An economic boom, recession and depression are just economic process that countries go through. You can weather the storm with accurate preparations just like anything in life, and what is more is when you know when it is coming through reading the sign, so your preparation gives you an edge over those who are not prepared.
Central to these preparation are the concepts and tools given in this book. You and your children must build the right financial practices and habits from the start. The discipline and diligence during the good times is what will set you up to surivive and thrive during the bad periods.
Below are some tips that I have learned from my mentor.
- Save 20 % of your income in anticipation of lean times during a recession
- Live a lifestyle of adequacy, not extravagance during times of good eceonmic growth. This is so you can save easier and have access to funds during a recession.
- You need to conserve by downsizing, conserving and consoliding when moving into lean and those of a recession. Contionous gearing with no end to keep the business growing will only lead to more pressure and stress during periods where are not operating in a fickle environment
- have some of your money in precious metals such as golds and silver, it can b a hedge against the devaluation of currency.
- Devise action steps to pay off unprofitable borrowings and debts quickly
- Save and multiply investment for your childrens education
- Have adequate insurance protection for medical emergencies, I personally know of families that have been wiperd out during a recession because a close family member fell into a medical emercencies. It is better you to invest in medical coverage for your parents or the aged to protect them against any unforeseen incident than to be caught with a hude medical bill yourself
- We must be good stewards of all that is given to us and we cannot rely on others to manage our money fo us. I personally believe managing our money is everyone first business.
- Learn to take advantage of taxaton benefits, credit and good debt to allow us breathing space, but do not over commit to what you can afford to pay back. A good guide is that you must be able to pay back loans you take even in a recession. If you think your business is going to contract during the period, or that you might be out of a job, then you cannot afford to make that investment.
- It sounds great to say I have bought five properties, but they are not yours until you have fully paid for them.