The latest topic of discussion and focal point of financial world news is "recession". Many in the west lost their jobs, many are worried about loosing their jobs, business lost a major chunk of their revenues and some even winded up so all these news are making a pessimistic outlook for the people. There are many lists made by people till now and you can get them on google like "What not to do" and "what to do" in a recession and most revolve around doing more savings and also most important, where to keep your savings as now even the banks and insurance companies are going down around the world.
People are generally very pessimistic about it now and i think are not expecting much from year 2009 and 2010. I am trying to look on what benefits a recession brings,what things easily then before and overall what opportunities it brings so to see the hope of revival of economies and people
First, Lets start with the people who lost their jobs during recession, some of them may have savings and some of them might have not. What these people will try to do depends really but i think many will probably look to start their own business or may be some kind of consultancy work independently of what they were doing at jobs. Some of these guys are going to be very successful, some are going to be average and may be for most its not going to work out. But the one thing common in all of them will be "survival". Most people perform their best not for money, or other goals but for survival, they do the best they have got, because they have no choice overall. So overall if 3 million jobs lost, even if 0.5 million start business and be successful, hopefully they can create jobs for another 0.5 million or may be more. I am not an economists but overall small businesses are best for any economy
Second, I think university business is going to do very good. I think good universities should have their shares in stock market because it will be good time to buy them, Don't stop yourself from increasing your skill or knowledge basic thinking that they are making money of it.. This recession, spend time and your savings on some degree that is going to help you get a better job when the recession is over. You may even consider a career shift, its a good time to make plans for future and may be do the MBA degree you were not able to do after you started your job after graduation
Third, I would say diversifying your savings is the most important thing in recession. Land and houses are going to be really cheap, they are already at bottom prices of many years, how low can they go huh? so if you got plenty do buy some nice place as i think it would be best time to buy it. I won't say that if buying it consumes most of your savings. This idea is only for those who got enough.. Buy some Gold too, with the trillions in dollar recession plans and all the big countries going in major debt, the world may be up for a major currency devaluation ( and i was trying to give you hope). Its a fact , may be an economist would explain me better how all this works but common sense tells me that it should devalue so be ready.
Overall, in this slumping economy i would say make smart choices and be positive, do the savings but don't do spend on the right things , after all spending is what runs the economies.
3 comments:
hey,
i appreciate the effort u put in writting this article, but i reckon this recession is not something, u can easily deal with.
With all the big companies cutting down jobs, small businesses closing down and crashing market, i dont quite agree with the idea of starting a new business as smaller businesses are in even deeper recession and because of how this whole capitalist system works, i doubt if any government is going to bail them out.
As far as buying the property is concerned, yea if u got enough cash on you that is pretty good idea but i think we will have to wait one more year if we want a really good deal. But again you will have to be very sure that you can keep up the mortgage payments as repossession rate is quite high in these tough times. In a year's time, may be, when the economy starts coming to life again, it will be very good time for the first time buyers with huge deposits to try their luck.
Because each and every job is at risk, switching job, again is not what anyone would suggest.
Saving?? i dont see anything that a common man can save in. Poeple have to choose between food and heating/clothing as the energy and food prices rocketing and banks are cutting interest rates. If u buy shares in a good company, u never know, may be it will close down the very next morning.
Now the question is "What can we really do to survive this crunch?"
Nobody knows the answer to that. I believe its a system failure, individual efforts can not achieve any good.
Its just wait and see time for all of us. We should study systems that are surviving well like that of china. we should study the reasons and causes of recession that ruins everything every 15-20 years.
Shahid
P.S: I am not very familiar with what is going on in pakistan. I wrote this keeping in mind the global situation
Thanks Shahid, Thanks for leaving your feedback.
I wrote my article keeping global audience as Pakistan was in a bad shape even before recession. We are not an export driven economy so bad consumer situation in west didn't effect us much on the whole. Definitely export based sectors like software, textile are effected
I agree with you that capitalist system has it flaws and it keeps going down after every few years. Governments use different wayss to keep it up like lowering interest rates but this time none of the normal things are working and i agree that we should have a study of systems like even Islam provides a financial system which we can read as a starting point. However, my article took the assumption that capitalist system is going to be there and my basic point of starting business was some follow up of some news in U.K and Europe that governments are considering things like outsourcing and contracting to small business rather then big business to save costs so there might be many opportunities for small businesses but yeah definitely not for 1-2 people companies
About buying property, i assumed that you don't buy on mortgage. I don't know how it works as i stay away from it .. and i think if one wants to buy, the next whole year will have some good deals .
The idea of survival is making me work more myself these days and even my clients who are doing more effort so decided to pass on to people.. I am just working more and more to keep my business going good, just because of the fear and its returning results
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