The word ‘Recession’ could mean a lot of scary things. For the urge of common words, it synonymizes with hardship, inflation, and many more. But in more technical terms, recession means a period of significant economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. The major cause of recession is inflation, but then a lot of factors could be responsible for inflation.
The man on the street might not even know what GDP is, but he knows life has just become so miserable. The cost of living has tripled, there’s power shortage, loss of jobs, decline in real income, increase in unemployment rate and the list is endless.
Some scholars believe recession or economic downturn is a critical period in wealth transfer, either to individuals, startups or organizations.
However, the only way out of recession is investment, and more investments. Although trust is often lost in the economy during recession, investment during this period saves the idle production outputs and hence sustains the production activities. This creates more jobs, increases wages and profits.
Every cloud they say has a silver lining, ‘no matter how thin’. Recession is always a memorable one, either for the good or bad reasons. How can we take advantage of the problems and challenges of the weak economy?
These suggestions will not only help you defeat the recession but will also ensure you come out better and more financially stable.
Invest in real estate NOW
Generally, there’s a drastic reduction in buying power during a recession. This often increases the negotiation power in the purchase of goods and services.
Smart investors always take advantage of the state of the economy, whether strong or weak. It will be more profitable eventually if investments are made in real estate during an economic downturn. The value of land assets is low during this period and is likely to appreciate after recession.
You could purchase homes that have dipped below market value and have become very affordable due to damage to the property or the need for a quick turnaround.
There are several great deals in the market at the moment, take advantage! Keep monitoring the market landscape for opportunities to pick up high quality assets at discounted or promotional prices.
Track your finances daily and save
Tracking your daily expenses will help to cut back heavily and reduce unnecessary spending. This is applicable to organizations as well as individuals. As an individual, you can conduct daily, weekly and monthly assessments.
No one should be spending more than they need to right now.
Below are some excellent ways to save money in a recession:
- Draft monthly budget and stick to it
- Transfer idle money to fixed deposit
- Source extra income
- Little or no debts
Become an innovative Entrepreneur
Innovation is critical during a recession. The good thing is that constraints can aid or enable innovation. Where there are problems and challenges, equal opportunities exist. Experts believe the best time for startups is during this time.
Businesses that address the basic needs always thrive in a recession. Counter-cyclical businesses do well in economic downturns, since demand for their products and services continue regardless of the economy.
Simply set out to create value.
Below are a few tips on innovation:
- Surround yourself with inspiration and not demotivation.
- Try solving problems.
- Keep imagining.
- Write down all that you have imagined.
- Fuel your creativity.
- Access your assets.
- Take actions.
- Don’t stop.