Chuck Bentley on Four Steps to Prepare for a Recession

Dear Chuck,

I keep reading about experts predicting that a recession is coming. What do you think? Although I am getting ready, what is your advice to help me ride it out?

Getting Ready 

Dear Getting Ready,

Of course a recession is coming! They are inevitable; we just don’t know when or if we will even be here to experience it. Our nation has survived recessions in the past. Those who plan ahead typically weather them well, and even come out ahead!

Warren Buffet once famously said, “Predicting rain doesn’t count; building arks does.” I have some practical and Biblical advice that will help you.

Recession Defined

A recession is simply a contracting of the economy or period of correction from over-expansion. Technically it means:

  • The economy declines for at least six months.
  • There is a drop in real gross domestic product, income, employment, manufacturing and retail sales.

A rapid increase in the unemployment rate may indicate that a recession is in progress. Other red flags may occur like the current global recession in manufacturing, impacted by the trade war. Here is an article with a much more detailed definition.

Negative Effects on Population

  • Unemployment
  • Consumer purchases decline
  • Stock prices fall
  • Home values plunge
  • Businesses go bankrupt
  • People can’t afford their mortgage

Positive Effects on Population

  • People try to manage money better
  • National savings rate rises
  • Opportunities arise for the creative and prepared
  • Purchase depressed housing or make investments where prices have dropped

Since we know two things – a recession is certain to come and opportunities will exist – I will give my advice according to the 4 P’s.

The 4 P’s: Plan, Prepare, Don’t Panic, Be Patient

Plan

Anticipating a recession, we can set goals, make clear plans and escape emotionally-driven decisions made in fear. I like to say that planning is the antidote to fear. Since we have had lots of time to plan, (an unprecedented span of continuous economic growth since 2009), there should be nothing to fear when the correction occurs.

Click here to read more.

SOURCE: Christian Post, Chuck Bentley