Recession And Stress In 2023: How To Deal With The Crisis? 🌏
Currently, people around the world are worried about money. Unfortunately, the situation in most countries, in the upcoming years, is not going to be better. Almost all financial news media discuss the possibility of an economic decline in 2023. They predict a crisis, especially in the so-called dollar zone (mostly in North America). Europe is also in trouble, and it could get even worse.
In contrast to America and Europe, the economic area known as BRICs — Brazil, Russia, India, China, and South Africa — has a more promising future. It looks like they are moving economically in a better direction than the West. Sadly, as a result of unfortunate political choices, people in the United States and Europe are now facing the most serious situation (recession).
While this article may cause fear, we can prepare for a difficult time and feel better, but we need to know what problems to expect.
How to prepare for a crisis? Let’s look deeper into this article to find the key answers (*not financial advice)! Especially if you live in Europe or in the US. It’s time to wake up and take action!
Predictions: What is Likely to Happen in 2023, And How to Deal With it? 🌏
Remember, it’s normal to feel afraid of the unknown, but if you are aware of what may happen, you can prepare and not be scared.
💥 Crash of Some Big Tech Companies is Coming
Amazon, and Google. The situation of these companies is difficult, even terrible. Their products are getting worse and worse. More than half of their employees are useless. These companies are mostly supported by the government (so they can still exist). Nevertheless, their financial situation is far from optimal. Of course, we cannot know when exactly this crash is going to happen, but according to the analysis, it is coming closer and closer.
We can see it also on Twitter, where Elon Musk bought it and fired more than 50% of the workforce. And you know what? Twitter is doing better; its website is working a little faster. It means: more than half of the company got fired, but the company improved. So what does it tell us? That 50% of people were useless, and the same is probably with Facebook, Google, and Amazon. All of these companies are in trouble. People may lose their jobs.
According to reports, Google and Amazon are losing a lot of money, and are in trouble long-term. Generally, tech companies hold up the American economy, and if this industry crashes, many more people will lose their jobs (the truth is many of them are doing useless work). That situation may affect the whole US and world economy.
🛒 Crisis In Online Shopping And Stock Markets
Online shopping is also in trouble because they keep their prices down, but, at the same time, costs are increasing. Furthermore, American and European stock markets will likely continue to go down 10–20% in 2023. However, big companies are going to stay strong but decline just through 2023 (or longer).
📉 The Entire Crypto Market Follows Bitcoin’s Cycles
Despite cryptocurrency’s volatility, crypto and stock prices are somewhat correlated. Anyway, we believe that this correlation is less significant for the cryptocurrency market than bitcoin’s cycles. We are about 1,5 years away from the bitcoin halving (May 2024), so 2023 is going to be even more boring on the charts than last year. Maybe it’s a good time to accumulate your favourite assets (not advice, do your own research).
💵 Inflation Is Expected To Continue Its Upward Rally
People, especially in Europe, can worry about how much they will have to pay for everything. Things will get more and more expensive in Europe because of the war in Ukraine and the sanctions for Russia provided by European politicians. These decisions might not kill the Russian economy, but they will actually destroy Europe. As a result, energy is getting more and more expensive. Europe is probably in the worst situation, but America also has a problem.
🏦 Interest Rates Are Going Up
If you need to borrow money, or buy a house or car, in 2023, you will have to pay more. It will also affect businesses. Many companies are going to go bankrupt. Many companies have big loans and will have to pay much more in instalments despite the world financial crisis. It is the main reason that businesses get bankrupt and people lose their jobs. This situation causes a downward spiral in the whole economy.
🏠 The Housing Market Can Also Drop
Similarly to 2008, the real crisis may start from the housing market crash. At that time, it triggered the banking system’s decline, the stock market and other industries’ problems. Especially in America, housing prices dropped, and people couldn’t sell their houses anymore. What’s worse, some people absolutely need prices to stay up because it’s their primary source of income and savings. A decline in the housing market could be a real disaster for them.
🚗 Used car prices are dropping, and people will have a problem selling their used cars.
Whoah! Putting this all together can seem like an economic disaster, but don’t worry. It’s nothing new for the world history. For example, people already had to live through this kind of crisis in the ’30 of the previous century. And you know what? They survived! How?
This article will tell you how to embrace “the suck” in the current times.
Will The Current Crisis Be Short-Lived?
We cannot assess how long it will last, but things will probably not clear up soon. If we are lucky, things will get better in about 5 years. If not, we may look at the Great Depression in 1929–1939. It means around 10 years of economic decline. We know it’s pessimistic but it’s true that the next 5 years will be economically much worse than the last 10–12 years.
So What To Do?
1️⃣ Don’t Be Afraid And Prepare
The older generations of people have already survived economic shock in, as mentioned before, 30' years. How did they do it? Certainly, they lived a simpler life than us. But they did not have any awareness of the then-coming crisis. Now we have, so we can prepare for it. Information is our advantage over older generations. On the other hand, we need to realize that for the last 50–60 years, we have lived in an extra material excess that we don’t need for everyday life. We got used to things, but, to be honest, we confused it so much that we believe we need it all to live. But actually, we don’t!
2️⃣ Want Less Things
Let’s come down to earth a little! We don’t need TV, we don’t need the latest smartphones and other material things. Obviously, it is nice to have them because they have certain conveniences but it is not necessary to have new-brand cars, exaggeratedly big houses, etc. Even in the worst situation, if you don’t have money to pay cell phone bills, you can still survive because it’s not a product of the first need. We need food, shelter (house) and good people around us (family, friends). So we actually need material things very little.
3️⃣ Simplify Your Life And Focus On The Basics
If you choose a simple life and reduce your needs and spendings, you will be happier and calmer. It is not about earning less, no. It is about living below your financial maximum. If you are not financially stressed, you feel better, so you certainly need to reduce material consumption. Negative examples are some celebrities that make a lot of money every month but spend 90–100% of their earnings, and they are still not financially stable.
4️⃣ Savings
During a crisis you should make savings. Unfortunately, most people spend 100% of their earnings every month. This is a big mistake! Please don’t do it. You can make it differently and spend 50–70% of your monthly salary. And the money you are left with (after bills and daily needs) could be divided and invested in different financial assets.
5️⃣ Investments And Reasonable Portfolio
Apart from savings in fiat currency, we would need more financial assets in our portfolio to feel safe. Historically, gold has been a good choice in times of economic crisis. It is much easier to have gold than a house for rent. Bitcoin is also a modern asset that can keep you from economic problems in the future. Of course, it is not financial advice. However, BTC is a big global brand in the new blockchain technology that will surely stay with us for a long time. Also, good traditional stock market companies can be a great bargain during a crisis. It’s an occasion because you can buy them more in a bad time than during the bull market.
6️⃣ Investing Strategy For Times Of Crisis
We have a few methods and practices available to invest in different assets. You can do daily trading and track the market prices and charts regularly, but, we think, it’s not a good choice during the bear market, especially for newbies. You can also put your whole savings into one asset at one time, but it’s too big a risk to invest in a local top. This kind of “one-time” investment may cause you to get stressed when the price continues to go down. From a reasonable and historical point of view, it’s better to divide your savings into different assets and use the DCA (dollar-cost-averaging) strategy to invest in them. This strategy is relatively the safest among others. It is about investing smaller parts of your whole savings, regularly, for example, once a month through many years in an asset of your choice. It’s a strategy especially for long-term investors.
Ari10 has created a simple DCA tool (reccuring purchases) that can help you automatically invest in bitcoin (BTC). You just put your debit/credit card into the DCA programme on the Ari10 Exchange, choose the time and amount you want to spend for bitcoin, and you can start regular purchases with the DCA strategy.
Summary
When you need things less, you have a deep feeling of control over your life and confidence. Obviously, it is always nice to have material stuff but try not to desire them so much and in some time you will be surprised how little you need. Also, think smart about your finances; then you will feel much less stressed about your life.
*Remember: nothing in the article should be taken as investment advice. You are the only person who is responsible for your finances. You should do your own research before any investment decision.
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