Maybe you don’t want to become a billionaire. Maybe you only want to survive recessions better. Well I got news for you!
If you’ve been around the personal finance and self-development block for a while, you’ll realize that good financial advice is only as good as what you do with the advice.
I’m about to show you 5 worthwhile tips to help you recession-proof your finances, and set your financial outlook on a surer footing. What you do with these tips is up to you, but please ponder them, think about them and take something away.
Do What You Can Today, Don’t Wait
A quote by Robert Kiyosaki says, “The most life destroying word of all is the word tomorrow.”
Meaning, people procrastinate, no matter how good the advice.
A smoker can see incontrovertible proof today that at the rate he is smoking cigarettes, he’ll likely develop a deadly disease which I don’t want to mention by name because you gotta have some feelings, this is people’s lives we’re dealing with.
But, you know, he says “Okay I get. I’ll start quitting tomorrow.”
Problem is, he never starts tomorrow, and if you ask me, he doesn’t get it either.
Maybe he gets it on an intellectual level. But it’s another thing to “get it” on an emotional, “heart and soul” level, where you believe with all your heart and start acting as if the objective in your mind is the reality.
You might have been meaning to start cutting back on credit card purchases, get a better job, start a side business, something to improve your financial outlook.
Today is the day baby. Yeah get on it!
Develop More Than Two Income Streams
Turns out, a job is not as secure as it once was. In the last recession, plenty of hard-working workers lost their jobs when companies downsized or moved operations off-shore.
What would you do if that were you?
The answer is in, and it’s quite clear! Unless you develop multiple, independent income streams, your career and financial picture is hanging by a thread.
Start a business online or offline, start consulting, or some other line of industry. Turn a passion of yours into a second career. Sell stuff on eBay or Amazon or Etsy. Here’s a little guide on starting multiple income streams in case you need ideas.
Invest In Assets, Eliminate Liabilities
An asset is a cash-producing property or belonging. Maybe you can think of examples, here are a few:
- A piece of commercial real estate that you can rent out.
- A commercial vehicle like a light truck.
- A dividend-paying stock
- A small business that you start or acquire
- A piece of intellectual property that you can sell, get royalties for, or otherwise get some type of rent or other income for producing or acquiring
Liabilities on the other hand, are technically things that you are on the hook for to someone else. However, there’s a better, more practical definition for the purpose of getting your finances recession-proof.
To you, a liability is going to be anything that takes cash out of your pocket, as long as it’s not putting cold hard cash in your pocket going forward, on a steady, reliable basis. That’s a liability. It puts your position at risk of a recession, not good.
Of course, buying a brand new car is now a liability, instead of an asset. The only way you justify purchasing bling is if it’s being rented out or otherwise generating a discernable cash flow each month, greater than cost.
Dominate 1 or 2 Industries
You want to play the game long-term, stay motivated and shoot for the moon. The best players in particular industries barely feel a recession. That’s the position you want to be in. Are you an accountant, a software developer, maybe a factory worker for a multinational?
You want to rise to the very top in your industry, preferably as an entrepreneur. That way there’s few brakes on your progress and you can really dominate an industry.
These are my tips so you can begin to recession-proof your finances. Begin today! Do this, and your financial future will be like never before.