Like may individual in America we were greatly impacted by the 2008 recession. Other were more impacted by the 2000 “.com” bubble. As a society, we don’t learn well from our past doings, but as individuals, we can prepare for what we know will happen again.
The economic recession is caused by a perpetual loss of business and consumer confidence. As customer confidence drops down the slope, demand decreases. It is a period of general decline in the economy of a state, and it is typically accompanied by a decline in stock market, an increase in unemployment, and a decline in the housing market. Recession directly has a grievous effect on the rate of unemployment in the state. At this period, workers are being laid off, people lose their jobs, and the struggle becomes stiff. Simply put, our expectations and actions are what put ourselves into a recession. This article seeks to expose you to how you can survive the next recession.
- Cut out your stupid expenses. When the money flow is on the rise, we tend to spend our income on new clothes, new shoes, fashionable bags and more. Now is the time to cut out those careless purchases. Don’t eat out as much as you used to. Don’t eat high-end foods. Don’t make dumb purchases. Now is the time to carefully create a budget and work towards saving as much. Make sure that at this time you are not purchasing what you have an alternative for or what you can do without.
- Invest in recession-proof companies. During a recession, there are companies that would not be affected or would slightly be affected. These companies offer valued services that are of high necessities at a very affordable price so people will consider their services or products over others. These companies are the best to invest in at this time. You should throw some money in and see what it yields. These are the long-term investments favored by individuals like Warren Buffett.
- Invest a lot at the bottom of a recession. Recession lasts for an average of 6 months and may impact a year or two of the economy. When you realize that the recession has dug hard into the economy, at the near bottom of the economic decline is the best time to invest your assets into a company. Quite a number of people have made a fortune by investing a lot in the recession. You can make a fortune too. (Buy Low, Sell High)
- Don’t rely on your employment. Like heck, this is 2017! Relying on one source of income is not advisable. You can have a major source of income which is your employment, but you should have other activities bringing you a few bucks that go into your savings. I know of an engineering contractor who makes thousands monthly and then spends his night writing design proposals for other firms. He channeled whatever he makes into his children’s accounts. Multiply your source of income. Having multiple streams of income is what they call overflow.
- Cut out your TV/CABLE. Get Netflix. Your monthly subscriptions to your TV/Cable might weigh you down at this time. It rolls into about $120-150 monthly and for 6 months that amounts to about $900. If need be to watch a movie, get Netflix. You invest about $9.99 monthly. In 6 months, you save up to $840.
- Don’t sell your assets during the recession. Never! Don’t even think about it. Situations may grow worse but when you calculate how much you will be losing, you will realize it’s not worth the struggle.
- 3 Months rule. This rule states that you should have savings that would sustain you for more than 3 months. This way, you stay clear of running broke. Always have savings to fall back to. Always!
These common everyday factors, if observed will help you course clear from being broke during the next recession. You’ll be recession proof and come out with more in your pocket.