Making Money During Recession
If you’re anything like me, making money during recession environments has got to be on your mind quite a bit these days. While it is a bit early to totally hit the panic button this is still a good time to be making plans in case things get worse.
Why It’s Not Time to Hit the Panic Button Yet
First I think we should talk about some good news, and there is some. Despite the fact that the economic news has been negative of late, there are bright spots in the economy as well as dark spots. Segments like automobiles and housing – while depressed – are actually bouncing up and down quite a bit – albeit at lower levels. Some segments are actually doing pretty well (handbags, makeup, women’s accessories) – so it’s not like all economic activity has come to a halt.
The point is there are some things to be hopeful about, and while the economy appears to be settling it at a slower growth rate, it does appear to be settling – not spiraling out of control. Certain sectors have been hard hit by layoffs over the summer (think financials and real estate), but then again they expanded out of control in the boom times as well, right? So don’t panic – the world economy isn’t going to implode tomorrow, despite the threats. Things may get worse, but that’s why you’re going to be prepared, right?
A Few Concepts You Need to Know about Recessions
I don’t necessarily need you to be an economic genius to understand what I am about to explain to you, but there are some economic concepts you need to be aware of during recessions. Most people are familiar (at least a little) with the concept of inflation. The idea is that as time goes on prices rise on goods which have a limited supply. This principal is based on the idea that demand for things grows as time passes because of expanding populations and expanding availability of money.
Most people get inflation, at least a little. Did you know that the reverse can be true as well? That prices can FALL? Would you find it hard to believe that recessions can lead to (potentially) steep price declines? All of these things are true, despite what you are seeing at the fuel pump right now. It may *feel* like gas prices are high today (I paid $3.43 yesterday), but in reality gas prices have fallen from their peak of $3.90 (in our location) earlier this year.
I don’t need you to know or care WHY prices rise and fall, I only need you to know that they DO rise and fall, and right now (for many important goods) they are falling a bit, and that has consequences. Falling prices can lead to further reductions in confidence and business bankruptcies, further reducing employment and demand. While we do not yet appear to be at that point yet we are walking down a perilous path and our politicians are playing games of chicken with our livelihoods. While this is a serious threat to our livelihoods it also represents a great opportunity to get ahead if you can stay afloat or grow your income while others struggle.
Tips on Making Money During Recession Economies
Here are a few tips on making money during recession economies. Some of these should be obvious however chances are there are a few of you out there who may need a reminder or two. A few of these represent new opportunities for you to increase your chances of successfully growing your income even though times are tough.
- Keep your day job – If you are fortunate enough to have a day job and are bringing home income and (icing on the cake) still have benefits then you need to do everything in your power to stay on your boss’s good side. Losing your job today can easily mean 6-18 months of unemployment – even if you have employable skills. So don’t kid yourself – the grass ISN’T greener on the other side of the fence.
- Start a free blog – You may not have the killer new idea to start a money making blog right away, but if you start a blog on a topic that interests you will begin to develop a following of like-minded individuals who may be willing to help you get started monetizing your interest later.
- Advertise your business – If you already have a successful business but are seeing signs of revenue flattening or falling off, take advantage of free advertising methods using social web marketing
- Expand your knowledge of ways to make money – if you have some money set aside for investing, consider taking one of the free courses on day trading options
- Raise cash by selling unneeded items – One of the easiest ways to make money during recession economies is to reduce debt-load. Selling unwanted or unneeded items to raise cash (and use it to pay off collateralized interest bearing debt) is one of the best ways to be prepared for job-loss or recession. Tryin to sell items AFTER the recession is in full swing is a waste of time, because nobody has any money to spend. DO IT NOW!!
I hope you have found some useful ideas to help you make money during recession (or pre-recession) economies. Getting ahead of the game now can do a great deal to put you on firm footing should times get worse, and it won’t hurt you to be well prepared if heaven forbid nothing happens and times get better.