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How To Use The 2023 Recession To Get Rich - YouTube
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what's up guys it's Grammy here so this
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is potentially going to be a once in a
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generation opportunity to build wealth
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because now it could be one of the
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easiest times to increase your net worth
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dramatically if you know what you're
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doing after all there's a popular saying
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that riches are made in recessions and
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it doesn't take much to realize that
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we're already beginning to move towards
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that point just take a look at the
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headlines today more than 9 out of 10
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CEOs are bracing for a recession 97 to
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CFOs are cutting costs by 10 and JP
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Morgan warns the stock market Could Fall
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by another easy 20 from current levels
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now even though this sounds negative the
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fact is recessions happen on a regular
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basis and if used correctly it's
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possible to set yourself up for the rest
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of your life through some incredible
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opportunities and discounts with even
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Warren Buffett being quoted as saying
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bad news is an Investor's best friend so
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let's talk about exactly what's expected
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to happen throughout these next 12 to 24
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months the best benefits that you would
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be able to take advantage of today and
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precisely what you can do to make sure
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you're in the best position to make as
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much money as possible on today's
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episode of if you subscribe in the next
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15.39 seconds I'll show you this really
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cute picture of a kitten so thank you
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guys so much and now with that said
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let's begin alright so before we talk
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about the best upcoming opportunities
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you first need to understand what you're
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going to be up against and to start we
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need to talk about a recession generally
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recessions are accompanied by a
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significant rise in unemployment a drop
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in wages a loss in consumer confidence
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and a decline in values across
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everything from stocks food energy and
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services with sometimes long lasting
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effects throughout the entire world but
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second along with the recession usually
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comes a decline in earnings see every
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quarter companies report the revenue and
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give guidance on their future outlook
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but lately they've been cutting
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forecasts bracing for slow or even
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negative growth inciting recession risks
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at the highest Pace in 10 years that
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leads us to third layoffs when consumers
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earn less they spend less and when
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companies see less demand they begin to
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scale back on their expenses with
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usually employees being the first to get
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let go in fact just a quick Google
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search for Mass layoffs shows you dozens
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upon dozens of companies who are are all
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trimming their Workforce and as Bank of
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America explains the U.S economy will
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soon start losing 175 000 jobs per month
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so in terms of what this means for you
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and your Investments as well as how you
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could use this information to make you
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money let's start here with number one
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stocks as of now all three major indexes
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are down between 20 and 30 percent with
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analysts like JP Morgan who believe that
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we have another 20 to go from current
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levels however if we take a look
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throughout history since 1946 the
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average bear Market drop was close to 30
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percent with the most severe having been
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in 2009 when the S P 500 fell 57 from
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the peak now once you combine the
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average with the recession bear markets
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tend to do even worse with an average
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drop of 34.8 percent which just for
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reference right now we're down about 25
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all of that is to say that generally the
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absolute bottom occurs when we see
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capitulation across investors usually
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that's a time of the start of the
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recovery and things begin to bounce back
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now I'll cover exactly how much you can
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make from this in the next few minutes
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but first we we have to talk about
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number two real estate even though every
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area is different and some locations
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might continue to flourish housing
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declines on a national level are
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actually incredibly rare in fact as you
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can see throughout the last 60 years
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there have only ever been a few times
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where prices meaningfully fell more than
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10 percent but now the general Wall
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Street consensus is that National
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housing prices are going to decline
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seven percent with a worst case decline
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of 10 to 15 percent should interest
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rates continue to increase of course
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every Market is going to be different
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and according to Moody's Analytics the
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most vulnerable markets could see
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upwards of a 25 decline from the peak
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including parts of Florida Arizona Idaho
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and Southern California with the decline
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lasting another 12 to 18 months before
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bottoming out now in the big picture
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it's probably not going to make that big
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of a difference for anybody with a fixed
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rate mortgage who intends to stay in
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their property for another five to ten
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years but for anyone looking to invest
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or buy a house we may begin to see some
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deals starting to come on the market
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which we'll cover shortly because we
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have to also talk about third cash
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clearly up until now there's been this
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mindset that cash is wasting away to
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inflation but when every other asset is
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falling in price sometimes cash could be
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the safest place to store your wealth
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and you know that's significant when
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someone like the billionaire Ray dalio
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admits that cash is no longer trash the
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truth is many people forget that as
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recent as 2018 cash was the best
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performing asset and had you just been
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saving your money in a high-yield
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savings account you would have far
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outpaced the market cash is now becoming
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such a significant part of the portfolio
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that even fund managers are holding on
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to the highest amount of cash since 2001
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and Citigroup said that cash is the only
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asset that investors could use as a
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recession hatch but as far as what you
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could do about this to make money and
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why so many people never take advantage
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of what's about to come here's what you
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need to know all right so in terms of
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why this next recession could be a once
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in a generation opportunity just to
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consider this first everything becomes
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less expensive the way I see it even
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though one person might think this is a
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bad time to invest everything is falling
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30 percent a wealthy person would see
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this as an opportunity to be able to buy
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those exact same companies for a 30
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discount Warren Buffett really had the
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perfect analogy for this he said when
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hamburger prices go down in price we
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sing when hamburgers go up in price we
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weep for most people it's the same thing
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with everything in life that they're
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buying except for stocks when stocks go
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down and you can get more for your money
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people don't like them anymore so first
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reframe your belief because a falling
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Market could work to your advantage the
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second there's less competition the fact
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is when times are difficult companies
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scale back they fold they can serve cash
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and they play it safe but this opens the
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door for smaller more aggressive
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companies to stand out and take their
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place for example one study across 16
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000 companies found that those who
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continue to advertise increase their
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value and got more bang for the buck
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with Positive Growth years after the
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recession ended the third there's way
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more opportunity in a way a recession is
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the Market's method of weeding out the
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week and Patrick met David made a
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fantastic comparison a few months ago
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that the peak of the market cycle is
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exactly like a forest this means that
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only the largest most established trees
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or companies get access to all the
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resources or in this case sunlight
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everything at the bottom has a difficult
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time being able to compete and it's hard
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to grow but just like natural forest
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fires our economy has a way of
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repeatedly clearing out and bankrupting
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the companies who no longer are able to
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sustain themselves giving opportunities
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for newer smaller businesses to continue
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to develop and fourth after every bear
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Market comes a bull market as Yahoo
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finance points out historically the S P
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500 has fallen an average of 29 around a
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recession with a median drop of 24 but
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once stocks have found their low their
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average return the following year is 40
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percent and within two years the market
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has increased an average of 58 percent
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this means that investing in the way
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down is much more profitable than
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pulling out of the market and waiting
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and long term the market is always
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recovered in every single example so far
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throughout history and finally fifth you
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have to act before anyone else knows
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about it I know it sounds easy to think
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oh perfect I'll just invest during a
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recession but the truth is recessions
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are never confirmed until much much
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later for example the Great Recession
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that began in December of 2007 was not
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officially announced until December of
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2008 only a few months before it
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officially ended the recession before
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that began in March of 2001 but they
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didn't call it a recession until
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November later that year and this
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continues with about a six to 12 month
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delay until we actually know we are in a
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confirmed recession but in terms of what
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you could do about this to profit number
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one scale back in your expenses this
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means that you track your Market cut
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back on unnecessary spending and operate
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lien while you continue reinvesting as
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much as possible back into the market
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this should also include a plan on what
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you would do if your income were to drop
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20 to 50 percent how you would make up
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the difference and if you could take
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preventative measures ahead of time to
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protect yourself from that happening two
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hold on to some cash now I'm a firm
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believer that even though statistically
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your money is best off invested as soon
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as possible there is something to be
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said about the Peace of Mind of having
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cash on the sidelines just in case of
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something to fall back on for me cash
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makes up anywhere between 15 and 20
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percent of my portfolio depending on the
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time of the year but generally this has
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given me so many opportunities to jump
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on good deals when I find them and it
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lets me sleep at night knowing that no
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matter what happens I have something to
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fall back on the three protect your
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career this at the end of the day is
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going to be your best hedge against
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whatever happens because financially
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your worst case scenario is not the
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market going down but instead it's the
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market going down at the same time that
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you lose your job and have to sell off
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your Investments at the bottom before
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they have time to recover so now is the
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best time to improve yourself learn new
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skills and double down on whatever
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you're currently doing as an example of
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that a previous study found that just a
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five percent allocation to bitcoin would
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have boosted the cumulative return of a
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traditional portfolio by 65 since 2014.
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so if that's something you're interested
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in it's important to use an exchange
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that gives you the best price possible
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with the code Graham then after that for
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invest long term the best course of
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action when it comes to investing is to
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Simply carry on as usual and pretend
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like nothing's happening it's shown that
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dollar cost averaging or the practice of
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buying into the markets on a regular
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basis is the most profitable strategy so
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stay in the market and continue buying
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in and five diversify your Investments
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now if you can't personally handle a 20
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drop without panicking it's probably a
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sign that you're invested too
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aggressively for instance if you're
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completely in U.S tax stocks then it's
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probably a good idea to add large caps
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and international stocks to the mix too
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or potentially look into investing in
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real estate or buying REITs where rents
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tend to be a little bit more stable the
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more legs your portfolio is to stand on
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the less like it's going to collapse
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should one or two of them fall out
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although in terms of my own plan
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throughout the next 12 to 24 months this
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reminds me when I first began my career
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in real estate at the very peak of the
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market in 2008 right before Lehman
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Brothers collapsed prior to the credit
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Market freeze into the very very
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beginning of a 50 stock market decline
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from the outside looking in I probably
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picked one of the worst possible times
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to start a career in an industry that
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was about to see one of its worst drops
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in history but I gotta say it was an
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eye-opening experience to begin working
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and almost immediately see co-workers in
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the same office leave their jobs because
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business dried up overnight however if
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it wasn't for that I might not be here
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today because I was one of the few
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remaining agents in my office who was
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willing to take on the lowest worst
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deals possible just for the sake of
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gaining any experience I could and today
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I see the exact same opportunities for
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people and businesses who want to take
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the risks that the more established
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companies can't for me I see a lot of
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value continuing to buy in as usual
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holding a bit of a cash position on the
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side potentially starting a new business
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and buying real estate once the market
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is flattened this is also a great time
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to double down on your work take on a
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side hustle and learn as much as you can
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because whatever you do today is going
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to be rewarded many times over by the
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time the market recovers it's definitely
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not going to be easy but rest assured it
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will be rewarding for those who stick it
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out and subscribe and hit the like
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button if you haven't done that already
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so with that City guys thank you so much
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for watching also feel free to add me on
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Instagram and don't forget that you can
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get all the way up to ten thousand
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dollars as a bonus when you sign up at
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public.com Graham depending on how much
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you transfer from another brokerage the
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link is down below in the description
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for anyone who wants to take advantage
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of the offer enjoy thank you so much for
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watching and until next time
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