These two simple questions have been floating around the internet and have given me much to think about. DH and I were never affected by the 2008 Recession because we suffered our own private recession in 2001. That’s when the Dot Com Disaster hit the stock market and my four-year old computer company took a nose dive. Both hubby and I lost practically everything we owned. We had to start all over again from the bottom up. I did all my crying and learning in 2002 so by the time the real Great Recession hit in 2008, DH and I were well prepared.
I sold my home in 2001 and had enough equity to move to a less expensive area in our state. We relocated to a rural community and bought 3.5 acres of land for $51K and built a custom-made modular for $65K. My husband was the General Contractor and did all the plumbing, heating and electrical by himself BUT we had to shell out another $54K to clear the land, put in the foundation, the well, the septic and file and pay for all the permits. The modular was a two-story edifice but only the first floor came finished. We didn’t have the money to afford finishing the second floor till 2010.
DH and I were determined to never, ever borrow money again. When you lose your business and your job, with no future prospect of getting a job in the very near future (DH remained unemployed for two and a half years) you learn very quickly the true meaning and reality of life. I’m not going to go into great detail because it was a very painful experience. The bank seized all our accounts (because five dishonest customers falsely claimed they never received their computers, so the bank seized all our money to make up for the American Express deficit). The bank repossessed my prideful, vanity sporty car, which I knew well in advance I should have sold it but stubbornness and my failure to accept our reality wouldn’t let me do the right thing, so I learned the hard way. (a friend of my husband’s gave us a pick-up truck to drive in exchange for my husband installing his home heating system)
And to make matters worse, we owed $14,000 in sales taxes that by the time the state got through with us, despite making $5,000 a year payments (the state was tacking on $20,000 a year in interest plus penalties and fees….it was a hopeless situation) we owed them $157,000 after five years. Yes! You read that number right. Our only way out of the hole we got ourselves into was to get our modular home ready for sale and just sell it. Since we had no mortgage, we figured we could pay off the tax debt AND have enough equity available again to start over one more time, yet again.
Enter my estranged father in 2004 who I hadn’t spoken to for three years. My dad was an abusive son-of-a-bitch and again, I am not going to go into any detail here. I just want to say that he knew he was dying with only a few more weeks to live. He begged my sister to take him to see me and my new home. When he got there, he could barely get out of the car, but he did. He was just a skeleton and I was aghast at what this once strong, powerful man looked like. My dad looked around my property, saw a modular cape cod house sitting atop a mass of mud and dirt and he said “I will leave you enough money to finish off your home.”
My father kept his promise and left me enough money to both pay off the tax lien ($157,000) and our tax attorney ($30,000) and to finish building our home, put in landscaping and close out the permits. DH and I had downsized from a 9 room home to a 4 room home (we don’t use the new upstairs. those 2 bedrooms and 1 bath are for my kids when they (rarely) visit.
No matter how anyone looks at it, DH and I had the capability of getting ourselves out of the mess we had gotten ourselves into. We managed to live debt free, own two cars without loans and have a small savings account. My dad, however, made things a lot easier for us. And for that, I am truly thankful and grateful to him, forever and ever. A year after my dad’s death, we built a pre-fab, steel erected barn and dedicated it to my father’s memory. (we like pre-fab, modular buildings…….much more affordable and better than stick-built IMHO)
I had a block of money still left over from my inheritance and rather than invest it in the stock market like my attorney and accountant had advised, I bought real estate instead. I bought a beach house, for cash, in Newport, RI in 2005 that my family and I enjoyed for the next ten years. When the 2008 Great Recession hit, my husband was back working (thank the Lord!) DH and I were totally debt free and we had cash in FDIC-only accounts. We did have to tighten our belts a wee bit but WE DID NOT FEEL ONE PANG FROM THE GREAT RECESSION. We were very well situated financially.
When it came time to sell the beach house, however, my good fortune evaporated. The state had condemned all homes near the beaches that had septic systems and to make a long story short, we were forced to install an above ground septic system @$37,000 plus the value of the beach house declined by $50,000.
Technically, I lost $87,000 off my retirement money. So, The Great Recession got us indirectly, I suppose. Initially, I swore off all real estate and invested the money into laddered CD’s but silly me, in 2015 (?) I bought another piece of real estate, a condo in Sarasota Florida and this time when I sold (forced to……that’s another post) I made $25,000 after I paid off the broker and closing costs. Additionally, the value of our Cape Cod home is now worth upwards of $500,000 so, my main idea of making money from real estate paid off.
It’s taken me a long time to admit to myself my weaknesses and my foibles. I know we all make mistakes but I am very hard on myself. I think sometimes to cope, I pretend that all is right in my world but secretly, I know that it’s not. DH and I have suffered some really tough times but looking back on all of it, I realize those hard times make us who we are today. I think I have really mastered good money management and living within my means, reagardless of what other people may think. DH and I live without a mortgage, no car loans, and if we do use our credit cards, I pay them off in full each month. If we can’t, I transfer them to zero-interest cards and take the time necessary to pay them off. Yes, I have the money in the bank but my experience has taught me that cash is king, so I don’t let cash slip through my fingers so easily anymore. Better to use their money than mine.
So where are Nick and I right now, today, in our retirement? The answer to that is: exactly where we are supposed to be. Happily living in one house, in a great community, that gives us every single thing we could ever want or need. My real estate quests are over. (my RV soothes my real estate longings) I have finally settled down and invested my money with Fidelity. I manage a money market account now. And yes! everything is still FDIC (I’m not that risky). We have the same amount of expected cash as if none-of-the-above had ever happened and we had just cheerfully lived a simple life.
In other words, we are exactly where we are supposed to be.
It took us a convoluted way to get here, but we’re here nonetheless.