Who wins in a recession
A downturn is upon us, but winners will always emerge
Are you ready to expand as the world contracts? Even in the current dire economic situation, plenty of people will still emerge as winners. Winners know that recessions are not something to fear but are rather opportunities for those who are properly prepared.
Here are the top seven characteristics of winners in times of a recession:
1. The win-win mindset
Winners know that perspective and mindset is everything. The difference between a winning and losing mindset can be small, but it's distinct and is incredibly important.
Does winning mean someone else has to lose?
Despite what some people think, true winners don’t take a “win at all costs” approach. Winning at all costs isn’t winning – that’s usually just cheating or scamming people, and at its worst is breaking the law.
Think of a used car salesperson who sells cars hiding serious mechanical issues. Over the long run, this will lead to complaints, bad online reviews, and legal action. This will soon lead to the downfall of the shoddy salesperson – certainly not a win.
Instead, part of the winning mindset is how winners look for win-win arrangements – the idea that all parties in any situation can end up with favourable outcomes.
2. Cash holders who are willing to put it to work
‘Cash Savers’ are set for more punishment as interest rates continue to tumble further. Even before recent events you might have heard us say that cash is trash.
Share markets (stocks) have already dropped in value before recovering most of their losses, and now most commentators expect that the NZ property market will fall too.
Smart investors with some cash to spare can win by investing more at times like these. Investing right now could be thought of as a necessary shopping trip when everything you need is on sale. This might take the form of:
- Investing a lump sum or regular surplus into the share market (either directly or through funds). It’s been reported that Saudi Arabia is doing this at a scale much bigger than most of us can imagine by launching a NZ$64.4 billion purchasing plan - for personal investors the exact same theory can apply, or
- Property investors and first home buyers who can make the most of the combined dip in values and record low interest rates.
When more normalised conditions return, savvy investors will be left with sizable gains.
3. Asset owners
The NZ authorities have started a process known in financial circles as ‘quantitative easing’ – which is more widely known as money printing. It will take time for newly printed money to steadily take effect in the real world, but when it does, it increases the value of assets such as shares and property (real estate). The more cash there is in the system, the more values should go up.
Like point #1 above, as normalised conditions gradually return, those that already own assets can expect a win as those assets rise in value.
4. People with a job
Having a job might not mean working for a company, it could mean being self-employed, contracting to others, or having a stable source of ‘side hustle’ revenue.
If you are reading this and still have a job then you can count yourself lucky, you might already be considered a winner in this area. There have been thousands of job losses at well-known places like Air New Zealand, the Warehouse, Vodafone NZ, Auckland Council, Fletcher Building, Sky City, Ngai Tahu and so on. Plenty more are likely on the horizon as the initial government wage subsidy scheme has just ended, and as NZ has a large proportion of small and mid-sized businesses most of these job losses will go unreported.
What if you’re already unemployed?
If a winner unexpectedly finds themselves without a job, you better believe they’ll treat their job search as their ‘new job’! This means putting more time, energy, tenacity, and creativity into getting themselves back into the work force. If they spent 8hrs at their last job, now they’ll spend 10hrs a day finding a new one. This won’t be just relying on a scroll through listings on a jobhunting website or sending out a few CV’s either – winners will do whatever it takes to get in front of hiring decisionmakers, such as making cold-calls or knocking on doors. If needed, a winner will change fields entirely, perhaps to one of 10 best jobs in a downturn.
5. The disciplined
During uncertain times, discipline is more important than ever.
Disciplined people have established routines, keep a level head, and can avoid distractions related to the epidemic and it’s economic fallout. While others are panic-buying toilet paper, being fooled by corona-related scams, or are making common mistakes in a downturn – instead, disciplined people know what they want and are able to stick to their long-term proven techniques to get it (or keep it!).
Without downplaying the health impacts of the current situation, especially what has happened in some densely populated overseas locations, disciplined people will be winning by staying calm and staying the course. For instance, even when further investment market turbulence occurs – which is likely – or a second wave of COVID-19 hits our shores, people with discipline will keep their cool and stay in control.
6. Those with a well-developed plan
“An idiot with a plan can beat a genius without a plan” ― billionaire investor Warren Buffett
Winners are fixated on where they want to be, and the practical steps they’re taking to get there.
As Warren Buffett suggests in the quote above, having and sticking with a plan could be the single most important thing on this whole list. This is so important it’s closely related to the only guaranteed way to get rich.
When troubling times hit, people with a deliberate and carefully prepared plan usually sail straight through the storm. They have already considered and planned for the inevitable storms that life will throw at us all. They might not have known a global epidemic was coming, but they have read a history book or two so know that natural disasters, wars, famine, recessions, and other issues are normal events that occur over the course of a lifetime.
This means they’ve probably already taken any number of deliberate steps to ensure they ride out the trouble, and not only that, make the most of a bad situation.
7. Positive, energetic, and innovative people
Winners will do whatever it takes to increase and solidify their income. This includes taking on other income opportunities to increase their monthly income, then invest the extra funds – including investing in themselves through professional development courses and qualifications.
In general, it might be hard to watch the news right now and feel a sense of optimism. Riots, racial tensions, recessions, and the global epidemic dominate the headlines. There are no easy answers, however, winners have a purpose and focus on solutions.
Winners take action, even if that’s just staying the course. Winners won’t be waiting for the situation to change, waiting for handouts, or waiting for help from anyone else.
The bottom line – who wins in this recession?
“You were not born a winner, and you were not born a loser. You are what you make yourself be” ― Lou Holtz
Here’s a recap of the top seven things which characterise winners at a time like this:
- The win-win mindset
- Cash holders who are willing to put it to work
- Asset owners
- People with a job
- The disciplined
- Those with a well-developed plan
- Positive, energetic and innovative people
If you’re reading this and think that you can do a little more to improve your chances of winning – what better time to start than today? Perhaps we can help – get in touch by leaving your details below and we will reply within one working day.