By Stephen Pate, NJN Network, Charlottetown, PEI, February 5, 2009
This is not a get rich quick scheme or a pitch for some course or tapes. This is just the best tried and true way I have of making more money during a recession than any other time. Since I retired at 50, you might consider it. I’m posting this to remind us, myself included, that someone else’s misfortune need not be our own. I’ve been through 5 or 6 recessions since I started working and the 1981-1983 downturn seemed like the worst. Inflation was out of control. Loans cost 23% interest and unemployment hit 10.8% in the USA and Canada nudged 11%. Pretty bad but consider that 89% of people who wanted to work were working throughout the recession. So here’s the trick. Focus on you, your family and those you support. I like simple math. In 1982, I billed $27,000 in accounting services to clients. The GDP of PEI back then was about $900 million. By my calculation, I only needed .003% of my province’s total GDP to break even. Surely there would be enough for me and my family without breaking the bank.
So I focused laser like on making that little bit of the economy it took to feed my family, pay the mortgage and put gas in the car. By the end of the year my income had shot up to about $40,000. That’s the second part of the trick: working harder always pays off.
Consider that each family unit really only takes a minuscule amount of the money floating around in the economy. Focus on where it is and work hard to get your share.
So why bother reporting and reading all the bad news? Bad news is like the weather. You need to know the weather to decide how to react. You don’t hear about rain and stay indoors for the week. You might take an umbrella or wear a rain coat.
During any time when things are in flux, change can happen unexpectedly.
Remember the Golden Rule: he who has the gold makes the rules.
Conserve cash or gold during periods of uncertainty. That’s why we save for a rainy day and that rainy day is now. It’s important to reduce your exposure to debt by prudently paying down credit cards but don’t use up your cash. Cash can get you out of trouble. Credit can be withdrawn but with cash you are the King. People respect you when you have cash and treat you like a bum when you don’t.
Did I say stop spending? You already knew that. Only buy what you absolutely need. There was an old couple on TV this week who lived through the Depression. He said “We made do.” The man became an expert wooden toy maker because he couldn’t afford to buy his children toys. It was cute: the reporter put a coin into what looked like a tiny bank. As soon as the coin was dropped, the box exploded all over the place.
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