Beating the Recession

What is a recession?

A recession is generally started due to a lack of demand for a countries produce. This can begin in many ways; most recessions begin as a result of massive inflation, meaning a large jump in prices for goods often caused by an uncontrollable economic boom.

Prices tend to escalate at a rate that is unsustainable and because of this goods become unattractive, people are not prepared to pay for or can not afford to pay for the highly priced goods causing a reduction in value for both goods and companies, resulting in a loss of profit and eventually in redundancies, which inevitably creates a vicious cycle.

How do you take advantage of the recession?

because prices are so low across the market it is a good opportunity to get good bargains. The trap that most people fall into is that they think that because prices have gone down they do not want to invest, however, when prices go up people are more than happy to invest and as such loose money.

Investing in property or stocks and shares is the same as buying general goods off the high street, why pay the highest price when you can wait for the sale?

The advice in the following article is simply opinion and may seem ruthless, however, to make money sometimes we must be ruthless. As it is only opinion based on my experience there is no 100% guarantee that it will work. Making money is not instant, it takes time and courage. If you do not have both then stop reading now!!!

Investing in stocks and shares

The trick isn’t to invest when the markets are booming, but to invest when they are suppressed. Obviously there is an element of risk involved in any kind of investment, you must choose a good stock broker who you trust and spread your risk by only investing small amounts at a time such as £50 per month.

If you only invest small sums regularly you will be able to take advantage of dips in the market, the lower the price of the stocks and shares the more you purchase. Although you will also see your investment value go down but do not panic, this is where having courage comes in. You will need to be brave enough to hold until the investment value increases. Once the stock market recovers you simply take the interest and use it to invest in something else with a little more risk. You should then do your research, find something else that has a low current value but a high potential value and re invest your capital.

Of course most financial advisors will tell you not to skim the interest, this is because of their corperate training although there are certainly advantages to leaving it all together you will be able to spread your investment and take more risks by simply keeping your capital safe and risking the money that wasn’t yours in the first place, therefor if you loose it you can just start again and if you make money then it is just a bonus. Think of it as gambling with the banks money that you never have to pay back.

Investing in property

Investing in property is the same as investing in stocks and shares. As the prices go down you have more of a chance to make money when the prices increase. Of course you need a deposit but if you invest wisely you could make a large amount of money. Here are a few ways that you can take advantage of the current market:

Because of mortgage defaults banks are repossessing houses, this means that you can get a property at a low price via auction. (make sure that you research and understand the risks involved before you do this.)

Alternatively you will note that due to an unstable market some estate agents will be undervaluing properties to get a quick sale, look for these: An easy way to spot them is to go to a street with similar sized houses for sale and look at the comparison prices, do this a few times until you have a list of about 3 or 4 estate agents. Research the estate agents and compare them to others until you find one or two that are consistently cheaper than all the rest to ensure that it is not a one off. This is where you should purchase your property from.

Finally NEVER offer the full asking price straight away. When prices are low, often vendors (sellers) and estate agents are looking for the quick sale, don’t let the estate agent push you either. They may use tactics that involve giving you a short time span, so to avoid this you will need to ensure that you do not show your true interest in the property. Make out that you have several more properties that you are viewing. Also, you need to find out exactly what it is that the vendor wants, is it a quick sale? highest price? no chain? etc play on this.

Overall don’t be affraid to ask questions and to be cheaky. Only go to the full asking if you have no other choice and if you are sure it is a good deal. To be sure that it is a good deal do your research. Are there any improvements due in the area? don’t be affraid to go for a ‘developing’ council estate if you know that a new transport connection or a new revamp is being planned, all you need to do is talk to the local council. Again RESEARCH the area, go there at night, talk to the neighbours etc.

Once you have purchased the property get advice from an estate agent, get a free valuation and ask them how you can improve the property value, do this several times, make notes and follow the advice. When prices recover simply sell the investment, take the money you made and repeat. Because the money that you earned is pure interest and wasn’t yours in the first place you can take bigger risks and there for earn more money.

Free Money

Making free money is quite easy and can be done in several ways:

1) Use an interest free credit card, invest the money (safely), maintain the minimum payment and when you are due to pay the money back you do so, keeping the interest you earned from your investment. As your credit rating increases you could even use the interest free card to raise a deposit for your investment property. (Although again, make sure that you understand the risks involved, if you don’t make the money back you could end up in debt. Practice with smaller and safer investments first.)

2) Find something that would normally be thrown away to begin your investment, like CD cases, these can be found from businesses etc and sell it on eBay. Then use the money to invest or purchase a sale item whcih you can then sell at a later date for a higher amount.

3) Use your skills or time to make money. (provided that it is legal and moral of course)

4) Cash back sites are also good for this. Make sure that you don’t buy anything that you wouldn’t normally otherwise it defeats the point.

sometimes all it takes to make free money is a little initiative and creativity.

Summary

This is not a definitive guide but it should point you in the right direction, obviously it is now down to you whether you choose to take this advice or not. I have just begun on this journey as advised to do so by someone who is already making large sums of money and I look forward to telling you the results of my work one day. I would also recommend reading a book that has inspired me Rich Dad Poor Dad by Robert Kiyosaki.

Even if you do not agree with everything he says one thing that Robert Kiyosaki advises is to never say can’t instead always ask How.

Obviously there are risks involved so please make sure that you only risk what you can afford to loose.