A global recession is a temporary economic decline in the trade and industrial activity that affects many countries around the world.
It is a period of global economic slowdown or down turn of economic output which is generally identified by the fall in the GDP in the successive quarters.
Many companies, enterprises and entrepreneurs due to the corona virus Covid 19′ pandemic are now suspending all economic operations .
However, currently (April 2020) the economic growth is decelerating in many countries.
The Global Economy
The current estimates has shown that in 2020, the global economic will perhaps slow down its increase in several percent compared to the previous year.
More so, the effect of the Covid 19′ pandemic on the global economic is very enormous. The high probability of potential recession of the global economy in many countries in 2020 is currently specified .
The main factor behind the fall in international trades and the international capital flow is the the recent pandemic.
I’m not saying these aren’t hard times, but smart wealth builders know how to make use of opportunity in every economic environment.
Even in a recession, you can find skillful ways to extract economic advantages and position yourself for the next economic recovery because not all time are good.
However if you want to live a wealthy life, then you would have be wise: Learn how to be optimistic in every situation which includes the bad times connected with an economic downturn.
Is recession coming in 2020?
The predictions of whether recession is coming in or not, is now becoming so thick and swift. The corona virus outburst has triggered severe fear in financial markets as investors face up to a distressing reality.
There has been an observed speculation recently in the press about the imminent global crash and the inescapable repercussions it will cause. The predicted 2020 global recession might be optimistic.
The downturn will be sudden and keen. However a productive response from policies, household and companies could restrict its duration.
The International Monetary Fund’s January forecast update noticed growth picking up from 2.9 percent in 2019 to 3.3 percent in 2020.
And there were profused reasons to be optimistic, then came the novel corona virus with the economic surprise of the health crisis circulating around the world.
What could activate a global recession?
The coronavirus has inspired people to stay at home and avoid travel, it has reduced demand for flights, hotel rooms and restaurant bookings.
At the same time It has tangled supply chains. The longer the pandemic lasts, and the more dramatic the struggle are to contain it, the more deep the effects will be for the global economy. Right now, the situation is highly uncertain.
How to make profit during Economic Recession
1.Reduce your Costs:
Whether you are own a business or you are running a household, now is the time to cut costs and become an efficient cash flow machine.
Abolish redundant employees and replace barely productive employees with better quality from the surplus job market. Also, find lower-cost providers for services and goods, and cut every form of loss.
When you waste less and use every resource to its maximum advantage, it’s good for the environment and it even better for your upshot.
Now that businesses are in declining rate, make use of that extra time to lower your costs and improve quality and efficiency.
2. Own Instead Of Rent:
Real estate prices are down and interest rates are low, its’ advisable to make purchase of your office or home rather than renewing the lease. The economic relationship of rent compared to been an owner has effectively changed in the last two years.
Most accountants agree that if your time horizon for using the real estate extends to 20 years or more, the scales will occasionally incline in favor of ownership.
3. Bargain Shop:
Many merchant are offering brant price concessions. It seems everyone is having a sale, but you have to ask for the discount. Not only but also you will be amazed by how much money you can save just by asking for a discount.
4. Add To Your Portfolio:
There is an opposite correlation between long-term investment returns and the valuations of the market when you obtained your portfolio.
Subsequently the best time to build your portfolio is when investments are beaten down and the values are strong.
The lowest valuations have the highest expected returns. Build your portfolio when surety are on sale.
5. Refinance Debt:
Interest rates are whopping off low. Debt refinancing is the substitution of an existing debt by means of another debt with terms that are more helpful.
In other words, debt refinancing refers to the replacement of existing debt with new debt.
Locking down unrealistically low, long-term, fixed rate mortgages is an exceptional opportunity in today’s recessionary environment. This generalship applies to investment real estate as well as your personal residence.
6. Take Advantage of Government Boondoggles:
A boondoggle is a project considered a waste of both time and money, yet is usually prolonged due to additional policy or political incentive.
There’s no reason the taxpayer should be going intense into debt to bield consumers to purchase cars (Cash For Clunkers) or homes (First Time Home Buyers Tax Credit).
However, like it or not, these industries are lend a hand by the government.
Don’t respond to these incentives by creating imposition, but do use them if you were already considering a purchase. As long as the music is playing, you should be smart and do the dance.
All times are good times if you know how to position yourself to find the good that already exists there. Hidden behind the doom and gloom of this downturn is an abundant opportunity if you just know where to look.