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Here's what these investors did in the recession. Boy, are they glad the market tanked

Key Points
  • What goes up usually comes down.
  • Nowhere is that more clear than in the stock market.
  • Here's what you should consider when the chips are down.
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How to make money when the market tanks

What goes up usually comes down.

Nowhere is that more clear than in the stock market.

Like nearly anything else in life — from parenthood to picnics — investing in stocks isn't always a day at the beach.

Imagine the stock market plunging, and the value of your hard-earned investments along with it.

Sounds terrible, right? Not to Carrie Piaskowski, 40, who treated the last recession as an opportunity to go in a buying spree.

Carrie Piaskowski (with her husband Wayne) put every extra penny she had into stocks during the recession.
Source: Carrie Piaskowski

Every extra penny she had went right into stocks. At the time, she was working for ING Direct (now Capital One 360) in customer service. It wasn't the easiest time to work for a brokerage, taking orders, she says, but she told people, "If you liked SPY [SPDR S&P 500 ETF Trust] at $103, you should love it at $83."

Piaskowski, an IT manager in Exton, Pennsylvania, says she is fortunate she learned so much about finance while working for ING. She was under 30, and when the recession hit, she says she took it as an opportunity to buy stocks at fire-sale prices.

Not-so-secret sauce

People who aim to be financially independent and possibly retire early have one thing in common.

They invest. Not only do they invest, they do it aggressively. They do it often.

Grant Sabatier, for example, who went from broke to millionaire in under six years, checked his progress daily. If he had an extra $60, it went straight to one of his accounts.

Sabatier and people like him invest a high percentage of their income. Even those who aren't highly compensated tech people shovel in as much as possible.

When it comes to stock market volatility, you're not going to see much nail biting in this crowd.

Here's what Jordan Sowhangar, a certified financial planner at Girard, an investment manager in Souderton, Pennsylvania, tells clients when she begins working with them. "We say, 'This money will absolutely fluctuate. There are going to be statements you are not happy with.'"

Got that? On occasion, you're going to look at your account and feel your stomach drop in tandem with the value of your holdings.

You are not the only one. No one likes seeing they suddenly have less money. Sowhangar says it's critical to look at what happened in the market to cause a drop. It could be short-term or long-term volatility, but to keep people from losing their minds, she helps them refocus on their long-term goals.

She reminds them why they are investing and what their time frame is for meeting those goals. If it's 15 years out, for instance, clients still have plenty of time to recover from a downturn.

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A rocky ride

Ups and downs. Get used to them.

"Loss is a temporary part of the game," said Stacy Trinh, 34, of Honolulu. "Consistency will put you way ahead of the pack in the long run."

Trinh, who owns the personal finance blog Keeping Up with the Changs, graduated in 2007 and soon saw just how rocky the economy could be.

Yet Trinh didn't let that stop her from her goal — reaching financial independence by age 40 — or her strategy — aggressively investing in her 401(k). Once she had a full-time job, half her salary went to retirement savings.

Based on her 401(k) statements, Trinh's account took a beating between October 2007 and March 2009. It was pretty rough to log into her account and see the loss climb into the tens of thousands just as her adult life was starting.

Trinh consistently invested throughout the recession. The compounding effect of buying at especially low prices means her account value is now worth a couple of hundred thousand dollars.

Sticking it out paid off big time, she says.

Good time for blinders

Ignore the news cycle and take a 30,000-foot perspective rather than the individual days and momentary drops.

Allison Keech Sanka, 48, was initially crushed during the financial crisis. "I felt like I had lost so much money," she said. "But it did recover."

Simply because she did not know what to do, Sanka, a software marketing director outside Philadelphia, did nothing.

"I was lucky," she said, "but [doing nothing] was the best strategy."

The experience definitely altered Sanka's perspective. Having seen her balance dip by 40%, she now views other market plunges with much more equanimity. "Remember what happened," she said, reminding herself that she's seen it go there and recover. "Look at a 10-year view. See how the line goes up?"

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A recession strategy

While everyone else was freaking out about the steep stock market drops, Piaskowski saw the low prices as a golden opportunity. She and her husband didn't have a lot of money, but they felt they could not miss out on the bargain, so they cut costs and put in whatever they could.

It was worth it to eat pasta for a month, she says. "It's a scary time, but scary times are the most interesting," Piaskowski said. "When is the market going to dip like that again? So many things were undervalued."

For the first seven years, which took them through the recession, Piaskowski and her husband were able to come up with about $50,000 each year. They paid down debt, built up savings and made principal payments on their mortgage. For the last two years, the couple has saved about $100,000 each year.

It takes less than you think

This year, they hit a milestone: financial independence. Piaskowski says they could live off their portfolio for the rest of their lives.

It took less than 10 years. "It seems overwhelming at first," Piaskowski said. "But it doesn't take nearly as long or nearly as much sacrifice as you think to get there."

You don't have to put in huge amounts for decades. Piaskowski has maxed out her 401(k) for just the last two years, but with all the money she and her husband funneled into investments when prices were low, they now have $500,000 in investible assets — and 20 years to grow that amount.

Start small if you feel timid, says Piaskowski. Pay $10 toward a debt or as an increase in your 401(k). Then, increase the amounts as you learn to get more aggressive.

Don't wait till you feel ready. "You'll have missed the opportunity to get ahead of the game," Piaskowski said. "You're going to kick yourself after."

Check out Don't Fall For These 5 Myths About Money via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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