5 Ways Young Adults Can Thrive (not just Survive) in a Recession
This is for all the young people who feel like they’re staring into a dark abyss of a job market. And it’s for all those in their 20s and 30s who feel more financially stressed and at risk of losing their jobs, getting pay cuts or furloughed.
Having graduated in the 2008 Recession, I know what that stress and anxiety can feel like.
If it were a movie, it might look something like this.
- Graduate in a cluster of an economy 💥
- Move back home for the “time being” (until you find a job, or indefinitely…whichever comes sooner) 🛋️
- The initial joy of being back home with your parents, home-cooked meals, and Netflix binges 🎥 🍕eventually gives way the a hollow and anxious feeling: Now what?
These are the thoughts ran through my head back then:
Will I fall behind further and further, because I graduated in a horrible job market?
Am I destined to be underpaid going forward?
What will this experience teach me?
Since I couldn’t figure out a good objective answer to the first two questions, I decided to reflect on the third.
Now, a little over a decade later, when I reflect on how graduating in the worst economic downturn since the Great Depression has shaped my life, I’m mostly able to see the positives.
I wanted to share some things I learned, in case it helps anyone who’s currently feeling anxious or uncertain about their future.
Upside #1:
Starting your investment journey at the bottom of the market can be great for a young person. I only wish I had invested sooner.
Warren Buffett has a great saying: “Be fearful when others are greedy and greedy when others are fearful.” It’s great advice, though I know it’s not always easy to implement. When you start working full-time and if your company offers a 401(k) and an employer match, take advantage of it.
I remember in 2008 when I first started working full-time and setting up my 401(k), it felt scary to invest when I saw people losing 50% of their investment portfolio value.
I decided to play it safe by keeping my money in the default selection: a money market fund (low-interest bearing, low risk option) while I *researched* and planned to *get smarter about investing* (it was really a delay and procrastination tactic on my end).
The truth is you can always be gathering more information, but at some point you’ve got to act. Investing is almost always better than the alternative: being left in the dust by inflation (prices rising faster than your money is growing in a low-interest savings account, money market, or under your mattress…)
My co-worker jolted me out of my complacency. “You’re crazy to have your 401(k) money sitting in a money market,” he said. “You have so much time ahead of you for your money to grow, investing in almost any diversified stock fund would get you a much better outcome over time.”
So I tore off the band-aid and got started. It was just the beginning of my investment journey and I’m sure I’ve made a lot of mistakes along the way. I invested in some mutual funds where the fees were too high for the returns (or performance of the fund). But the important thing is I got started, and continued to read 📚 and learn about how to invest my money throughout my 20s.
Investing my 401(k) and eventually setting up an Roth IRA, and brokerage account really paid off — eventually I was able to get an MBA from UC Berkeley debt free, support a nonprofit I’ve supported since college, and start my own business.
By the way, I realize there’s so much information out there and it’s hard to sift through it all to figure out what you should do. It’s a bit crazy that most schools and colleges don’t teach a skill that’s so essential to our well-being.
Because so many people over the years have asked me how to get started investing and to simplify the concepts for them, I created a personal investing course for college & grad students, recent grads, and young adults in their 20s and 30s.
Ultimately, I learned while you can be frugal — and that’s a great life skill — there’s a floor to how much you can scrimp and save. And although people will tell you there’s no ceiling to how much you can earn, let’s face it: that’s a patronizing platitude in a recession where starting salaries are depressing and promotions and raises are hard to come by.
Takeaway: starting to invest early, even with small amounts at first was a huge first step in my journey to financial independence.
Compounding (your investments generating more money) is an incredibly powerful thing (so much so that Einstein called it the “eighth wonder of the world.”
Upside #2:
Recessions are a great time to cultivate your creativity💡and build a portfolio of projects you’re proud of.
Not only can you use these projects to get even better jobs than most of your peers (because employers and hiring managers love to see people who take initiative and go above and beyond), the experience alone and the momentum you create for yourself will be so valuable.
Some of the projects I undertook by myself and some with friends were:
- Helped a food/restaurant-focused private equity group document and streamline their food truck processes. Now I can actually say I’ve made burritos on a food truck and operated a deep fryer.
- A friend and I got paid by a political consulting firm to develop recommendations for a mobile polling app they wanted to create.
- I helped a family friend with a partnership plan for her food testing company.
The cool thing is that people and businesses always want help. Lots of times you just need the confidence to ask to be paid what you’re worth, and for short-term projects it’s usually a win for the company to get your expertise.
Even if you do some projects for free, that just means you can be selective. So pick things that get your heart beating a little faster, or companies and people you really believe in, so you can be proud of sharing that project as part of your portfolio.
Every time I did a project I was proud of, I shared it with my network (you’d be surprised by how many new leads and opportunities it generated). I also saved the work products on Google Drive and made sure to track the outcomes and impact the project had so I could build up a portfolio and references.
Upside #3:
It’s a great time to take a risk and start something — whether it’s a part-time project, passion project, or full-time business.
What do you have to lose? If you have down-time, pouring it into a creative pursuit will energize you more than YouTube, TikTok, and Netflix.
If your 9 to 5 job isn’t fulfilling or giving you enough opportunity to grow, one of the ways you can keep learning is by building a part-time project and beginning to offer it to customers. If it goes well enough, it could launch you into something else.
Recessions are a time where a lot of other creative people are looking to do something meaningful and you may find people more easily that have capacity to help you with your design, website, coding, marketing, or any other aspects of your idea.
Upside #4:
It’s a great time for reflection and hitting the reset button.
Life happens fast. And often our coping mechanism as humans is we go on autopilot. We go through the motions in life without questioning whether we really have to do something. Meetings back to back don’t provide time to think. Catching up on the real work after meetings. Commuting. Working out if possible. Rinse and repeat.
This current recession affords many of us the additional time to reflect and cut out the non-essential things in our lives. Was there one status update meeting that everyone really hated? Gone. If you can work from home, are you finding it can be more productive than 12 people buzzing around you in an open-office floor plan environment?
I find moments of introspection and reflection a real gift. Life is short and sometimes it’s the bumpy parts of the journey that help you recognize that change is needed and give you the courage to make that change.
Upside #5:
It’s a great time to embrace simplicity: to downsize and simplify your life.
Since college, I’ve lived in D.C., NY, and San Francisco. I’ve moved probably five or six times in my 20s. The best decision I’ve ever made regarding that dimension of my life is to commit to owning fewer things.
In fact, in my 20s I decided that all my possessions (minus furniture — which I always got from IKEA or Craigslist anyways) had to fit into 4 boxes 📦 and two suitcases.
I decided on a capsule collection of more timeless wardrobe pieces (black sweater dresses and turtlenecks, french striped tees and dresses, one or two good jeans, and a few great sweaters). It allowed me to spend way less energy on deciding what to wear and organizing clothes. And the secret is when you were black all the time, no one realizes it if you’re wearing something two days in a row.
I picked a few meaningful pieces of art, photography and books. I love to read, so I committed to using my local library and e-readers more.
I can’t tell you how grateful I was to be able to move in such a light-weight way cross-country and multiple times.
I know Recessions are hard, and I don’t want to make light of it. There are so many people undergoing such tremendous stresses — health, financial, and social inequities.
I do believe in trying to make the best of things even while we are trying to change things for the better, so I hope these reflections help some of you.
