Investing Mistakes to Avoid in a Recession (From Someone Who Lived It)

 

Have you ever made a really big investment mistake? Mine was back in 2008. I’d been putting just $25 into a Vanguard money market account every month. At the time that was pretty painless.

However, when the stock market tumbled during the Great Recession I cancelled my automatic deposits. I just let the money sit in my account. We started holding cash, or at least as much cash as you can hold when you’re in the midst of adopting two Chinese children! At the time I used to tell people, “We have all our money in Chinese orphans!”

Turns out, investing in Chinese kids was the best thing we could have done with our money. We’ve been paid back in something far more than monetary wealth ~ we built a family and a life together that I would never give up.

Stopping our Vanguard deposits, however? Monumentally stupid. I just sent all our money when the market was high and then stopped investing when it was low. I “bought high”, the opposite of what you should do! At least I didn’t compound the mistake by selling low. I just held it. 

Well, fast forward to 2024 and that $25 a month? Worth $60 grand! I haven’t even looked at it since Trumpenomics because I don’t want to get discouraged, but I am about to start automatic deposits again. When the market is low it’s smart to buy. I use a money market because I went to school for art and writing, not investing. I prefer to let the professionals deal with recessions and bear markets. 

If you’re a DIY investor I recently read utility stocks are a great place to spend right now. We just upped my husband’s energy company investments. You want to put your money in something people can’t do without, that isn’t subject to tariffs like tech products for example. Remember of course, I am an art major, so take my advice for what it’s worth, but this is what we’re doing.

Despite my background I do flatter myself I am pretty good at intuitively investing for the future. Right before the pandemic I talked my husband into buying our mountain land and building our tiny cabin. I also insisted on buying our current home. Now? We own a million dollars of real estate. Because we bought super low and in cash when possible we could still cash out pretty well even if the market drops. It’s so comforting to feel that security. That was the second best investment we ever made, after adopting our younger children. 

So what does this mean to you? If you’re worried right now about your job or your stocks or inflation (or all of it) ~ I get it. I would be panicking if I hadn’t already made it through the tech bust and the Great Recession with my business intact. I want to reassure you, circumstances don’t have to rule you. Rather, you DO have the power to create wealth in any environment.

My advice is to first take stock of your talents. Then invest in yourself first and foremost. This is Warren Buffett’s number one investment tip. He says invest in yourself first, because it’s the one thing that can never be taxed or taken away from you. Look at your skills and find a way to monetize them. Don’t get hung up on one income stream, but continually add more. The first money you spend on investment should be in education to further monetize your skills. 

Don’t mistake me… I am not saying you can make a living only doing what you love most. This might surprise you, but I was not super into dolls when I started my 25-year doll business. I tried a whole bunch of things. My eBay name is still ab_art because I started out trying to sell art. Then I didn’t change it before I got doll-famous so now I’m stuck with it! I started selling dolls (and doll supplies and tutorials) because that’s what sold best. Yes, I was good at it because I am good at making and fixing things, but it wasn’t my area of expertise when I started my business. 

So what do you do now if your job is looking precarious (or you lost it) and your 401K is in the toilet? First of all, don’t panic. You can get through this. You can get to an even better life than before if you play your cards right. I am living proof.

Second, start investing in yourself. Right now. Today. In hindsight, I was wrong when I said the real estate was our second best investment. Actually, all the time and money we put into educating ourselves was our second best investment. I never worry about money anymore because I have proven to myself I can make more money under any circumstances. I am confident in my abilities. Remember how I was so scared last week because I invested more than I ever have in a business coach? Well, guess what… I already made enough money to pay for the first month and the coaching hasn’t even started yet!

Let me help you find this confidence in yourself. I have a number of opportunities: start your own doll business with my Doll University book. Make your first $500 online with the 2025 Income Kickstart. Make passive income from digital products with Digital Profits Genius… and so much more available from mandaline.com. The best time to start was yesterday; the second best time is today! 

And don’t forget the Mandaline communities, both free and paid. If you purchased my Doll University or Midcentury doll books you’re already enrolled in the Doll University Students online group. Check your email for a link to create your account or sign in here.