
Posted by David Dick, David Dick Financial on 07/26/2022
Inflation & Planning during a Recession
Inflation is so inconvenient to young professionals who are starting their careers or trying to find a career path. But how does one navigate through these times where the economy is falling and inflation is rising? STOP worrying! Recessions in the US happen every 5-7 years historically. We haven’t had a recession begin since 2008 (14 years ago). We are/were due for a recession.
I won’t go into the crazy details of the market styles or reasoning why we are in this current state, but rather look at the basic levels involved and how to project ourselves onward and upward.
First, I am going to beat a dead horse by stating save money. But I will give a perspective to this as well. The reason saving money is essential is that this allows you to have assets for a safety net, and also giving you investable assets for personal growth. Most people will state that your most valuable asset is a retirement account, your home, etc. I see the most valuable asset as something different. YOUR INCOME! From a financial eye cash flow is the most valuable piece to your existence (plus health but this is a financial blog). You can have millions in your retirement or real-estate but if you don’t have cash flow how are you able to purchase groceries that have gone up in price.
Because I need to keep this fairly short and I think you can read in between the lines on cash importance from the above statement lets get into the fun part of this blog post. Okay, we have saved money and learned the importance of having cash on hand. Now it is not an unknown fact that most millionaires are self-made during and right after a recession. I am not saying that you will become a millionaire over night, but we have this major opportunity in front of us to set ourselves up for a bright future. Financial Advisors have the luxury of seeing this as we study the market. For stock market portfolios shares are considered to be at a discount as their prices have fallen. Investing for the long term we see this historically and as the economy stabilizes and returns to a growth phase, we see prices rise and dividends begin to increase. As a Young professional who has taking the time and discipline to build up your cash you can take advantage of this concept. I am not a realtor, but I also am a fan of how real-estate can benefit one’s personal wealth (consult a real estate agent for more information here). This biggest thing to take away form a fanning economy and inflations is that you have been given opportunities through investing with multiple avenues, and we see how important cash on hand really is to keep the same style of living while still building for our future.
I hate that I have to cut this short, and this is all for education purposes only. I hope you can take this and see the light at the end of the tunnel as we navigate through a recession with increasing inflation. I give you all my best EYP members and I hope this helps to bring piece to your throughs on where the economy is headed and what you can do.