Haven’t you heard? There’s a recession going on. Well, technically, it’s still a little early to call it a recession. To officially be called a recession, our Gross Domestic Product must decline for two successive quarters. But that’s not much comfort to the people today who are worried about job loss, declining sales, or even business failure. If recession is on your radar, what can you do prepare? How do you plan to withstand it’s impact?
Obviously, if you are worried about your income being reduced for any reason, you should immediately put yourself on a financial diet. Spend as little as you possibly can. Try to build up a short term cache of cash you can use to even out dips in your income stream. With any luck, the recession will be over before your cache runs dry.
You should also dust off your networking skills. What industries seem to be unaffected by the present downturn? Who do you know in those industries? Give ’em a buzz. The worst that can happen is you’ll get reacquainted with an old friend. And don’t forget to be on the lookout for other people who are affected by the recession. If there is any way you can help somebody else, their gratitude may be invaluable down the road.
Is there any way to take advantage of a recession? If you aren’t worried about any sort of income loss, you might be in a position to make a little money. You’ve heard the saying, “Buy low, sell high,” right? Stock markets around the globe suffered huge losses this week, with drops as high as 10% in just a few days. If you believe, as I do, that the markets are fundamentally sound, then this may be a great time to buy. If you do buy in now, just be prepared for further declines before the climb back up.
So stow the sails, batten the hatches, and keep your eyes on the horizon. I’ll see you on the other side.
This article originally appeared in the January 23, 2008, edition of the Greenhorn Valley View.