This is NOT our nation's first financial crisis. This is NOT our nation's worst financial crisis.
So why does it prey so heavily on my mind?
Well, it IS the first financial crisis where I've been paying attention to my personal finances.
I wasn't around for the great depression of 1929. My parents were, of course, and it affected the rest of their financial lives in a positive way. But their caution did not rub off on their daughter. Maybe a financial crisis is something you have to live through in order to learn from?
But I was present for the oil price surge of 1973-1975 where stocks slumped 45%.
Of course, 1973 was the year I finished graduate school and got my first real job--I joined VISTA, the earlier incarnation of Americorps, and set out to save the world while earning $200 a month (and getting food stamps!). Being poor was noble, I had no savings, and nothing going on in the stock market really affected my personal life. If there was an internet, I had no knowledge of it.
The leveraged buyout bust (and subsequent 36% drop in the stock market) occurred in 1987. Where was I? Not saving for retirement, that's for certain. I was deep into motherhood, caring for a seriously disturbed child (with all the attendent psychiatric bills) and merrily charging up my credit cards. I vaguely knew there was a crisis out there, but, again, it didn't seem to affect my personal life.
Then there was the tech collapse of 2000-2002 during which stocks dipped 38%. I heard about that one, but I wasn't invested in tech stocks. In fact, I had just started serious retirement savings and was sticking close to index mutual funds. I got quarterly statements, but had no easy way to check on my 401(k) balances daily.
Then came 2007-2008. Suddenly, I'm worried about retirement, blogging intently, and really, really paying attention to the stock market and my personal expenses.
I need to remind myself that the cyclical return on stocks will occur whether or not I'm watching, and that what goes down, will (assuming the historical record is correct) eventually go back up.
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5 comments:
In 1987 I was self employed and almost all of my clients were publicly owned companies. When the stock market crashed, my phone stopped ringing and I was out of business within the month. I was able to find a job within days and start all over again. I laid off credit cards for 12 years and then got sucked into them and debt again.
In 2000 I was self employed again and ran a very successful computer company. When the tech dot com bomb hit, I lost my business, was heavy in debt BUT I was able to sell my home, pay off the debts and start all over again with enough equity to buy another home without a mortgage. This time I learned my lesson and stayed away from all debt.
Now, it's 2008, I am again self-employed but I am whole lot smarter this time around. Without debt, I just have to worry about paying modest expenses. I don't have a dime invested with those snakes on Wall Street.
This time around, Grace, it is very different. You can't go get a job so easily and you can't sell your home either. Retirement portfolios are 50% less than what they are supposed to be. To anyone who is caught up in this downturn, there aren't very many escape routes or the means to start over.
That's the difference and why this time around, it really is scary.
In 1987, I was 20 and had no investments.
In 2000, I had only been investing for 2 years and didn't have very much in the retirement kitty. Even though my investments plunged, it was only a few hundred dollars and did not hurt too much. Plus, I didn't pay too much attention. Looked at my quarterly statements when they arrived, but that was the extent of my attention. Also, I was in 4 different funds, all domestic large growth, and didn't have any idea that I was merely buying 4 brands of the same exact thing. I was confident that I was diversified. LOL!
This time is painful. However, I just keep sending in my contribution. I believe that in time I will be rewarded for doing so.
Wow! I feel much better now after reading Morrison's comment. It takes a lot of courage to start everything all over again. Well done!I made a bit of money during the dot com boom, maybe that's why l wasn't too worried before. I am now though, but will just hang in there.
Non-financial firms interact with banks every day to finance their current operations and future investments.
Retirement Plans, Retirement Savings,
Retirement Investments,Home based Business
What will you say then after Jan, 20, 2009?
Retirement Plans, Retirement Savings, Retirement Investments,Retirement Income, Retirement Funds,Home based Business
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