7 Money Rules to keep in mind in a recession:
1/ Debt
Interest rates are going up and they will keep going up from here
If you have high-interest-rate debt, start paying it down as fast as you can
Interest rates are going up and they will keep going up from here
If you have high-interest-rate debt, start paying it down as fast as you can
As interest rates rise, payments on high-interest-rate debt will keep getting bigger
This could cause you to never repay the principal amount leaving you in a situation where you never get out of debt
This could cause you to never repay the principal amount leaving you in a situation where you never get out of debt
2/ Inflation
Most people think you need to start hoarding money in a recession
However, in the current high-inflation environment this is absolutely the wrong thing to do
Most people think you need to start hoarding money in a recession
However, in the current high-inflation environment this is absolutely the wrong thing to do
Inflation is eating away at your money’s purchasing power
At 10% annual inflation, $1 today is worth $0.90 in a year from now
Invest your money, don't hoard
At 10% annual inflation, $1 today is worth $0.90 in a year from now
Invest your money, don't hoard
3/ Investing
The stock market is at all-time lows
There could be more pain ahead but it’s hard to tell where the bottom will be
The stock market is at all-time lows
There could be more pain ahead but it’s hard to tell where the bottom will be
In a downturn, start to pick your spots and invest gradually
Instead of trying to invest all your cash at once
Although it might not seem like we will get out of this recession, this too shall pass
Instead of trying to invest all your cash at once
Although it might not seem like we will get out of this recession, this too shall pass
4/ Don’t Panic Sell
It’s hard to hold stocks when your portfolio is in the red every day
But this is exactly what you need to do
It’s hard to hold stocks when your portfolio is in the red every day
But this is exactly what you need to do
If the companies you hold have strong fundamentals, don’t rock the boat
Charlie Munger said this the best:
"The first rule of compounding: Never interrupt it unnecessarily."
Charlie Munger said this the best:
"The first rule of compounding: Never interrupt it unnecessarily."
5/ Income
Start to look for ways you can increase your income
• Ask for a raise at work
• Consider switching jobs
• Start a side hustle
You can only cut your expenses so far.
Finding ways to increase your income will take you further
Start to look for ways you can increase your income
• Ask for a raise at work
• Consider switching jobs
• Start a side hustle
You can only cut your expenses so far.
Finding ways to increase your income will take you further
6/ Negotiate
I personally need to keep reminding myself of this
Anytime someone gives you a price for something try to see if you can get a better deal
I personally need to keep reminding myself of this
Anytime someone gives you a price for something try to see if you can get a better deal
Worst case scenario they say “No” and you end up at the same place you would be if you never asked
Best case scenario they give you a better price or throw in more product/features
Best case scenario they give you a better price or throw in more product/features
7/ Invest in yourself
Improving your skills and enhancing your market value is something you should always do
Just like your phone needs a software update, your learning shouldn’t stop
Enhancing your skills will make you marketable when the economy enters the next expansion
Improving your skills and enhancing your market value is something you should always do
Just like your phone needs a software update, your learning shouldn’t stop
Enhancing your skills will make you marketable when the economy enters the next expansion
If you enjoyed this thread, retweet it so other people can benefit!
Follow @AliTheCFO
I tweet about:
• Finance
• Business Frameworks
• Personal Growth
Follow @AliTheCFO
I tweet about:
• Finance
• Business Frameworks
• Personal Growth
Loading suggestions...