There is so much going on in the world right now with the economic downturn and cost of living crisis. Corporate insolvencies increased by nearly half during the first six months of the year, according to an analysis by Interpath Advisory. Companies blame crippling inflation, rising interest rates, energy costs, global uncertainty and supply chain chaos. On the household front, the cost of everyday essentials like groceries and bills are rising faster than average household incomes. Are things going to get better? This was a question asked by one of my clients that is struggling to make ends meet.
I am an optimistic individual, and I strongly believe that things will eventually get better. After the 2008 financial crisis, life went back to normal - oil, food and flights were affordable again. And even though this current downturn looks much darker, I believe some good news is lurking around the corner soon. One statement that recently caught my attention is the focus of this blog post: ‘Millionaires are made in a bear market and during a recession!’ How true is this? I ask myself over and over again. Even though this statement sounds cliché, it is true. History has taught us that amidst every economic downtown are golden opportunities we could take advantage of.
The impact of the current financial situation on individuals, families and businesses has prompted some questions in my mind. Questions like: “Oyenike, how are you preparing to come out of this global economic downturn wealthier than you are right now? What are you strategising to execute during this bear market? Are you coming out of this turmoil ‘recession rich’ or will you be worse off?…” Recession rich is a slang term used to describe people that are well-off during a recession. These individuals are not affected by an economic downturn. Instead, they smartly increased or maintained their wealth during a financial crisis.
As for me, I am willing to utilise my creative skills, get outside my comfort zone, explore new opportunities by taking advantage of them, and double down on passive income streams. I see this downturn as a chance to re-think, re-strategise, and devise a plan to push forward. I will make budgeting my best friend, ensuring I know where my money is going. I will be sticking to my long-term investing plan and continue to diversify my investment portfolio. I will be bulking up my emergency savings while abstaining from debt at all costs. I will keep learning and continue to increase my financial knowledge – one can’t afford to be ignorant in this season.
Over to you. How are you preparing to come out of this global economic downturn wealthier than you are right now? The winners in all recessions are the people who keep their jobs and hours (and when I mean jobs, I don't necessarily mean a 9-5 role). The winners in all recessions are those with excess cash and wealth to snap up what owners needing cash sell: lower-priced small businesses, lower-priced stocks and bonds, and perhaps even a lower-priced house or two. A lot of millionaires are indeed made in a bear market and during a recession!
About Nike
Oyenike Adetoye (aka Nike) is an impactful speaker, author, and personal finance expert. A Chartered Management Accountant by profession. Nike is the founder and CEO of LifTED Finance, a private financial firm that educates, coaches and supports people on their journey through financial fitness and wealth management.