If you’re like me, aka. Millennial, this will likely be the very first recession / depression like situation you’re about to experience. In the face of so much uncertainty, there is one thing I can tell you with absolute certainty:
This is not going to be the last recession-like situation you will walk through in your lifetime.
The world’s economy fluctuates in a surprisingly predictable manner – as predictable as the last rollercoaster ride you’ve taken. Recall that ride, that steep dive downwards, your body slicing through the air and the screams that seem to engulf everything else around you. Once the worst is over, you begin yet another slow climb upwards – to the next steep dive. And when that happens, it almost always catches you off guard. But as you ride it for the second time and the third time and the subsequent rides you take (assuming you’ve got the express tickets so you won’t have to wait all day long), you become used to it. The dives still take you through a chilling moment, but it no longer becomes a surprise.
The economy works in a similar fashion. It’s a rollercoaster ride.
Long story short: there will be multiple good times (peak) and bad times (recession / contraction).
The real question is: How do we prepare ourselves for the peaks and recession such that we don’t take a nose-dive downwards and hit face-first onto the ground the second it dips into a recession?
Well, ask yourself what’s that one thing you need to have throughout the rollercoaster ride, no matter how many bumps and dives there are up ahead?
Your safety strap.
The safety harness / strap / guard is the thing which keeps you where you need to be through the ups and downs.
So what’s the equivalent of this safety harness which we can turn to in life to keep us where we need to be – snug, safe and happy – throughout the different stages of the economic cycle?
It’s simple: a sound, robust financial plan.
Side note: The esteemed work of a financial planner has been tarnished by the run-of -the-mill salesperson who makes a living shoving overpriced insurance plans down your throat. Fortunately, it’s becoming easier to distinguish a good financial planner from an insurance salesperson. From designations such as the credible Associate Wealth Planner (AWP) and the Certified Financial Planner (CFP), consumers like yourself would have a little more confidence in sifting out the bad eggs from the bunch. Have a listen to my podcast episode #1 at http://www.anchor.fm/womenwealthjourney to learn more about the three questions you can ask to interview your financial planner so you’re prepared to weed through the bad eggs and find a good financial planner for yourself.
Establishing a solid financial plan now will put you in a better place for the next recessions and peaks upcoming (or other financial setback).
Here’s a quick run down of what makes a good financial plan:
1. Good savings habit
2. Strategic allocation of income into investments, liquid savings, insurance, and others.
3. Ensures that risks and uncertainties are insured adequately
4. Long-term and short-term financial goals and life plans are taken into account and revised annually at the minimum.
5. A solid continuity plan for the next generation.
There’s a lot to be shared from this simple list of bullet points, and if you’d like to appoint me as your financial planner, you can always do so by booking a video call appointment with me via http://www.calendly.com/cherietanjy/initial
In the coming months, I will be sharing those bullet points in the form of online courses and webinars. Feel free to express your interest in these online videos and courses by dropping me an email at firstname.lastname@example.org or send me a DM via Instagram @cherietanjy