Financial Opportunities

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“There’s never been a recession or depression we haven’t recovered from. We will recover from this. The economy will recover, and the markets will recover. The average recession takes about 17 months to recover.” David Bach

Learning how to look for financial opportunities during a crisis and understanding how small amounts of money saved and invested can change your life are important skills and mindset to embrace. It’s a skill that can be taught. And, you can learn how to invest, to think like an investor and believe that you can to become a self-made millionaire.

To accomplishment these goals, it starts with you needing to have absolute clarity around where every single dollar is going. You should scrutinize your expenses and spending like a broke certified public accountant and ensure every dollar is given a purpose. And you must look at cutting discretionary expenses and spending like your life depended on it. Since small amounts of money, saved for the future and invested over a long period of time, can change your life for the better thanks to the miracle of compound interest and starting early.

Thus, get rid of storage unit with stuff you haven’t looked at in a year, let the stuff go. Cancel gym memberships, social memberships, anything subscription-related. And, do not buy that shiny new vehicle that costs more than your personal net worth.

Owners get rich.

“If you don’t know where you’re going, you might not like where you end up.”

There are three types of people in the world, according to David Bach’s grandmother– the person who taught him about investing: There are those who visit McDonald’s and spend money and eat cheeseburgers. There are those who work here at minimum wage, which is a really hard way to make a living. And there are those who invest in this place and they own it. Owners of assets are the ones who build wealth and get rich, he recalls her saying since “assets make money while you sleep”.

Even during market downturns and recessions, there are companies that are going to do well. So instead of focusing on what’s not working and the negative blather coming from financial news, you need to figure out what is working. Asked yourself, “which companies are doing well right now?”

There are two escalators or avenues for retail investors to building wealth: stocks and real estate, according to financial guru David Bach, author of the best selling book “Automatic Millionaire”.

Crisis Makes Some People Wealthy

Every time a crisis happens, it creates opportunities for a lot of people to become wealthy. Why? Because assets are on sale when there’s a crisis. People sell luxury items such as homes and boats because they can no longer afford them. People sell artwork for 1/5 of the price and short-sell homes. All kinds of assets are for sale when there’s an end of the world type of mentality.

So it’s important to have a strategy for these opportunities. And, markets will tank again in the next two to three years. Yet, no one knows if or when that will happen, but what you do know that the economy and the equity market will  tank in the next 20 years. And you have to be ready for it because there will be opportunities to purchase assets on sale, if you’re prepared.

“During recessions, the markets put everything on sale, which is why recessions make millionaires”, Bach says.

Big hat, no cattle…be rich vice looking rich

If you try to get rich overnight, you will remain poor forever. Instead, you should become financially selfish and the first thing to do when you earn money is to pay yourself first. You should selfishly keep the pay or “paying yourself first” from the first hour of income each workday.

References :

  1. https://money.com/david-bach-interview-homebuyer-mortgage-challenge/
  2. https://www.creativelive.com/class/how-to-retire-early-the-latte-factor-david-bach
  3. https://www.patrickbetdavid.com/the-20-rules-of-money
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