Finally the economic down turn is on. Most of the economies facing sharp decline due to great changes happening in the macro-economic level. All of us required to take some necessary actions to protect our self from any possible problems and to be in safe side. Here are some important strategies for us to protect against economic recession. Read further…
There are three major areas you would focus as a part of preparing to protect against recession: Income and Savings, Investments and assets and Job Security
Income and savings
We should take extra care in this part. Below are the possible steps you can do in this part.
1. Prepare a clean budget. This will help you to identify unwanted expenses and cut your spending.
2. Pay off all your debts, mortgages and loan. Remember, credit card and personal loans are more painful and avoid that if possible.
3. Protect yourself, family members and your major assets through cheap term policies with huge covers as well as through medical policies. You have option to select policies that have very cheap premium and huge insurance cover. Select one. Hospitality expenses are money losing loop holes in the financial planning baskets.
4. Create an Emergency fund as soon as possible – This will help you in some situations like job lose or any kind of unexpected and sudden financial crisis arising in your life that can imbalance your family financial back born. So prepare one and go ahead with that. Practice it till the end of your life and teach others to practice the same.
5. Try to generate some extra cash – of course you have a job. But it is always a good practice to try for some extra income through small business, freelance work, online work, part time work etc… This will be a great help for you in such time.
Investments and assets
1. Identify all your assets.
2. Protect major assets through required but cheap insurance cover. Major assets like home, vehicles, gold etc… should be protected.
3. Consider to span your Fixed Deposits and other savings across multiple banks.
4. Add valuable and secure items such as Government Bonds, large cap stocks to your portfolio.
5. Avoid investing on any instruments that does not have enough capital security like NBFC deposits, small cap or penny stocks etc.
6. Have a well diversified portfolio of debt and equity mix through investing high secured bonds, fixed deposits, various well performing equity mutual funds, blue chip stocks with very good track record.
7. Have well amount of gold exposure. This will be an asset at any time you can use as emergency.
8. Don’t touch your employee benefit like provident fund or 401k money.
9. Diversify your 15% of investment portfolio to international stocks.
Job security
1. Identify the possible part time work to earn extra cash.
2. It is the best time to develop your skills than the present one. Attend training or do self study to get more skills. Have career prospect like a Swiss knife.
3. Take care of the changes happening in the company. Little concentration can help you to identify any possible problem to your job to take an early action to get another job.
4. You should be highlighted in your importance in the workplace in a daily basis. In other word, improve your credit rating. This will protect you from possible job lose.
5. Update your resume and post it to the job sites.
6. Use your personal and personal contacts as well as available resources to get information and ready for another job if required.
Do the maximum you can. Rest all in the hand of god. Always remember that, any effort by anybody taking honestly will never go without proper result. Best wishes to you and myself too.
Feel free to inform me if you found that I have missed any important point in this article. I will certainly add the same by giving proper credit to you and your site.
