*This is a guest post by Daphne @ Joyful Days.
The last recession, which in my part of the world happened around 2002, was worse for me than the current one, even though all the statistics say this one is worse. The reason this time is much easier for me is that I learnt enough from the last one not to get hurt again. I got richer from the last recession, and you can get richer now too.
Make this recession pay you by making sure that it’s the last one that ever costs you. I won’t try to convince you that a recession is a good thing. For many people, it is not. The best thing you can do is to make this the worst one you’ll ever have. If you make the most of this unsolicited opportunity, this may be the best recession of your life.
1. Understand that the first time is the hardest
The next time a recession comes along (and it will) you will be no stranger to it. We do not fear what we know. The second time round, your coping mechanisms will be in place. Use this one to practise a few: play computer games all day to escape the despair, curse and moan to your best friend all afternoon over tea, go for long runs… do whatever it takes. Next time, you’ll have a whole bag of tricks to employ once you see tough times coming.
2. Learn some financial survival skills
The last recession came when I’d just given up a full-time income to start freelancing. Some months I didn’t have enough income to pay the bills. I had to risk my savings in ‘punting’ stocks, watching prices like a hawk, buying and selling within daily or weekly fluctuations. It was unnerving, and I wouldn’t do it now, but at the time you just do what you know to do. If you survive once, you’ll know you can survive again. This confidence itself is priceless.
3. Change your financial habits
I decided I didn’t want to live on the red line ever again, and trained myself to live on only half my income, saving the other half. This means that you can lose half your income and not worry too much. The savings over the years also allow you to make investments which generate a cashflow to back up your principal income source. If you manage this well, you will sail serenely through the storm of the next recession.
4. Build safety nets
Identify where the recession hurt you most. Was it most painful to cut back on your insurance, sell your house or car, or forego the family’s annual holiday? Start building safety nets for these areas so you won’t be caught offguard again. You may want to switch to insurance plans or mortgages with flexible payment schedules, or start putting aside part of your monthly income in a separate holiday account to protect the parts of your life that are most important to you.
5. Be thankful that it’s only temporary
For most of us, the good times will eventually be back. I hate to pull this “think about the hungry children in Africa” stunt but it is true. Some people will live in need all their lives. Some fathers have already sold a kidney so their families can eat. Some mothers will send another daughter into prostitution. If you have phone or electricity bills to pay, you are already better off than many people. Be grateful for what you have.
So there you go. This recession can make you richer in so many ways: in experience, in financial skills, in money habits, in safety nets, in gratitude of spirit. May this recession be your worst one ever, and may it be your best one too by helping you get richer!
Daphne has a lifestyle her friends envy. She is practically semi-retired in her 30s and just loves her life. Her blog Joyful Days was started as a challenge by a friend to help others find and live the life of their dreams as well.
24 thoughts on “Let This Recession Make You Richer”
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Good post Daphne,
I think this is one topic that positive people like you should write more about. I will be writing on this from my angle soon. Let’s put in more positive energy into this. It is all about changing our collective financial consciousness.
Nice post! I’m very impressed that you save half your income.
Another idea for letting the recession make you richer is to put money into perspective. A recession helps some people realize that family and friends are more important than money. It’s an opportunity to reevaluate your beliefs.
Roger – A Content Life’s last blog post..30 Days of Mindful Eating – Day 14
Awesome post Daphne!
Middle Way’s last blog post..Catching Up
“The next time a recession comes along (and it will) you will be no stranger to it.”
This is SO true. I’m not old enough to have lived through a depression (though I have through several recessions) but my family was extremely poor. Like duct tape your shoes together poor. Like eat only rice for four months poor.
And I have noticed that, even through all the depression talk, I am unfazed and unworried. I have a peace of mind that only comes with experience. I never IMAGINED in those days when we were scrapping to survive that I would come to be GRATEFUL…which I think is the best part of the economic crisis.
Thank you for sharing this!
Hayden Tompkins’s last blog post..The Secret to Getting Kids to Read
I followed you here (that is ok in blog world right? :-))- I have never been here so thank you first for the new blog to read. Second, these are good examples- this is happening to me now. Since the economy has been so bad we got rid of both of our $400 a month cars and bought a beater to get around. With payments, insurance, and gas going down we are saving over $1200 a month. That is huge- now we are able to take more money and use it to build our business and maybe take a seminar or two. Wish I did this years ago. Great stuff Daphne
Jay’s last blog post..Inner Noodle’s Guide to Dream Analysis- Step 5
Thanks for the opportunity to guest post on your blog. It’s been a pleasure and honour writing this post.
Thanks for your encouraging comment. I’m looking forward to reading your take on the economy. You’re right that we need more positive spins on a situation that perhaps the media is making out to be worse than it is.
Thanks for sharing your experience here. Your attitude of gratitude after living through poverty is amazing, and I wish everyone who has never been in need would read your comment. I totally agree with you that we can be grateful for our past struggles. You say it so well. Thank you.
Daphne’s last blog post..Can You Become Richer In A Recession?
@ Daphne – Thank you for taking the time to write the article. I think a lot of people are getting a lot of use out of it. It’s sure helping me remain positive too. You know I read too much economic bad news. 😉
@ Jay – Thanks for coming over. I hope you enjoy my blog as well. And I hope you subscribe. Your blog is pretty cool as well. I always love finding new blogs!
@ Hayden – Its good to hold the perspective that you have. Many people have not known want and therefore don’t know how to handle it when it comes. Knowing how to handle it, mentally and emotionally, is priceless.
@ Roger – I agree. I am impressed that she saves 50% too. Although I manage my money really well I only save 10%. I have made some choices in life (debt) that have put me here. I think the key is a solid plan to get where you want. I plan on kicking my savings up to 20% in 5 years after I pay off some debts.
@ Sunny – I agree. I look forward to more positive writing by both of you!
Great advice, Daphne. Thank you.
Nice looking site, Jeremy. I will be back later to explore more. Thank you!
Michael – Love to Spare’s last blog post..True Brotherhood
Great post!! I agree that most of us do not really all that much money to survive on. Sure, some minimum amount is needed to cover our basic necessities. I find that most of my expenses actually are kids-related, rather than on myself. I left behind all my designer suits, branded bags and expensive lunches, the day I quit my last job!
Evelyn Lim’s last blog post..How To Ground Yourself In 7 Ways
A useful and timely post at this point in time of our economy! 🙂 This recession could indeed make us richer, both spiritually and financially if we could just see the opportunities behind the problems.
Jocelyn at I TAKE OFF THE MASK’s last blog post..A Prayer of Hope for the Economy
I’m a country dweller living in a relatively remote location on a small island. My lifestyle is extremely simple and frugal and as such I will not be making any major changes at all.
I really appreciated this post. I loved this part:
“This recession can make you richer in so many ways: in experience, in financial skills, in money habits, in safety nets, in gratitude of spirit. May this recession be your worst one ever, and may it be your best one too by helping you get richer!”
The reason I love it is because that’s exactly what I began to experience when I abandoned urban living and opted for the basic, cooperative and community based lifestyle I live now.
Thanks for this great post. 🙂
timethief’s last blog post..No Competence – No Success
Wow, that was brave of you to play the stock market!
There are actually many cut backs that one can make and keep after a recession without “harm” e.g. insurance deals, mobile phone contracts etc.
LifeMadeGreat | Juliet’s last blog post..What Do You Think Of This Quote?
You’re so right that we start to realise what’s important – friends and family. And that awareness stays with us long after the recession has ended. I didn’t start saving half my income straightaway, but worked upwards from 10% to 20% etc so the adjustment is gradual and thus easier.
@ Middle Way,
Thanks! I’m enjoying reading your blog about managing finances too.
Yes I think it is okay to follow someone in the blogging world! 🙂 Isn’t it amazing what is possible if we decide to go with a simpler life with fewer bells and whistles? I sold my car a few years back intending to get a smaller one instead, but since then I’ve gotten used to not having a car and the freedom this brings.
Good to see you here! Thank you for reading.
It’s funny how designer suits and branded bags start to lose their shine when we realise what we can have in their place. The joy of using that money to make others happy sure outweighs the short-lived good feeling that any suit or bag can give.
A lot of the blessings of a recession are indeed spiritual, and we can also try to get some financial advantage out of one!
Thanks so much for sharing your experience. It must have been exhilarating to leave behind the urban trappings for a more free and open way of living. And I’m sure you feel and are richer in many ways compared to your old lifestyle!
Punting was nerve-wrecking and not something I would choose. At the time I didn’t know what else to do. You’re right that there are many ways to cut down our expenditure. Phones are a big culprit these days!
Daphne’s last blog post..Can You Become Richer In A Recession?
Great post Daphne. You mention the “staving children in Africa”, but volunteering is a great way to keep your skills honed, meet people and generally feel fulfilled. It has other suprising benefits to. I discovered that a charity that I have volunteered to work at is managed by some of the top executives of my company. Great way to get noticed!
Kim’s last blog post..The Art of Chivalry from a Woman’s Point of View
Hi Jeremy & Daphne,
Daphne, great tips, especially I like #5. As long as we can be grateful for what we have and get, we can get through any recession.
Thanks for sharing, Daphne.
Arswino’s last blog post..10 Characteristics of Positive Thinking People
Hi Daphne and Jeremy,
Jeremy – What an excellent guest you have here today – Daphne’s awesome!
Daphne – It’s always great to see you, and here today is no exception! Building a safety net is so important – and one thing we’ve worked very hard to do. And we’ve eliminated all debt except for a home mortgage. This add much confidence for me going into any market – knowing we do have something to fall back on. Knowing that if something were to happen, we could survive for a while – adds an extra layer of confidence in knowing you can take your time and find the “right” thing for you – not just take something to pay the bills…
Daphne – a great article here today! And, “Her blog Joyful Days was started as a challenge by a friend to help others find and live the life of their dreams as well.” — this is very true! You’re doing that Daphne!
Lance’s last blog post..Sunday Thought For The Day
This is a great post, I am going to stumble it 🙂
Grandpa lived through the great depression, and he would used to tell us story about how 1 out of 4 people are unempolyed and broke. And Grandpa always had the kind of faith that what ever it is we can survive it, cause he had seen the worst.
I like your 5 points alot, very useful.
Imperfect Action is better than No Action
Giovanna Garcia’s last blog post..Singin’ in the Rain
Like the author, I saved half my income as a “safety net”…Kept it in a low-risk mutual fund…Guess how that turned out? 🙂 🙁
Chris | Martial Development’s last blog post..My Art is Sustainable, Ethical and Green
Wow, what a coincidence that your management was volunteering at the same organisation! Sometimes things just work out in your favour – karma maybe? Thanks for your comment!
Thanks, and you’re right that gratitude is the only prayer we need, as it will answer our every need. Well said!
You know I feel good just seeing your name and even before I read your comment? You have a way of making people around you feel good, and I’m so thankful to be one of those people!
Thanks for sharing your experience with safety nets. Yes I find that once these are in place, there’s a peace of mind that is priceless, the kind that lets us go to sleep at night with no cares in the world to keep us awake. Thank you for being here with me today, Lance!
Joyful Days’s last blog post..Can You Become Richer In A Recession?
I recently heard someone on TV who lost his money with the Bernie Madoff scandal. He said something like his money is gone, but Madoff could never take what truly matters.
I believe that, yes, we need money to survive in society. However, if we have our health and people who can support us (and we can support!) then we can persevere. I’ve heard stories, seen movies, read memoirs that give me hope that my belief is true.
Thank you for some hope!
Stacey Shipman’s last blog post..Podcast Wednesday: Does Acknowledgment Work in the Workplace? Interview with Chris Littlefield
Although the recession can be a thought of as a scary time it is also an opportunity to be creative and shine. It is an opportunity for members of the world community to pick themselves up and make responsible choices towards becoming richer. I also think it is an opportunity to redefine what we mean by rich.
Stacey / Create a Balance’s last blog post..Authentic Happiness Series – Part One
Thanks so much for the Stumble! You sound like you come from a tough family, with your grandpa living through the Depression and yourself building a successful business from scratch. What a proud tradition to belong to! I’m glad that we share the faith that whatever it is we can survive. Thanks again, Gio.
So sorry to hear about your mutual fund. It’s a bad time round the world for investments. I’ve lost 50% of my investment in the stockmarket too this time round. The good news is that this is a paper loss at the moment, and that if you invested for the long term than in 5 to 10 years or more it will reap a positive return for you. It’s a safe bet that when we invest, we lose some and we win some. If we can take the loss together with the gain, then we’ll be happy investors! And if we can’t take the loss maybe we shouldn’t risk our savings in the stockmarket. I hope your mutual funds turn around and all ends well eventually.
@ Stacey Shipman,
That person on TV sounds like someone with the right attitude, which is what is most needed at a time like this. Your point is interesting about needing money, because after all we use our money to buy health and happiness for the most part, don’t we? So if we already have what we want money for, money loses its shine. Thank you for sharing.
@ Stacey / Create a Balance,
You’re so right that this recession offers an unprecedented opportunity to revamp and redeem the global financial system. I only hope that Obama and other world leaders do they very best job they know how in this regard, and I think they really are trying their best. As you say, it’s all about responsible choices.
Daphne’s last blog post..How To Find Happiness in 5 Minutes
I think this post is not about “make you rich” but learn from recession. o, may be later after recession you may get richer :))
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