Eat. Sleep. Pee. Repeat.
That’s what my life feels like during this recession right now. It’s repetitive. We’re waiting to hear the verdict. “How bad is it, your honor?” Nobody knows — not even Warren Buffett.
Some of us already have a one-way ticket to wreck city. And some of us might actually do better because of the recession. It’s hard to tell. Everybody is guessing, even CNBC Finance.
Pausing the economy for an extended period of time and locking people in their homes has never been done before. The graphs from The Great Depression or 2008 recession may not apply to this one.
The recession is going to be tough no matter how much money you had before it all started. Having lived through the last recession, here are a few harsh truths (not financial advice).
Blaming the Recession Won’t Help You
If you get caught in the economic cyclone, blaming the recession won’t help you. It’s like blaming a fortuneteller for your future failures.
The recession hits us all and all you can do is focus on what you can control:
- How you think about the recession
- What you do in the recession
- The effort you spend revitalizing your skills
- The way you interact with others
The recession might throw you off your game, but it’s not the recession’s fault if you fall down and stay down.
Don’t Accept a One-Way Ticket to Wreck City
What is wreck city?
Gambling, speculating, followed by your worst nightmare: leverage.
I was reading the other day that more retail investors than ever are going in and out of the stock market trying to make a quick buck so they can retire. Many of these people are signing up for financial platforms that come bundled with huge amounts of leverage.
Leverage equals debt. For example, you invest $2000 into the stock market and the platform you’re using gives you $10,000 of stocks. If the stocks go up 5%, then you get 5% back on $10,000, not $2000. It’s great if your stocks go up. But if stocks do down, well, you experience the toxic effects of decay.
Decay is where the performance of your investment declines because of the expense ratio, which is higher than normal to compensate for the fact you borrowed some of the original money you invested. In simple terms, fees are eating away your investment returns.
Just because we’re in a recession, doesn’t mean you should invest money you don’t have or take big financial risks without the education to back them up.
If you don’t know what you’re doing when it comes to investing, it’s a good idea to stay away from the markets or get professional advice.
Now is Not the Time to Be Complaining
There are people during this recession that are spending entire days complaining on social media. Complaining doesn’t fix the economy.
Spraying endless comments full of complaints on other people’s content won’t help you stay safe or make a living. It’s not time to complain; it’s time to worry about you and what you’re going to do about this recession.
The recession will eat you alive if you don’t pay attention and quit complaining.
Nobody is Coming to Save You
Government handouts and support from your employer are temporary. When the dust of the recession settles, it’s going to be a cowboy showdown with pistols, at the intersection between Main Street and Wall Street.
Don’t wait to be saved or “spared.”
What will save you is your own effort. Now is the time to be committed to your goals and aspirations. Now is the time to work a tiny bit harder after hours and build your own little empire.
Those who do well are those who save themselves. Those who thrive are those who save themselves and then help save others through their effort.
Veer Out of Your Own Lane
“Stay in your own lane” is terrible advice.
Now is the time to veer out of your lane in case you’re heading into oncoming traffic without realizing it. Question what you’ve done to date. Are you still in the right lane given this recession? If not, could you veer into a new lane?
Four Weeks Pay Between You and the Door
That’s all the separates you from your job (at least in Australia).
You can go from doing well and paying your bills to being let go at any moment and forced into fight or flight mode. This is nothing to fear, though. It’s a reminder to start building your safety blanket.
- Reduce your expenses in advance
- Have some emergency money ready to deploy
- Look to de-risk some of your investments (if you have any)
A financial nightmare only occurs if you’re not ready for it. Preparation helps you have fewer bad dreams about money.
There Are More Job Seekers Than You May Realize
I have three people in my network who have quit their jobs during this recession. They’ve had enough and believe now is the time to go elsewhere. What they’ve found is that there is an overwhelming number of people looking for work.
A LinkedIn connection of mine, Frank Mengert, put up a job ad and got 647 applicants in 24 hours.
Now may not be the best time to start your next career or be up against an avalanche of jobseekers.
Longer Work Hours Have Become a Thing
The whole work from home whenever you want seemed like a dream at the start. Axios recently surveyed 2050 workers and found that 47% of them were working longer as a result of the new work from home culture.
The lines between home and work are blurred. Companies are being forced to cut costs which means doing more with fewer people.
This is why it’s more important than ever to think about how you manage your money and where you invest your time. You may be working longer hours and going backwards financially if you don’t.
Another Income Stream is Crucial
If you were ever thinking about building a side business, the time is now. The resources you need to start creating a second income are cheaper than ever, and marketing costs are at rock bottom.
Not relying on one income gives you options and helps you diversify the risk associated with the precious time you invest in your work hours. If nothing else, I’ve found this thought to be useful:
A second income can help you see what is possible in a recession.
Your Currency Devalues
Think of your money devaluing as a hidden tax. It’s the price anyone with money pays if they don’t understand how it works.
What Time Is It?
This is the time for new skills. This is the time to seek less stuff. This is the time to work on yourself. This is the time to take yourself damn seriously.
Solution: You Have So Much Potential Hidden in Your Imagination
The good times lead us into a trance of repetition.
The way you break the repetition that could lead you to be worse off in the recession is to unlock your imagination. Your imagination can look beyond a recession and see new possibilities. Your imagination can help you see yourself differently.
Your imagination can contemplate a different life where this recession gets you out of your comfort zone and helps you grow into the person you always knew you could be deep down — the person you’d forgotten about.
The harsh truths you face in a recession can define you in new and exciting ways when you utilize your imagination. Write down who you are. Write down what you’re afraid of. Write down what excites you.
Write down who you could become. Write down what you dream of. Most importantly, write down what action you can take during this recession to become the person you just imagined you could be.
Your imagination will save you during this recession.