Liked on YouTube: How to prepare for a Recession - It's Coming

How to prepare for a Recession - It's Coming
Recession 2019 - could it happen? How to prepare for a recession? Will we have a recession in 2019? Yes, it’s very possible. The economy seems strong right now. But the U.S. has seen a quarterly economic expansion since 2009, 10 years. This is 4 years longer than the average expansion. This kind of growth can lead to inflation, and rising interest rates. And these are the biggest causes of a recession. So sometimes the law of averages can punch you in the face. A recession is a downturn in the economy that officially it occurs when the GDP or gross domestic product of a country is negative for 2 successive quarters, or 6 months. These recessions are inevitable. But they tend to sneak up on people because the statistics are not available until well after the 2nd negative quarter is over. So you don’t really know when you’re in a recession until it’s behind you. So it’s best to prepare for a downturn when things are good, like right now. It’s likely to come from self-inflicted wounds. Things like an escalating trade war with China. A hard Brexit for the U.K. Downturn in consumer and business sentiment, and political change in the U.K. or U.S. - these are all likely possibilities right now. Here are 6 small tips that can help you be prepared for this inevitability. And if the downturn doesn’t come, you will just be better prepared for the time when it does. 1) Pay off debt. There is nothing like being free of debt in order to increase your cash flow. Credit card debt should be first on your list, since it is the most costly at over 17% average interest per year. Mortgage debt is the least costly, and there are tax benefits, so it is not usually advisable to pay off this debt. But if you have automobile debt, personal debt, or other types of debt of over 7% APR after tax, then it is usually advisable to pay it off. 2) Reduce spending. A penny saved is a penny earned as Benjamin Franklin said over 200 years ago. Skip a vacation and save the money you would have spent. This can be part of your rainy day money. Eat in instead of eating out. If you eat out once a week, take a look at the cost, that’s probably more than your cable bill. Speaking of cable, unless you’re getting $150/month worth of entertainment from having cable, cut the cable. I did this recently, and my bill went down from $150/month to $40/month with a faster internet. A myriad of Streaming services make it less attractive to keep cable. Take every dime you save on costs and put it in a savings account. Pay yourself instead of the cable company. The surest way to make more money is to spend less money. 3) Increase your Emergency savings. The average length of unemployment is 22 weeks. During recessions, it is 30 weeks. And for people over 55, it takes an average one year to find another job. So save to at least be able to afford to live for a year without a paycheck. The reality is that half of all workers over 50 will suffer a job loss, and the vast majority are not prepared. Consider yourself warned. 4) Update your resume. No matter how safe you think your job is right now, you should know that employers tend to panic during a downturn. And the first thing they will do to save money, is to fire people. This is just a reality. I don’t care how much you think your boss loves you. Unless you are directly responsible for creating top line sales for your company, when it comes to people, most large employers have absolutely no loyalty. It’s all business. And when push comes to shove, and profits are on the line, they don’t give a bleep about you. Take advantage of employer provided education opportunities. Up your networking game. Most jobs are found because of who you know, not what you know. 5) Get a Side gig if possible. One of the easiest ways is to sell your services on Upwork or other freelancing websites. Everyone, including you, has something that they are good at. It may or may not have anything to do with your job. Why not sell this special skill for a fee as a freelancer? 6) In your investment portfolio, increase money market, and short-term bond exposure vs. stocks. This will insulate you from the market downturn. And if you have the money, invest it in stocks during downturns – why? Because everything is on sale. The stock market will come back up soon. It always does guaranteed. Also consider converting 401K, and traditional IRA to Roth IRA. Why? They will have decreased in value, thus minimizing capital gains. And money in your Roth IRA will grow tax free, and will not be subject to RMD. It is the best investment gift the government has given you. Is a recession coming. Yes, it is inevitable. It always does, because world economies are cyclical. So it’s only a matter of time. But you can set yourself for a soft landing by preparing for the worst during the best of times. #recession #arvinash
via YouTube https://www.youtube.com/watch?v=Y8pLU7WMG38