As I’m writing this, the context is continuing to change and may not even be valid in the next hours or days. But what I want to talk about is the impending economic downturn.

We know economic downturns will happen. They consistently come every 10-12 years. In 2001, 9/11 had a significant impact on the economy; again, in 2008 the housing market crashed. And now, coronavirus. The truth is, we never know what is going to come or how it’s going to impact us. At least not 100%.

Who could have predicted the coronavirus coming about?


The Importance of Having a Plan

Amidst the chaos and uncertainty, this is a profound reminder to us all to be prepared – to have a plan. I get frustrated when I hear people say, “oh this won’t affect me. I’m only 45 years old, the market will correct itself and I’ll be alright. At 60 I will still be in good shape. Plus, I have a financial advisor who is telling me all of the right things to do.”

I can’t totally argue with that. It’s true that the market does generally correct itself. But what I have a problem with is the idea of trusting all your money to someone and not having a clue what is actually going on.

Let’s say you set your retirement goal for 2030 and then in July 2029, we get a 30-50% downturn. How useful is your advisor going to be now when your money just tanked on Wall Street? Even if you make it to your 2030 goal, take all your money out and then the market tanks two days later, where are you going to put that money? Do you have the knowledge of what is going to provide cash flow and earn you a living?

On many levels I do not understand the logic of blindly giving your money to someone on Wall Street and hoping (fingers crossed!) that is all works out. I wouldn’t blindly give your money to a real estate investor like myself either. It doesn’t matter the setting – it’s the lack of involvement and knowledge that is problematic.


Mitigating the Effects of an Economic Downturn

We all need to become learners again. We need to become curious and involved in our financial decisions. You don’t have to be another cog in the system, following traditional financial wisdom.

Start learning NOW! Go meet people (well, from 6 feet away). Make connections. Educate yourself. Get curious and involved again. The point is, learn what to do with your cash now – don’t rely on Wall Street characters to make all your decisions for you.

The COVID-19 pandemic has been a massive wake-up call for a lot of people. There are many variables we cannot control – that is obvious. But what we can control is our own decision-making. Empower yourself with knowledge, information, resources and connections, so you can get to a place where you are as prepared as you can be for anything.

Because the truth is, we will have another downturn, and another and another. So learn from this event and be proactive.


When You’re Ready, We’re Here

We would also love to discuss opening your investment options, especially when it comes to wealth education. Get in touch with us here to find out more.

Image Attribution

Article Name
What's Your Plan? Planning for the Economic Downturn
Coronavirus is here, and the recession we have predicted is following it. Read on for what to do in advance to mitigate the effects of economic downturn.