The recession appears to be here already. With historically high inflation, labor shortages, and wage stagnation, it certainly feels like we’re entering a recession. But it’s not all bad news. You can learn how to navigate your wealth through this challenging economic time and retake control of your financial future.
Are We Already in a Recession?
Some experts argue that the United States is already in a recession. It certainly feels that way for many consumers, too. Americans worry about the rising price of gas and groceries. Living costs are also increasing as we see interest rates on mortgages rising and the rate jumps on rent. All these circumstances have many wondering if we’re already in a recession.
So, what points to a recession? The answer here is twofold. Technically, the National Bureau of Economic Research (NBER) says that a recession is “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
Some economic indicators would undoubtedly point to a recession. For example, earnings and incomes have been suffering, and the country’s Gross Domestic Product (GDP) growth is slowing down. On the other hand, there are still open jobs, and new ones coming out every day – which doesn’t necessarily point to a recession.
Another important metric to consider is consumer sentiment. The way people are feeling speaks directly to the economy’s performance. Right now, people may not feel so good about their finances. Their dollar doesn’t go as far, and everyday items like groceries and gasoline cost more than people have been used to.
The biggest thing driving this “recession” is jobs and a crash after the high that many companies saw over the past couple of years. When the COVID-19 pandemic took over, technology and e-commerce companies saw huge revenue increases as people sat at home with nothing to do but shop online.
Now, these same companies are sounding the alarm. Meta has started cutting back on jobs, and other tech companies are retracting job offers and slowing hiring. Companies are also spending less money on online advertising as they come to terms with the temporary high from COVID with the realities of the U.S. economy today.
The Benefits of Recession to Personal Wealth
While a recession may seem like a time to panic, you can often find highs in the lows. A recession is a time to reflect on your spending decisions and consider how you can build wealth.
- Understanding the process. To get through inflation, we’ll have to experience the symptoms of a recession. Knowing this can help you stay strong and understand that there is a light at the end of the tunnel.
- Analyze your spending habits. Americans have an intense consumerism culture, and it can be challenging for many to break away from purchasing. Take time during a recession to examine your spending habits and determine which material things you can live without.
- Wealthy vs. Rich. Most people want to be wealthy and think that earning lots of money and being rich is the way to get there. In reality, being wealthy means that you feel comfortable financially and can plan towards larger financial goals. It’s vital to understand that you can be wealthy without being rich – and wealth should be your primary goal.
- Find the path to financial freedom. If you can break away from consumeristic beliefs and the idea that you must have the newest technology and the nicest items, you can put yourself on the path to financial freedom. Developing this contrarian mindset will help you find independence, financial comfort, and wealth.
In Summary: Focus on the Long-Term
Curbing and assessing your spending habits during a recession is key. Making impulsive purchases for instant gratification will not bring long-term happiness or financial stability. If you want to establish security in your finances, you must break away from consumerism and focus on finding comfort.
If you need help getting ready for or managing through hard economic times, we can help. The William Rogers Company is the culmination of a 25-year career developing cross-discipline methods and knowledge for helping individuals and small to medium-sized businesses in Southern California maximize their income and potential for ascending to new heights. Schedule a call today and get started on overcoming your financial worries in business and life at 888-297-3321.