As I predicted in the previous article (this article), an economic recession would come after 1 or 2 years. The next one could be the worst economic depression we have ever experienced.
Today, I will talk about how to survive and increase abundance during a recession.
How to prepare for the coming recession
Sometimes, we want to prepare for the future to stay safe and be more abundant. If we tend to worry about the future, knowing the risks and countermeasures makes us calm.
We can also use the event as an opportunity. If we can predict a large-scale environmental change, we can prepare and store valuable but cheap things in advance. We can sell or use them after the environmental change to achieve more abundance.
An economic recession would be one of the large-scale environmental changes.
In this period, people and society dispose of unnecessary things and make our lives less wasted. Unimportant jobs for living will decrease, and luxury products will be difficult to sell. On the other hand, the necessary things to live become more expensive.
The value of money could also change. When basic commodities are in shortage, people realize that fundamental goods are more important than money.
Perhaps you remember the event in 2020. The pandemic caused items to disappear from grocery stores. That meant people valued goods more than money. We cannot eat money; it is just a tool for exchange. If all the store shelves are empty and we cannot buy anything, money becomes worthless.
What should we do now?
In other words, people’s lifestyles and rules change during a recession. To use it as an opportunity, we can prepare for it.
However, we sometimes don’t know the mindset to live efficiently during a recession and how to be abundant. The lifestyle in a recession is different from the one in an economic boom. Not knowing that often makes us fear losing our current jobs or incomes.
Today, I will introduce how to survive and increase abundance during a recession. During this period, the ability to prepare would be more fundamental than keeping jobs. This knowledge might relax us and allow us to prepare for the future appropriately.
The difference in lifestyles between economic growth and recession
During a recession, the ability to prepare would give us safety and abundance. It means stable things change in times of economic growth and recession, as follows:
- During economic growth, jobs, money, and status tend to be stable and reliable.
- During a recession, essential living items and stockpiles tend to be stable and reliable.
In other words, during a recession, jobs, money, or status tend to be unreliable.
Stagflation is a typical example. It is a condition with high inflation, stagnant economic growth, and elevated unemployment. It means that the prices of essential living items go up, people buy fewer things, and jobs other than socially basic work decrease.
Many cannot rely on their jobs. The prices of essential items soar, but people cannot help but depend on money. That makes them nervous and cautious. Society becomes bleak.
Many people cannot adapt to it soon. That might be why society hates recession and stagflation.
Adapting to the next recession in advance
However, if we know the rule change, we can easily adapt it and use it as an opportunity.
We can reduce luxury items or habits and prepare essential living items in advance. Starting them early would be better because changing lifestyles and disposing of unnecessary things often take time.
Reducing debt would be helpful. Although some advisors recommend debt during inflation, I don’t think so, especially during stagflation.
During inflation (or stagflation), the value of money decreases. It means that if we postpone repayment, we can repay it easily. If the value of money becomes 1/100 and our average income level becomes 100 times in the future, we can easily repay debt.
However, we have to keep paying back continually while our income is unstable. It is not always possible to reschedule a payment. That could be a fatal risk. That is why I don’t recommend debt during a recession or just before it.
The importance of thinking for ourselves
During that period, thinking for ourselves would help. Getting information on the Internet tends to cause losses. This is because many people follow it and rush to one or several affordable things.
That causes sudden prices to soar. For example, if the internet spreads that eggs are the most effective and affordable food, many people rush to buy them. That causes egg shortages and price rises.
On the other hand, if we can think for ourselves, we can find affordable items at appropriate times.
In my case, during the confusion of the pandemic in 2020, flour disappeared from grocery stores. However, I remember there was a lot of soy powder called Kinako left over. It was minor food, and people in my area thought it was just an ingredient for sweets.
Although it was nutritious and can be used in many dishes, many people stuck to flour and didn’t realize they could use it. It remained cheap.
That is an example. If we can think for ourselves, we can find such opportunities.
A similar phenomenon in the financial market
Something similar often happens in the financial markets, too. The prices of commodities, such as gold, silver, crude, or crops, soar in this period. Although we have to be careful to buy them because the market prices will collapse at the beginning of the recession, we can find a cycle from history.
If we can prepare for it, we could make profits. In the financial market, we can easily buy, store, and sell. That is why I like the financial market.
Recession is not something to be afraid of. Relying on only something that will become unreliable, such as jobs or money, makes us fear.
Knowing the phase changes and preparation would help us and relax us.
Conclusion
That could be a way to survive and increase abundance during a recession.
During a recession, the ability to prepare helps us.
This knowledge might relax us and allow us to prepare for the future appropriately.
Thank you for reading this article. I hope to see you in the next one.
