The 2008 financial crisis devastated many families and resulted in a global recession that led to the collapse of many businesses, large and small. The markets went haywire and borrowing money became pretty much impossible for most people.
At the time I was working in a very stable, government job which guaranteed a steady income that allowed me to pay all of my bills and any debt I had at the time. The greatest impact to my financial well being was a fairly significant hit to my retirement savings. My retirement account lost more than $60,000.
While I was disappointed at this loss, I felt that the markets would recover and I would be able to regain and even surpass the money that I lost. So I continued to steadily invest into my retirement account. After all I needed to work for ten more years before I reached the mandatory minimum age necessary to gain full retirement status and begin receiving the coveted federal civil servant “pension”.
During that time, I never worried about not being able to pay my bills or mortgage or buy food. But I also realized that the more money I saved, the more secure I would feel. So over the next ten years I embarked on a strategic plan to become debt free and achieve financial independence. But in order to achieve my goals, I realized that I needed to change the way I made money decisions.
The 2008 financial crisis prepared me in a number of ways for this current financial climate brought on by the coronavirus pandemic. First, multiple streams of income are key to being ready for times when traditional income (received from working for someone else) is not available. Second, knowing how financial systems work is necessary to reap the benefits of the laws and regulations that reward the wealthy. Third, being consistent in my saving and investing habits allow my money to buy more when stocks go “on sale”. And finally, I need to maintain a stellar credit history so that I can borrow money if and when I need to.
Because of the lessons I learned back in 2008, I was prepared when “Ms. Rona” (aka COVID-19) pandemic started to sweep across the nation and the closure of major and minor businesses sent hundreds of thousands of Americans to the unemployment lines. I had long ago achieved consumer debt free status. Besides my monthly utility, transportation and food bills, I only have to pay my mortgage out of my income. And I am still able to invest in the market with the money I have left over.
My decision 12 years ago to change my mindset and actions related to money management means that I don’t have the anxiety being experienced by many others due to the current financial crisis. Financial independence and debt free living have provided peace of mind for me and my family. And yes, my retirement account took another big hit this year. But I’m not worried. I’ll keep making wise money decisions and ride Ms. Rona into another financial victory.
