There has been a significant conversation around whether or not a recession is on the horizon — no matter how frequently Trump says otherwise. There certainly are signs that a recession is going to occur in the future. This is not to say that a recession will begin tomorrow, but rather in the, relatively, near future.
The Federal Reserve recently reduced interest rates again, to increase growth in an economy that has begun to reveal signs of slowing down. The yield curve went inverted in August of this year — this has occurred before every recession since 1955. It is important to note that the curve is no longer inverted, but some believe a recession is imminent.
After all controllable expenses have been minimized, job cuts will begin to take place. Over the last couple of days, people I know have been cut from their positions “due to downsizing”. Companies have begun their downsizing efforts as the economy is slowing to maintain their profit margins.
We as individuals have to recognize that companies must turn a profit because without profitable companies, there are no jobs to be had — there is no way to sugarcoat this.
This process sucks, it is painful, and it hurts individuals — and potentially morale within an organization. However, this is the reality that we live in.
As millennials, we were young during the Great Recession, some just beginning their careers and others still in college or high school. It has been a long and (mostly) prosperous 10 years since the last recession ended, but the next recession — whenever that happens — is going to hit us while we are smack dab in the middle of our careers.
We need to begin now to prepare ourselves for an inevitable downturn, which is hopefully not as bad as the last one. Here are a few things you can do to put yourself in the best position possible.
Pay off as much debt as possible
Debt, especially if you lose your job, is a heavy burden to bear and some debt is worse than others. Aggressively reducing this debt will be vital not just for preparing yourself for a recession, but also for relieving stress.
- Payoff high-interest credit cards — paying 20%+ on a credit card is going to catch up with you fast. Get rid of it.
- Payoff vehicle loans — having a vehicle with no loan is important if you lose your job as it will save you the stress and worry of the possibility of your vehicle being repoed (if you are to miss payments), making the job hunt that much more difficult.
- Private student loans — private student loans tend to have higher interest rates and come with fewer payment options than those through the government, pay these off fast.
- Federal Student loans — easier said than done, trust me my bachelor’s and my wife’s master's degree did not come cheap, but reducing this debt burden is one of the best things in the world (hopefully, I get to enjoy that one day).
Make yourself more valuable
Making yourself valuable to the organization you work for can make it that much more difficult to be rid of you if and when downsizing begins. There are some easy ways to make yourself more valuable:
- Take on any new project — show initiative when a new project comes up, be the first one to volunteer.
- Learn new skills — the more skills and knowledge you have about the company and the ability to turn that into a profit for the company will be noticed.
- Have a “thing” — ok, I might be stealing this one from How I Met Your Mother and it is probably more fun than realistic, but having a thing like “sports guy” makes you likable and being likable gets you hired and promoted.
- Be positive — a positive upbeat attitude is always appreciated, no one wants to hang out with the person that is constantly negative about everything.
- Have a good relationship with upper management — nobody likes a “brown-noser” but having a positive and friendly relationship with upper management is nothing to snuff about.
Create multiple revenue streams
I know, I know, I just said make yourself more valuable to make it more difficult for the company to downsize you, but honestly, the company sees you as an asset. The moment an “asset” becomes a “liability” or depreciates it forces a company to consider cutting their losses.
The company only “cares” about you when you are valuable to them. Don’t rely on your job as your sole income, start building multiple revenue streams. It is easier than ever to build up a side hustle.
Scratch that, it is most certainly not easy.
However, there are certainly plenty of opportunities to build a side hustle. Having capital makes it easier to get started, but not everything requires cash up front. Let’s take a look:
- Start writing to make money — Medium is a good platform as long as you follow the steps that have been laid out by successful writers.
- Create a youtube channel — this one is not my cup of tea, but it is certainly an option. Prepare to spend a lot of time building a following.
- Sell what you are good at — good at motivating? People will pay for that. Are you a competitive weight lifter? Look into being a part-time personal trainer.
- Purchase an investment property — Then another and another. If you can swing it, go with both residential and commercial properties.
Some of these are free, some take money, but all take hard work and years of building to make them successful. Start now: I did a quick google search for you.
Through chaos comes opportunities
“In the midst of chaos, there is also opportunity”
Remember that through chaos comes the opportunity to make money — if you can find it. Take for instance The Big Short, they researched and found the underlying problem and took advantage of the opportunity.
I am no guru, I am not Warren Buffett, so don’t ask me where the opportunity will come from because, frankly, I don’t know. However, the “chaos” of hearing about people I know being downsized from their company gave me the idea to write this article.
Take advantage of the chaos and rise like a Phoenix from the ashes.