Money Management In A recession

Money Management In A recession


Recessions are not necessarily bad times because they are great times to multiply provided that one is prepared and has sufficient cash to plunder the opportunities. Your children need to be familiar with the basic concept of each safety nets for themselves to both survive and thrive during each cycle.

As mentioned earlier, every nation will go through an up or down cycle with its own economy. The trend is usually 5-7 years and 5-7 years of recession there after where making money becomes extremely difficult. In a recession where making money becomes extremely difficult. In a recession cash flow becomes a problem and people do not usually have redy cash on hand to capitalize on opportunities.

There is one exception to the rule however and that is if a government does not improve confidence through accurate economic policies during a recession, a downturn can turn into a depression, which we saw in the US in the 1930 s and recently in Greece. This is horrible state to be in where there are no investments in the country, the whole economic systems have collapsed and even the currency might crash and lose almost all of its value. In Argentina some years ago, the valueof currency we so low that ridiculous amounts had to be paid just to buy a washing machine because of the extreme devaluation of the currency.

Whether you are in a recession or, in a worst case scenario, a depression, the key is to make preparations in each cycle so that you can thrive or survive in the next cyle.

Lets say for example that we have 7 years of economic boom time, 7 years of recession and about 4-5 years of depression or collapse of the economic systems. The following are what you can do and how you can prepare for each cycle so that you can capitalize and take over opportunities and survive and thrive during the crash.

You must find and make you own preparations to be ready for each cycle, and not just follow a trend or even what iam saying as the end call of preparation. Research this topic and related investments thoroughly so that you make decisions based on your own economic state, risk potential and financial knowledge. You must teach your children not to rush decisions but take the time to adequately plan and prepare their strategies.