How I became a millionaire in my 30s and retired early by learning to invest during the 2008 recession

"Quit Like a Millionaire" co-author Kristy Shen shares the investing lessons she learned after 2008 that helped her retire in her 30s.

Kristy Shen
Kristy Shen and Bryce Leung are the authors of "Quit Like a Millionaire."
Courtesy Kristy Shen

In early 2008, when I was a couple years out of college and had a full-time job, starting to invest some of the money I was earning seemed like the responsible, adult thing to do. 

At first, I considered real estate. At first glance, housing seemed like a safer bet than some other potential assets. But living in Toronto, the most expensive city in Canada, the average cost of a house was over a million dollars, and that just seemed like a recipe for debt and undue amounts of stress. So instead of buying a house, I decided to invest in the stock market.

Investing was initially not an easy concept for me to grasp. I grew up in rural China before immigrating to Canada when I was 8 years old. At one point my family was living on 44 cents a day. So becoming a millionaire seemed like a dream that was out of reach. 

That was especially true when my foray into investing collided with the Great Recession. There were some days that were pretty scary, but instead of panicking, my husband and I decided to learn everything we could about wisely investing for the long term. And, as a result of that trial-by-fire experience and supercharging our savings, we grew our portfolio to seven figures and retired in our 30s to travel the world.

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The last few months have seen the pandemic affect every aspect of our lives. But the important thing to remember is that you can find opportunity during uncertain times like this one, especially if you want to start investing.

These are three lessons I learned from the 2008 recession that still help us manage our portfolio today. 

Think about down markets as buying opportunities  

If you were already a little nervous about investing before the pandemic hit, seeing the recent volatility of the stock market, after 10 years of a bull market, might deter you from getting started. 

The turbulence this year has been understandably unsettling, but remember: Some of today's millionaires were born out of the last recession. Essentially, if you're a long-term investor, a down market gives you an opportunity to invest "on sale," which positions you to grow your wealth as the market recovers.

Some of today's millionaires were born out of the last recession.

That's what we did during the Great Recession. Our net worth was $135,000 at the time and it was liquid, instead of tied up in a house or other big purchase. So we decided to invest that money and take advantage of periodically buying as the stock market fell so that we could pick up units on sale. Even though our portfolio dropped initially, it recovered in just two years, and we were able to participate in the decade-long bull run afterward.

While this worked for us, the most important thing to remember is that you don't need to have a big sum like that saved already to start investing. You can start with whatever amount you feel most comfortable with. 

Don't try to predict the future

We didn't become millionaires by day trading (buying and selling individual stocks and holding them for less than a day) or using options (betting on the rise and fall of individual stocks).

We did it by staying the course and investing for the long term. Had we danced in and out of the market back in 2008 or dabbled in complicated investments we didn't understand, there's no way we would be where we are today.

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My best advice is: Don't try to predict the future by investing in individual stocks or complicated investments. You might get lucky once or twice, but over the long term, the likelihood is that you will end up losing money.

That's why big-name investors like Warren Buffett recommend investments like index funds. They don't require you to be an expert or pick winners: You're betting on the market overall, which has a long-term track record of growth.

Take steps to reduce your risk

When I first heard about investing, I thought it was gambling. You pick individual stocks and make money only when you pick the right stocks. 

But learning how to wisely invest in the long term by building a balanced and diversified indexed portfolio isn't like gambling at all. Investing does entail taking on risk. But that's essential for long-term goals. Why? Because your money is being eroded by inflation in a savings account.

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Even so, there are things you can do to reduce your investing risk and craft a portfolio that can help you meet your goals and weather tough markets. Start by breathing deeply and thinking "AIR": allocation, indexing, rebalancing.

  • Allocation. As you begin to learn about investing in the stock market, a good place to start is by choosing a mix of assets that matches your risk tolerance. For us, that looked like a portfolio made up 70% equities, 30% bonds. 
  • Indexing. Using investments like index funds lets you sleep easy, knowing that you're not picking individual stocks (because again, you can't predict the future) and are instead diversified across all companies tracked by an index. That way your entire portfolio can't go to zero by betting incorrectly on one stock.
  • Rebalancing. By periodically rebalancing, you are selling assets that have gone up and buying assets that have gone down. Doing this at set times helps you stick with your ideal allocation, and enables you to make decisions unemotionally by buying low and selling high instead of following the herd. 

As Warren Buffett says, "Be fearful when others are greedy, and greedy when others are fearful." 

Even though things are uncertain, I would encourage you to take this time to start investing. While my husband and I don't have paychecks coming in from 9-5 jobs anymore, I know that we can use the lessons from 2008 to invest what we earn from our passion projects, and provide for our future.

Kristy Shen is a world-traveling early retiree. She and her husband, Bryce Leung, used to live in one of the most expensive cities in Canada, but instead of drowning in debt, they rejected homeownership. What resulted was a seven-figure portfolio, which has allowed them to retire in their 30s and travel the world. They now spend time helping people with their finances and realizing their travel dreams on Their bestselling book "Quit Like a Millionaire" from Penguin Random House is a step-by-step guide on how to invest wisely to retire early and travel the world. 

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