Jaseem Abid woke up on Friday, ready to log into work. It should have been the same as every other remote workday from his London residence.
But when the senior software engineer attempted to access his laptop, he found he was locked out… Same with his email and Slack messenger program.
This was how Abid, a Twitter employee, found out he was now a former employee.
Layoffs have been a well-documented trend this season.
In just the past few months, thousands of people have been let go in mass layoffs across the tech sector. Amazon slashed 10,000 jobs. Facebook’s parent Meta Platforms let go of 11,000 workers. Cisco cut 4,100. Twitter fired 3,700 people – half of its workforce. The list goes on.
When companies start tightening their belts and cutting jobs and expenses, it’s a huge warning sign the economy is slowing down… and recession may be on the way.
Some folks, like Abid, are now facing the harsh reality of unemployment coupled with tougher economic times ahead.
That’s why right now – whether you’re fortunate enough to have a good-paying job or are dealing with the anxiety of unemployment – is the time to prepare.
Here at Intelligent Income Daily, we want to equip you with the knowledge and skills you need to help boost your income. This is what will help protect your financial freedom and keep you afloat in tough times.
Today, I’ll share three tips you can use to protect your finances and prepare for the coming recession.
Three Tips I Wish I Knew Before the Last Recession
Back before 2008, I was a young and reckless real estate developer. I had a small fortune, but it was all tied up in risky speculative assets.
When the Great Recession hit and the market crashed, I was nearly wiped out.
I learned my lesson the hard way, and these days my top priority is risk management. With that in mind, these are three tips I wish I had used back then to protect myself from that recession…
- Tip #1: Build up your cash savings. This serves two purposes. First, it acts as a buffer in case you have unexpected expenses or suddenly lose your source of income. Second – and more importantly for investors – it gives you dry powder to invest in a bear market.
As strange as it may sound, bear markets are when fortunes are made. That’s because they are a rare opportunity to buy world-class companies at rock bottom prices – for fractions of what they would normally trade. But to take advantage of the opportunity, an investor needs to have the cash available to buy shares when no one else wants to.
- Tip #2: Build a portfolio that gives you growing income. Quality dividend companies can give you a reliable source of income that doesn’t depend on you going to work every morning. And when your portfolio gets large enough to completely support your lifestyle, you can retire on your own terms.
The best part is: Well-managed dividend growers can keep increasing your income every year – even in a recession. It’s like getting a raise for doing nothing.
- Tip #3: Focus on what investments companies are spending their money on. When times are good, companies are willing to throw money at whatever idea comes along, even when it doesn’t make a lot of sense. But when they’re preparing for recession, companies spend only on what’s necessary or the projects that give the greatest returns on investment.
By keeping some cash reserves, focusing on income, and taking a look at the sectors successful companies are prioritizing… I could have sidestepped a lot of the pain I got hit with 14 years ago.
Happy SWAN (sleep well at night) investing,
Brad Thomas
Editor, Intelligent Income Daily
And you could make more money in 2023 than you would by trading, chasing the latest "hot" stock, or doing anything your broker tells you. Get the details here - including the name of my #1 stock.
Source: Wide Moat Research