Even though experts say that we narrowly avoided the fiscal cliff and even though many economists and talking heads tell me that everything is okay, and that the US remains in a slow recovery, I remain skeptical of all the flowery words and sound bites floating across just about every airwave in the country. And it is because of my deeply ingrained skeptism that I decided to take pro-active steps in preparing for recession of double dipped magnitude. The way I see it, it's much better to be safe than it is to be sorry -- or to be caught off guard by yet another drastic fiscal disappointment.
I'm recession proofing my income
Going through a divorce doesn't leave me in the most rosy financial situation I could have dreamed at 33-years-old. However, it did wake me up to the cold, hard reality that it's time for me to be the primary bread winner and provide for myself and my children in the smartest way possible. For that, I'm choosing to work smarter, not harder. In order to do that, I am doing a few things to earn wages -- to pay the bills -- but also to build wealth, simultaneously.
- I found a job/business opportunity that pays me dividends and residuals on top of commission, in a recession proof industry. Those wages and profits will allow me to grow several other financial areas of my life, once my divorce decree is final.
- I am using blogging and freelance writing to promote my businesses, in addition to earn extra side income, and offering ad space to advertisers -- since I have a high-traffic financial advice site -- in the interim, while I build my business and fund other projects.
- I plan on using a portion of my profits to fund personal charity work (tax deduction) and start working on real estate investing with the rest.
- I am constantly finding new apps and ways to monetize my life, adding pennies to the bank everyday -- which eventually adds up to dollars, then hundreds and so on.
- I am using smart spending rebate portals, coupons and discount venues to pay less for the things I do anyway -- and also to save money on the things I want to do -- allowing me to keep more of what I earn and save more of what I earn.
I'm not counting on savings, investments, CD's or other venues
Here's one thing I learned from living through two recessions while living in the US: when the US falls, there is a global slowdown. After the financial fiasco in Greece and the current state of affairs in Europe as a whole, my concern is that things will get far worse before they get better. Because of that, I'm already seeing mortgage rates on the rise and savings and CD rates remaining at 30-year-lows -- and falling. Since mortgage rates are an excellent predictor for the economy as a whole, seeing those creep up makes me realize that no investment rate will follow an upward climb in the near future. However, I know real estate is a sure thing, based on my years of helping people buy and sell land and property. Thusly, that's where I plan to put my investment dollars in 2013 and beyond.
I'm not counting on credit
As mortgage rates creep up, credit restrictions will start to loosen in order for most big banks to stay in business. However, should the worst happen, I'm not going to be stuck in a cycle of debt gone bad. I'm taking the next 12 months to focus on paying off my community debt once my divorce is final and moving on using a cash only basis, even when it comes to real estate investing.
Even if I'm being overly prepared, cautious and somewhat pessimistic about the financial future currently laid ahead of me, I remain confident that my and my daughters financial future will be secured. But even more than that, I am confident in my strategy in the event that the bottom drops out tomorrow, 20 tomorrows from now or even 200 tomorrows from now when it comes to government and federal spending and the myriad of financial faux pas that go along with it; all because I plan for the worst and hope for the best.
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More from this contributor:
- Budget, Tax & Economy