How to Win in a Recession

Introduction

In the midst of an economic disaster, it can be hard to know what to do. You might be tempted to stash your cash under your mattress or buy up real estate in anticipation of a market crash, but this advice is probably misguided. The truth is that we don’t yet know if we are headed towards a recession, and if so how bad it will be. However, there are some steps you can take now to prepare for what’s next: whether it’s a slight downturn or the beginning of an economic apocalypse.

Don’t hold on to cash.

It’s not the end of the world, but it’s important to keep it in perspective. Everyone is feeling the pinch right now, so you’re not alone. If you’ve been holding on to your cash too tightly, it’s time to start putting it to work in an investment that will give a return and help protect against inflation (while also earning interest).

The best way to do this is through investments that generate dividends or interest payments. That way, as long as there are taxes on your investment income, you can still earn some money from them even if the market goes down temporarily.

Investing in stocks is one option you should consider if you have extra cash lying around — but there are other choices as well! You could invest in real estate by buying a home with cash up front instead of getting a mortgage loan; this will require some significant upfront costs but could be worth it over time if housing prices continue rising after this recession ends (and they probably will).

Keep paying down your debt.

Sometimes people say that debt is a good thing if you’re buying something that will increase in value — for example, a house or stock portfolio. But it can be a bad thing if you’re spending money on depreciating assets like cars and clothes.

If you have more debt than you can manage during the recession, the best thing ot do is to get out of it. Pay off your credit card debt as fast as possible. The less interest (and other fees) that accrues on your account, the sooner your balance will be reduced to zero and stay there for good. Also cancel unneeded subscriptions. We subscribe to so many things that only hurt our funds.

Don’t try to time the market.

• Don’t try to time the market.
• Don’t predict the economy.
• And don’t even think about trying to time your investments or your retirement savings — it won’t work!

Manage your expectations.

Managing expectations is one of the most important things you can do to help your business succeed in a recession. It’s so important, in fact, that it should be your first step when planning any new initiative or project for your company. You may not know how long the recession will last, but you can definitely manage what you expect from yourself and others around you.

When times are good, managing expectations is about setting realistic goals for yourself and others. For example: if someone tells me they want to make $100k within six months as their expected income goal (and yes this happens), then I would tell them that we need to find ways to increase sales by 30% every 6 months just so they can stay even with inflation alone! We would also need to find ways of reducing costs by 20% at each milestone because if we don’t our profit margin will be eaten away too quickly during such rapid growth periods!

There are ways to act in a recession, but it’s not always cut and dry.

• Don’t panic.
• Don’t try to time the market — that is, if you’re holding on to cash, don’t try to sell it during a downturn and buy back in when things look better.
• Don’t hold on to cash because doing so will keep you from participating in the market, which means that your gains will be limited by how good an investor you are and not how good an economy performs overall (which, again, is beyond your control).

Conclusion

The best way to survive a recession? Don’t panic. We know that it can be hard, especially if your job isn’t secure or you don’t have much wiggle room in terms of money coming in. But with some careful planning and consideration, you might find yourself far better off than others who did nothing at all during this time. Think about how we got here, and what caused people to lose so much wealth in the first place: they panicked! They sold their stocks when they were losing value, or took out too many loans when business slowed down. What we learned from the Great Recession is that it’s best not to do anything drastic — just keep doing what you can afford until things turn around again (and they will!). Only then should you start making changes such as investing more heavily or buying back into some of your favorite stocks.