Investing is an essential strategy for creating wealth. Everyone you know is talking about mutual funds, stocks, bitcoin, cryptocurrency. And if you’re like me, you have friends who brag about their high returns investing in IPOs (IPOs) and how that extra money they’ve earned helps pay the bills considering of the current high inflation.
Today more than ever, it is essential that everyone invests intelligently.
We cannot afford to make financial mistakes in an environment of high inflation and rising interest rates because these mistakes will hurt your future financial prosperity.
A US recession is increasingly likely to arrive later this year or early 2023. The contagion from this recession will impact the entire world. I want you to take action and not let your financial situation get worse as the economic outlook gets tougher.
Here are three practical and simple strategies you can consider implementing so that you can financially withstand the impending negative impacts of a recession.
Tip 1: Switch to a high interest savings account
Your emergency fund, that “rainy day” money, should be around three to six months of income. Start building your emergency fund by storing funds each month in a high-interest savings account. Uncertainty is the new normal, and the need for an emergency fund is now greater than ever.
You will need to open a high interest savings account and start depositing money regularly until you have enough funds to replace three to six months of income. Start with what you have, whether it’s $100 or $10,000 a month, and with consistency, you can have the emergency fund and be ready for any “rainy day” that comes your way. .
Tip 2: Get rid of your high-interest debt so you have more money to save and invest
You can start by paying off this credit card with the lowest outstanding balance while making minimum payments on the other credit cards (i.e. if you have multiple credit cards and loans). Gradually work to pay off all credit cards, then you can free up more money to save and invest. To stay disciplined, set up standing orders or automated withdrawals on the credit card account to stay on track.
Other types of high-interest debt are your lines of credit, payday loans, and lease-purchase payments. With rising interest rates, these are all expensive debts because you are paying a lot of money in interest charges to be able to repay the amounts you have borrowed. Use the same principle and pay them back as soon as possible.
Tip 3: Change your investment strategy to focus on quality companies
Start learning about the types of stocks that do well in a recession and choose a group of three to five companies that you know well. These will be the stocks you seek out and add to your portfolio.
As an experienced investment strategist, this is where I can really take you to a place of abundance with investment money. Imagine having passive income each month from dividends or capital gains from your investments. This can certainly go a long way in creating financial security.
Money loves speed. Take action today with these three tips, and you will see a positive financial impact.
I wish you continued financial success!
Keisha Bailey is an experienced investment strategist who teaches people how to earn passive income, build wealth, and save time by investing in stocks. She can be reached at [email protected]