Income and jobs continued to be under threat. What can be done to secure your income to get through this next phase of the economy?
500% Rise In Unemployment Claims For Former Top Earners
According to a recent report from Bloomberg, top income earners have been behind a new 500% surge in unemployment claims. There are no doubt many more that have not filed for unemployment.
At the same time hiring freezes mean that there are few if any new jobs to get. If there are openings, the processes will be highly competitive. In addition, compensation may be far less than it used to be. This at least seems to be true for high tech jobs.
It is all eerily reminiscent of the Great Recession when many top earners and CEOs ended up lining up with hundreds of other applicants for minimum wage jobs.
As more companies run out of cash, and startups, including those with recent multibillion dollar IPOs, that have been going furiously fast find there is no more funding available, it is quite possible there will be new rounds of significant layoffs.
Other Sources Of Income Likely At Risk
Based on historical cycles, other sources of income are likely at risk too. Public stocks are likely to cut dividends. Other asset classes like municipal bonds could dry up if local governments go bust again, as they did last time around.
Your own business may be included in this. Whether you are a dentist or tech entrepreneur, the waterfall effect of your customers running out of money as they lose their own income and battle high inflation may hit those revenues as well.
Finding Income In Real Estate Investing
Recent data on demand for mortgages going back up, and other factors have some proclaiming housing has hit the bottom and is coming back. Whether or not that is true in terms of short term paper values or not, it still offers one of the best income opportunities.
Rents are up from NYC to Miami, with the NY rent control board proposing a historic hike of almost 17% for around a million renters.
Real estate is a hard foundation for downside protection, along with strong yields that are not reliant on short term fluctuations in paper values.
People will always need housing, and that need is growing. This is along with tax benefits for better net income, deep and broad income diversification, and the ability to benefit from both ups and downs in the economy. This can apply to single and multifamily rentals, self storage, builder buyouts, and flips.