Why is it that some people get richer during a recession while others struggle financially? It might seem unfair. You could think it has something to do with social class or intelligence, but honestly, it’s much more about how you prepare yourself for these challenging times.
I’m here to tell you that a recession is not something to fear — it’s actually an incredible opportunity to create long-term wealth, if you take the right approach. Over the last decade, I’ve helped thousands of families restructure their finances and mortgage financing to achieve better financial futures. Today, I want to share with you the key lessons I’ve learned on how not just to survive, but thrive during a recession.
By the end of this article, you’ll understand the three essential elements to take control of your finances in tough economic times — smart investing, strategic financial moves, and essential preparations to position yourself for success.
The most important step in preparing for a recession is mindset. Warren Buffett famously said: “Be fearful when others are greedy and greedy when others are fearful.”
When the word recession comes up, most people get anxious, stressed, and uncertain. That’s understandable — it’s a complex time, often accompanied by job losses, market crashes, and financial worry. But that’s exactly when opportunity knocks.
The key is to avoid letting fear control your actions. The news and media thrive on fear, sensationalizing worst-case scenarios because it attracts attention. But fear and panic don’t build wealth — strategic action does.
To get ahead, start tuning out anything that doesn’t feed you positive, fact-based information. Focus on what you can control — your financial strategy and decisions.
Recessions typically drive down asset values, which means prices go on sale for those who have a plan. This is your chance to become a smart buyer.
Many people get caught up trying to time the absolute bottom of the market — but the truth is, timing the exact bottom is almost impossible. Instead, focus on buying assets that make sense for your financial goals and risk tolerance when the prices seem right.
For Canadians, real estate tends to hold its value better than many other assets during recessions. When interest rates drop during recessions, real estate prices often stabilize or even increase after an initial dip. However, many people hold back due to fear and uncertainty, creating a unique buying opportunity.
Stocks are another accessible way to get into the market with relatively low friction. Consider investing in blue-chip Canadian stocks, especially in industries that have proven their resilience over time, like Canadian banks.
If you’re new to investing or worried about market volatility, dollar cost averaging (DCA) is an effective strategy. This means investing a fixed amount of money regularly — for example, every day or every week — over a set period, rather than investing a lump sum all at once.
DCA spreads your risk and takes advantage of market fluctuations over time. It’s a disciplined way to invest in the markets without trying to predict short-term ups and downs.
Don’t forget to maximize your tax-advantaged accounts, like your TFSA and RRSP in Canada, which many people underutilize during downturns.
During recessionary times, real estate can offer unique advantages — but only if you are strategic.
More listings on the market mean more options and potentially better deals. If you’re someone who adds value to properties through renovations or improvements, this is your moment.
Long-term holds in stable or growing neighborhoods remain a solid wealth-building approach. Just make sure you have a healthy income and the financial position to hold real estate long-term, because it’s not a liquid asset.
Wealth building isn’t just about stocks and real estate — it’s about investing in your skills and abilities.
Recessions reshape job markets, especially now with technology and AI rapidly changing how and where we work.
The greatest return on investment you can get is from yourself. Develop skills that are in demand, especially in tech, AI, digital marketing, or any field that aligns with your strengths and the market’s needs.
Most people freeze up during recessions, but if you move forward, you can fill gaps in the market and open new opportunities.
This might seem counterintuitive during a recession, but it can actually be the best time to start or grow a business.
Whether you lost your job, fear losing it, or want to create something new, recessions often create gaps for innovation and entrepreneurship. Many successful companies were actually started during recessions.
You don’t have to reinvent the wheel. Many established businesses are underperforming because owners can’t adapt to new technology or marketing methods. Buying such businesses and updating their operations can be highly profitable.
High-interest debt, like credit cards or costly personal loans, can drain your finances fast.
In recessionary times, freeing up cash flow by paying down or eliminating high-interest debt should be a priority. This strengthens your financial position and prepares you to seize investment opportunities.
Finally, make sure you have 3 to 6 months of savings for emergencies.
Also, have access to liquid assets like a home equity line of credit or investments that can be easily converted to cash. This liquidity provides flexibility and security in uncertain times.
Every financial journey is unique, but one thing is clear: staying silent and passive during a recession won’t get you ahead.
Focus on managing your mindset, making strategic investments, investing in yourself, and securing your financial foundation.
Ready to take the next step?
If you're a first-time homebuyer looking to navigate the market confidently, check out my First Time Home Buyers Course designed specifically to empower you with the knowledge and tools you need.
Have questions about your mortgage or want to explore how these strategies fit your unique situation? Book a free 15-minute consultation with me today Book a 15-minute Consultation and let’s create your plan for financial success in any economic climate.
Taking control of your finances during a recession is possible — and it could be the best decision you make for your future wealth. Let’s get started!
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