Sep 24, 2020
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How To Make Money During A Recession

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It s time to play down worry and scarcity and instead focus on making moves today that will help you. [+] PHOTO BY COWOMEN ON UNSPLASH We are able to experience another recession perhaps even a depression. I presumed it could start as early as 2018 and declared it would be no later than 2020 but I had no idea about COVID-19 and just how severely it would hit

 

Now the realization from most is that it s inevitable and the Fed is concerned about a depression. However drowning in worry and scarcity as we face this downturn isn t the best approach. It s also pointless to try and predict when this would turn around fully recover or perhaps hit bottom

 

Instead I m going to share five ways that you may keep your corporation alive and even turning a profit during this economy. #1: It s All About Liquidity Our goal during this first step is to build an automated system to create cash. To do this I need you to automate your savings and be deliberate along with your investing

 

Let s start along with your savings: you want it to be available assessable and unaffected by the market. Your savings might not make money. It really is about creating peace of mind staying power and ensuring you ll have the money to capitalize on the opportunities that present themselves

 

When you are already tight on cash and cash flow isn t strong consider refinancing loans during this low rate of interest environment. This can be business loans mortgages or perhaps cars. The secret’s to lower your outgoing cash requirement and feature cash accessible to weather the storm. For those that have access to cash you may earn money on the buy

 

For example: I’ve got a chum named Bob who helps distressed home sellers. These are those who have a property perhaps even some equity but they ve got to eliminate it. Maybe they are able to t afford to pay their mortgage or they bit off more than they could chew and the tension is keeping them up at night

 

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VT Engage Rally The Youth Vote On Campus When these sellers look to liquidate their assets who do they liquidate them to? People like Bob who have cash

 

I need you to build liquidity so you may seize opportunities. There’s already a chance to buy small businesses that are cash strapped. For those businesses that complement your existing business you may gain access to infrastructure employees and save businesses from going under. Again earn money on the buy and be portion of the solution

 

#2: Reallocate Restructure And Renegotiate When you have any underperforming assets you may cash them out to repay higher rate of interest loans. For example using cash value from a life coverage intra-family loans or sometimes loans from retirement plans to repay higher rate of interest loans. At present in case you qualify and feature the time to apply the SBA has low rate of interest loans with longer terms to manage cash flow

 

You also possibly paying too much interest because you don t have the correct credit cash flow reporting (therefore not getting the best deal from banks) collateral or perhaps the correct connections—but you may change that. Restructure loans through equity to repay higher rate of interest loans. I also want you to look at renegotiating your interest rates

 

With mastercard companies negotiating a lower rate is easier than you think. Despite a mortgage you may do a streamline refinance and stay with an analogous entity or organization. When you have a mastercard you may inspect refinancing it into a car loan which will lower your payments. Do you have a mortgage with a lot of equity built up? If you may refinance it and repay a business loan you would lower your interest payments

 

In case you cashed out a mutual fund or certificate of deposit that was non-performing or underperforming then took that money and paid off a high rate of interest loan you d be observing a guaranteed return. #3: Stop The Losses You don t have to participate inside the downside of the market

 

When you have an investment you may installed a stop-loss that means you automatically move to cash if the market goes down by a percentage. So in case you ve got retirement plans or investments inside the stock market you establish the point where you are unwilling to suffer losses or deal with volatility and remove the risk

 

Instead use your money to hire employees and put money into yourself. You are your greatest asset. Put money into developing your skill set and only put money into what you know. Moving to cash prevents the inevitable mental stress of a falling market. In this time assess your competencies and begin investing with focus

 

Determine the investments that make the most sense to you. Are you investing or speculating creating certainty or gambling? What kind of investor are you and what investments make the most sense? Risk isn’t inside the investment. It s in you the investor. Stop relying on those who know more about sales than financial strategy

 

Stop handing your money without knowing your exit strategy mitigating your risk or without creating immediate cash flow. I need you to put money into yourself develop your abilities and become more productive today so that you can be portion of the solution during these trying times. #4: Stop Tipping The Government It s your duty and responsibility to save on taxes legally and ethically so how are you able to maximize your deductions? Here s an excellent example: when you have a home office you may actually write off more of your vehicle

 

Why? Because you re going from your house office to another office which gives much more justification for owning that vehicle. What are another ways you may maximize your deductions? Could you pay your kids? (It s tax deductible and that they don t have to assert income. )
Could you rent out your house to your corporation for 14 days a year? Smart business owners document every dollar that goes toward their business and prepare a tax team to help them maximize their deductions which makes each dollar more productive

 

#5: Reclaim Insurance Costs Along with your insurance it s time to eliminate duplicate coverages and improper structures. Also when you only insure catastrophic things not inconsequential things you keep more money. This could mean raising your deductibles and dropping short term insurances when you have enough savings set aside

 

You may increase your elimination period on certain insurances so they kick in later. Look for multi-policy discounts or using an umbrella policy and lowering your limits of liability to the minimum to be more efficient. When you make these changes you will lower your premiums. You may invest that money back into yourself and building up your liquidity or acquire more catastrophic coverage and transfer risk to the insurance company

 

If something catastrophic happens they re on the hook not you. While Others Worry You Can Prepare Bottom line: it s time to play down worry and scarcity and instead focus on making moves today that will help you navigate this chaos while having the ability to be a leader for others

 

Build liquidity. Restructure loans. Protect the downside. Save on taxes. Eliminate inefficiencies with insurance. If this recession becomes a depression there were still one-third of people that thrived during that tumultuous time

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