Personal Lessons Learned Since The 2008 Financial Crisis

Personal Lessons Learned Since The 2008 Financial Crisis

By Financial Samurai

 On September 15, 2008, Lehman Brothers went bust. I remember this day clearly because I made a $200 side bet with my friend over the weekend that the US government would bail them out. To my surprise, the US government didn’t rescue Lehman, and the stock cratered that Monday and never recovered.

 Despite all the economic devastation, I wish I could rewind time. I’d rather be 31 than 41, simply because I love life and want to live as many years as possible.

 The period between 2008 – 2018 was the most exciting 10 years of my life. Here are some of the lessons I have learned since the financial crisis.

Lessons Learned Since The 2008 Financial Crisis

 1)  It’s really hard to go all-in, even when you know you should. Despite telling myself over and over again that we were in the buying opportunity of a lifetime, I couldn’t convince myself to invest much more than my usual 401(k) maximum because my world was falling apart.

 A couple dozen friends had been laid off, including my best friend at the time, who worked at Lehman. I feared I might be next and would need as much cash as possible to hold me over just in case.

 In 2005, I had taken a $1,200,000 mortgage to buy a single family home. I already had around $380,000 in mortgage debt from the first property I bought in 2003. With property prices in San Francisco falling along with the stock market, bankruptcy was a very real possibility if I had lost my job.

 Therefore, I built a significant CD portfolio with most of my excess cash instead. The best 5-year and 7-year rates were at 4.25% at the time, so I decided that was where most of my savings went.

 The only things I did right were keeping my job and not selling any real estate or stocks in the middle of the downturn.

 Events leading up and through the 2008 financial crisis

 See: Your Risk Tolerance Is An Illusion: Just Wait Until You Lose A Lot Of Money

 2)  Chaos is a great motivator. I had been putting off starting Financial Samurai since 2006, but once the financial crisis hit, I decided to finally launch in the summer of 2009. If I got laid off, I needed a backup plan.

 I also decided it was time to get married. I had known my wife since college, and she would be turning 28 in 2008. For some reason, 28 always stuck in my head as the perfect age for her to get married. Further, I had also wanted to focus on my career until 30 to see how far I could get.

The difficult times of 2008 made me want to hold onto her even more. I could lose everything, but I couldn’t lose her. Relationships were more important than money back then, and they are more important than money today.

​3)  You gain a tremendous amount of confidence and expertise in 10 years. Previously, I’d always been embarrassed to ever say I was an expert in anything. But once I turned 32, I felt I had developed some expertise in the Asian Equities market. And now that I’m in my 10th year building Financial Samurai, I have no problem believing and saying I have expertise in digital media.

 Because of this experience, I also no longer fear financial ruin. If Financial Samurai shuts down and all my passive income goes away, I know I can get a job back in finance, fintech, or online marketing. The base pay would range between $150,000 – $250,000 + stock, and my family would be fine.

 Age discrimination is no longer a fear either. Instead, you realize experience makes you incredibly valuable. Once you’ve been able to earn income by yourself for so many years, nothing will stop you from living the life you want.

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