Is a recession likely to occur in 2020?
And what does it mean for you (how to prepare)
Will there be a recession?
If so when will it be?
This is what everyone is trying to find out!
The United States most certainly isn’t in a recession at the moment.
But the chances that it will happen in the near future have increased sharply over the
past few months.
In fact, this may not only affect the US, but the entire world is at risk.
It could very well be coming very soon!
I mean look at the downturn in trade caused by the US-China tariff war.
The slowed US growth after the increased interest rates by the US Central Bank and the Federal
Reserve.
Brexit trade effects, the uncountable financial market jitters... the reasons are endless!
Countless reputable financial reporting stations have claimed that the chances of getting into
a recession soon have increased by more than 50%.
Question is, what can we do about it?
The short answer is nothing.
There’s nothing in our power than can stop a recession.
Instead of wallowing about what you can’t change, why don’t you prepare yourself?
In today’s video, we will share with you ten ways you can prepare yourself to be recession-proof!
Pay very keen attention and watch till the end.
And, if you haven’t subscribed yet, what are you waiting for?
Now let’s begin, shall we?
#10 Pay off High-Interest Loans I know this sounds like common sense, but
remember common sense isn’t always common practice.
While most people know they should be doing this already, it isn’t a reality in their
financial plans.
Essentially it would be better to pay off all debt but if you can’t, start with the
higher-rated ones.
The reason why this is so important is when the recession occurs the chances of being
laid off are 50X higher than in a normal economic period.
Once you lose your job, you have no source of income to pay off debt so you have to start
selling off your assets to cover costs and expenses.
It could start with your household items, your car, and you could even end up homeless.
#9 Emergency Fund Do you have an emergency fund?
If something drastic were to happen today would you be able to get money ASAP?
Statistics claim that 40% of the entire US population won’t be able to get $400 if
an emergency occurred and only 15% of citizens maintain a healthy emergency fund.
This only shows how adamant people are to securing themselves financially.
The golden rule is to have saved up to six months of your monthly expenses.
Ideally, it would be even better if you could stash away enough for twelve months.
There is no debating with this you NEED an emergency fund and you need one ASAP!
Start by noting down your recurring expenses wit basic needs at the top of the list then
save enough to sustain you through six months.
#8 Cut Down Your Costs This is the best time to evaluate how much
you spend and search for cheaper alternatives.
The easiest way to do this is by listing down each and every regular expense, listing all
other alternatives and selecting the best based on functionality and cost.
Once done, create a proper budget that you have to abide by.
Don’t stay with too much cash.
Separate your accounts for each expense.
Essentially be conscious of what each dollar you have will be spent on.
Also, don’t buy things that depreciate in value.
This isn’t the time to upgrade your television or buy that new car that you’ve always wanted.
Stop trying to impress your neighbours or friends.
Instead, invest your money wisely!
#7 Invest In Yourself And Your Ability To Earn
It has never been a better time to invest in yourself!
Ask yourself these two questions: How can I make myself more valuable to my
employer?
How can I be more valuable as an individual?
It may seem hard to achieve but surprisingly this is one of the easiest things to do.
You can look at your career line and search for online courses that can boost your resume.
Identify someone who is higher up in the rank than you within the same career path and ask
them to be your mentor.
Don’t wait until you are jobless to build yourself!
If you’re an entrepreneur, build your customer list and upgrade your marketing game.
Focus on building a stable relationship with your customers to boost recurring sales and
attract new customers.
#6 Supplement Your Income Get a side gig or look for a better paying
job.
We’re not telling you to quit your job today, but if you got a better offer take it and
run!
One of the best ways to insulate yourself during these tough economic times is by increasing
your earnings.
They say it’s easier to get a better job when you are employed, so why not go for it!
Update your resume, send multiple applications and network like crazy!
Invest in your social capital, it’s claimed that, it is of more value and importance than
a resume.
If you can’t do any of the above, review your current job.
Work twice as hard in it, put in a little more effort in overtime hours and apply for
that listed promotion.
Strive to be the employee of the month and ensure your reputation at work is great.
This is because when layoffs happen, they start with the weakest links in the company.
#5 Take Advantage of Company perks If you are employed this is the time to utilize
all the company benefits.
Take advantage of the medical plan you currently have as it’s not guaranteed you’ll always
have it.
During recessions there are major layoffs, this means you will have to cater to all your
expensive medical bills.
Andrea Blackwelder, an expert financial planner advises employees to visit their doctors for
full body checkups while they are still employed.
What other perks does your employer provide?
Gym reimbursement?
Training assistance?
Specific discounts on certain purchases?
There are all sorts of benefits lurking on your organization’s HR portal.
The best thing you could do right now is to use them before you lose them.
However, don’t overspend just to get some discounts.
For instance, you could be better off holding some restaurant vouchers and eating a home-cooked
meal.
#4 Improve Your Credit Score You must be wondering why you should be worried
about your credit score when the economy is tanking, right?
Here’s why… prices of assets go down during a recession.
In fact, houses during the 2006 crisis have doubled if not tripled in value today.
Now here’s the problem, the interest rates will tank too but banks will not be willing
to easily dish out loans.
They only lend to the strongest borrowers and the determining criteria is the credit
score!
This means if your credit ain’t stellar just forget it!
Ensure you regularly check your credit report, pay loans off before deadlines and keep an
eye on any false report that could derail your score.
This way you will be able to access loans during the tough economic times when emergencies
arise.
#3 Prepare Your House for Emergencies Are you well prepared for any power outage,
a natural disaster, civil unrest or any unanticipated bank closure?
Will you survive through a week without any access to groceries or money?
Well, if the answers to all those questions are NO.
Let me share a few tips to get you ready.
PS, some of these tips are only to be used in extreme cases.
One … have basic necessities available.
These include extra food purchase more of dry foods with longer expiry dates, batteries,
alternative power and heat sources.
Two … Keep some money around but in small quantities so that you are not tempted to
make impulse purchases.
Also, store it in a safe place.
Three … if you have a car, store a gas can, some jumper cables and blankets in your trunk.
Four … If you have some space in your home start a garden.
You actually don’t need a lot of space to have a garden, even a small balcony will do.
Personal gardens are a great way to be self-sufficient which means you get to save some money!
#2 Work on Your Mindset Your mind is the most powerful tool.
It can either build you or break you.
It’s very important to prepare your financial mindset for the coming recession.
It all beings with your thoughts!
Start by practicing gratitude for everything around you.
Mindfulness, prayer and meditation have proven to reduce stress levels and keep people healthy
over the years.
Plug into positivity podcasts and learn from your mentors.
A great way to also change your mindset is by focusing on positive news and disregarding
negative reports unless they directly affect you.
Also, be very mindful of how any thought affects your daily life.
Just because the recession is going on, doesn’t mean you have to actively participate.
What people don’t understand is that personal finance isn’t dependent on interest rates,
political parties, the stock markets or any other forces.
Although these factors can have some influence, everyone has the power to thrive in any economy!
Stay positive, keep searching for opportunities, always be ready to prosper even within the
recession.
Always remember no situation is permanent!
As Warren Buffet said, during the 2008 recession, ‘We’re still in a recession, we’re not
going to be out of it in a while, but we will get out eventually.’
And finally, tip 1.
Now, this tip isn’t necessarily what you can do to prepare yourself but what to do
when it happens.
This right here could be the most important thing you could do to boost your finances
during a recession.
Pay keen attention to our final and crucial tip.
#1 Keep Investing When the recession kicks off, it won’t be
so obvious.
Stock prices will start falling steadily but then gradually people will start panic selling.
Here’s what you should do, INVEST!
When everyone else is in a daze of selling and stashing money in bank accounts, it may
seem counterintuitive to invest, but I guarantee you it is the best thing to do!
Prices will appear to have hit an all-time low, but they can only go up from that, that’s
how you’ll make your money in the future.
The best way to do this is by investing regularly.
You can automate this so that it runs on autopilot, maybe every week or every two weeks.
A great way to do this is by Dollar Cost Averaging with stock investments.
You can also have a constant recurring transfer to your brokerage or IRA account.
Also, increase your contribution to your 401(k) or whichever other retirement accounts.
Continuously invest so that you’re primed for success when the recovery happens.
However, invest in the long term.
Invest with money you don’t necessarily need within the next few months.
Most people make a fortune when the economy stoops low.
You too can be one of them!
The possible upcoming recession should be viewed as an opportunity rather than a disaster.
That’s it for today, if you’re still here you must’ve enjoyed the video so give us
a thumbs up.
We have a lot of great content in store for you so make sure you subscribe and tap the
bell notification, so you never miss a video.
With that said, I will see you in the next one.
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