How I Survived the Crash of 2000

I used to be a millionaire. There were a lot of us who used to be millionaires. I worked for Microsoft from 1994 to 2003. Those were the glory years. When I started at Microsoft the stock price was at the beginning of an incredible run. The price in today’s terms would be $3.14/share. Six years later, at it’s high point, the stock topped out at $58.72 in December of 1999.

I had a 401K heavily invested in Microsoft stock. I had thousands of stock options, many with a strike price in the single digits. I built a big house and thought that I had my financial house in order.

I didn’t.

The stock started falling at the beginning of 2000. A year later it was $23.22 in December, 2000. My options were “underwater” and worthless. I had to sell the house I could no longer afford, and the stock would take over a decade to claw it’s way back into the $40 dollar range.

I lost it all.

I not only lost all my Microsoft money, I eventually ended up broker than broke. (Starting Over At 40.)

But, this column is called “Survived.” And I did. Because it wasn’t about the money. It’s certainly important to have enough money to live. And there were a couple times where I fell below that line. But, that’s not the true measure of success.

During the time that Microsoft stock was in freefall, there were stories about people who had been merely foolish with their investments and those who had been downright stupid.

My mother was a licensed financial planner. She helped people make and keep lots of money. But, I was too smart for her. She told me to diversify. But, Microsoft was shooting up 20-30% per year. She was getting 10-15% returns. Why would I leave that 5%-15% on the table?

Why? Because when the market turned south, my mother’s clients lost a few percentage points. I lost it all. But, I ONLY lost it all. I was one of the merely foolish. There was another category of Microsoft employees who lost more than it all. Your broker will loan you money against your stock options. You can only borrow 50% of the value of your stock portfolio. A stock option isn’t a real thing. It’s only permission to buy stock at a particular price.

But, a few people treated their options like a bank account. They borrowed against it and just spent the money, vacation, fancy dinners, cars. When the stock tanked, the people who had borrowed against their options had a problem. They were way over leveraged. Their brokerage firm called in their note. The firm liquidated their holdings to pay their loan. The brokerage firm then went to the Microsoft people and said, “Your account value dropped so that you now owe us a bunch of money. We sold all your shares. And you owe the IRS lots of taxes.”

As I read about these people, I appreciated being merely foolish.

It’s tempting to look back on that time and think I blew a million dollars. I don’t do that. Not just because I’m by nature a positive person, but because I have “investments” from those days that no broker or stock market reversal can take.

I adopted 10 kids during this period. Adoptions are expensive. International adoptions even more so. I watch my kids growing up and I realize that not only did I survive the stock market crash of 2000, I thrived. The things I invested my money in can’t be measured in a spreadsheet. They are measured by seats at the dinner table. I lost a bunch of money, but I’ll make it back. Or, if I don’t it will be okay. Our best investments from those days pay off every day in hugs and kisses and cries of “Daddy’s home!”

Did I survive the crash? Ask the kids.

Rodney M Bliss is an author, columnist and IT Consultant. His blog updates every weekday at 7:00 AM Mountain Time. He lives in Pleasant Grove, UT with his lovely wife, thirteen children and one grandchild.

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