The media is still trying very hard to convince everyone that the financial system is in great shape. Which is normally a huge red flag on its own.
Meanwhile a new survey covered by Yahoo shows that 70% of Americans feel they are already in a new recession. With 55% saying they fear that they will lose everything that they have in this recession.
It will turn out okay in the end. Staying levelheaded, understanding what’s really happening, and how to survive and thrive through this regular phase of the economy will go a long way toward relieving the stress, and avoiding being a victim of it.
Know Your Cycles
Knowing your historical economic, financial, banking, and real estate market cycles will bring a lot of perspective and comfort during these times.
However, it is important to speak to industry veterans who actually lived through it to get the real data on what to expect. Not just relying on manipulated statistics in the news that may mislead you.
Banks act foolishly, the Fed raises rates to deflate the economy, remove liquidity, and create more unemployment. Then public markets crater, real estate sells at deep discounts. Then things recover and soar again. This will keep on happening, unless there is a major shift in monetary policy and strategy.
One primary tool to survive financial crises like these is to diversify. Diversify deep and wide.
That includes not having all of your cash deposits with one institution, so that you are not caught without access to any of your money.
It applies to your income sources. So, that you always have something coming in.
It also applies to your assets and investments. Ensuring that you have a concrete foundation with downside protection. As well as the potential for upside gains that can at least match real inflation.
At some point in the near future, we will see a fantastic time to be buying. Especially in real estate. We expect there will be an opportunity to scoop up large amounts of deals at deep discounts.
If you are buying now, just make sure that you are sticking to the basic fundamentals. Like to make your money when you buy. Know what you are getting, and the best, worst, and most likely scenario.
Serve The Need
All you need to do to really win in times like these is to find enough people to serve. Acknowledge those problems you need to solve may have evolved a little at this phase in the market and meet those needs.
For serving investors it is a lot about giving them a safe haven for their capital, as well as income. At Praxis, we can proudly say that none of our investors lost money in the 2008 financial crisis, nor ever in our existence, for that matter.
On the consumer side, there is a massive need for housing. With millions of Americans bracing for losing everything they have this year, that is a lot of people that will need more affordable rentals and homes.