Let’s face it. Recessions are awful for most. The media are pushing the narrative that the economy is falling apart. All hell is breaking loose, and we’re all going to live on the streets by Christmas.
If you take a step back, that’s often not the case. During times like this, there’s undoubtedly a pullback in public and personal spending, higher prices, and inflation. All of the good stuff, but it can be a time for an opportunity if you’re smart with your money or have some set aside to put to work.
This article will explore some of my top tips to make money in a recession and how you can implement them immediately.
Protect your income
Now, before we go on to make money in a recession, we need to protect what we already have. It’s essential to think about your job safety as, for most of us, it’s what will get us through a recession.
Would you be in line to go if the company were to hit hard times? I know it’s not something we like to think about, but it’s important to know where we stand.
Arrange a chat with your line manager or your boss if you’re close. How is the company doing? Does a recession affect them? Are there any new skills you might be able to learn that might be useful?
This small chat gives you a good idea of where you stand and if the company is performing. If you walk out of that meeting and are filled with dread, then perhaps figure out a way to make yourself more indispensable or look elsewhere if it’s looking bad.
Right, let’s get into the good stuff!
Start a side-hustle in order to make money in a recession
Side hustles are the talk of the town right now, and why shouldn’t they be?! Working on something you are passionate about to create extra income sounds great, but often the question is, where do you start?
When thinking up your grand plans, start with something you are passionate about. You can make a list of the things you like in one column and then think about how people are making money from them and note those down in the next column. If you do this for an hour, I’m pretty sure you’ll have a good idea of where to start.
For example, blogging as a side hustle is a fantastic way to monetise your hobbies and make money in a recession. There are websites about practically everything, and Google rewards you with traffic for writing about topics that people are looking for answers to.
With a side hustle like blogging, you can make money from multiple different streams, including display ads, affiliate commissions, freelance writing and even your own products.
If writing isn’t your thing, but you love creating, then you could even look at freelancing or selling crafts on Etsy. When you put your mind (and time) to it you can pretty much do anything you enjoy and make money from it.
Investing (long-term focus)
Investing in the stock market is one of the best ways to make money from a recession. I can hear you say what are you talking about? Surely stocks just drop during a recession. You’d be right in saying that they do but as they fall in price, they are discounts that crop up all over the place, providing you with the opportunity to get into the markets. This is similar with Forex trading.
When investing for the long term, ten years or more, these drops in price will be your most profitable trades. You need to ensure you’ve got the stomach to carry on investing each month little by little, as they may even drop further after you buy them.
That being said, if you pick great businesses that are growing yearly, then the price will go up over time. In the short term, the stock market is like a voting machine, but over time it’s like a weighing machine. If that company is growing every year, eventually, it’ll be priced in.
Buy Businesses – Physical or Online
Unfortunately, during a recession, there are lots of businesses that go under or look to sell. Whilst that is certainly not something we like to see, if you’re savvy, you might be able to pick up a great business at a cut price.
For example, the coffee house at the end of the road, which is always busy, might fall behind on rent and unfortunately have to look for a new buyer. You sense the opportunity to dive in as you have the capital and know that it’s a profitable business long term.
Now, this is a pretty huge investment, but you get the gist. You’re saving a business that could go into administration or picking up a location (it doesn’t have to be a coffee house) on the cheap.
Another exciting way to invest in a business is by buying an online business. For example, an eCommerce or online clothing business might not have the funds to invest in new inventory or online adverts so you could jump in as an investor to inject some cash into the business. Even taking over from an existing influencer or starting a blog like SavvyDad is a great option in order to make a passive income, particularly if the brand or the site has been around for a while.
Essentially, if you’ve got some spare funds that you’re looking to put to work, 1000s of business opportunities crop up during a recession.
One of our favourite ways to make money during a recession is to pick something that everyone seems to continue going mad for, no matter what. For us, that happens to be trainers, but this could be bags or popular brands. The key is to pick something that sells out in an instant but has resale value. Even having a clear-out of your own preloved Converse and Nike classics might help raise funds to budget for the future.
We’re not talking about Sketchers, but rare ones when we mean trainers. For example, a new pair of Nike Air Jordan or Adidas Yeezy’s could go from anywhere from £500 to £5000 on eBay or Stock X, but their initial retail price was more like £100 to £150. The margins are insane!
You need to be hot on the release dates and times if you’re to stand a chance of getting a pair, though! Fear not. There are apps that do this for you, like Heat Mvmt, where you can set alarms for your chosen releases and grab yourself a passive income machine!
Do a car boot
If you’re not into investing or side hustling, then that’s fine. Some of us just can’t be bothered, but if you need a bit extra, then look at selling at a local car boot.
Take a day on the weekend and bag up a load of clutter, old clothes, gadgets, kids’ toys and furniture. Borrow a big car or van and get to a local car boot.
A little tip for building up your inventory is to ask close family and friends if they’ve got anything they’d like to chuck in. You’ll be surprised at what they give you.
Last summer, we held three car boots making over £250 from all three and had a blast with the kids doing it too!
A huge thanks to Sammie for this guest post. Sammie Ellard-King is the Founder of Up the Gains – Money Made Simple. With over 15 years of working in marketing and creating content for some of the world’s biggest brands, you can check out Up the Gains as a safe place to learn about personal finance online.