Wednesday, 15 January 2020

How To Prepare For The Next Market Crash In 2020 Recession

2020 Recession

In this article, we're going to talk about the 2020 recession and how I will help you prepare for the next market crash. So if you've been following financial news you can obviously see all the articles headlines and obvious signs that we're headed for a recession eventually. So in this article, I wanted to talk about my personal prediction of when this recession will happen, defensive strategies that will help you prepare for the next market.

Let Get Started

The Recession Will Not Be A Bubble

My ultimate prediction is that this recession will start sometimes in 2020 and it's not going to be a bubble. it's not going to be like if you remember in 2007 we had the subprime mortgage crisis where people that were making $50,000 were getting qualified for houses that cost $600,000 this is were cops and nurses living in mansions. This is not the issue, it's going not to be like the housing bubble, this is going to be long and slow because we've been pumping in artificial money into the economy for about 5 or 6 years now in my personal opinion.

With that being said, of this being a long and slow recession I want to start with my defensive strategy for everyone first.

Defensive Strategies

1. Pay Off All High-Interest Debt

What I want to say with this is pay off all debt period if possible because these high-interest debts or all debts, in general, those monthly recurring payments of stuff that you bought that you don't need just to impress people you don't like it's going to drain you if you lose your job in a low and slow recession. 

Read: How To Get Out Of Debt Fast - Debt Snowball vs Debt Avalanche

It's going to be like debt by a thousand cuts, you're going to have the house, the car, the furniture that you finance, the thing you put on layaway, all the stupid things that you don't need, consumer electronics, the TV, the appliances all that stuff, the little $50.00 a month payment, it's all going to come back to bit you in the butt.

2. Establish A 3-6 Month Emergency Fund

You should have this anyway regardless of the good economy or bad economy or recession or not, you need a 3 to 6-month emergency fund because you may get laid off during this time period. A lot of companies are cutting their workforce and you may be one of them. If you get laid off this will save your butt. End of story.

3. Do Not Panic Sell

If you already have positions establish in the market do not panic sell, this is the worst thing you can do. You've spent all this time and money investing in these companies and you see them go 10% 15% 20% down you're thinking only crap let me get rid of this falling knife, no, do not panic sell. 

If you look at historic charts you will see that even in 2007 or 2008 when most of the stock market was losing 40% of its value, all those companies doubled overtime over the next 10 years.

Now, let's talk about offensive strategies. Once you've done all of the defensive strategies that I've talked about, you need to go on the offensive.

Offensive Strategies

1. Build Your War Chest (Money)

That war chest is going to have all your money and gold bars and silver. Once you start building your war chest this is the money that you are going to use to invest and this is the money that is going to grow for you. 

Most fortunes are made during a recession. 

If you pick up a bunch of rental properties in 2007 and 2008 they've pretty much doubled in value if not tripled in value at this point and you've also been making a nice cash flow this whole time. You need to save as much money as possible to use to invest and you need to grow that war chest. 

2. Update Your Resume And Network

Go on LinkedIn then get LinkedIn premiums started going to all the network events in your area because if you do lose your job you're already one step ahead and with the hiring process at a new company or you're already making connections that could save your butt during a layoff. This only applies if you think you're actually going to get laid off. 

If you own your own business obviously you don't need to do this but if you're a w-2 employee or an office worker or just someone that's looking for a new job you absolutely need to update your resume and put yourself out there.

Networking is all about who you know not what you know, and when it comes to getting a job. And the best time to find a job is when you already have a job, that's why we're being offensive so even if you're already employed go on the offensive. 

I hope you got some value from this article.

No comments:

Post a Comment