wasn’t diversified, what is diversification?

    Yep, a simple diversification across the core assets and with a stock-bond split saved us during 2008 when everything went down.

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