Friday, February 20, 2009

Thriving in the Recession(Depression)

The downturn many of us here had predicted, but no one particularly wished for, at least in the schnadenfreude way, is here. The deniers are still in huge numbers, but with every day of falling markets, fall in prices, canceled sales orders, interviews that do not convert and bills that do not get paid, their numbers will dwindle.
One of the good things that came out of this blog was that it prevented at least a handful of people from jumping on the Alberta real estate bandwagon during the last two years.

Having saved yourself of making a stupid blunder then (and assuming you didn’t change course, like a blogger who is mentioned here frequently), what are you doing now?

Here’s what I’m doing?

Saving lots of money. As usual. Our expenses are fixed at around $3500 a month or so and we make a lot more than that. After taxes, rest is all savings. We plan to continue to do so.
Continue to diversify the sources of income. We don’t rely only on regular employment income. We have significant business income (two different side businesses) along with interest income. We are always looking to add more streams and make existing ones grow so that our reliance is not great on a single source.
Keep on tithing. That’s what we will keep on doing, especially in bad times when a lot of people will be in need of help. Of course, it doesn't mean giving money only to your church, but to any non profit that you think is going great work. Or to food banks. Of course, this is a purely selfish thing to do as it saves goblets of cash, come the tax time. If our income increases even in this market, we’ll proportionately increase our contributions to this end.
Staying fit. The doom and gloom should never be internalized. This is a personal lesson from the dot cum bust era. It should be studied and examined and decisions made accordingly. One of the best ways of remaining positive is by working out regularly. I try to run 5 to 6 miles every day or do some other aerobic exercise for at least one hour. It will hopefully keep me away from the grips of Big Pharma in the latter years. In the short term of course, my energy levels are high, attitude positive and productivity improved.
Volunteering. And that means doing things beyond writing good blog posts and posting useful links to help people. It means, trying to help other people with your valuable skills and time. And trying to make some difference.
Not wasting time on TV-I haven't watched TV in a long time. Everytime I travel and see TV programming for a while in a hotel room, I feel so good about the decision of not having cable TV in our home. Not only does it save us several hours in a day, but it also helps us save $50 to $100 in cable TV bill. Plus, it keeps your materialistic desires in check and helps you keep all the propaganda at bay.
Not Depending on Government Bailouts or Help- Believe in the old fashioned capitalistic way. Watch out for your interests and protect your interests. Do things that make sense to you. Don't get influenced by the mass media.
Start looking for investment opportunities. This may not be the right time, but the right time will soon arrive. Keeping the cash handy for investments is a good thing, but zeroing in on the asset classes you would like to buy will be helpful too. Whether it’s commercial real estate, apartment buildings, dividend paying ‘boring stocks’, strip malls or anything else, clearly define the criteria by which you will define the investments and establish valuation levels that will make you comfortable, irrespective of the short term market fluctuations. And that will certainly mean looking beyond the valuations in play in the last two decades or so. I’ll post more on this once I have more time.

What are you doing?
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