3137: 12 Ways to Make Yourself Recession Proof by Philip Taylor of PT Money on Personal Finance

[00:00:00] This episode is brought to you by Lakinta by Window. Your work can take you all over the place like Texas. You've never been but it's going to be great because you're staying at Lakinta by Window. Their free bright side breakfast will give you energy for the day ahead and after you can unwind using their free high speed Wi-Fi tonight, Lakinta tomorrow you shine. Book your stay today at lq.com. Before we start please check out our new podcast Good Sleep. Have you ever noticed how a calm mind can really set the

[00:00:30] stage for a good night's sleep? That's the idea behind our new podcast Good Sleep. Greg, our host from Optimal Relationship's Daily is here to help ease you into a peaceful nights rest with some positive affirmations and these affirmations aren't just comforting they can help ease anxiety and nurture positive thoughts setting you up for true Good Sleep. So press play on Good Sleep tonight because a good tomorrow starts with a Good Night's sleep. Just search for Good Sleep in your podcast app and be sure to pick the one from Optimal Living Daily.

[00:01:00] This is Optimal Living Daily Episode 3137, 12 ways to make yourself recession proof by Philip Taylor of ptmoney.com and I'm Justin Mollock. This is the show where I usually read to you kind of like an audio book but on Sundays I share an episode from a different podcast in our Optimal Network and today's comes from Optimal Finance Daily. Please do follow or subscribe to that show. It helps keep this one going.

[00:01:28] Again, that's Optimal Finance Daily but with that let's get right to the bonus episode and Diana's commentary as we optimize your life.

[00:01:42] 12 ways to make yourself recession proof by Philip Taylor of ptmoney.com

[00:01:48] In the latest issue of Money magazine, Stephen Gandle presents a special report on survival strategies. Quote the economy and the markets may be in for a hard fall. Here's how you and your family can land safely.

[00:02:03] I thought I'd share the 12 points that the article makes as well as my comments on each. All this after the markets have had their best one day gain in five years. Oh well I think these points are applicable regardless of the outcome.

[00:02:16] 11. Recessions Learn the facts. Apparently the last time we were in this kind of economic downturn was in the early 90s. The article states that it took about three to six months for the economy to turn around once it hit full recession.

[00:02:32] I have no idea what this current downturn entails but if history repeats itself and we go into a recession will be up and out of this thing before too long.

[00:02:41] I'm not going to panic but I still think it's a good idea to brace yourself a bit. That's what the other 11 points are all about.

[00:02:49] Sure up your balance sheet. Number two, stock up on emergency funds. In the article it suggested that you move from a three months expenses emergency fund to the six month variety.

[00:03:02] I think more emergency cash is always better so I'm all in favor of this move. If you can move towards more short term savings than do so. If you don't have an emergency fund you should start today.

[00:03:16] Number three, slim down the debts. It's always a good time to do this but apparently even more so in a potential recession. When your stocks are flying high you can afford paying a little debt interest but not now.

[00:03:28] You can read more about how I paid off my high interest credit cards on my blog. Sure up your portfolio. Number four, regain your balance.

[00:03:39] It's easy to set your retirement savings on autopilot and just forget about it. Have you checked your 401k lately? What funds are you invested in?

[00:03:48] Are they properly balanced for someone your age? In my opinion target date funds are a good way to make this happen.

[00:03:54] Number five, venture carefully beyond our shores. A quarter to a third of your equity holding should be in foreign stocks as the author. That seems high to me. Again I let my target date fund do the work for me here.

[00:04:10] Number six, scared then embrace bonds. If you think we're still headed downward then you may consider moving more of your portfolio into bonds. The author says to do this instead of trying to tie in the market with stocks.

[00:04:24] Work harder and smarter. Number seven, get to your company's core. Working on key projects for your company will apparently make you less likely to lose your job if times get tougher. Make sure you're generating revenue for your company. Any position can add value. Be proactive and find the little things that add up to big savings for your boss.

[00:04:45] Number eight, get to the office and stay there. Make sure you're getting plenty of face time with your boss. If you work from home often consider stopping that practice for a while. Also you might want to be the guy or gal who is first in and last out. Can't hurt.

[00:05:02] Number nine, cozy up to a headhunter. Get on Facebook or LinkedIn now and connect with recruiters in your field. Believe me they'd love to hear from you.

[00:05:11] While you don't necessarily have to begin your job search, make sure you have a few connections. The few unwanted interruptions I do get from these recruiters, I don't mind because of how they've helped me out in the past.

[00:05:24] Number 10, get ready for next time. The author mentions laying the groundwork for an industry switch. Healthcare is now and for a long time will be a very hot field. Consider a career switch and begin investigating the path needed to get there.

[00:05:39] Focus on the home front. Number 11, be a picky buyer. The author mentions offering 10% below asking price if you are in the market for a new home and offering your home for slightly less than comparable homes if you're selling.

[00:05:55] I don't know much about real estate so I won't comment but to say I think there are plenty of deals out there right now. I wish I had a lot more cash in order to take advantage of some of the deals available.

[00:06:05] Number 12, and a savvy borrower. If interest rates continue to fall then you may be able to justify refinancing your mortgage. Apparently the biggest savings may come on jumbo mortgages above 417,000. That's a big mortgage.

[00:06:22] One of the things my father taught me is that the US government has long since learned that the housing market is what drives our economy. Therefore they will do anything to keep it propped up. Look for plenty of bailouts to lenders and borrowers.

[00:06:36] Like I said, well I think it's great to look at this stuff now. Most of these points are things you should consider all the time with your finances, not just in a downturn.

[00:06:44] You just listen to the post titled 12 Ways to Make Yourself Recession Proof by Philip Taylor of PT Money.com.

[00:06:56] Okay sponsor time and instead of reading a script about Gusto's benefits let's hear from small business owners, the people who use Gusto every day like me. Here's one. With Gusto I think of payroll as a 30 second job. The website is so friendly and a joy to use.

[00:07:11] Friendly payroll. You don't hear that every day. Amy from Utah says I love Gusto so much they do our medical dental vision and life insurance. It's so painless it's like going to the spa and we have great options and rates even though we're a super small team.

[00:07:27] Health insurance like going to the spa? Wow. And here's what Amnit says about Gusto's support team whenever something comes up I reach out in literally 24 hours later they tell us what to do or assure us that they've already handled it for us.

[00:07:41] Smart technology and friendly humans. That's cool. Honestly the list goes on and right now our listeners get three months free when they go to Gusto.com slash old.

[00:07:52] Yep, three months of payroll benefits admin and more totally free again that's gusto.com slash OLD.

[00:08:02] Okay, so I just want to point out that this article was written in 2018 what a simpler time it was back then am I right.

[00:08:09] But most of the advice here applies anytime during a recession a pandemic or when times are good.

[00:08:16] The thing is even if the economy is booming your own personal recession could happen at any time a health scare unexpected job loss or other hit to your income is bound to happen at some point.

[00:08:30] And that's not to be negative we shouldn't live in fear we should expect these things as a normal part of life.

[00:08:36] This is why we create financial safety nets for ourselves so that we're prepared for what life throws at us good or bad when it comes to my investment portfolio I'd be hesitant to make any changes due to fear of a downturn.

[00:08:51] Remember when we invest worse signing up for the roller coaster ride my strategy has always been to hold a years worth of cash so that I can better tolerate the volatility of the market.

[00:09:02] And clearly this article was written when the housing market wasn't completely insane while the low interest rates are great right now for buyers it is absolutely a seller's market and so buyers don't have the luxury of being picky or offering 10% below asking price.

[00:09:19] And the current housing market where inventory is low many people are willing to overpay for a home nearly every article I've seen lately regarding real estate recommends to not buy right now if you can avoid it.

[00:09:32] But if you're going to go for it don't be bullied into overpaying for something you really can't afford or settle for a home that may lead to buyers remorse just like any other economic cycle this sellers market won't last forever so it may benefit you to hold off on buying a home right now.

[00:09:49] And that will do it for today have a great day and start to your weekend thank you for listening and I'll be back here reading to you tomorrow where optimal life awaits.