We’re currently learning this in extreme ways and will be better off as a result. All we have to do now is be positive. Tony Hawk, president of the Tony Hawk Foundation and founder and CEO of Birdhouse Skateboards; the most influential and commercially successful skateboarder of all time, with a net worth of $100 million.
2. Make the most of your financial resources.
Take advantage of all the services available if you’re anxious about your finances. Do your research on the CARES Act advantages that are available to you. Paying for necessities and reducing superfluous expenses should be your top goals. If you’re having difficulties paying your rent, try refinancing your mortgage or calling your landlord. If you have a lot of credit card debt, start paying it off right away, starting with the cards with the highest interest rates.
Right now, the finest investment you can make is in yourself. With unemployment at an all-time high, rebrand yourself as a more attractive job candidate.
Take online courses and gain new skills so that when we emerge from this, you may repackage yourself for a new economy. Barbara Corcoran is the founder of The Corcoran Group, the host of the “Business Unusual” podcast, and a Shark on “Shark Tank.” She can be found on Instagram and Facebook.
3. Adapt to keep your firm afloat.
Forget your plans if you want to keep your business afloat during these trying times. It’s past time to change. Consider how you can digitize your products and services; for example, you could virtualize your events or sell digital downloads instead of actual items. Use technology to automate your procedures and reduce your reliance on people.
In a crisis, cash is king, therefore keep an eye on your cash level on a daily basis. Collect from those who owe you money, renegotiate payment conditions with those who owe you money, and put a stop to unnecessary spending. Retention of existing consumers should take precedence over new business. Inquire about how you may assist them with their problems.
4. Accept the circumstance as it is.
A recession does not signal the end of the world; rather, it signals a shift in people’s wants from want-to-haves to must-haves. This recession, like previous ones, will give rise to a slew of new businesses and millionaires. You have the option of being upset, waiting it out, or relying on a government bailout or you can embrace the new normal, recognize the new opportunities, and adjust yourself properly.
With a positive attitude, problem-solving skills, and hard effort, this may be one of the most fruitful times of your career. There’s never been a better moment to start a business. People in a booming economy are swamped with marketing messages and have difficulty deciding where to spend their money.
Now that advertising is quiet (advertising is cheap), our requirements are crystal apparent. You can succeed if your company meets those demands in the same manner that Zoom, Netflix, and UberEats do. Mike Peters is an entrepreneur, philanthropist, and the founder of the Yomali group of enterprises, which has produced over $1 billion in internet sales.
5. Concentrate on resolving issues.
The way you approach each problem impacts the outcome. You will obtain a poor result if you have a bad attitude. You’re more likely to acquire what you desire if you have a positive outlook. In a recession, money does not disappear; it simply changes hands. So figure out who has money, what fresh challenges they’re dealing with, and what you can sell them to help them address those problems.
People, for example, still need to stay in shape when gyms are closed, thus online personal trainers are booming.
You must also know how to use social media and advertising to generate traffic to your website. You’ll succeed in good times and bad if you know how to acquire traffic that translates into paying customers. Connect with Bedros Keuilian, the founder of Fit Body Boot Camp, author of “Man Up,” and host of “Empire Podcast Show” on Instagram, Facebook, and YouTube.
6. Invest in yourself and advance your career.
Right now, there isn’t much “I’m afraid of missing out.” No one is getting together as often, partying as much, or brunching as much as they used to. This experience will not happen again in your lifetime, so take advantage of it.
Don’t become too comfortable. Find a new activity, read a book, enroll in an online course, and live in the now. You can do everything you set your mind to if you focus on yourself and invest in yourself. Zain Kheraj, co-founder and CFO of TrustMySystem, an analytics and sports consulting firm
7. Continue to exercise and study.
Make a plan for each day and hold yourself accountable to it. In many respects, I’ve had to pivot, but one thing that hasn’t altered is my dedication to exercise, which is essential for staying optimistic and focused. I enjoy going for a run or a walk. If you don’t, do 15 minutes of planks, jumping jacks, or core work on the floor while listening to your favorite sweat songs.
I’ve become reliant on my electronics, like many of us, so I’m using them to educate myself. Use a motivational app or watch a motivational video, such as Glennon Doyle’s on YouTube “TEDxVasa’s “Unlocking Us with Bren Brown” or Antoni Lacinai. Take a deep breath and express your gratitude to the universe.
This circumstance may cause post-traumatic stress or post-traumatic growth. It’s entirely up to you. This could be the time when you need to incubate your gifts. Holly Parker, founder and CEO of Douglas Elliman’s Holly Parker Team; award-winning broker with over $8 billion in sales; follow Holly on LinkedIn and Instagram.
8. Think about the best and worst-case scenarios.
It’s difficult to predict what the future contains, yet difficult times can benefit those who persevere. Many of the world’s most successful companies, including Google, Apple, Microsoft, Airbnb, Disney, and many others, arose from recessions. Recessions abound with opportunities, but few people take advantage of them. It’s critical to acknowledge that the next decade is likely to be substantially different from the previous one. Don’t assume that assets that have done well in the past will continue to perform well in the future. Invest in gold instead of Tesla stock.
If you’re in charge of a business, make prudent judgments so that you can prosper even if things go worse.
Simultaneously, put as much money into growth as you can. Maintain a sufficient amount of cash in your company’s bank account, and then aim for the stars. Vote for the charity Judd Rosenblatt, founder and CEO of AE Studio, an agile web development and data science consulting organization with a purpose to empower human agency through technology;
9. Continue to put in the effort.
Because the world is continually changing, you must be able to change as well. Concentrate on being innovative and adjusting to what’s going on around you. Do not cease leveling up with a sense of urgency, whether you’re learning a new talent or honing an old one.
Anything worthwhile in life requires time and effort, so you must put in the effort. Work like hell, as billionaire CEO Elon Musk puts it. Every week, put in 80 to 100 hours. This increases your chances of succeeding. Farhaz Kheraj, co-founder and CEO of TrustMySystem, an analytics and sports consulting firm
10. Do not surrender.
Keep your flexibility and willingness to pivot in mind. Those that emerge victorious from this situation will be continually moving. This entails being upfront with clients and looking for new revenue streams and methods to continue in business. Consider how you can make the most of your team. Is everyone in the correct spot?
How do you get through a downturn?
But, according to Tara Sinclair, an economics professor at George Washington University and a senior fellow at Indeed’s Hiring Lab, one of the finest investments you can make to recession-proof your life is obtaining an education. Those with a bachelor’s degree or higher have a substantially lower unemployment rate than those with a high school diploma or less during recessions.
“Education is always being emphasized by economists,” Sinclair argues. “Even if you can’t build up a financial cushion, focusing on ensuring that you have some training and abilities that are broadly applicable is quite important.”
Is it beneficial to have cash during a downturn?
- You have a sizable emergency fund. Always try to save enough money to cover three to six months’ worth of living expenditures, with the latter end of that range being preferable. If you happen to be there and have any spare cash, feel free to invest it. If not, make sure to set aside money for an emergency fund first.
- You intend to leave your portfolio alone for at least seven years. It’s not for the faint of heart to invest during a downturn. You might think you’re getting a good deal when you buy, only to see your portfolio value drop a few days later. Taking a long-term strategy to investing is the greatest way to avoid losses and come out ahead during a recession. Allow at least seven years for your money to grow.
- You’re not going to monitor your portfolio on a regular basis. When the economy is terrible and the stock market is volatile, you may feel compelled to check your brokerage account every day to see how your portfolio is doing. But you can’t do that if you’re planning to invest during a recession. The more you monitor your investments, the more likely you are to become concerned. When you’re panicked, you’re more likely to make hasty decisions, such as dumping underperforming investments, which forces you to lock in losses.
Investing during a recession can be a terrific idea but only if you’re in a solid enough financial situation and have the correct attitude and approach. You should never put your short-term financial security at risk for the sake of long-term prosperity. It’s important to remember that if you’re in a financial bind, there’s no guilt in passing up opportunities. Instead, concentrate on paying your bills and maintaining your physical and mental well-being. You can always increase your investments later in life, if your career is more stable, your earnings are consistent, and your mind is at ease in general.
During a recession, who benefits?
Question from the audience: Identify and explain economic variables that may be positively affected by the economic slowdown.
A recession is a time in which the economy grows at a negative rate. It’s a time of rising unemployment, lower salaries, and increased government debt. It usually results in financial costs.
- Companies that provide low-cost entertainment. Bookmakers and publicans are thought to do well during a recession because individuals want to ‘drink their sorrows away’ with little bets and becoming intoxicated. (However, research suggest that life expectancy increases during recessions, contradicting this old wives tale.) Demand for online-streaming and online entertainment is projected to increase during the 2020 Coronavirus recession.
- Companies that are suffering with bankruptcies and income loss. Pawnbrokers and companies that sell pay day loans, for example people in need of money turn to loan sharks.
- Companies that sell substandard goods. (items whose demand increases as income decreases) e.g. value goods, second-hand retailers, etc. Some businesses, such as supermarkets, will be unaffected by the recession. People will reduce their spending on luxuries, but not on food.
- Longer-term efficiency gains Some economists suggest that a recession can help the economy become more productive in the long run. A recession is a shock, and inefficient businesses may go out of business, but it also allows for the emergence of new businesses. It’s what Joseph Schumpeter dubbed “creative destruction” the idea that when some enterprises fail, new inventive businesses can emerge and develop.
- It’s worth noting that in a downturn, solid, efficient businesses can be put out of business due to cash difficulties and a temporary decline in revenue. It is not true that all businesses that close down are inefficient. Furthermore, the loss of enterprises entails the loss of experience and knowledge.
- Falling asset values can make purchasing a home more affordable. For first-time purchasers, this is a good option. It has the potential to aid in the reduction of wealth disparities.
- It is possible that one’s life expectancy will increase. According to studies from the Great Depression, life expectancy increased in areas where unemployment increased. This may seem counterintuitive, but the idea is that unemployed people will spend less money on alcohol and drugs, resulting in improved health. They may do fewer car trips and hence have a lower risk of being involved in fatal car accidents. NPR
The rate of inflation tends to reduce during a recession. Because unemployment rises, wage inflation is moderated. Firms also respond to decreased demand by lowering prices.
Those on fixed incomes or who have cash savings may profit from the decrease in inflation. It may also aid in the reduction of long-term inflationary pressures. For example, the 1980/81 recession helped to bring inflation down from 1970s highs.
After the Lawson boom and double-digit inflation, the 1991 Recession struck.
Efficiency increase?
It has been suggested that a recession encourages businesses to become more efficient or go out of business. A recession might hasten the ‘creative destruction’ process. Where inefficient businesses fail, efficient businesses thrive.
Covid Recession 2020
The Covid-19 epidemic was to blame for the terrible recession of 2020. Some industries were particularly heavily damaged by the recession (leisure, travel, tourism, bingo halls). However, several businesses benefited greatly from the Covid-recession. We shifted to online delivery when consumers stopped going to the high street and shopping malls. Online behemoths like Amazon saw a big boost in sales. For example, Amazon’s market capitalisation increased by $570 billion in the first seven months of 2020, owing to strong sales growth (Forbes).
Profitability hasn’t kept pace with Amazon’s surge in sales. Because necessities like toilet paper have a low profit margin, profit growth has been restrained. Amazon has taken the uncommon step of reducing demand at times. They also experienced additional costs as a result of Covid, such as paying for overtime and dealing with Covid outbreaks in their warehouses. However, due to increased demand for online streaming, Amazon saw fast development in its cloud computing networks. These are the more profitable areas of the business.
Apple, Google, and Facebook all had significant revenue and profit growth during an era when companies with a strong online presence benefited.
The current recession is unique in that there are more huge winners and losers than ever before. It all depends on how the virus’s dynamics effect the firm as well as aggregate demand.
In a downturn, what sells?
- While some industries are more vulnerable to economic fluctuations, others tend to do well during downturns.
- However, no organization or industry is immune to a recession or economic downturn.
- During the COVID-19 epidemic, the consumer goods and alcoholic beverage sectors functioned admirably.
- During recessions and other calamities, such as a pandemic, consumer basics such as toothpaste, soap, and shampoo have consistent demand.
- Because their fundamental products are cheaper, discount businesses do exceptionally well during recessions.
In a crisis, how do you make money?
Another strategy to profit from a crisis is to stake a wager that one will occur. One approach to profit from a bear market is to short sell equities or equity index futures. A short seller borrows shares they don’t own in order to sell them and, presumably, repurchase them at a cheaper price. Option techniques, such as buying puts that grow in value as the market falls or selling call options that expire at zero if they expire out of the money, are another way to profit from a falling market. In the bond and commodity markets, similar tactics might be used.
What industries do well during a recession?
Healthcare, food, consumer staples, and basic transportation are examples of generally inelastic industries that can thrive during economic downturns. During a public health emergency, they may also benefit from being classified as critical industries.
Is it possible for banks to freeze your funds during a recession?
The good news is that as long as your bank is federally insured, your money is safe (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent organization established by Congress in 1933 in response to the numerous bank failures that occurred during the Great Depression.
In a crisis, what is the best asset to own?
During a recession, you might be tempted to sell all of your investments, but experts advise against doing so. When the rest of the economy is fragile, there are usually a few sectors that continue to grow and provide investors with consistent returns.
Consider investing in the healthcare, utilities, and consumer goods sectors if you wish to protect yourself in part with equities during a recession. Regardless of the health of the economy, people will continue to spend money on medical care, household items, electricity, and food. As a result, during busts, these stocks tend to fare well (and underperform during booms).
Are banks allowed to take your money?
The Dodd-Frank Wall Street Reform and Consumer Protection Act. According to the law, a U.S. bank may take its depositors’ cash (i.e., your checking, savings, CDs, IRA, and 401(k) accounts) and utilize them to keep the bank solvent when necessary.