*TREND SETTER ALERT*
Recessions are totally in! So so hip. First step…LEARN the lingo!
Recession: A contraction of the economy. The “rule” is that to actually be in a recession we need to see 2 or more consecutive quarters of negative GDP.* So basically, the economy is not growing, it’s shrinking.
-So are we in one? Technically=NO Physically=YES
We are in a “Recessionary Environment” meaning we have all the ducks in a row leading us in that recession-direction.
The US consumer makes up 2/3rds of GDP and the US consumer is hurting. This past quarter, growth of GDP was a measly, yet surprising 1%. The fact that there’s any growth is pretty amazing considering the TON ‘O BRICKS the US consumer has had dropped on them this past year, i.e. mortgage/credit crisis, gas prices, job loss, etc. What’s keeping the GDP afloat? That shnazzy stimulus check! (That magically appeared at the same time gas prices went through the roof). BUT, Now that the stimulus is all gone…what will we be left with??…A RECESSION!
OK, blah, now that I got that out of my system…
Spinning this forecast, which seems desperate and mundane, into a fabulous opportunity is what it’s all about.
This “Recessionary Environment” does come with its PERKS to those of us who 1. take notice and 2. TAKE ACTION. I, myself, like to focus on the perks, so here are some ways to spruce up your recession.
1. Get ready for some major sales.
- Retailers: Wait for the sales for your shopping needs. Retailers will be marking down to move clothes and products.
- SUVs: If you have ever dreamed of a day when you’d be rolling around in an Escalade or Land Cruiser, go check them out now! Now that gas prices have soared, car dealers can’t dump their SUVs faster enough. (TIP: Wait till the last few days of the month for the best deals! Oh, and at the rate crude oil is dropping in the market…gas prices will be much cheaper in a month from now – so TAKE ACTION if you’re in the market for a SUV.)
- Used Cars: This market has exploded in the last few months. There are unbelievable deals out there right now! There is a glut of used cars now that the move toward fuel-efficient vehicles, bicycles and even public transportation has taken hold.
- STOCKS!:I loooooove stocks! There are some fabulous deals in the stock market right now. I would like to spend a whole post talking just about the stocks with the best values I see out there. So, look for that to come!
- Houses: WARNING. WARNING. WARNING. (This goes for stocks too but a house is a much bigger asset!!) The housing market is still looking pretty grim. Yes, houses are on sale but the prediction is that the housing market has really only seen about half the pain in falling prices. If you ARE looking right now, use this as leverage to negotiate a lower price. If you are just thinking about getting into a new house, I say wait, there is a good chance you can get a better deal down the line.
2. Use this time to save that cash and start building a portfolio. Here are some options.
- Start a new savings account (maybe for one of those half-off houses). If you have CASH just sitting in a regular savings account in the bank, there are better places to put it so it can grow for you! Money in the bank right now is only collecting 2% a year. The 2% interest rate will probably go up but it may not be for a year or more so for now you might as well move your money somewhere else, like into a CD* that yields 3-4%.
- Put money in your IRA, Roth IRA, 401(k). Make your yearly contribution as early as you can so you can get that money invested somewhere that will make you a better return. I will be talking much more about Retirement accounts in posts to come!
3. Launch a business. A recession can provide a unique opportunity to entrepreneurs.
- If you have a business idea that is geared toward saving people or companies money…what better time than during an economic downturn to be of service. In the current environment everyone is looking for a way to save, come up with a way and you are made.
- A recession can provide a great opportunity to get ahead as a start-up. When you have a small, efficient workforce you will have the advantage over big-bodied, slow moving corporations who most likely have to cut cut cut.
- Take action. Move forward in an environment where most are moving backward!
That’s it from me today. So much more to talk about but this is getting lengthy. So, get out there and take action ladies!! Work it like you know you can, especially in this recessan! (*Spelling changed for rhyming effect)
Behind the asterisk: MORE VERBIAGE EXPOSED
*GDP (gross domestic product): the total amount of CASH that comes from all final goods and services in the country at a given period of time, i.e. a quarter).
*A CD (certificate of deposit) is a bank investment that has a specific rate of interest (i.e. 3-4%) but also has a specific amount of time you must keep your money in it. CD’s range in time anywhere from 3-months to 10-years. The longer the CD, the higher rate of interest. The benefit is having a fixed rate of return.
