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Post-recession Recovery- When the Economy Recovers
Good morning everybody. This is the third part in a three-part series I wanted to bring to everybody's attention about economic recessions. Recessions are tough, and I've spoken about what to do before a recession and during a recession and now I want to address how to recover after a recession ends. I went through the 2008 Great Recession and came out on top. It was a very rough time- there were layoffs nationwide, I was laid off, there were time periods of uncertainty but I came out better for it. It wasn't easy- it was a trial economically, physically, spiritually and definitely mentally. I wanted to talk about what to do when it's all over when the dust is cleared and it's time to recover.
A recession is defined as a reduction in GDP for two consecutive quarters. There are other aspects that come into play and usually there's a stock market dump accompanied by an employment reduction. The 2008 Great Recession saw that as well as a cratering in the housing market, during which many people lost their jobs. There were foreclosures, the stock market crashed, people were laid off and there was just a lot of pain everywhere. We were all caught up in it in a way we were all in it together and united in that we were all struggling. Officially, the recession lasted about 18 months and it was over in 2010, but in actuality it lasted about 5 years depending on where you were at when the dust settled it was about 2012-2013 and it was time to recover.
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When a recession hits there's likely going to be a reduction in the price of assets. That doesn't mean that the value of those assets is going to be reduced. Hopefully, during the recession you were able to pick up cheap stocks, houses, cars, toys etc. and whatever you wanted if you still had a job. If you're like me, I picked up some of all of the above as I had a job during most of the Great Recession. The housing market dipped in 2009 and recovered around 2014. The stock market recovered around 2010, and since then it has been rising streadily. A key part of economic recovery is the bull-market return, which is a good opportunity to sell the value you bought during the recession. As the market turns from recession to growth, many of the items purchased at a discount can be sold at a premium. This can be a mechanism to get out if debt and accumulate more appreciating assets.
In terms of financial recovery, many of us took on credit card debt, personal loans and various other things that helped us get through the recession. As the economy improves, it's important to make good on those loans. As part of your financial recovery, begin to pay off all your debt. I suggest you follow the Dave Ramsey Debt Snowball method where "debt snowballing" is assessing your debts from smallest to largest and systematically paying then off. After the recession, I was left with some credit card debt from a period of unemployment that I had to pay down and I immediately paid that down as it was my focus. Make sure to pay off interest rates highest to lowest get rid of your debt faster.
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Another aspect of recovery during the recession is concerning your career and professional network. If you have holes in your career as I did due to layoffs, update your resume and add-in explanations for what happened. I was working in companies that literally lost their budgets and had to lay us off, so I annotated that- I wanted to make sure that my employers don't forget the Great Recession of 2008 had impacted companies around the world and that was very important. In addition, make contact with everyone in your professional Network. I wrote before about how important a professional network is, and societies for your profession are key. Remember to thank everyone if you got a job through a professional network. Thank them and attend the society meetings- don't just ghost after the recession ends. It's very important to continue going- they helped you and they'll be there to help you in the next recession likewise if you can be a mentor to others do so.
Take note of the skills you learned during the recession- did you learn how to garden, did you become a handyman? I learned a lot of handyman skills and a lot of other important skills such as repairing clothing, cars, and other items around the house. It's very important to take stock of what you have learned- don't forget how to repair things in your sphere, because the next recession is going to be more of the same. Continue to learn and build your skills if you knew nothing about auto repair before the recession, you need to continue to build those skills, because in the next recession you may be paid to fix cars. Keep building those skills and don't just drop them because the recessions over.
Another aspect you might want to consider is education and certification. When you survive the recession and your career is recovering, you want to make sure that by the time the next recession hits you're an excellent position to weather the storm. You might want to go back to school part-time for a Master's Degree and you might want to get additional certifications. Educating yourself and improving your skills are key to building wealth- people pay for skills so if you have a gap in those fill in those gaps before the next recession hits.
The final and most important thing you must do after the recession ends is to check on your health. Your health is your wealth, and if you were offered one million dollars or your health you would take your health. The reason for that is your health is really your wealth. Take stock of where you are and improve your fitness if during the recession you became very keen on your fitness keep pushing. If you let your health go, you're going to lose it this is so key the stress of a recession on your mental health and physical health is going to be notable so make sure you take stock of that go to the doctor and get fit. Ask for help and get it. Utilize telehealth if possible and follow the doctor's orders.
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We may be entering into a recession in 2023. A number of economists are calling for one. I highly recommend getting yourself ready right now not in the recession as it's very hard to do so when everyone's scrambling. Recessions are hard and they can cut deep, so make sure that you take the time to take care of yourself and your family. Make sure you spend time with your family, as there can be a real pressure to earn money, but time with family and your health cannot be recovered thanks for support on these posts and have a great day.
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