Yes, cycles in real estate have always existed. As you know, the last one took place ten years ago, in 2008. My goal is not to predict the next crisis but to prepare you to face this difficult period without too much trouble. As an investor, you are aware that this is the best time to enter the market. As Warren Buffet puts it: "Be fearful when others are greedy and greedy when others are fearful. "
A LITTLE HISTORY BEFORE YOU BEGIN
For the youngest who have not known or heard about these economic and financial crises.
1973 - The oil crisis following the Bretton Wood agreements,
1987 - The stock market crash that is due to financial speculation,
1997 - The Asian financial crisis,
1998 - The collapse of the long-term hedge fund (LTCM) which is a kind of Hedge Fund,
1999/2000 - The Internet bubble,
2001 - The 2001 terrorist attacks, which damage the economy and New York with the financial sector,
2008 - And of course, the subprime crisis.
So in thirty years (not counting 1973), there have been more than six periods that have turned the world economy upside down. We must therefore prepare for another difficult period in the years to come. Since we have a short memory, it was good to remember these dates.
For 2018/2019, we talk a lot about the dollar crisis. The two authors to read on the subject are Jim Rickards, and Peter Schiff.
WHAT ARE THE SOLUTIONS TO AVOID DAMAGE?
AVOID BAD DEBTS
Stop all your credit cards. Especially the revolving credits. You will start making more money by stopping enriching the banks. You'll save more money with your "reverse cumulative effect". Take advantage to renegotiate all your credits if you can not repay everything.
DO NOT MAKE A NEW CAREER PLAN
Looking for a new job during a crisis is not the best solution. Ask all those who had to apply between 2008 and 2009. During these uncertain times, many companies stop investing in staff. Only "unicorn" type companies are hiring and continue to grow. Although the change is in my opinion always good, especially when you go out of your comfort zone, if you can shift your career change or career a few months, it would be a good idea.
CREATE NEW SOURCES OF INCOME
Internet and the new economy created around the Internet makes it easier to have a semi-passive income with a blog, dropshipping, ... etc. Young people are better equipped than our elders to diversify their income by using their skills, their technological know-how, and all while keeping their work during the day.
Although technology disrupts a number of industries (eg taxis and Uber), it's also easier than ever, thanks to it, to start a business at home for the most ambitious.
With time and energy, it is possible to create other sources of income in addition to your work. However, do not listen to the gurus who tell you it's easy and that it will be done in a weekend. Starting a business at home is very easy but making it work is something else.
HAVE CÔTE SAVINGS
You will tell me that I have already told you that savings were for "the neck ...". So have more liquid investment (action, participation, ...) that it is possible to resell quickly in case of a hard blow. Even if, in general, the value has dropped (because this type of investment is affected first in a financial crisis), the must is to have inexpensive real estate assets that are easy to sell, such as car parks and car parks. studios. They are less liquid than an action but easier to liquidate than a house or commercial space.
THINK A LONG-TERM INVESTMENT STRATEGY
Remember: the most dramatic financial events, including stock market declines, come from short-term investment. When you invest for the long term, as for your retirement, of course you take a little risk to get a better return.
LIVE BELOW YOUR MEANS TEMPORARILY
Just because you can afford to buy what you want does not mean you should buy it. Spend wisely. If you can, stop some subscriptions and some expenses like your gym membership, especially if you do not go there often. Change your mobile phone plan Eat less often outdoors. Stop buying a new pair of shoes every month. The list is long, so I advise you to read the article I wrote about early retirement that gives you clues to spend less.
IN CONCLUSION
Cycles have always existed, which has not prevented fortunes from being built. I would even say empires. Although everyone tells you not to invest, during these periods there are opportunities to make good investments, whether in real estate or on the stock market, by buying at a low price.
Are you ready for the next crisis?
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