I’ve heard it everywhere from network news broadcasts to some of my favorite personal finance blogs – are you better off than you were four years ago? It’s tempting to make a knee-jerk reaction based on my political affiliation, to say one thing without really evaluating how my financial circumstances have changed between 2008 and now. After all, during that period I had a child, quit a job, started a new career, and had another child; I’ve been busy.
So I thought I’d break it down, a la my friend David at Skeptic Finance, and see exactly what’s changed – and what hasn’t – since the financial meltdown launched us into the biggest economic catastrophe of our lifetimes.
When the markets crashed in 2008, I had roughly $8,000 in my employer-sponsored 401(k). As soon as the markets started heading south, I reallocated my account into mutual funds with a less-aggressive target date of 2020 (instead of 2050, as they’d been in prior to September 2008). As a result, I was able to minimize my losses; my account never dipped below $6,800. Today, it’s worth just under $15,000, even though I stopped contributing to it and started putting money into a Roth IRA instead.
In late 2008, my husband and I also made our first foray into the stock market, purchasing $500 of four different stocks for a total investment of $2,000. Our stocks dipped at first, but by March 2009 were all in the black. They peaked at $4,500 in late July 2011 (just before the debt ceiling crisis and resulting credit downgrade sent the markets tanking temporarily), and are worth $4,200 today.
Are my investments better off? I’d say so. I’d also be remiss if I didn’t mention that my knowledge of how to invest has improved dramatically over the past four years as well, so it’s not just the economy alone that’s responsible for the strong return.
My Real Estate Holdings
In August 2006 – at the height of the housing boom – I bought my first house. It cost us $146,900, and at the time, I didn’t question whether it was a good deal; I knew it wasn’t. However, I loved the house, and to me, that was all that mattered.
In the years since, my husband and I have added on and made many upgrades to the property, totaling about $22,000. When we put our house on the market last winter, we listed it for $163,900; by August, we’d dropped the price to $146,900 – the same price I’d bought it for six years earlier – and didn’t get a single bite.
Are my real estate holdings better off? Absolutely not. The housing market definitely hasn’t improved as I’d hoped it would during this economic recovery. That said, I made some stupid decisions when it came to improving the property that may have priced it out of the neighborhood.
My Job Status
Four years ago, I was on maternity leave after giving birth to my first child. I was making less than $30,000 a year as a TV news producer for an NBC affiliate in a top 50 media market. Although I worked my way up to senior producer by 2010, I knew it wasn’t the industry for me and left to work freelance.
Today, I earn nearly $40,000 a year working for various contractors in several different fields, all of which are tied to communications. Even better, I do it all working less than 20-25 hours a week from home.
Is my job status better off? You betcha. I learned that my skill set was far more valuable than I thought; in other words, I’d undersold myself for years. I’ll never make that mistake again.
Reader, what about you? Are you better off than you were four years ago? Why or why not?