History of Recessions: Millionaires Are Made During a Recession with Millennial Personal Finance Expert, Dominique Broadway
The recession is coming! Everywhere you turn, you're plugged into 24- hour news cycles and social media feeds that tell you that the next great depression is tomorrow. While some predict an impending economic crash, others are more interested in seizing the moment's opportunity.
That's right; millionaires are made during tough times.
Which is exactly what we're on over here. So let's separate the real tea from the fake news. We'll start by defining what a recession is, how long recessions last, and the signs that we're heading into one. Then we'll give you three tips to recession-proof your life. And finally, we'll provide some resources to help you get started.
So what is a recession?
Essentially when the economy stops growing. It usually lasts two years, but we are in unprecedented times to make it last longer. The signs that we are in a recession will be revealed when basic living expenses are higher. The media will tell us that we are out of the recession but beware that we should be in our bag ALL the time, and mindset is everything. Recession-proofing your life means securing a heavy nest egg, diversifying your income streams, and not panicking.
Is It Too Late To Recession-Proof Your Life?
The answer is no! There "ain't nothing but space and opportunity out here". Plus, there are plenty of reasons to start thinking about how you can recession-proof your life. On this week's episode of That Wasn't In My Textbook, Financial guru and founder of Finances Demystified Dominique Broadway shared several tips for recession-proofing your life. She shared the first step to securing your financial future during a recession (Spoiler alert: make sure your emergency fund is tight). That way, if you experience a loss of income, you'll have a cushion to fall back on. By definition, a recession is defined as a significant decline in activity across the economy, lasting longer than a few months.
In the U.S., it's usually announced only after the fact by economists—usually after two consecutive quarters of negative economic growth. However, we are in unprecedented times, so we must be over-prepared.
How to Recession-Proof Your Life
Below are a few major keys for recession-proofing your life.
I hinted at this earlier, but this point is worth repeating. Build an emergency fund with enough money to cover three to six months of living expenditures - but don't stop there! In this podcast episode, you'll learn why three months of expenses are just the beginning in today's world.
Invest in yourself by taking courses and taking advantage of opportunities to learn new skills that can make you more valuable to employers (or yourself as a future millionaire in the making:)
Diversify your income streams by having multiple streams, so you're not as reliant on one source.
Pay down high-interest debt, so you're not as burdened by payments if your income declines. Invest in assets that have historically held their value during economic downturns, such as gold or real estate.
Stay informed and be proactive about changes in the economy so you can adjust your spending and saving accordingly.
By following these tips, you can help protect yourself—financially and otherwise—from some of the more damaging effects a recession might have on your life.
During my interview with Dominique, we touched on so much more, like the historical recession periods, how millionaires are made during economic downturns, and how we use the recession as an opportunity to level up.
