I plan to invest more if there's another recession — here's why - Business Insider

In 2008, during the Great Recession, I was working as a cashier and was afraid of the stock market, so I didn't invest any money.Looking back, though, I wish I had — the recession was primetime to put my money in the market since stocks were basically “on sale.”If there's another recession in the future, I definitely plan to invest. While I know this isn't possible for those struggling to make ends meet, it makes sense to put any disposable income you have into the market when it's down.Read more personal finance coverage.It was October of 2008. In Eastern Idaho, we had already received our first snow, though red rock had not yet been thrown down on the roads. You could feel a sense of urgency when you walked into the break room at my job. The crisp mountain air wasn't what had everyone on their toes, though.I had a side hustle as a grocery store cashier at the time. At our store, employee stock options were offered as a benefit. While I was only planning on being in my role as a cashier for a short while, others had planned their careers with the company, purchasing stock and pouring money into their retirement savings plans.That's why the room was so tense: The recession was beginning, and no one's employee stock options were doing well, nor were any of their other investments. Because of that, I allowed my fears and the fears of my coworkers to get to me, going so far as to withdraw all the liquid cash from my savings account. But that wasn't my biggest financial mistake during the Great Recession.I regret not investing during the last recessionMy income wasn't very large in 2008. Even if I'd had faith in the stock market and enough knowledge to invest, I didn't feel I had enough disposable income to put money into a retirement account, let alone open a brokerage account. I told my employer to take the smallest amount possible for my pension, and I had no other IRA or 403(b) account open.I look back and kick myself now for not putting more money in the market. In the days prior to low-barrier-to-entry robo-advisers, I'm sure I would have struggled with the initial investment required for index funds. But I still wish I'd tried. Here's why.During a recession, stocks are on saleIt's a cynical way to look at things, but when you hit a recession, stocks are cheaper. If you invest during a recession and have the risk tolerance and time horizon required to sustain any short-term losses, you're highly likely to see your investments experience a lot of growth over the long-term. This is because while short-term investing is a roller coaster ride, long-term, the American stock market has historically always gone up. For example, I ran my numbers through an online 401(k) calculator, and if I had maxed out an IRA at the height of the recession in 2009 and never invested a penny more, I'd currently have about $18,050, or a 3.61% return on my initial $5,000 investment. And that's if I never set up my dividends to be reinvested. If I retired in the year 2052, I could reasonably assume that my initial $5,000 investment alone would be worth $123,472, assuming an average 6% return. If I did the same today, my $5,000 would only be worth $34,202 if I retired in 2052. My plan for the futureYes, I wish I had made that $5,000 investment in 2008/9 when stocks were “on sale.” To be honest, I probably couldn't have swung the full $5,000, but I could have invested more than I did outside of my pension. With a baseline of zero dollars invested, that wouldn't have been difficult to achieve. But stocks don't live in a vacuum. While they may be “on sale” during a recession, a recession brings along with it several other factors that eat away at the disposable income you need to be able to invest in the first place. Housing insecurity, income insecurity, and austerity policies all may make the idea of investing seem laughable to most American households when they're living through a national financial crisis.If I'm fortunate enough to remain financial stable during the next recession, though, I won't make the same mistake. I'll delegate much of any disposable income I have towards my investments. In the meantime, I'll be taking other steps to fortify my finances and career so I'm in a place to have a disposable income when the next recession strikes. More personal finance coverage4 reasons to open a high-yield savings account while interest rates are down It took less than 10 minutes to open a high-yield cash account with Wealthfront and earn more on my savingsHow to buy a house with no money down When to save money in high-yield savingsBest rewards credit cards7 reasons you may need life insurance, even if you think you don't