These 3 Actions Helped Me Survive the Great Recession
They may help you survive this one
A recession is either already here or coming very soon. In the UK, the Bank of England has forecast a recession lasting for five quarters. In the US, most experts expect a shorter recession. The truth is that no one knows for sure how this will pan out. However the recession turns out, though, we still all need to protect ourselves.
I came out of the Great Recession in better shape than I entered it. In some ways, I was lucky. But I didn’t leave anything to luck. I planned ahead. I am doing the same right now. What I did last time worked very well. I expect similar results this time.
I hope this helps many others also come out of this recession stronger.
1. Create a second income stream
This is a no-brainer for me, but I still see many that continue to struggle with just one source of income. That’s usually their 9–5 job. A job that could easily disappear during the recession. That sound like planning to fail.
Hopefully, you’ll keep your 9–5 and all will be well with the world. But why take a chance? Why not create a second income stream just to be sure?
If it turns out that you didn’t need it, you can use the extra cash to invest. More on that below.
During the Great Recession, I started flipping goods on eBay as one of my extra sources of income. I started by selling some of the possessions that I no longer needed. I then moved on to buying secondhand goods and reselling them. It’s possible to make quite a lot of money doing this. It mostly depends on where you live and how much time you invest.
You could also try something more straightforward, like driving for Uber or delivering food for one of the many food delivery companies.
2. Spend less than you earn
This should go without saying, but many people still spend more than they earn. Often, the spending is on products and experiences that they could go without. This is especially important during economic times like these.
Don’t just bury your head in the sand and hope for the best.
I’ve known people that did this and ended up having their house repossessed because they couldn’t pay the mortgage. Don’t let that happen to you.
Not every disaster that happens during a recession can be prevented, but many of them can be.
Maybe you can skip that expensive holiday this year or put off buying that new car. Maybe too much of your money gets spent on eating out. Or maybe you have too many monthly subscription services that you don’t really need.
A couple of friends of mine that were renting condos have decided to move in together for the next year or two. This will help them save a big chunk of money. It will help them through these tough times. Maybe it’s something that would suit you.
Only you can figure out the best way to cut back your spending.
3. Invest when assets are at a discount
We often get excited by Black Friday sales. We get to buy products that we want at a discount.
A recession is like Black Friday for assets.
You will usually see stocks, property, and other assets at a discount. I don’t know why, but most people don’t get as excited about these discounts as they do about the annual Black Friday discounts.
Maybe I’m different because I would rather buy a property that’s on sale for 20% off than a TV that is marked down by 20%.
Most people would opt for the TV, but that’s just wasting money.
If you have cash at hand, this coming recession will be a great time to pour money into index funds, property, and crypto. That’s what I’ll be investing in.
If you don’t have cash, you can continue with your usual monthly investments. This is where the second income I mentioned above can come in handy. Earning extra cash means you can buy more discounted assets. That will pay off big during the years ahead.
It’s that simple to set yourself up for the best chance of both surviving the recession and coming out ahead of where you are now.
So, to recap, just do the following:
1. Create a second income stream
2. Spend less than you earn
3. Invest when assets are at a discount
Keeping it simple is the best way to get great results.
