An economic recession period is the best time to make more money, to get more wealthy. When the pandemic came, the top ten millionaires doubled their wealth, because everything crashed. S&P 500 was down by 38% in 2008, and around 40% right after the pandemic came in April 2020.
What is a recession?
A recession is a significant decline in economic activity that lasts for an extended period. In general, a recession is characterized by a contraction in economic output, a rise in unemployment, and a decrease in consumer and business spending.
What causes a recession?
Economic recession is caused by a lot of factors such as a stock market crash, high-interest rates, loss of customer confidence, reduced wages, and high unemployment over a long period. Every factor can cause a recession if left unchecked.
How to make more money in a recession?
- Save your money in a recession.
The first important thing to make money in a recession is to cut some spending and to stop buying unnecessary things. Before you go shopping, the best thing to don’t jump on other things is to make a list. Plan everything you need before, so when it’s time to shop, just buy what you need.
Creating a budget, or using an app for that, will be a great investment also. This will help you to manage where you spend your money and how much you spend for every category, such as transportation, food, pleasure, bills and subscriptions, so you can cut some expenses.
- Look for freelancer jobs.
Even if it’s a recession, some jobs may be in demand at that time. For example, a financial advisor can make extra money by teaching people how to manage their money.
Some companies will try to find freelancers or contractors for basic needs instead of hiring full-time. This will be a flexible way to make money, to provide yourself with an extra source of income.
- Start a business.
According to The Economist, 47% of millionaires are business owners. To start a business in a recession, when others are shutting down may not seem ideal. While a lot of businesses are stopping to invest in advertising and marketing, can be an advantage for you. When is less competition, there are more chances for success.
Investing can be a daunting task in a recession. For some of you will seem very difficult, but according to investors, or books, an economic collapse is the best time to grow your wealth. When the stock market crashed you will find a lot of opportunities to invest, a lot of stocks will be in “sales”. Even if some sectors will be very affected, some of them will outperform. After every year when a recession affected the economy, the stock market grow consistently. Every billionaire waits for a recession, so they can grow their portfolio with more good companies at a low price.
Creating a dividend-paying stock portfolio will also be a stable income. Buying some companies that have a background of paying dividends for many years, is safer than a new stock. I always check the background of the company before I buy.
- Consider real estate investments to make money in a recession.
In that period you can find and buy proprieties at a discounted price. Real estate can be a good investment during an economic recession. Rental proprieties may also generate a good stable income. Having some properties rented can generate income that you don’t have to worry about.
Above all, be patient and make more money in a recession.
In that period try to don’t panic and be consistent. If you have a good plan, save money, invest and create a diversified portfolio will help you pass the recession growing your wealth by a lot.