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Do These Things During a Recession and You Can Be One Step Closer to Financial Independence

by | May 23, 2022 | Money

I wish I could do mic drops like Warren Buffett.

Every time the 91-year-old buff man gets asked about inflation or recessions, he says something kickass.

Recently, when old man Warren got asked about how we should protect ourselves from inflation, he said “Unlike currency, skills are inflation-proof.”

He went on to explain that in-demand skills stay in demand despite what the inflation rate is or how valuable or not the US dollar is. Legend.

Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you. The best investment by far is anything that develops yourself, and it’s not taxed at all.

Building in-demand skills during a recession is smart. Here are a few more things to do in a recession.

The simple way to buy your future

Holding onto huge debt in a recession is exhausting.

All it takes is a gust of wind and you’re blown off course financially for many years. Sure, debt can be seen as good by finance bros. The trouble with debt is we take on too much because we’re trying to buy a stupidly big, and unnecessary, future.

The best trick in a recession is to invest money to buy your future. That’s what the smartest people do.

Recession is the code word for “discount.”

Stocks can accidentally look risky

When stocks plummet and we go into a bear market, the average person thinks “well, stocks are risky. Told ya.”

Finance expert Nick Murray says the real risk is not owning stocks over the long term. If you store wealth (aka time) in a leaky bucket known as dollars or a savings account, that’s the real risk. You’ll never reach financial independence if you don’t own real assets.

Stocks only go down temporarily.

Don’t let that turn a long-term opportunity into a risk.

Investing is glorified tribalism

Humans are irrational.

We do what the tribe does. And if the tribe is all buying stocks like mad, we do too. So prices go up because everyone’s buying and there is less supply.

Just because prices rise doesn’t mean the stocks are worth anything.

Young Money guru Jack Raines says “prices that go up for no reason can certainly drop for no reason.”

That explains this recession perfectly. No one knows why stocks went so high in price in the first place.

There was a bloody raging coroni-macaroni health crisis hurtling through time and space. Yet while sitting at home in our onesies, somehow we managed to pump stock prices sky-high with optimism we had about markets, but not about everyday life.

The delusion is now over.

Humans are landing back on planet earth and realizing a company losing money shouldn’t be worth 200x more than a profitable company.

Recessions teach us how delusional we can become from tribalism. The key lesson is to remember, so you don’t invest poorly.

You make most of your money in a bear market, you just don’t realize it at the time — Shelby Davis

The risk of one income stream is exposed

Tech bros working for big tech are getting laid off left, right, and center.

They’re realizing that even they, the almighty disciples of world domination with supposed genius IQs, are not immune from recessions.

All those hours spent slaving away for Mr Bezos now mean nothing. They realize they should have added a second income stream. Multiple income streams are how you face a recession, ready to do the tango.

Anyone with access to the internet can add a second income stream. The future of work is multiple income streams. Switch a second, third, and fourth income on, if you dare, to live during hard times with less stress.

The beauty is it frees you up to help others when you do.

Financial opportunities come out of nowhere

I always try to keep an open mind.

Yesterday on a random call with a new stranger, I learned three new ways to make money online that most people don’t know. You can’t buy the information or google it.

Basically, every tech platform/app has an underbelly of superusers. If you play your cards right, you might bump into one of these users.

When you do you’ll access unfair opportunities that can make a ton of money. As a result I’m now about to add two new income streams — and I’m not that smart.

Recessions are when open minds get rewarded.

The simple way to make more money in a recession

Making money in a recession requires you to ask more times.

If you run an online business you have to pitch more offers. If you work a sales job you have to pitch more customers. If you have a boss and want a promotion you have to ask more times.

The key isn’t to ask the same request the same way every time. That’s stupidity. The key in a recession is to make more asks and alter it slightly each time. You’ll eventually crack the shell of opportunity open.

But you have to be more resilient and disciplined in these hard times.

Easy opportunities won’t just land on your lap. Existing customers won’t just throw cash at you because they can’t be bothered shopping around. No. Be one of the ones that asks more times. Said differently, don’t give up so easily.

Get addicted to a cool drug not invented in the 70s

Once you start making money doing something you love, it’s more addictive than crack. You can’t get enough. You don’t need alarm clocks.

Recessions are a great time to find your drug.

The question to ask is “what am I obsessed with?” For me it’s online writing and teaching. For you it could literally be anything.

I know it sounds cliche. But don’t ignore common advice.

A piece of advice is common, usually, because it’s changed so many people’s lives. The drug of work you love doing is no different. Find it by chasing obsession.

Investing is way harder than it looks

The typical investor who tells you to buy the index fund is delusional.

Most investors forget about taxes and inflation when calculating how much money they make. When you account for tax/inflation, you realize investing isn’t the easy street many make it out to be.

Doesn’t mean you shouldn’t invest. But it does mean it’s way harder so you’re better off starting sooner, investing more than you think, and learning more than you know.

Otherwise you risk becoming one of the schmucks who’s currently getting their face ripped off because they bought overpriced tech stocks and a stupid crypto with a dog face on the coin.

Stay safe out there.

These are the rare moments in history where you can leapfrog your way to financial independence faster.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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