Jared Dillian lost roughly $500,000 in Lehman Brothers stock when the firm collapsed in 2008. He worked on Lehman's ETF trading desk and held restricted shares that went to zero. Some colleagues who had bought discounted company stock through an employee purchase plan lost about 80% of their net worth.
Dillian survived the collapse better than many peers because he had lived below his means. He owned a cheap house with a small mortgage and took no vacations. This gave him cash reserves to walk away from the job market and start his own newsletter instead of scrambling for the next available position.
The collapse shaped his investing approach. Dillian now treats cash as an option rather than a drag on returns. He built a five-asset portfolio split across stocks, bonds, cash, gold, and real estate. This simple allocation has historically cut volatility roughly in half, according to Dillian.
Dillian has written a book called "The Awesome Portfolio" about the five-asset strategy he developed after the 2008 collapse. He also runs a market newsletter and research service at jareddillianmoney.com.