We’re living in a whirlwind of an economy and a global crisis. With inflation at 9.1% now, there’s a huge possibility our economy is headed for a market crash.
There are food shortages all over the world, the latest headline being in Africa. Inflation is through the roof in countries like Argentina (75%) and Sri Lanka (over 50%).
People are rising up because they want to see change, they are fed up with corrupt leadership and are struggling to survive.
While there’s a lot of chaos happening in the world, old systems are being demolished for a reason. They aren’t working anymore.
A recession is a tough time but it’s just a cycle and it’s temporary. With all of the fear and negativity happening in the world, right now is the best opportunity to build and create wealth.
This is when you plant your seed so that you can harvest the fruits of your labor. As they say, “recessions make the most millionaires”.
Here are the 4 ways to get rich in a recession.
How do the rich keep getting richer? They invest in assets like stocks, bonds, businesses, crypto, and commodities such as gold/silver.
Warren Buffet, one of the world’s richest people has accumulated his wealth and is worth over $100 billion because of his successful investing methods.
Many people can be seen turning to Bitcoin as a long-term investment due to it’s immense scarcity, even passing the likes of gold in that factor.
Scarcity, one of the main factors for demand is something that bitcoin certainly has, there will only ever be 21 million Bitcoins.
Imagine buying $1000 worth of Bitcoin in 2010, you would’ve been a gazillionaire. Now imagine buying the dip and holding for 5 years. The likelihood of getting similar gains as has been the case historically is likely according to some experts wherefore it’s a retirement strategy people are turning to.
Admittedly, Bitcoin is still being treated as a risk-on asset by the majority of investors, so don’t risk what you can’t possibly fathom losing!
When the dollar keeps devaluing, you must turn to assets that are performing for the long term. This is why large companies like Tesla and Microstrategy hold BTC and 52% of institutional investors hold Bitcoin/crypto.
Some investors also use Bitcoin as a hedge against inflation. In general, more people are losing faith in the dollar system, it’s collapsing. This is just the start of BTC adoption.
Experts also recommend investing in commodities like silver and gold to protect your finances during a recession.
Both gold and silver perform well when risk-on assets such as stocks are down. The precious metals industry is often a guaranteed way to protect your assets and prepare for a recession.
An article by Bloomberg state that “Despite a recent drop, the Bloomberg Commodity Index is still up about 17% this year, compared with the S&P 500’s plunge of nearly 20%”.
It’s often best to buy gold when there are signs that we’re about to enter a recession because as soon as the market crashes, the price of gold goes up. It’s an opportunity to flip your money fast or retain the value of your money.
Overall, I think it’s important to diversify your finances and have an emergency fund just in case. Bear markets are the perfect time to buy low and sell high to make gains in the future.
Invest in real estate, a market crash is the best time to buy your dream home or property. I used to live in San Francisco and pay a fortune in rent, $1500 for an 8x12 shoebox in a 3-bedroom apartment. Never again!
I would prefer to invest in a property that will pay back in the future, that way I don’t have to keep spending most of my income on rent.
The housing market was super hot until it recently corrected and mortgage applications declined because the Fed raised interest rates.
Say that you bought a home last year with a 3% interest rate and now the interest rate is 5%, you would be losing money. The market crash is the best time to get housing deals and a low-interest rate on a loan.
Getting rich isn’t just about money, it’s about enriching your mind, body, and soul.
Supply chain issues and the Russia/Ukraine war have caused energy, oil, and food prices to increase.
A recent report by the USDA found that food prices were 10.1% higher than in May 2021. It’s also way more expensive to dine out, this has increased by 7.4%.
These prices may continue to increase and if we enter a recession, there could be a possibility of a food crisis, similar to the 2008 recession. Therefore, I would recommend stocking up on rice, beans, lentils, canned foods, and flour.
Freeze some meat, buy a cow maybe? Start a garden and learn how to sustain yourself, don’t depend on grocery stores. You may be dealing with long lines and people fighting over food instead of toilet paper this time. It’s better to be prepared so you have less to worry about.
Is there a business idea that you’ve always wanted to start but are afraid to? Well, hop on it!
This is your time.
Invest in a class and learn a new skill, start doing photography, social media marketing, and teaching online classes. Whatever your hobby or niche is, you can create a personal brand out of it.
When the markets are down and there’s no demand for certain technology and services, companies start laying employees off.
Netflix, Coinbase, Carvana, Tesla, and Loandepot are some of many that have recently announced layoffs and if the market continues to spiral downward, this is just the beginning.
The sad reality is that you shouldn’t depend on a company for income, you need to have some savings aside or build something for yourself.
There will always be turnover in companies and changes, it’s the name of the game.
It’s good to have a game plan and start going after your dream, whether that’s becoming a creator or starting a small business from your home. In the age of technology, possibilities are endless.
Are you going to invest in the S&P? Or the S&ME? Build the best you in these times!
There are many things you can do to hedge yourself in tough times. Sometimes you want to look for monetary investments or personal safety investments, and yet other times you want to look inward and treat yourself to chasing your dreams.
Maybe do all of the above if that sits well! Overall, recessionary times are good times to reflect on what you want and prepare yourself and your plan for the next economically pleasing cycle.