How to Succeed in an Economic Slump

by Daniel R. Murphy  

As you read and see news about poor economic forecasts are you discouraged? Are you wondering how you will succeed in difficult times? It is possible to succeed in down times. There are things you can do, concrete steps you can take, to sharply reduce the chances of failure and improve your chances of success even in hard times. Here they are.

First, do not panic. Do not allow bad news and alarmist predictions of doom and gloom to paralyze you. Take stock of your situation, examine your options and make a plan.

Follow these steps: 

Take a deep breath. Seriously, cool thinking is critical during difficult challenges. Relax, pour a cup or glass of your favorite drink and sit back. Reflect on all you have accomplished and all you know you can do. Count your blessings and consider all your assets and advantages. Whether you have many or few, every advantage and every asset you have is of value.

If you have a job consider how best to keep it. Then, consider how best to improve it - to get a promotion or to raise your value to your employer. As Naploeon Hill taught, go the extra mile. Show up early for work and stay late when you need to. Do all your work as well as you can and do some extra. Anticipate your employer's needs and propose ways to address them before they become problems. Good employees are more secure than those who just show up for their paycheck.

Begin to enhance your value in the market place. No matter how well you do your job you must always be prepared for a market downturn that could cause you to lose your job. Keep your resume up to date. Read books and articles on how best to write and update resumes.

Keep yourself well informed about your area of work. Know which businesses are up and coming and which may be in trouble.

Put yourself on a budget. Do not over spend. Do not ever spend more than you earn. Resist debt. Other than your home, and possibly a car and education, do not borrow for anything. If you do not have the money for it you cannot afford it.

Save! This is possibly the most important advice. Pay yourself first. The more the better. Save no less than 10% of your net income and if you can save more than that.

Invest wisely. Invest your savings wisely. Do not put all your eggs in one basket. Diversify your investments. Invest in money market funds or buy stocks and bonds in different areas.

Maintain a cash reserve. This should be the first place you put your savings. You should have enough cash in the bank, or in equally liquid investments, to live off of for at least 6 months, preferably for a year.

Purchase some fine metals, gold or silver. Examine the markets and invest carefully. It is good to have an investment in gold or silver to hedge against possible paper money failures or rampant inflation in the future. Do not place all your savings here however.

Start our own business. Many businesses began during recessions or depressions, including Microsoft (1975 recession), General Electric (1873 depression), Disney (1923 recession), Good Humor Ice Cream, Sikorsky Helicopter and Combined Insurance which all began during the 1930s. Done right a business can be one of the most lucrative ways to build wealth and protect yourself during bad times.

There are no sure things. There are no secrets that are fool proof. There is no guarantee that anyone will succeed or fail. However if you discipline yourself in some very specific ways, set goals, follow through and spend your time and energy on the important work of securing your career and finances, your chances of success are much improved.