Can you guess what time period by far made the most millionaires and even billionaires in history? It’s probably not what you think. Okay, here’s the spoiler … it was the Great Depression! That’s right … there were some who knew how to profit from a recession … and I mean big time!
Learning how to make money in recessions is imperative as we’re talking about your entire livelihood on the line! If you’re not generating income while times are challenging nor practising proper risk management, you’re in for disastrous consequences like the mass.
Conversely, when you know how to profit (or keep your wealth and assets) during these times … life is much, much more fulfilling as you have more choice, can sleep peacefully at night and can serve your community and world on a bigger scale.
THE THREE KEY HIGHLIGHTS:
- There’s huge amounts of profit to be made in recessions compared to when times are stable due to market volatility, more opportunities, lower business start-up costs and more.
- 7 differences between people who profit vs don’t profit from a recession and what you need to do to create more wealth.
- The middle class and 9-5 workers suffer the most in economic or financial recessions as history shows.
I know it may sound crazy (or even impossible) but recessions truly create more millionaires. Indeed many businesses and individuals financially blossomed through the Great Depression. But of course … schools, history and the mainstream don’t teach you this.
All you’ve seen and heard about this infamous period is the catastrophic damages and fear inflicted upon society. Distraught families, up to 25% unemployment rate, banks collapsing and so forth.
To be clear, serious distress was certainly experienced by many. Let’s be real … in times of challenges or recession, not everyone prospers. Quite the opposite … very few do. That’s the bad news.
However, the good news we can learn from history (which you were never taught) is…
There were small groups of people who knew how to profit from a recession and as a result capitalized big time on the massive opportunities available.
Opportunities which can make you a millionaire or even a billionaire with the right attitude, adaptability and steps in place. Take these 6 people who made big money during the Great Depression as an example.
Or these 5 smart investors who profited in the GFC.
Even in March 2020 (right as the virus struck) the markets went wild as you may recall. Take the cryptocurrencies market for example … BTC lost atleast half of its value causing altcoins to fall with it. This really hurt the “buy and hold” investors who saw a substantial downturn in their portfolio.
However, smart traders, business partners and investors we work with saw this as an opportunity to clean up. A business partner, for example, turned 100k USD into over 1 million USD within one (1) year.
In the stock markets, Derek and Shakeel, who teach individuals how to potentially create income through trading, made more profits last year with the markets being volatile than any other time.
You may be thinking … how?
I credit this to Nathan Rothschild’s infamous quote.
“The time to buy is when there’s blood on the streets … even if it’s your own”.
In other words, while the mass is panicking, getting worked up about the government and markets are volatile as a result of this, wise business owners and investors see this as the time to strike.
These are the individuals who are educated, adaptable and understand how to manage their risks.
You too can easily become part of the “new super rich” in the new economy if you play your cards right, know where to look and how to profit from a recession like the sovereign and elite do.
So … let’s look at how recessions have created more millionaires in times past … and how you can learn from this to create more wealth from a potential financial collapse.
7 Differences Between People Who Profit vs Don’t Profit From a Recession
ETHICAL DISCLAIMER: Before I discuss why certain businesses and investors succeed in recessions, it’s important to note atleast 75% or more of the population feel and experience the consequences of a societal collapse – losing a substantial amount of money, feeling terrified and uncertain of the future, and losing trust in the system.
Profiting from a recession isn’t an easy task … it’s hard. But intelligence (educating yourself), adaptability and persistence = profits.
For more information on how big players made big money in previous recessions, this Quora answer provides great insight into “why more millionaires and billionaires were made in the Great Depression than any other time period”.
Now … let’s look at 7 key differences between those who profit vs don’t profit from a recession:
1. Defensive Measures Already in Place (Proactive)
“Plan for what is difficult while it’s easy. Do what is great while it’s small. The difficult things in the world must be done while they are easy.” – Sun Tzu, The Art of War
Anticipating what’s ahead is essential for business owners, investors and traders if they wish to profit from a recession.
The greatest solutions are created before the problem even arises. This is commonly known as insurance. Let’s put this into perspective…
Do you buy car, house or life insurance expecting to use it tomorrow? Of course not! You’d hope you NEVER have to use it in your entire life. That’s the best value you’ll ever get from these premiums.
The same principle applies when insuring your wealth and assets. But even more so as it’s your entire livelihood we’re speaking of!
Setting up structures beforehand is always the best time to do so while it’s easy so you’re protected and have peace of mind in case the worst spontaneously occurs.
We’re big on asset protection at the Global Wealth Club as we recognize the dire necessity of it.
2. Ability to Adapt
Another key to profit from a recession will be determined by your ability to adapt to the conditions – both mentally and physically. When an economic or financial recession breaks out, you must be able to let go of the old and embrace the new.
If you’re not able to move with the times, then it’ll be hard to succeed. Conversely, when you know how to adapt and adjust your lifestyle accordingly this can lead to results.
For example, when the Information Age started, companies who weren’t refused to transition online, and instead kept their business strictly as a physical presence suffered. Blockbusters is a clear case of this when Netflix took over the movie industry. Uber vs Taxi too.
Likewise, as a hypothetical, let’s say you own a café and lockdowns start to become more imposed. If you’re worried about having less customers daily, learn how to adapt and find the solution. That could be takeaway, delivery service, selling recipes or otherwise.
Another example is influencers, travellers or people who aren’t willing to change their lavish lifestyle. This kind of group will suffer greatly if they can’t get used to extreme conditions or cut down on extra costs such as going out to bars, night clubs, family outings and such.
3. Contrarian Mindset
While mass hysteria breaks out … while fear breaks out on the streets … while people are complaining about their government … the wise, sovereign and elite are doing the exact opposite.
That is, they see times of challenge as a rare opportunity to create more wealth. As mentioned earlier in this article, a lot of investors have the mindset the best time to buy is when everyone else is selling. Buffet, Rothschild, J. Paul Getty are a few who spring to mind.
Some investors like to purchase property during recessions as they see the price drops as a huge bargain and believe the value of it will grow long term.
Another example I saw in real life is when a former client grew his cryptocurrencies portfolio to 30M. When asked his secret, he explained the key to his success was a contrarian mindset in his investing strategy. He’d sell when markets became greedy and bought when markets became fearful.
He also explained the importance of taking profits and believed the more the value of a coin goes up, the more you’re at risk as people are looking to sell. (However this is not financial advice so do not base your entire decision on this strategy).
Bottom line is this…
Knowing how to profit from a recession requires a contrarian mindset and attitude. This applies in business, health, investing and whatever pursuit of life you engage in.
4. Know Where to Invest
Following on from the above (contrarian mindset), just because you can buy or attain new investments at a discount doesn’t mean you put your money into every single stock, crypto or precious metal available.
For all you know, it could keep going down and never restore its value. Therefore, knowing where to invest (by having a good team, support or system around you) is a crucial part of making money in recessions.
We emphasise at the Global Wealth Club the importance of a diversified portfolio (Harry Browne’s permanent portfolio is a concept we like to teach) to ensure your investments can handle any market condition.
Further, knowing where to invest (and discovering where the super-wealthy are putting their money) is crucial to grow your wealth – for obvious reasons.
5. Recognize Opportunity
One of the biggest distinctions between someone who does vs doesn’t know how to profit from a recession is their ability to recognize an opportunity.
While most people see “challenges” such as lockdowns, mandates, inflation and so forth as major economic problems … the super wealthy and sovereign individuals see it as an opportunity for innovation, change and most importantly profits to be made.
Opportunities which aren’t present through boom periods suddenly become available. Business start-up costs become much lower, lots of unprepared businesses or “competitors” get wiped out, property value drops and stock market volatility becomes massive for smart traders to name a few.
Further, those who are smart also recognize the businesses most likely to prosper in recessions. They see where the world is heading and take advantage of it before anyone else does.
The above image gives an idea of which businesses are likely & unlikely to prosper during recessions. (All of these industries were based on our research of comparing historical successes).
Whenever there’s a recession … demands and needs from society become much higher for certain things. Food, health, financial education, entertainment, etc. Those who recognize what people are needing most are those who make big profits in recessions. Take a look at these (now billionaire) families whose businesses were rooted in the Great Depression.
6. Don’t Wait For Things to Happen
More than ever, we’re seeing freedom fighters and annoying crowds on mass complain, whinge and protest for their government or employer to fix the world. All of which will achieve nothing if you look at it objectively. Only thing it will do is create short term relief for a long term problem.
Because at the end of the day, while governments, banks and corporations have power over persons, they can ultimately dictate your life (unless you’ve taken necessary steps to overcome it).
Dr John Demartini puts it perfectly, “if you don’t take control over your life, someone else will do it for you.” This is the essence of becoming sovereign … i.e. Reclaiming your power in ALL areas of life.
As a simple example, if your finances are dependent on a stimulus check, employer or otherwise (and you don’t know how to generate an alternative source of income), you’re not sovereign in your wealth creation. Therefore, you’re likely to be affected by a recession.
The elite, sovereign and wealthy don’t wait for things to happen. Rather, they make it happen. They do this by all other 6 principles (recognizing opportunity, knowing where to invest, develop their mindset and more).
7. Set Up Multiple Income Streams
The final stage, and perhaps the most important one, is having multiple income streams set up and generating money while you sleep. As Robert Kiyosaki says, the poor and middle class exchange time for money while the rich make money work for them.
This is the approach you need to take in your life, even more so when heading towards a recession. Why?
During recessions, it’s not the poor nor rich who get hit the hardest in their wealth … rather, it’s the middle class and 9-5 workers. The reason is simple. They have the largest mortgages, expenses and expect life to always remain comfortable.
David Morgan, a respected market watcher, explains during the GFC it wasn’t the man up the street who ran to the ATM but mostly the Wall Streeters. They knew what was going on and realized the problem they were facing.
The middle class category suffer most in recessions because they’re extremely dependent on the very system which is crashing for their income. When they lose their job, they have nothing left to create money for them.
Not just this, but if banks are going down, the dollar is losing its value and banks are looking at exercising bail-in laws … that’s a lot of their money gone (as all their savings are in cash or banks, not diversified in alternate investments).
So … my point is it’s not just a luxury to have multiple sources of income but a requirement to make large profits in recessions. This can be a job, business, investments (mainstream, alternate, offshore, etc.), or otherwise.
There you have it … that’s how to profit from a recession.
Of course, this is easier said than done. Creating and building a ton of wealth in our current system wasn’t designed to be easy. If it was, everyone would be a millionaire. However, with that being said, if you understand the game and can apply these strategies in real life, making large profits is easily achievable.
As the old saying goes … “the rich become richer and the poor become poorer”. And the middle class dissolves. You have to decide which side of the spectrum you want to become part of.
Most people say they desire to become rich but their actions show otherwise. The majority prefer to do what’s easy and blame the government, banks, employers or someone else for their financial challenges. However, it’s ultimately up to you to create your future.
And as quoted by Sun Tzu…
“Plan for what is difficult while it’s easy”
Thanks for reading.
Disclaimer: As we are NOT licensed financial advisors, on financial and investment matters, the information is provided for educational purposes only. It should not be relied upon as financial product advice. None of the information takes into account your personal objectives, financial situation or needs. You must make your own decision how to proceed. If you want financial product advice that takes account of your particular objectives, financial situation or needs, please seek financial advice from a licensed financial advisor before making any financial decision.