The housing market is collapsing (or has already), gas prices are high and our income stabilizes or goes down. Banks fall out of the sky, governments bail them out. Every day, we are brainwashed by news and information about our bad economy, through television, internet, radio and newspapers. If that isn’t enough, it is the talk of the day at the office, in public transport, at birthday parties and in the supermarket line. I said to myself: It’s enough!

Like with nearly everything around us, economy is being shaped by the collective mind of all of those who are part of it. As employee, entrepreneur or consumer, you are part of it. Your supply is based on demand, and your demand is satisfied by supply. If demand rises, and supply doesn’t, prices go up, and the demand will drop again. If prices go up, you can buy less. As soon as people notice that, they want more salary. As soon as they get their few percent rise, they can buy again, and demand rises. To support the rising demand, supply has to increase, which means more production, more jobs and lower prices. And so on, and so on. Obviously, economics is a lot more complicated than that, but this is one of the basics.

Why does the economy goes bad? At some point, when things are going really well, a simple psycological impulse can turn the tide: “It’s going so well, but it can’t stay like this forever, so let’s save some money now that I can afford.” That means people spend less, and save more, and less spending leads to lower demand while supply has been high. So… prices drop, or stay high, but income usually doesn’t, so companies start to see their profits dropping. They start firing people, restructure their company, or otherwise, and economics start to panic. And so does the public. Recession starts.

For most people, it is very hard to just avoid such economic tragedy. After all, one mind cannot change the collective reality. You loose your job, you see your net worth drop, or the value of your house goes down. With increasing prices and stable salaries, it becomes increasingly hard to pay the bills. Those who are not able to adapt their life style, get in trouble, because they simply cannot afford to keep on living it. People start to burn until they reach their credit card limits. It is real, and it is very hard to avoid it, or get out of it. I say “very hard”, because I believe it is not impossible.

A bad economy has a lot of downsides, but people often forget that it also has some benefits. After taking ‘the decision not to join’ this economic downwards spiral, I gathered the following opportunities that make me avoid it, or even benefit from it. I have to give you a little disclaimer though: I’m not a financial advisor, and I can’t garantuee this will work for you as well as it works for me. Whatever you do, it’s at your own risk

1. Buy some stocks. There are bargains!

My grandmother thought I was insane when I told her I bought some stocks the other day. Things are bad and for some companies, things can hardly get worse. Okay, actually it can - if they go bankrupt. However, some companies are unlikely to, for example because they have good long-term prospects, because traders are confident, or because their liquidity is good. Jump in when things are going bad, at some point things will get better! It just takes some patience. And patience… is a virtue! As I write, CNN reports that Warren Buffet, one of the richest people in the world, said: “Now is the time to buy!”

If you have stocks and see your portfolio value dropping at insane speed, I have one advise for you: THINK TWICE AND GET ADVISE! I would never sell or buy on gut feeling, as fear is a bad advisor. Don’t forget that there is sunshine after the rain. Always.

2. Buy property

Property prices drop quickly. Most people would rather sell their soul than their house at the moment, as it is unlikely they will get good money from their value. However, some people either have no choice, or simply don’t care. If you are thinking in long-term investments, buying property might be a good idea as it is likely to increase in value in the years to come. One challenge… You have to find either capital or mortgage to buy it. And that’s not so easy these days…

3. Be prepared

Many small business owners and employees from large corporations have the assumption that people spend less money now the economy is in turmoil. Statistically that might be correct, but people still spend money. It is your job to make sure it is your product or service that they spend on, instead of cut on. Try to figure out how you can help other people making money, and clearly communicate why this is the time to use your product or service, and why cutting costs is not wise. Be prepared by knowing that, and anticipate on it if you deem it necessary.

If you have more ideas on how to benefit from this economic downwind, don’t hesitate to leave a reply!