Recession Clinic

A lot of people have been asking me lately about wealth-building during a recession. The common concensus seems to be that doom and gloom is the name of the game and survival is the most the average person can aim for. But this is where we display our wealth consciousness, or our poverty consciousness.



Becoming wealthy during a recession need be no more difficult than during boomtimes. It's all a question of your approach. Both boomtimes and downturns produce winners and losers. People who were winners during the boom could well be losers during the downturn if they fail to adapt. People who were losers during the boom could well find they can be winners during the downturn. But nothing is given. It's all up for grabs again and this is why times of massive change, such as the recession we are undergoing now, are also times of unprecedented opportunity!

At the moment the world is going through an economic global earthquake, that has most of us quaking with fear. An earthquake is caused when the teutonic plates that make up the earth's surface move, unleashing energy, which we feel as shock vibrations. The earth's surface is re-arranging itself for a better fit.

And so, our economic order is undergoing the same process. The tension that was built up by the forced boom of the last thirty years, caused by artificial amounts of cheap credit, was unsustainable. Recession was inevitable. It did not come out of the blue as politicians have tried to tell us. (The state of affairs we are now experiencing was predicted by economic commentator, Will Hutton, many years ago and by numerous others since.) A re-ordering had to take place and old certainties no longer hold true as we tread gingerly upon the new economic surface that this quake has created.

But remember, all quakes unleash energy. In an economic quake, this energy can be harnessed and used by us to create new, sustainable models of economic prosperity. There are enormous opportunities for those who are aware of them and not paralysed by fear.

A colleague of mine, planning a new business venture, recently said "Never let a good crisis go to waste!" It made me smile. Amidst all the negativity of recession, there are real opportunities for those of us who are able to embrace this time of change and go with it, seizing the zeitgeist and bringing our buisness and wealth-creation plans into harmony with the new economic order that is evolving.

I have been brainstorming some of my successful colleagues and acquaintances for tips and advice on what people should do to prevent themselves becoming victims of this recession. Some of these men and women are hardened old warriors, who have survived one, or even two previous recessions.

Here are the common themes which they emphasised:

1. Just as in property the three most important things are Location, Location, Location, in a recession, the three most important qualities to have are Adaptability, Adaptability, Adaptability! The things that worked during the boom, won't work now. The rules of the game have changed. Things that were sure-fire, no-brainers before, could lose you money now. Professionals and tradespeople who thrived during the boom are now lining up in welfare queues. The givens of economics have changed. This has an upside too. What didn't work before might work now. Things that were not worth doing before might now be profitable. Professions and trades that were in decline may now be now back in demand. Look for the upside of every downside and ADAPT to it!

2. Take control of your own destiny. Don't wait until you get fired to make yourself less vulnerable to the downturn. If you work in a vulnerable sector of the economy, retrain for an up-and-coming sector. If you are in a job, start building your defences now, not later. If you were thinking of starting up a sideline business, get it off the ground in your spare time now. If there is an educational course you can take to gain a new skill and make you a more desirable employee, do it now. If you can diversify your dependance on any one source of income, do it now. And while you are still in a job, do it as well as you can, so that you are less likely to be let go if choices have to be made. But have your safety net prepared if that does happen.

3. Network and talk to people about what's working for them and what's not. Look for the new areas of opportunity and see if you can get involved. For example, investment bankers, realtors and car dealers are doing badly at the moment. But foreclosure experts, forensic accountants and green tech tradespeople are on the up. High street sellers of low-cost, low-quality, 'disposable' clothing are going out of business. But sellers of quality, classic fashion and craft goods and vintage stores are doing well. Shoe shops may be closing their doors, but cobblers are going to get new business. So are tailors and upholsterers and people who fix stuff we used to throw out when it broke.....Do you see where I am going with this? It is all a question of how you look at it. For every downside there is a possible upside. There are opportunities, but we must be able to ADAPT to take advantage of them.

4. George Soros has said that we are witnessing "the end of financial capitalism." This has brought about the collapse of giant institutions like Leaman Brothers, Bank of America, Goldman Sachs, Merrill Lynch and shaken every other financial institution across the globe to its core, causing our governments to have to rescue them. They are falling like flies. But what is now emerging is a space where small enterprise and real businesses that make actual products, as opposed to inventing spurious financial ones, can emerge and rescue our economy. In the present time, small is beautiful. Our broken economy can be rebuilt----but in a new way, this time from the ground up, brick by brick, one small business, and one sole trader at a time.

The buzzwords for success in the new economic era that is dawning are:The Smart Economy, The Knowledge Economy, The Innovative Economy. It is here that our future prosperity lies and these are the areas there will be opportunities in. Microsoft, Apple, Motorola and many other companies that are now household names, began during the 1980's when times were tough and money was scarce. People who are creative and who can provide products and services that people need can begin to sow the seeds of their future prosperity now. Look for the opportunities.

The times they are a-changin! This means everything is all up for grabs again and we all have an equal chance to create wealth, because the old hierarchies have collapsed!

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Women can be wealthy too!
For every downside there is an upside---look for it!