There’s no question that the 2008 financial crisis hit America hard. The housing market crashed. Financial institutions considered too big to fail did fail. And the economy sunk into the third-longest recession since World War II.
Although more than a decade has passed, some Americans are still feeling the effects of the Great Recession. Others hit rock bottom but managed to bounce back and are doing even better today than before the U.S. economy collapsed. Through determination and hard work, they are now thriving.
Find out how five people who lost everything in the recession turned their lives around and took control of their finances.
What Sean Sandona Was Doing Before the Financial Crisis
Before the Great Recession hit, business was booming for Sean Sandona. He owned a home remodeling company that was flourishing and was building spec homes — houses built for sale, not for a specific client — in the Chicago suburbs.
About the time that the housing market was starting to decline, Sandona had broken ground on a spec house that would’ve been the biggest and most expensive property in the neighborhood. He hoped to sell it for $980,000 but couldn’t find a buyer. When he finally sold it for $720,000, it wasn’t enough to cover the amount he borrowed from the bank to build the home. So he had to use everything he had to pay back the loan. “It brought me down to nothing,” Sandona said.
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How the Financial Crisis Affected Sandona
When the U.S. economy collapsed, the home remodeling industry dried up. “It forced me to file Chapter 7 bankruptcy,” Sandona said. “In 2008, I walked out of bankruptcy with 100 bucks to my name.”
He lost everything except his house, and did any odd job he could find to get by. “I went from CEO of a million-dollar-plus home remodeling company to posting flyers and picking up dog poop,” Sandona said. He ended up getting a divorce because the financial impact of his bankruptcy had ruined his home life. Then he lost the one thing he had left — his home.
“A year after the bankruptcy, I woke up in the middle of the night and my house was on fire,” Sandona said. He spent the night in the hospital recovering from smoke inhalation and walked out the next morning with nothing except his dogs. “I remember the day after getting out of the hospital and there was just a shell of the house and I said, ‘I will never quit,’” Sandona said.
What Sandona Is Doing Now
Sandona decided that he needed to build a business that would be recession-proof, so he borrowed a few thousand dollars from family members to start North Village Snow Management in 2009. He marketed his snow-removal service to homeowners associations, and word got out among his clients that he had previously worked in the construction industry. Soon, they started asking him to look over construction project bids and guide them through projects. One thing led to another, and he ended up expanding his company — now called North Village Group — to provide maintenance, repairs and capital improvements to homeowner associations and multi-family properties.
“It’s going amazing,” Sandona said. “We’re slammed.” North Village Group is generating $4.25 million in revenue, and Sandona just hired a CEO so he could focus on his latest venture: Doorage, a self-storage service that will pack belongings in containers and transport them to a storage facility. If customers want a container out of storage, they can go online to request their belongings and have them delivered. Sandona said Doorage isn’t profitable yet, but it has funding from investors and will expand to 50 markets nationwide over the next six years.
“I went from picking up dog poop to owning a group of companies and founding a tech startup,” Sandona said. “If you don’t quit, the sky is the limit. I hate to sound clichéd, but it’s true.”
What Sa El Was Doing Before the Financial Crisis
In 2008 when the financial crisis struck, Sa El was just starting out in the insurance industry. He was in his early 20s and had been working since high school as an artificial intelligence programmer for video games. But he had switched careers to become an insurance agent and was going door-to-door in Atlanta trying to sell policies.
As the economy sank into a recession, El stopped knocking on doors and started making phone calls to drum up business. He worked 16-hour days and called 200 to 300 people a week trying to sell insurance. But no one wanted to buy policies in a recession, and those who had policies were canceling them. “Anything you felt like you didn’t need, it went on the chopping block,” El said. “Life insurance was the first thing to go.”
How the Financial Crisis Affected El
Because El didn’t have any savings, he was struggling to get by when his insurance sales dried up in the recession. However, what really sank him financially were canceled policies. El had been paid commissions by insurance companies in advance once clients agreed to buy a policy, rather than after they had started paying premiums. For example, if he had sold a policy with a monthly premium of $50, he would get an advanced commission equal to nine months’ worth of premiums — $450. But when customers started canceling those policies within a few months after signing up, El had to pay back his commissions.
His insurance business, Zion Financial, went from not making money to losing money. He was so broke that he couldn’t even afford to own a cell phone. The longer the recession lasted, the less he could afford. He and his partner, now husband, moved several times to apartments with cheaper and cheaper rent. “We pretty much lost everything and had to start over,” El said.
What El Is Doing Now
Although El said that there were many times during the recession where he didn’t know how he was going to survive, he tried to maintain a positive mindset. “I always focused on where I wanted to be,” he said. El told himself that if he could just keep going, he could get to where he wanted to be.
He didn’t give up on his insurance business, and sales started picking up as the economy recovered. But the big change in El’s recovery from the recession came in 2017 when he rebranded his company to Simply Insurance and started selling insurance online. He’s now bringing in $18,000 a month in sales. And he’s more prepared financially if another recession strikes. “Now that I’ve been through one, I know the steps to take to survive another one,” El said. “It was definitely a wake-up call.”
What Larry Chester Was Doing Before the Financial Crisis
Larry Chester became a casualty of the financial crisis before it sank the U.S. economy into a recession. As the chief financial officer of an importing company in the Chicago area, Chester was living a comfortable life. He had put his three daughters through college, traveled frequently with his wife and had almost paid off the mortgage on the home he’d been living in for 25 years. But everything came crashing down on him in 2006.
Sears had been a major client of the importing company that Chester worked for and was starting to struggle financially. In an effort to cut costs, Sears put pressure on Chester’s company to cut its prices, which hurt its bottom line. “We certainly ended up being in a position where cash dried up,” Chester said. And he ended up losing his job.
How the Financial Crisis Affected Chester
Chester was 58 years old when he lost his CFO job. Not only did his age put him at a disadvantage for finding a new job, but also jobs were becoming more scarce as U.S. economic growth started to slow. As a result, he was unemployed for a year.
Chester didn’t have an emergency fund when he lost his job, so he tapped the equity in his home to keep himself afloat financially. Because he thought he would find a new job quickly, Chester borrowed heavily from the home equity line of credit he opened to pay his bills and also to pay for weddings for two of his three daughters.
The only way he could make his monthly HELOC payments was to borrow more money. Because he had built up so much equity in his home over the 25 years he had lived there, he ended up borrowing twice as much as the amount of his original mortgage. As his financial life was falling apart, so was his marriage. When he and his wife divorced, he was forced to sell the house through a short sale for less than what he owed — which sent his credit score tumbling from 775 to the mid-400s. “It’s an embarrassment for me — as a CFO, I look back and think I really did a lousy job of managing the finances of my family,” Chester said.
What Chester Is Doing Now
After a year of being out of work, Chester finally landed some temporary positions. As he bounced from one short-term engagement to the next, he realized that he was basically working as a consultant. “So I took the work I had been doing and started a firm,” he said. In 2009, Chester launched CFO Simplified to provide CFO consulting services.
He got off to a rocky start, but Chester now has five full-time employees and his company’s sales are growing. The 71-year-old is in good health, so he doesn’t plan on retiring any time soon. His credit score is back in the 700s, he can afford to travel again and drives a sports car. “Overall, things are going well,” Chester said. And the best part is that losing his job helped him discover that working for himself is better than working full-time for someone else.
What Michael Blank Was Doing Before the Recession
Michael Blank became an IPO millionaire when the software startup he was working for, WebMethods, went public in 2000. He then read Robert Kiyosaki’s book, “Rich Dad Poor Dad,” and decided he wanted to create sources of passive income so he never would have to work again.
Blank quit his job and hired a mentor to teach him how to flip houses. He signed up for an apartment building boot camp. He also took classes to learn how to trade stock options. “But, my big idea at the time was to get into restaurants because I was surrounded by a bunch of people who made it all sound simple,” Blank said. So he invested his IPO millions into pizza restaurant franchises.
How the Financial Crisis Affected Blank
When the Great Recession began, Blank owned six pizza restaurants — two of which were losing money. “I had no choice but to sell these two locations at the worst time in history to sell anything, especially restaurants that were losing money,” he said. His other four restaurants made it through the recession, but, by 2013, their profit margins were shrinking. Blank let the managers go and started running the restaurants himself. It only got worse from there.
“It got so bad that I had all of my credit cards maxed out,” Blank said. “I remember clearly going to Panera and trying to buy a cup of coffee, and my credit card got declined because I had maxed out the $30,000 limit.” At the same time, he was getting letters from the IRS because he wasn’t paying taxes that he owed. By 2015, his pizza restaurants were losing $10,000 a month, and he had maxed out a $200,000 line of credit. “I had to sell everything at a loss,” Blank said.
What Blank Is Doing Now
Blank clawed his way out of debt by investing in real estate with loans from family members. “I was primarily flipping houses in the early days before I saw the light and switched to apartment buildings,” he said. He raised money from investors to buy apartment buildings and starting blogging about his real estate investing.
He now leads real estate investing training programs. Blank is also the author of “Financial Freedom with Real Estate Investing” and his company, Nighthawk Equity, controls multi-family properties worth $27 million. He said he is grateful that he now has multiple sources of passive income.
What Rafe Gomez Was Doing Before the Recession
In the 1990s, Rafe Gomez launched a successful marketing company. But when the dot-com stock bubble burst in 2000, his company tanked along with shares of Internet companies. In need of new work, Gomez used his experience as a DJ in clubs in the 1980s and 1990s to land a radio DJ gig.
From 2003 to 2008, Gomez was the host, DJ, and producer of “The Groove Boutique,” a radio mix show that aired across the U.S. “The show was No. 1-rated from New York City to Los Angeles and led to lots of opportunities for me to tour, produce music and appear on TV,” he said. But then the 2008 stock market crash and recession hit, and his radio DJ career capsized, Gomez said.
How the Financial Crisis Affected Rafe
A decline in advertising revenue during the financial crises prompted the radio station that aired Gomez’s show to change its format. “They announced their decision to the staff on a Monday morning, and as of Tuesday, over 50 people whose careers were tethered to the previous music format were laid off,” he said.
Gomez was out of work for more than a year. During that time, he and his wife burned through almost all of their savings — including retirement savings. “We sold wedding gifts, jewelry and other items of value to generate enough liquid income in order to just barely pay our bills,” he said.
What Gomez Is Doing Now
During the year Gomez was out of work, he went on interview after interview using the advice of career experts. But nothing worked until he developed his own interview strategy — which he then turned into an audiobook, “What’s In It For Me? A Powerful New Interview Strategy to Get You Hired in Today’s Challenging Economy.”
As Gomez tried to generate media coverage of the audiobook, he discovered that he was good at public relations. “I set up media hits on MSNBC, PBS, Fox News and many more,” he said. He thought he could translate his own success in getting media coverage into results for corporate clients. So he relaunched his marketing company, VC Inc. Marketing, and is now an award-winning provider of business strategy and sales support guidance for companies around the world.
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About the Author
Cameron Huddleston is an award-winning journalist with nearly 14 years of experience writing about personal finance. Before joining GOBankingRates, she was a contributing editor for Kiplinger.com and wrote the popular Kip Tips column, which was syndicated in Tribune newspapers nationwide. Her work has appeared on Yahoo!, MSN, AOL Daily Finance and other online and print publications.