Pretend that we could eat as much as you want, of whatever you want, whenever you want, with no consequences. What would a lot of people do?
Probably eat a lot of their favorite foods!
Of course, in the real world, we know that if we do that for any period of time, we’ll have to go on a diet.
That’s what a recession is – the economy going on a diet.
It’s just the business cycle. Things go well. People get over-exuberant. Too much debt. Bad investments. Then a recession gets rid of the excesses. It’s part of the evolutionary process.
So today, we want to discuss how to survive and thrive in a recession.
How to survive a recession
- Develop a contingency plan.
Start by asking yourself, “What if …?”
- What if you get laid off?
What if you have to work longer hours because other people got laid off?
What if your time gets cut back?
What if your benefits get cut?
What if your business takes a hit?
You know your situation. Think about the most likely scenarios and develop a plan for them. Then, do what you can now.
For example, why put off updating your resume until you need it? Do it now! Most people wait until they need it. You’ll be a step ahead.
- Watch your spending
Businesses cut spending to get through a recession. We should take a clue. Try to avoid making long-term commitments. In times of uncertainty, wait until you’re more certain before making major purchases.
- Don’t panic.
Resist the urge to drastically change your retirement plan and other long-term investments. You need to look at the specifics of your situation. However, as a general rule, if you won’t need the money for five or more years, you should probably stay the course. Historically, that’s been the best thing to do.
If you need the money before that, you may want to deploy another strategy. Check with your financial planner to figure out your best option.
How to thrive in a recession
- Take advantage of low interest rates.
Interest rates tend to go down during a recession. So consider refinancing your mortgage and other debt. Business owners may have prepayment penalties, but it may still make sense. In both cases, you need to analyze your specific situation.
Let’s assume you refinance. Use what you save each month to build your passive income.
- Keep investing in yourself
Once again, let’s take a clue from businesses. Businesses that thrive, after a recession, are often those that kept on investing, during the recession.
There are a lot of opportunities once a recession ends. Position yourself to thrive – take a class, attend seminars, and go to conferences. You’ll build skills and make great contacts. One of those contacts may lead to your next bigg opportunity!
- Look for great deals.
Once-in-a-lifetime opportunities may present themselves during a recession. People are often more willing to negotiate. You probably won’t find your great opportunity advertised anywhere.
So how do you find it? Network, network, network! You’ll most likely be surprised by it, so keep your eyes and ears open. Your accidental discovery will be the result of your active searching!
Our Bigg Quote today is by an unknown author.
“A bend in the road is not the end of the road… unless you fail to make the turn.”
So keep your eyes on the road and your hands on the wheel. Be ready for detours so you don’t have to come to a screeching halt!
Next time, we’ll look at the question, “Does it pay to blame others to cover your backside?”
Until then, here’s to your bigg success!
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