For many, the 2008 stock market crash was catastrophic. As a young professional, Ramit Sethi was laid off from his job — but he turned this into a learning experience.
Now, he’s using the knowledge he gained during this financial turmoil to help others. Since the market has been all over the place lately, this could be a good time to put his tips to work.
If you’re concerned about the current state of the market, following Sethi’s advice can help you get ahead — and stay there. Here’s a look at two key lessons Sethi learned in 2008 that can help you build wealth in the current economy.
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Have a Sizable Savings Account
Unlike many others, Sethi didn’t have to make any major lifestyle changes when he was laid off from his job. Thanks to his sizable savings account, he had money to pay his rent and other living expenses, so he didn’t have to scramble to find a job — any job — right away, he revealed in an Instagram video.
“If you have savings, you can weather the storm,” he posted on X.
When talking about this topic on his “I Will Teach You to Be Rich” podcast, he said having a healthy savings account allowed him to avoid having to make bad decisions due to money.
This further emphasized the importance of having an emergency fund. If you don’t currently have one or it isn’t fully funded, now is the time to zero in on this goal and make it a top priority.
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Build Your Cash Reserves
Much of the country was worried the stock market would never bounce back, but Sethi saw this as an investment opportunity. On his podcast, he said this is something he considered one of the most amazing investment opportunities of his lifetime.
He had cash on hand, but he wished he had a larger war chest that would have allowed him to bulk up his investments.
“From that day, I vowed to myself that I would always have a larger amount of cash sitting waiting for extraordinary opportunities,” he said.
Sethi is now prepared for this by having a little more cash on hand than needed. He said this fund is now essentially play money, so he feels comfortable taking a risk with it.
However, he warned against trying to time the market. He said you’ll never know when the market has reached the top or bottom, so buy when prices go down, but trying to outsmart the market is unwise.
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This article originally appeared on GOBankingRates.com: These 2 Lessons From 2008 Helped Ramit Sethi Build His Wealth (and You Can Use Them Now)
