Are you stronger because of the “Great Recession”?

by Nick on March 5, 2012

Doom and gloom.  Gloom and doom.  The gold rush.  The “flight to safety.”  The Lost Decade.  The Lost Generation.  The Great Recession.  Did I miss any (I keep thinking of more and adding them as I type…haha)?  These are just a few phrases that have floated around the Internet and cable TV to describe the tough times we have gone through and the fallout predicted by the morons pundits.  A lot of the focus has been on the effect on retirement with some people thinking they’ll never be able to retire.

Last week CNBC joined the noise, explaining “why 68 has become the new 65.”  I’ll give them credit:  At least they only added 3 years to your retirement and didn’t go as far as to say you’ll never be able to retire, haha.  Plus, whether or not those three years are “needed,” working just a few years extra really can make a big difference to your nest egg because you gain both the money you make during those years and the money you would have spent if you retired earlier.  It’s like getting double pay for those years.  So for anyone in their 60s who is still recovering maybe a few extra years of work is just what the doctor ordered.

But this leads me to my main question and the point of this post:  Are some people stronger because they’ve been through the Great Recession? 

Don’t get me wrong, I’m not “happy” about the rough patch.  And a lot of really bad crap has happened.

But did our sudden exposure to over leveraging and loose wallets teach us such valuable lessons leaving us much stronger 20 years from now than if we never went through this crap?  Will some families be more stable and businesses stronger?  I’m talking about people like these people who were doing some pretty dumb things on a small scale that were able to avoid complete disaster by changing their stupid ways and refocusing on positive financial habits.  Would they have made those smart moves if times were not tough?

I’m torn a bit by this question.  On the one hand, I know there are some people whose lives were essentially ruined (or ended) during the Great Recession.

On the other hand, many of us just starting out during the downturn have been scared (or forced) into focusing on building a solid financial foundation.  I’ve been fortunate to fall into this category.  For that, I know I’m stronger.  In fact, I think I’m lucky to have gone through the last four years (can you believe we’ve been going through this crap for 4 years already!?).  I look at things much differently now than when I was starting my real estate empire back in 2003. (I’ve also been fortunate to stay afloat so far but if I had gotten myself into one or two more of these “deals” it likely would have taken and others out…).

So I guess the question is more personal in nature than a “we” question.  So what is it for you?  Are your finances, priorities or focus on more solid ground because of the tough times?  I really hope there’s a silver lining to this dark cloud for you.  If not, I’m really sorry but there’s still time to reset and refocus to build a rock solid financial plan.  Start here if you need some thoughts and inspiration.

Until next time, put your credit card down and slowly step away from the mall!

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Image: Ambro / FreeDigitalPhotos.net

{ 10 comments… read them below or add one }

Money Infant March 5, 2012 at 1:32 pm

I actually spent the 4 years of the Great Recession paying off insane debts and saving enough to leave my job and move overseas. So I guess I'm one of the lucky few who was able to avoid the fallout.
My recent post Rich People Doesn’t Mean Happy People

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addvodka March 5, 2012 at 2:46 pm

I don't think we went through as strong of a crisis in Canada, but we still felt it. I was lucky; I was in school anyway during most of it, and was working in retail so I always had a job.
My recent post Why I Don’t Want to Work for Myself

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Modest Money March 5, 2012 at 8:04 pm

I do think that overall people will be stronger from going through this. If people are overly-optimistic, it leads to too many risks and unwise decisions. They need a slap of reality once in a while. It has forced us to reexamine our spending and savings habits. To build a stable future, we now know that we can't take things for granted and that we need to be smarter with our money today. Who knows what the future will hold.
My recent post The Decision To Get A New Job

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MoneySmartGuides March 5, 2012 at 8:48 pm

I'm just worried about those just starting out in the work force who lost most of their 401(k) money and then moved what was left to bonds and cash. I've read many stories of younger people being afraid to invest in equities because of the volatility we have seen recently. That scares me because not only will they not get the annual growth they need for their savings, but also because so much money (including government stimulus) has gone into bonds, many fear that they are the next bubble that will pop. If that is the case, the only place left for the fearful to turn is to put money under their mattress.
My recent post The Round Table

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shanendoah March 6, 2012 at 11:16 pm

We are stronger because of the recession. When C lost his job in 2009, it forced us to come to terms with our credit card debt (we were always paying more than minimums, so we didn't have a problem, right? wrong) and how much we spent on eating out.__He was on UE for the full 99 weeks (more than that because he worked the census summer 2010), and we used that money to pay off debt and get us to the point where we could live on one income. The fact that I then got a promotion that has me making alone what the two of us made combined back in 2004, meant that we could not only live on one income, we could live comfortably on one income.__C is back in school, which we're paying for out of pocket. He plans to get a graduate degree in Math. In fact, he may even get paid to be in grad school. And since we already live comfortably on my income, anything he makes will go right to savings and retirement.__It seems kind of sad, but C getting laid off was the best thing to ever happen to us financially because it made us get our act together.

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Nick March 8, 2012 at 4:17 am

Wow – I like to use "fortunate" rather than lucky because more often than not hard work and sacrifice is really more responsible than luck, but you're fortunate for having the skills, dedication and opportunity to rock it. Way to go!

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Nick March 8, 2012 at 4:19 am

Very cool, Daisy. I think it's a great time to be fresh out of college. The foundation you've undoubtedly built is going to serve you very well.

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Nick March 8, 2012 at 4:19 am

Couldn't have said it better myself.

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Nick March 8, 2012 at 4:22 am

That's a really good point about people being scared to invest. It'll be interesting to see how quickly they jump back in after missing all of the gains since March 2009. How can we reduce the emotional market-timing in good times or bad? If we could do that the world would be much, much better off.

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Nick March 8, 2012 at 4:24 am

Wow! That's a great story. You're absolutely right though… it certainly sounds like it was a blessing in disguise. You guys sound like you're well on your way to a rock solid future… great stuff!

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