As the stock market continues to fall, investors are becoming more and more discouraged. Layoffs are at record highs, and many large companies are requesting bailout money. At this moment, there are no signs of any positive improvements in the economy.
The interesting thing is that sometimes, when things are really bad, there are special opportunities available to us. A few years ago, I went to visit a lady who was selling a cat. She had a thick Russian accent, and I asked her about her story. She had come to America just 10 years before. She came here with nothing. Her only asset was her experience in the textile industry. She had arrived in America in 1990.
She was wonderfully lovely and warm, so I was curious about her life. How did she get to live in a nice house in Berverly Hills? I said, “I see you here in this beautiful house, and you came here just 10 years ago with nothing. How did you come to own this beautiful house in Beverly Hills in such a short period of time?”
Oh, many people ask me that. When I came here, I got a job working in textiles, and I saved my money. My dream was to buy a house in Beverly Hills. Then, in 1994, the Northridge earthquake hit. Everyone was talking about leaving LA. Many people wanted to get rid of their house, but there was no one buying. People were giving away their houses! I bought this one for $200,000 right after the earthquake.
I thought, “Isn’t that incredible! She came here with nothing, and five years later, she owns a house in Beverly Hills! I guess America really is the land of opportunity, and that’s why everybody wants to come to America.” Now her house is worth about $2 million.
The current financial negativity and economic situation reminded me of her story. Everybody is running in fear about the economy. However, just because large businesses are failing and people are losing their jobs does not mean that there are no opportunities available. As a matter of fact, the worse the economy gets, the more opportunity there is to make money quickly. There were more millionaires made during the Great Depression then at any other time in the preceding history of the United States.
Where is this opportunity? How can we make money when the stock market is falling and people are at risk of losing their jobs?
As real estate prices continue to fall, there are fewer and fewer people buying properties. This means that there’s less competition and it’s easy to buy a great property at a great price. Personally, I would not buy any real estate at this time, because it’s pretty obvious that prices are going to continue to fall. However, the story may be different in six months.
- Small Businesses and Independent Contractors
As larger companies have more problems, the market is ripe with opportunity for small businesses and individuals working as independent contractors. Large businesses are slow to adapt to the fast changing economy. A large businesses is like a giant cruise ship. It’s very powerful, and can travel a great distance, but it is also very slow to change course.
That’s why now is a great time to build a small business or work freelance. Many of the suppliers to businesses are failing, and it’s possible to provide services to replace those suppliers that have gone out of business. In addition, businesses are looking for ways to cut costs and improve productivity. This means that they are open to finding new suppliers.
- Stock Trading
Buying and selling stocks as a trader, and not as an investor, requires diligent work. However, anyone with an Internet connection and is the willingness to learn can succeed. Large amounts of capital are not required. And, volatile markets as well as down markets make it easier to make money quickly.
As local markets crumble, and people start selling stuff, it becomes possible to find better and better values. One of the tried and true ways of making money is to purchase in the local market and sell in a large (or national) market. Demand on eBay is strong because people are more careful about spending their money, and buying less in retail stores. eBay offers them an opportunity to buy more stuff with less money.
These are just a few random ideas about how we can use the down economy to make money. Many people will say that these are tough times, and it’s hard to survive. That may be true for the masses, but does not have to be true for the individual. I hope that each person who wishes to improve their finances finds a way to make it happen, regardless of the economy.
This is the first of a series about how the down economy is good for your finances. The next post is in the series is Can Getting Laid Off Actually be a Good Experience?
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