We know the recession is going to happen sooner or later. Are you concerned about this effecting your profession. How are you preparing yourself personally, professionally and financially.
I know this is a non-answer, but if you have healthy financial habits, you won't need specific preparation for a recession.<p>I believe you can't time the market so 'preparing for a recession' is a moot point. Instead set financial goals that align with your risk tolerance and that make you comfortable.<p>That being said, the advice that I would give is just standard stuff. I think some sources do a much better job at explaining those so I'll let others answer. Big strokes is just the usual stuff: prepare a emergency fund, contribute up to your employer match (or more), set up a budget, etc.<p>One important point is, if you invest in the market, just keep investing, no matter what others do.
I always try to have at least a year's worth of living expenses in my emergency fund. And that's in cash not in stocks or index funds - a lot of people on places like reddit criticize this ("You're missing out on much higher returns you'd get if you had it in the market!") but on days (weeks) like this I'm glad it's in cash.<p>Beyond that, I tend to live by this maxim:
"When times are good prepare for them to be bad. When times are bad prepare for them to be good."<p>So the question to ask soon is how will you prepare for the post-recession recovery? Asking this will keep you from despairing. Yes, this recession could last a while and be quite nasty, but it won't last forever.
We have been preparing my professional services company for recession for the last year or two. Key steps<p>1) carry no "real" debt, build cash reserves.<p>2) focus on profitability over growth. Typically driving growth means hiring sales/marketing in advance of the growth and spending profit to do it. Adding new services staff requires carrying about 90 days of the employee costs due to non billing the first month, and the 60-90 days until we receive cash from their first billings. Focusing on profit means raising prices, shedding overhead, getting long term contracts, driving efficiencies.<p>3) Focus on recession resistant industries.<p>4) Focus on acquiring more local businesses to reduce travel overhead required to clients.<p>5) no long term purchasing contracts<p>6) maximize credit line. Renew in advance of recession. During recessions banks kill lines of credit. As we start to get into a recession we will max out our line and then move the cash to another bank.<p>Personally<p>1) Shed leveraged real estate assets, they are very hard to liquidate during a recession<p>2) Reduce debt usage<p>3) increase lines of credit<p>4) build 2 years of cash reserves (min of 6 months during normal times). Lots of money is made during recessions, you need ready cash to take advantage.<p>5) reduce spending now
I fully expect a recession (and a pretty severe one), but I'm not doing anything special to prepare for it. The financial and professional habits I already have are what I would do in preparation anyway. Primarily, this boils down to being (largely) debt-free, having a large cash reserve, and ensuring that my skillset is up-to-date so that I can get work or start a business in almost any climate.
I'm a little bit concerned, but just a little bit. I'm primarily a software engineer, but in the past I've worked other white collar jobs and also blue collar odd jobs (sushi-man, deli-man, laundry, dry cleaning) and I'm used to hard labor, waking up early, etc. I think I'm pretty adaptable.<p>Financially, I don't have that much savings because I use the money to help family members. But again, I'm not concerned about myself. I'm more concerned about them.
I'm thinking of moving a couple silly side projects off EC2 to a spare home server to save $10/mo<p>Eating out less, cooking at home with family instead<p>Sitting on almost a year's salary in cash<p>pay off major debt, but I finished that a couple years back. If you have a mortgage, it's about to be a great time to refinance the way bond yields are looking.<p>The big one though, trying to work up the resolve to put to bed either my netflix subscription or my hulu subscription. Probably hulu. Haven't pulled the trigger yet.
It will hit hard and mostly people struggling already from the 2008 crisis, which is only going to further social unrest and claims to fight inequalities, rightly so. As for the people following this website, it should strengthen their resolutions to innovate at local level, possibly implementing solutions already validated in comparable environments and markets (e.g. here in Italy, more smart working like in the Northern Europe and more cultural business like in the UK).
I'm in the camp of more preparedness is better, and actions need to be taken. For me it's about studying recession histories, stay calm, keep investing.<p>Sharing what I posted in another thread: my look into the 2008 Great Recession was very helpful with my pattern matching. 98 out of 100 stocks lost money during that recession, but most of them did super well during the longest recovery period in U.S. history. Even AIG made people a bunch of money.<p>Here's the full dataset of 1363 mid cap + stocks that traded during the 2008 recession, and their performances: <a href="https://shan.io/writing/learnings-from-the-2008-great-recession/" rel="nofollow">https://shan.io/writing/learnings-from-the-2008-great-recess...</a>
Stability is good. Think twice about joining the next hot startup.
If VC freezes up startups will run out of money quickly. Don’t take on debt.<p>I haven’t experienced it myself but from what I have observed it’s a bad time to graduate from school once a recession hits. You won’t find a decent job and when things get better companies will hire shiny new grads and the grads from the years before will be left behind.
Not really. I have a good emergency fund - something every good financial guru has been preaching since before I was born. Beyond that, so long as I have my job I'll keep living. If I lose my job - it won't be the first time - I'll just cut my expenses and in the worst case I can flip burgers for something to live on until this blows over.
I am prepared by keeping 20 grand cash on hand.<p>I'm a foreigner on a work permit. I'll be fine _financially_ in a recession but if I get laid off suddenly my legal residency is threatened, and I need to have an emergency fund to deal with any fallout from that
We bought a ridiculously cheap place in the countryside with over 2 hectares (5 US non-SI units) of land in my significant other's native country. Holiday house, place to meet friends _and_ dirt cheap insurance against many pitch black swans.
Was working professionally through the last one and I'd say:<p>a) don't retire<p>b) if big corps are your thing, B2B big corps fare way better than consumer oriented ones so if you need to decide between two job offers, pick the one with the least chance of layoffs. There are no guarantees.<p>c) have cash standby. You should have this regardless of the state of the market. If you need cash and a recession is coming, it becomes a self-fulfilling prophecy. I learned to have at least one year of expenses in my checking account after witnessing the layoffs in 2008-2009 and then the trigger happy RIFs which followed well through the 2010's.<p>d) learn or be willing to learn or pivot your skills
As long as law and order doesn't dissolve I won't change anything. If anything I would have more dynamic behavior in a bull market. I may be delaying a job switch soon because my current employment is in a stable sector.
I've been preparing for it since 2008 when my business was effectively killed. Anyone that felt 2008 has been expecting this. I saved, I split my eggs into many baskets, I made a spreadsheet.
It's going to affect all professions somewhat.<p>Personally, a long time ago I realized that stuff happens, and you have to both deal with an unpredictable world and change. You can't really prepare except in general terms, so you mostly make the best of the situation you're in. Keep an eye on where you want to go with your life, and do your best to make it happen, but accept that it may not and there may not be anything you can do about that.<p>Professionally, my skills will be in demand one way or another no matter what happens. Whether I'm cheaper to hire than the competition will depend on what I'm willing to do to earn a paycheck at various levels. I've always wanted to optimize that so I can spend more time living and less working, so I'm planning to cut my costs long term and live cheaper if I can.<p>Financially... there's not much I can start doing now that will insulate me against a recession other than the above. I don't have long term investments except in myself and my skills, and I don't expect to ever be able to retire. I will probably change careers at some point, however. In a recession economy I will still be able to find a job, just maybe not at the pay level I'd like or in an area I want to work in, but I'll survive.<p>If your hope is that you can prepare and thus insulate yourself from the effects of a bad economy... it's only partly true.
I'm going to try and remove any kind of political talk from this as I can.<p>To be honest, with Brexit looming and uncertainty around a possible election, I've spent the last year preparing myself for a recession. Over the last few years I've noticed a few businesses in Bristol contract their operations back to the capital, and salaries for software engineers overall have dropped, so I've largely been preparing for what I thought was the worst-case scenario:<p>1. A bad Brexit, lots of uncertainty, job losses, etc.<p>2. Increase in price of essential goods. We have a cupboard full of long-life essentials to last a few weeks, so we definitely won't starve. We're lucky enough to have enough room to store things in bulk, so we don't need to panic buy - and quite frankly I don't see a point in buying a ton of stuff I might not need when there are loads of people that will definitely need it.<p>3. A quick access fund with enough money to last me and my wife a few months, if needed.<p>4. In the long-term, increasing my skills in case I need to find a new job in short notice.<p>Many of these steps will help for Coronavirus, but a concern of ours is what our "worst-case scenario" looks like with a Pandemic AND Brexit.
Well... Preparing for the recession is something you start doing 10 years before the recession, not 10 weeks before the recession.<p>It's just good habits constantly.
After my last startup failed 5 years ago, I planned to buy my first house somewhere in 2021, hoping that by then some crisis would happen to lower house prices and to give me some time to pile up a bit less than 400k$. I don't want to spend more than that on a house even if I had more money, I don't like mortgages and I had no idea in which country I wanted to live, so renting was a convenient option.
I had to decide whether to put it in indexes or to save cash in tax free saving accounts.
I went with the saving accounts so I'm sitting on cash.<p>I often half regretted not going with indexes but having 5 years of time before settling down wasn't enough time to risk it.<p>If I lose my job I'll start eating into my savings and get a smaller house / delay the stable house plan.
The good side of being laid off, would be spending more time with my sons.
Snapping up gold in what I see as the inevitable return of inflation.<p>The US is aggressively deficit spending in the boom times and in order to keep up this unsustainable spending in the bust times, the gov't will have no choice but to juice inflation.
I believe that there won't be a real recession until globalization and especially the position between China and the West is settled. No side will be willing to slow down. As a consequence, there will be full demand for whoever is willing to get something done.<p>However, there will be countries that will lose contact to the state of art in some areas. As a consequence, I am sorting my belongings to be able to move freely should that happen to my niche.<p>In the still not so unlikely event of a recession, I hope that I can use that opportunity to start something new when rent and wages are cheap and governments try to stimulate the market.
There will always be jobs. Just less unnecessary ones, more jobs revolving around saving money. Some people are getting rich off a recession, so people will still spend on luxury jets and wagyu steak.<p>Advertising will still be hot - companies will need money, so FB, Google will still do well. Anything that saves money will do well. Anything that raises efficiency and doing more with less manpower will do well.<p>My wife sells cheap lasagna and her business is absolutely booming now, especially since things like KFC has become a luxury.<p>It's also a good time to hold on to cash, gold, and possibly crypto if you expect deflation.
For a couple years now I've kept the vast majority of my savings in investments (Betterment) to keep them from depreciating, and because I can withdraw them in an emergency given 3 days' notice.<p>Obviously we're entering a season where that's to be avoided. So I'll probably start redirecting my surplus income to my regular savings account for a while just to give myself an extra buffer. Not <i>withdrawing</i> from the market, mind you, just taking a break from depositing into it.
Save extra money - my experience from the dot com crash and financial crash is that you should assume you are going to need 6 months of runway and so build up an extra rainy day fund that you will have when it hits.<p>For me, this means deferring big purchases etc. until this is built up again.<p>Note, this is in addition to your retirement, which you DO NOT WANT TO SPEND during the recession, since the stock market will have crashed then and you will be spending premium dollars there that you want invested for the recovery.
My dad is taking all the low interest business/housing loans before some of the banks grinds to the ground.<p>Buying poor shares expected to bounce back. That's about it, I guess.
Keeping my network strong, keeping my skills in tune with the local market, and keeping my fixed expenses low.<p>Companies were still hiring contractors during the last recession, but they could be more picky and you had to be able to hit the ground running.<p>As far as benefits, my wife works for the state education department doing an “essential service”. We can switch to her insurance if necessary.
I'd love to say I'm setting aside cash to buy real-estate, tangible goods, and promising stocks.<p>But I'm not. I'm at the tail end of my school 'career' and I'm praying I graduate. I'm continually coming to terms with the fact that I'm not nearly as smart as some of the kids I'm in classes with. Maybe it has to do with habits?
Maybe I am the dumbest. The official world gouvernance plan for this time is/was(?) to freeze paying dividends; debt-repayment, interest, ...<p>To accomplish the commanded view, the companys will stop given quarterly reports to the share market and start to give half-yearly reports... yearly... telling us: "We do this for your customer satisfaction" ?!
What recession? A 8% loss in DJIA is not a recession. 1987 had bigger losses and no recession for example. 2012 had similary terrible oil prices and losses. Why is everyone so eager to jump on the panic train. Both on corona,this,Iran crisis,etc... The panic is more dangerous than the event,let us try to be level headed without being naive.
- Bought condo outside of USA for cash with renter already in place - bringing ~$1k/mo<p>- Sold vested Co shares - not at the top of the market but 25% ago - before crash - and bought place in NV with much lower cost of living - moving out of CA soon.<p>- Some cash saved that with frugal living could keep us going for a year or so with no issues.
Nothing new or different. Keep a 6-month cash reserve, save for retirement, live within our means, and hope for the best. We have plenty of monthly expenses we can cut if needed, but won't until forced to do so. Beyond that, anything else feels like panicking.
No debt, enough savings, a house with a lot of land out in the boonies, a willingness to do any job. The 2008 recession did affect me, but I managed. Will manage this time, too. As long as you can learn and adapt, nothing's a problem.
2000 puts on SPY @210, 5/10.<p>Everything in cash/treasuries before the market crumbled.<p>This was eminently predictable from a payoff perspective. The market lagged the info coming out of China for a long time.
Plant a vegtable garden!
Learn to make your own kombucha, just kidding but learn to grow onions. People will kill each other over neccessaties like onions, matches and deoderant.
I have studied asset allocation (per Bogleheads.org) and understand my comfort zone.<p>Recessions are inevitable. I hope I'm ready, I feel like I am.
Savings<p>Financial prudence<p>A good stock of bare essentials<p>Ensure my car and house is well maintained (no costly surprises)<p>Make sure I am demonstrating and showing value in my place of work.
It's happening now. Today is "black monday".<p>I've got broad market puts (SPY) as well as puts on Square which are literally printing me money right now. If puts are consistently making money, than you're likely to be laid off in the next few months. I consider market shorts to be a form of insurance for this reason. If I lose my investment, than it means I keep my job. If my investment moons, than I'm about to lose my job.
I went through a few scenarios with a developer lens here: <a href="https://www.swyx.io/writing/coronavirus-recession/" rel="nofollow">https://www.swyx.io/writing/coronavirus-recession/</a><p>TLDR:<p>- If you make buying decisions (e.g. running a company or a department): think about how you can <i></i>turn fixed cost into variable cost<i></i>. If you were kinda half remote anyway, maybe go full remote or swap the office for a coworking space subscription. Hire contractors instead of full-time. <i></i>Buy SaaS services instead of build internally.<i></i> Focus on conversion and retention rather than inorganic user acquisition.
- If you are a freelancer or agency: Think ahead to how your clients could be affected - you may need to aggressively grow your funnel while also <i></i>planning for more downtime<i></i> between work.
- If you are an employee: You can't do much about your options or 401k. But recognize that you are doubly long the economy in terms of both your stock compensation and your job (and real estate in affected states).
- If you work at a startup that has a cash burn necessitating future fundraising, be aware that this can become very very relevant to you <i></i>if the funds don't materialize<i></i>, through no fault of the founders. Think through second order effects - the funds may not materialize not just because VCs are less willing to part with cash, but also because the startup itself may fail to meet targets because of the broader economic environment.
I'm much more worried about the virus than a recession. The latter... is going to suck, for a lot of people, but with the right policies in place, we can get through it. The virus is simply going to kill a lot of people if it's not checked.
My recession started around this time last year due to some health issues I wasn't aware of, causing the most severe burnout I've ever had, which led to a falling out with my job. So take what I'm saying with a grain of salt:<p>* Don't count on contracting or remote work as a fallback. I've been trying my luck at it without success. The last time I did it was 5 years ago but it's totally saturated now, with most of the clients going through upwork.com and freelancer.com with 10-50 applications per gig. Go see for yourself under common searches like PHP or React.<p>* The jobs really will all dry up. Go on something like indeed.com right now and see how many there are. Now imagine the same scenario after everyone has cut their workforce by 10-50% like after the dot bomb in 2000 or the housing bubble popping in 2008. Your selection may change from software developer to driving a delivery truck so it's good to have something you can fall back on. In my case it's moving furniture, but, at 42 I'm getting too old to do it. There will probably always be work in warehouses and restaurants though, like in the old ITT tech commercial.<p>* Assume that any possessions other than big ticket items like a home or car are only worth 10% of their value. You can get 25% at a pawn shop generally, but not after a recession when everything gets dumped on the market in triplicate. So all of the consumer electronics in your home are probably worth less than $1000 and won’t sustain you for long even if you sell all of them.<p>* Find your poorest friends or relatives right now and ask them how they get by. This is a good time to learn about donating plasma, collecting unemployment insurance, signing up for food stamps, etc. You’ll be able to make about $300-600 per month through these sorts of tools, but it will take all of your time. The US no longer has an operational social safety net (compared to healthy economies in, say, Europe) so the psychological toll of poverty has a way of locking people into its cycle by paying just barely enough to keep you in a state of slow decline. Best to avoid that by arming yourself with knowledge and knowing your rights.<p>* Consider getting involved in politics. The problems looming in this next recession are severe and exacerbated by the fact that no real legislation happened to correct the original causes of the 2008 great recession. Expect there to be no cash or credit available. Millions of people will be calling for reforms and there could be ways to help in causes like a new version of Occupy Wall Street. Assume that politicians are asleep at the wheel on this so any help from them will either not come or be too little too late. We’ll have to pick ourselves up by our bootstraps again.<p>This will be the third severe recession I’ve gone through since I graduated from college in 1999. Unfortunately my brain has adapted for survival instead of contributing to society at the level I had hoped for. I’m planning on the next recession lasting at least 3 years, starting around the time of the election. If it starts by summer, then Trump will almost certainly lose, so in the meantime we can count on an influx of capital from the private sector to keep us afloat. But next winter could be quite grim. Try to have enough money on hand to make rent until spring, roughly $3-6,000 for the average American. Note that the bottom half of the country has no savings, so there’s nothing they can really do to hedge against what’s coming.
I'm learning Rust. It helps to have a recession-proof skill. And there's a lot of software that will be re-written in Rust over the next decade to make the world safer in general.