“The game has its ups and downs, but you can never lose focus of your individual goals and you can’t let yourself be beat because of lack of effort.” Michael Jordan

It was August 2008. I was 28 years old and just finished my MBA internship at Goldman Sachs in New York City. Along with 300+ classmates, I returned to start my 2^nd Year at Darden, the University of Virginia’s consistently top-ranked MBA program. I was expecting a full-time offer from Goldman to start after graduation 10 months later. As is typical, our class was riding high. We could all taste the high salaries and already knew how we’d use our signing bonuses. Most of us believed we would soon take a massive step up in our professional and financial lives.

Then the world fell apart. On Monday, September 29^th, 2008 Congress voted against the bank bailout bill. We watched as the stock market plummeted. Not just one day, but day-after-day for months. It seemed like all news was bad news. We couldn’t pull ourselves away from the TV. We watched executives from some of the same companies where we had just interned exiting their corporate towers onto the streets of New York City. With boxes in hand many would never return. Our recruiting contacts started calling. “Full time offer decisions would be delayed,” they told us. All at once, the countless hours preparing for interviews and working late nights to prove ourselves seemed wasted. Our dreams were suddenly dashed.

“We sail within a vast sphere, ever drifting in uncertainty, driven from end to end.” Blaise Pascal

When I look back, we were the lucky ones.

As the market crashed we were in business school. We had 10 months before graduation to explore what we’d do next if, by chance, our job offers never came. The unlucky ones were those poor executives, managers, administrative assistants, and janitors who were thrust into joblessness overnight. Their income gone, they stared blankly as their 401(k)’s and company stock shares plunged. They went home to their families wondering how they’d get by.

You may be thinking “but that just happened to those Wall Street guys.” However, as a practicing financial planner, I can tell you I’ve since spoken to many regular Americans who had plans to retire, buy homes, and take vacations during those years and those that followed. They were forced to rethink their arrangements and delay their dreams. They were managers, physicians, lawyers, software engineers and the like. Financial turmoil does not discriminate, although it does start at the top and trickle down – the financial word for that is “contagion.”

They had no real warning and no real backup plans. Many were overexposed to the stock market. To make matters worse, some sold their stocks at the bottom of the crisis only to watch stock prices rally back and eclipse the market highs of the past (it’s called getting whipsawed). Throw in the housing crisis and unemployment that followed and I’m not sure there is an American in the country that was unaffected.

Situations like the Financial Crisis of 2008 are rare at such large scale, but I can assure you any one of us can find ourselves in a financial conundrum at any point – perhaps today, tomorrow, or 10 years from now. In fact, the risks only grow as you navigate life and get married, raise children, buy homes, change jobs, and the like.

What’s the point? We must understand what risks we have – personally. We need to know what we’re trying to achieve and what can get in the way of achieving that.

What would happen if you lost your job tomorrow?

How long could you live on savings before having to get a new job?

What would it mean for you (not just your portfolio) if the stock market fell drastically tomorrow? Do you know how a repeat of the 2008 Financial Crisis or a lesser recession would impact your life? Would it impact your ability to retire early or start a business like you plan?

Also consider the non-financial risks that carry real financial implications. What would happen if you or your spouse fell ill for an extended period? What if one of your children spent a few days in the hospital? Health expenses and emergencies are already a leading cause of bankruptcy in America. Given “consumerism” of heath care and changes to health insurance policies, you’ve likely got more responsibility than anyone ever before you.

Life is uncertain and we certainly cannot anticipate or fully prepare for every single risk, but the Financial Crisis of 2008 was not the first of its kind and it won’t be the last. It’s also far from the only risk you may want to think about. What we can do is identify known risks that other people have experienced before us. We can use their experiences and the data we can gather on our own to make decisions that mitigate those risks and give us a better chance at financial success.

If you lack the time, interest, or skills to consider the tradeoffs, find a good, unbiased financial planner. There are plenty of tools out there to help you get started, but be honest with yourself about your own capabilities.

You may be wondering what happened to me back in 2008

I would eventually get an offer from Goldman Sachs, albeit much later than expected. The vast majority of my classmates ended up getting job offers too. Even the handful that interned at Lehman Brothers, which ceased to exist the following summer, ended up working for Barclays, the bank that bailed them out. It’s interesting that I chose financial planning and financial planning technology as a career path. I'm now the CEO of myFinancialAnswers, a technology-powered financial planning software and service company helping young families and professionals make better financial decisions. I was always interested in personal finance, but I’m pretty sure my experiences during the Financial Crisis in business school had a huge impact on my path since. I hope you can glean from my experience and story and give yourself an opportunity at financial security.

personal reflection

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