Thursday, September 25, 2008

The Widespread Impact of the Financial Crisis of 2008

"I don't think it (the stock market falling) will affect most of America" ~ Senator Richard Shelby R-Alabama in an interview with NPR where he shared his opposition to the bailout proposal.

Contrary to Senator Shelby's statement, just about everyone I know has been affected by the stock market decline of 2008. From what I've seen, the impact also cuts across generations. Here's how it has affected those in my family:

  • My daughter's savings. Her 529 college mutual fund account is now 8.2% below the total amount we have contributed since 2005. At one time it was up about 20%. Fortunately, it will be another 14 years before we need the money.

    Her UTMA savings account is up 7.7% since I had invested it in CDs for the past 2 years.

  • Our retirement savings. In my Q2 2008 update, I shared that our savings had declined 21.6% since the beginning of the year. Most of the decline was due to my company stock, which is not in the financial industry.

  • Our parents savings. Although my in-laws and my mom have pensions and social security, they also have significant funds invested in the stock market. While I don't know their exact returns, I think they are also down for the year.
  • While I agree with Senator Shelby that the stock market decline is not a good reason for a bailout, I do believe that the current financial crisis could destroy the U.S. economy. I hope Congress realizes soon that they have to act quickly to hopefully contain the damage and restore confidence in U.S. credit markets.

    For more on Crossing Generations, check back every Thursday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2008 Achievement Catalyst, LLC


    Golbguru said...

    Super: I am curious as to how you are "reacting" (if at all you are) to what's happening. Especially considering that this directly affects you a whole lot more than most people given that you voluntarily retired last year.

    Does your family ask you questions about how you have planned to get through such times, etc.?

    Hope things are cool on your end with all this going on.

    Super Saver said...


    In July, 2008, I did start considering Plan B options of going back to work (URL: Since then, my company stock has recovered signficantly and I've put Plan B on hold. However, returning to work always remains an option should the market or my company stock price deteriorate further.