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Preparing for the 2nd recession

August 14, 2018

 

Preparing for the next recession

 

I wish I wasn’t writing this article and things were different in our country. A recession hurts people and our leaders should try to avoid it at all costs. But they don't care and they aren't going to so I am getting myself ready for the next recession.  It doesn't make a difference what political party you are if the economy heads towards a recession it is better to start preparing now and if it doesn't happen then you are in stronger financial shape for the future. 

Ten years ago, I was sitting on a 550 Sq. Ft.  Condominium in Long Beach, CA.  It was a refurbished development, so all the residents bought together.  We watched in a years’ time our condos go up $100,000.  Wells Fargo would send us letters monthly with checks printed enticing us "go on vacation" or "buy a new car" you have plenty of equity and they made it seem like is was cash in the bank.  I wish now I saved one of those predatory lending advertisements.  I knew several people who bought it.   I tried to explain to my friends you still must pay it back. The mentality was this is going to go up forever.   It was a crazy fever.  I had a really good job with good pay and I couldn’t afford to buy the current 550 sq. ft. condominium I was living in.  Something was wrong with that.  It was too high.  It was time for me to cash out and go home to Buffalo, NY.   I took a transfer and sold my condo 5 months before the crash.  Many of my friends were foreclosed on. 

 

I feel like it is 2007 all over again. There are too many factors haunting me right now.  The stock market is too high and falsely inflated by the buy backs the corporations are doing instead of investing in the employees or new growth like they were supposed to.  Real estate went right back up with people having to pay for higher insurance premiums PMI for life, what a deal.   The salaries is this country still haven't increased enough to balance out inflation.  The scariest indicator is the debt.  The credit card debt is mounting again because people can't cover their basic needs because of inflation.  I feel the biggest issues is the student loan debt. With over 3000 student loans going into default a day this is going to be a big  problem. The student loans investment  is unlike the housing bubble because the investment is in people rather than a physical property so I have no idea how that is going to pan out.  I also know someone who was just laid off on Wall Street.  The home builders are starting to cut back too.  

 

I am not a published journalist, economist or financial investors just someone who watches trends and  patterns and I would like to keep my money again. 

 

Get involved with protecting your assets.   I recommend baby boomers get involved with your pensions.  Fight for them and for social security.  Myself I pulled out of the market and into bonds.  Which even that isn't safe.  Pay off high interest debt and reduce your cost of living.  We just moved to the city of Atlanta and there are many expensive activities enticing me but I am being very conservative and just saying no. I have reduced my spending again.  Brewing my own coffee and checking out free things to do. 

Asking myself if I really need it or not. 

 

My generation X friends did anything to keep their houses including using their 401k.  They  lost the most out of anyone generation in the last recession.  The middle class is disappearing and that is real.  I going to do the things I want and not wait till retirement because it looks like retirement isn't going to be what it was for our parents and we won't have any time or money to go anywhere once we tick the golden 62 age. Enjoy your life and try not to just cash out your vacation time for money.  The good news is the GDP ( Gross Domestic Product)  is high and hopefully it won't take 10 years this time for a recovery and maybe it will just be a correction.  I don't know I'm not a expert just an average joe trying to travel through some rough seas. I think I'll have Charlie fix my bike and save some gas money this week. 

  

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