Don't know if you saw the figures that came out yesterday on the economy, but we're going down the path that everybody knows (and the politicians are not admitting) – and that is, it wont be long until Australia is officially in a recession.
It's probably the worst kept secret. The whole world is going through it and we're not immune to it.
So the question is, can any good come out of the worst of economic times?
Let's take a look at it from a positive perspective and see what we can come up with.
> Credit Crunch:
Banks obviously tighten up criteria for their lending, which ultimately keeps the consumer safer and more accountable for their borrowing.
It also will probably stop certain advisors recommending high-risk and highly leveraged investments to uneducated people.
We've seen some all-mighty collapses recently of “I'll do it for you” type of programs that have literally lost millions of dollars of hard-earned money.
People are likely to prioritise their spending now and seriously consider the difference between good debt and bad debt. You'll probably become more educated and accountable for your own money, putting you in a position of strength going forward.
> Losing Your Job:
This could be the best thing that happens to you.
It could open up a whole new world of opportunities that previously you may have spoken about but never really enrolled yourself in because of the need to have consistent income.
Your security has become your insecurity…
For the first time in your life, you may have to sit down and really think about what it is that you really want to do and that you've been putting off forever – because you've been trapped in your current lifestyle and needing the money week after week but going nowhere really.
> Losing Your Home:
Hard to believe that any good can come out of this – but let's give it a go.
This could be the relief that you're looking for. It takes a lot more of your income to service your own home as opposed to renting. I rented for 10 years before I actually bought my principle place of residence. Not so much as I couldn't afford it, but when you sit down and do the numbers it's actually smarter to rent and invest the rest than invest all of it on your home.
The relief and the saving that you get from renting could possibly give you the space for you to reinvent yourself and build momentum as an investor in the next upward cycle.
This could also be a windfall for you and your family where you're not working yourself to the bone just to pay off the mortgage. You can now spend more time with your children and be involved in their upbringing rather than saying to yourself, “I can't believe how fast they've grown…”
> Your Business Goes Broke:
Being released from the pressure of running a business and providing employment for not just yourself, but staff as well can sometimes be the best thing that happens to you.
You may have known for a long time that your business model was wrong, your margins too small and your particular business had limited growth opportunities… In the good times you were just above the red line, not making big profits anyway.
Now you can start afresh, use all your previous business experience to get into a far more lucrative business model.
> Hard Financial Times:
You will reflect now on the things that really matter in your life.
Whilst you're experiencing tough times, there are many people in the world that would swap with you in a heartbeat and look upon your head financial times as if they've “made it.”
Periods like this will teach you not to take things for granted, become a better and more educated investor and always be grateful for what you have rather than be depressed and sad for what you've lost.
After all, it's only money and it can be easily replenished.
Ok, they're my thoughts. What qualifies me to put out such advice..?
I've been in all of the above situations. I have dealt with each one of them front-on.
No, it wasn't easy. But I knew one thing… That no bad time last forever, like the seasons they shift and change.
If I didn't have those experiences, I would not be the person I am today.
I'd like to hear your thoughts on what good will come out for you in these tough financial times.