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We ‘the everyday people’ can flip the script and refuse to let the chaos induce confusion and panic. If we approach the economic downturn with a positive mindset with a view to taking advantage of the madness (like the rich and powerful 1% do) we can turn it around and stack the odds in our favour.
I’m not suggesting we ignore the cause of the boom-and-bust economy we find ourselves in. From a systemic point of view, money is obviously broken, and questions need to be answered. What I am suggesting is until this is addressed, its best to have a plan. How can we either combat or take advantage of the chaos.
1. Build an Investment Portfolio.
If you want to take advantage of the downturn and have savings but you don’t already have an investment portfolio, now’s a good time to start. In a recession, you could take advantage of a bear market, investing in the dip and buying at a low price. Hold the stock until the next bull market so you can sell high.
If investment sounds like an approach you’re interested in, it’s extremely important you educate yourself with the principles of diversification, and research thoroughly as mistakes can be costly.
Remember you need to be prepared to leave your money in place for as long as its takes for the markets to recover and if you don’t have an emergency fund don’t invest. Check out our beginners guide to investing to find out more.
Alternatively check out our good reads page for some great books to get your research going in the right direction
2. Invest in Yourself
If investing in the stock market isn’t for you then why not invest in yourself instead. For instance, if you live life on 80% of your income, with the savings you accumulate you can invest in training and qualifications to make you more valuable in the job market.
Improving your skill level can give you a head start over the competition, improve your potential value, and enable career or job progression. This of course can lead to increased income and better long-term prospects.
The investment will pay for itself, especially when the job market improves. In some way you’re getting to keep your money whilst fostering your personal and professional development.
If this sounds like a good idea to you, be mindful of the choice of study and try to go for something recession- proof such as Nursing, Public Utility Services or Law Enforcement.
Another really good way to invest in yourself would be to develop new skills such as blogging or opening an online store. A simple blog is quick and easy to start and hosting can cost very little. Online marketplaces such as Fiverr.com can also be a great way thrive by investing in yourself and making the most of your skills.
3. Make Small Changes to Cut Costs
If you are not able to consider either of the previous suggestions, by living within your means, you can still win in a recession. If earning more isn’t a possibility at the present time, there are still things you can do to improve the situation.
Try to reduce your spending. Obviously, you still need to pay your mortgage or rent, bills and any loan re-payments (that’s not to say that downsizing and reducing bills is not a credible option for some in the long-term). With a little tweak to your habits there are ways you can spend less on the day-to-day stuff.
Whether you want to reduce your debts, build an emergency fund, or build savings in order to invest or simply enable yourself to stay at home to bring up the kids, living within your means or frugal living is key and it can be a positive change for so many.
It can lead to more ready cash, less debt, and a simpler life, focusing on the things that bring you joy. In turn you get to feel like you’re beating the recession and disengaging from the chaos.
In raising your awareness and altering your approach to the economic downturn you get to flip the script and at the very least reduce anxiety, encourage piece of mind, and hopefully improve overall wellbeing.
If you’re lucky enough, and have the desire to use all three approaches, then the current situation provides an exceptional opportunity to make some positive lifestyle changes and enjoy some real financial gains long term.
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