I'm preparing for the 2022 recession. Are you?
There has been a lot of speculation as to whether or not another recession is coming in 2022.
It's not a matter of if. Rather, it's a matter of when.
Whether you are worried about a recession or not, there are still steps that you can take to protect yourself and your finances.
Ready to discover how I'm preparing for the 2022 recession? Keep reading…
Watch the video below:
(Click here to watch on YouTube)
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A 2022 recession is highly probable.
Economists fear a “double-dip” recession is coming soon. However, nobody knows how intense it will be. If you look at the U.S. economy over the last century, on average, every 10 years there has been a recession.
Back in 2008, the U.S. and Western Europe experienced a devastating recession. Hence, we are due for one. However, the next recession isn't expected to only affect the U.S. Rather, it's expected to affect the entire global economy.
My recession mentality
Yes, there are a lot of negative things that could happen if a recession hits. People could lose their jobs or their life savings. However, I believe that some good can come from a recession if you are prepared for it. You don't have to be a victim of events like this. Rather, you can be a victor.
If you invest your money wisely and have the right mindset, you can be so much further ahead through the recovery process of a recession. I always look for the opportunities that exist in every situation, both good and bad. I want to make sure that I am in the best possible position so that I can get further ahead in life.
I'm an active investor. I have a multi-million dollar investment portfolio and a multi-million dollar online business. Yes, a recession will hurt my business. However, you may not have a business. In that case, you've got to think about what will happen if you lose your job. Depending on where you currently are in life, you will want to take a different approach.
Regardless of your circumstances, you want to make sure that you cultivate a strong mindset. If something bad happens, you want to be mentally prepared for it. When people don't have a strong mindset and the economy drops, they get fearful, anxious, and sometimes fall into a depression. Preparing for the inevitable will lessen the blow when disaster strikes.
How I protect my money and prepare for a recession in 2022
If a recession hits, there is a chance that my business could drop in sales. Because people may lose their jobs, that means that they won't be consuming as much. As a business owner, I'm looking at my current marketing strategy and thinking about how I may have to change the messaging of it, based on where people will be at.
Similarly, I may have to change the pricing of my products or create new products altogether that may better serve the needs of my market. Also, I may have to diversify my business even more than it already is. If your entire business is dependent on one product and something happens to that product, your business will suffer.
However, if you have multiple streams of income, the structure of your business will remain strong. The more that you mature your business, the more that it will be able to withstand the challenges that come with it.
From a financial perspective, I'm an investor in the stock market. I invest in mature, blue-chip large-cap stocks in companies. I'm very diversified across many different sectors. My favorite investment is index funds. An example of an index fund would be the S&P 500 which is a United States index of the biggest 500 companies within the economy.
More than 50% of my net worth is in cash. The other half is comprised of stocks, REITs, and bonds. This is one thing that you can do to prepare for a recession. You want to make sure that you have 3-6 months of your expenses put aside in savings. This is emergency fund money so that, if you lost your job, you will have a cash reserve available to you.
Throughout the year, I keep a big cash reserve. When there are dips, I buy more stock at a discounted price and end up benefiting from the upside of that. When it comes to holding cash, I recommend holding it in an interest-bearing savings account. I keep my money in brokerage accounts.
This is how I'm preparing for the 2022 recession.
The best way to prepare for a recession is to develop a growth mindset. At the end of the day, you are in control of your finances, despite whatever is happening in the economy. The more that you prepare, the better able you will be to handle financial challenges in the future.
How will you prepare for the recession in 2022?
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