The 2020 Recession: How to Prepare & Invest.

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2020년 경기침체 우려는 심리 요인이 크며 지표(고용·GDP·소매판매·소비자신뢰)는 아직 양호하다고 주장. 미중 무역갈등은 오히려 매수 기회라고 봄. 침체 확률을 1~2년 내 10~30%로 보고 리세션 룰렛 비유로 시장 상승 쪽에 베팅하는 것이 유리하다고 주장. 빨간날 주식 매수, 부동산 시세 하단 매입, 소득 증대, 유동성(HELOC·신용한도) 확보를 권고. 금·채권 ETF나 고금리 예금은 보조적 안전자산으로 언급하되 전액 투자는 비추천.

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01. fears of the 2020 recession are so rampant that Google Trends shows of the term recession as a recent breakout a term and why is that well I think it's mostly because many of us our very human we are uncertain and we like certainty we don't like volatility in the stock market we don't like reds and greens we like to see solid growth things we can plan on things we can feel comfortable investing in how can we possibly feel comfortable investing in stocks right now or many of us how can we possibly feel comfortable with the idea of signing up for a 30-year mortgage when the market is so uncertain well in e're going to be talking about what you should do to plan for the possibility of a recession but more importantly than planning for the possibility of recession we're going to be talking about how this recession is made in China and how we're gonna solve it in America and specifically I want you to be a part of the solution and make sure to stick around to collect your four tips for surviving the 2020 recession in this video so let's go ahead and start by taking a look at the economy after all and I hate to say it but when people hear that somebody got cancer what's the first thing that we usually think to ourselves Oh what kind is it and then what do we do Oh oh my gosh I hope I don't get that what are the odds wha why do people get it Oh poor diet what Oh whoo good thing I'm vegan I'm good like that's so normal right because we don't like that feeling of oh my gosh something bad is happening I don't want something bad to happen to me and I think that's exactly why so many of us are searching Google and YouTube right now for information related to the possible recession yet every single time we look for data on this we come up with stuff like this this is the Economist and The Economist tells us the onset of a downturn is as much a matter of mood as it is of money and that's when we start realizing wow wait a minute underlying statistics let's take a look we have 160 4,000 jobs that were just added to the economy GDP growth held at 2% yeah there were expectations that it would be 2 point 1 percent but remember in order for us to have a recession we need to see this GDP number decline first of all to a negative territory but we would expect to see larger declines faster and yes things can turn quickly and I always encourage you to be watchful of those in fact I'll always be reporting those here on this channel so make sure to subscribe but what else retail sales are through the roof consumer confidence is up and then the argument comes up whoa you know we're at historic levels of debt people have more car debt than usual people have more credit card debt than usual yet when we compare that to the percentage that people are spending of their monthly income on household debt we're nowhere near at scary levels so I think it goes without saying that of the economy right now is in the weirdest point that it's ever been we're very uncertain and part of that is because we can't really look to history to say ok well hey you know what let's let's figure out the last time somebody pulled a gun on a cop what happened and we pull up books and we try to learn ok what happened in the last recession we could study this all we want but unfortunately unlike when you pull a gun on a cop you know you're gonna get shot when you have a recession problem that has never happened before in history we start wondering wait a minute this is really weird we look towards global growth and we see that global growth appears to be slowing but it was never really booming after the last global financial crisis so it's entirely possible that the rest of the globe is still looking to get out of the 2008 global financial crisis while at the same time many of us are looking for anything that says you know what the recession is coming and why are we looking for that we're looking for that because secretly we all know it we all want to go shopping in 2011 and 2012 again come on you know you want to go buy some stocks in 2009 and 10 as well pick up some B of a at 5 bucks I remember was that five bucks I remember how I felt when I was 19 years old looking at going oh my gosh I should buy that right now oh but I'm too scared if I get it I totally get it and look it certainly doesn't help that the world's largest economy an economy that's almost as large as 20 trillion dollars is fighting with the second largest economy in the world China at twelve point two trillion dollars in terms of size of economy yeah the United States is almost a double the size of China's economy but still when number one and number two were fighting everybody else in the room is like oh crap in fact think of this analogy when mom and dad are fighting us as a child in our memory oftentimes looking we're just like huh-huh-huh we're not actually thinking about playing at that time well the same thing is true right now with the marketplace and when mom and dad are fighting it's usually the best time to go play because you can go do whatever you want you're not being supervised well very similarly to the economy I think that when the United States and China have their trade battle it's the best time to pick up really good deals in the marketplace no matter what you're investing in because there's so much uncertainty so while the next recession might still take an unknown amount of time to develop what should we be doing in the meantime well that's where I have a for money tips for you and remember I'm just some guy on the internet so don't sue me bro my number one suggestion right now is make hey right now the economy is still relatively booming with the exception of manufacturing the ability to crush it out there right now if you are in sales if you're in computer programming if you're in whatever fields that you're in it doesn't really matter you should be going for a promotion you should be locking in higher wages right now if you're an entrepreneur you should be killing it right now doing whatever you can to push sales now a lot of people talk about oh if a recessions coming pay off dead and put money into savings well let's be real before the recession is usually the best time to make a ton of money because everybody is usually spending right before a recession and that's what we're seeing with the data I never like to just talk blind I'd like to speak with data supporting me and when the data says consumer confidence is up I don't look at that and think whoo I got to put more money into savings I look at that and go hmm how can I spend some more money on business to increase my revenue because the bottom line is the more money you have going into a recession the better off you will be going through it and coming out of it so number one increase your income figure out what you need to do to negotiate their race or you know what sometimes you just have to jump ship it might be comfortable to stay where you are but if you've capped out your income where you are you might need to consider a different option here's an example somebody came to me the other day and said hey I make thirty thousand dollars a year working at the United States Postal Service I want to invest in real estate and I want to follow the principles in your real estate investing course linked below and a twenty two percent off until September 10th by the way and now in this person's shoes making thirty thousand dollars a year and thought to myself okay this is you know we're working for a bureaucratic government if you like that kind of work something that could actually be very engaging especially at a younger age is something that I would have wanted to do and I almost did do go work as a cop in fact most cops in their first year on the road are paid upwards of 55 to 60 thousand dollars throw in overtime there are cops that will come to my real estate investing events next one's Austin by the way and they're making a hundred hundred ten hundred twenty thousand dollars because of the overtime and so all of a sudden you look and you go wow even within the bureaucratic world of working for the government there are opportunities to make more money you might just have to sort of relocate or reposition where it is that you're working second tip I'm a big fan of investing heavily hugely in times like this because they're volatile there's so many red days that create so much fear amongst other people that when I'm negotiating real estate contracts I do it on a red day when I'm looking to buy stocks I buy stocks on red days today the Dow is up 326 points I'm not buying today I bought when the Dow dropped 800 points that was the day I bought a lot of shares and I posted on my Instagram shares I bought so be sure to follow me on Instagram - so to me really all this Chinese combativeness is really an opportunity to just swoop in and keep buying because guess what China's doing now China is backing down to the power of the United States now look whether or not you like the president you have to recognize that the United States has a massive amount of clout people want to do business with the United States if things are painful here imagine how painful things are elsewhere that's why the 2008 recession was so terrible I'm gonna give you some ideas for things to invest in and it'll also give you some safe harbor suggestions in case you're nervous and how to balance that but something that you need to know when you're thinking about investing is you have to ask yourself what are the odds of recession and by most accounts right now the odds of a recession within the next two to four years or even within the next year are generally pitted somewhere and these are volatile estimates but anywhere between 10 to maybe 30% well in my opinion this is a pretty slanted roulette table that says the odds are there won't be a recession within the next year two or three years remember when you play roulette you have a 50% a chance of landing on black and a 50% chance of landing on rent but what if somebody now picked up the table and a slanted it so the odds were now 30% 70% which side would you want to invest in and in my opinion that right now is the odds that there won't be a recession there will be one in the future but at least not in that near-term future and so what am i doing I'm throwing my money on the 70% side and see let's do a quick example if I invested $50,000 over the next couple years let's say and I was able to make $25,000 by investing and I'll show you how you can do that and I was able to make that $25,000 now I have $75,000 in order for me to break even that is B par again the market would have to fall 33% at the worst part of the financial crisis of 2008 real estate prices fell about 33 percent for most houses in most areas let's continue for a second down the absolute worst-case scenario path if you bought the absolute worst time to buy a Dow Jones index on September 21st 2007 it would have declined all the way to its worst day 47 percent that means in the example that I made where you invested $50,000 and you went to $75,000 because you invested the way that I suggest that $75,000 would now be worth thirty-nine thousand dollars and you looking to go oh my gosh I lost 47 percent but because you invested and you invested in opportunities that let you grow money you actually really lost in this case a little more than ten thousand dollars and that's if you struck buying at the most expensive day and you sold at the worst possible time had you bought just a couple months earlier or had you not sold or sold a couple months later you would have only lost about 17 percent worst case scenario so notice how even if you made that mistake on the by timing if you just held on the odds are you're not going to lose some crazy exorbitant amount like when you look at those worst-case scenarios of losing 47 percent I mean just just wait but even if you made that mistake the fact that you invested and made gains actually helped insulate you from really getting hurt and see that insulation is exactly why I buy stocks on red days and I buy real estate below market value now a lot of people counter and they say well Kevin if you buy real estate for $450,000 that means the market price of that real estate that day is $450,000 that you're not actually buying anything below market value and this is somebody that just graduated economics of 101 because I too took economics 101 in fact I took many more economic classes but what you learned in the later economic classes is that there can be disparity in certain fields such as a real estate depending on the sophistication of the buyers and see that's where I prefer real estate investing over stocks stocks you're competing against very sophisticated computers and people in real estate when you're shopping for small deals like family duplexes triplexes for plexus you're usually competing against people that own 0-2 maybe one other property in fact 90% of buyers don't own more than two properties in the smaller deal space so you're really competing against people that are really unsophisticated it's kind of like shooting fish in the barrel to get good deals and yes that's exactly 'm gonna give you an example right here when I buy a property for $450,000 that needs $50,000 worth of work so I'm into it for $500,000 the market value of that property is not 450 or $500,000 that day the market value is the average of the sales in the neighborhood of a similar square footage so when I look at a neighborhood and I see okay we have four properties that just sold they're all 3-bedroom 2bath they all have a 7,000 square foot lot they're all single-story single-family houses and they're selling for between five hundred and ninety thousand dollars to six hundred twenty-five thousand dollars the midpoint there is somewhere around 612 615 $610,000 I know that somewhere in that range is the actual true market value of the place that I bought that I'm now into for $500,000 that is what I call buying in the wedge you're buying a property below market value and the reason you're able to do that is usually because people are fearful of doing basics like paint and carpet now I have a challenge for you let's say you put 5% down on that place that you bought for $450,000 and then let's say you borrowed the extra $50,000 to do the fix-up that's a lot of debt right in fact you've borrowed more than you've really paid for the property in fact your total debt would be about four hundred seventy seven thousand dollars but because the property after you do your fix up is now worth 600 600 ten thousand dollars what just happened you just fatly insulated yourself in fact four hundred seventy seven thousand five hundred dollars divided by let's say a value of six hundred thousand dollars is kind of like you put down 20.5% on that deal you basically just created $100,000 out of thin air you started with 5% down just $22,500 and you turn $22,500 into well over $100,000 in value now guess what the market could fall 50% and I don't care because I just turned 20 $2,500 into over $100,000 now if the market Falls 50% I still doubled my money I still took twenty two thousand five hundred dollars and turned it into over fifty thousand dollars that to me is how you can capitalize on inefficiencies in real estate I suggest you try to do similar things with stocks as well specifically taking advantage of volatility by buying on red days that is how I like to generate value that's why I suggest number one increase your income number two invest invest invest and if you can invest in places where you can buy things below market value that is how you're gonna insulate yourself you're not gonna insulate yourself having your money sitting in a wealthfront savings account earning you 2.3 percent now I enjoy wealthfront I'm a big fan of wealth run and if you don't yet have wealthfront I highly encourage you to create an account at wealthfront now my third recommendation is make yourself liquid and what I mean by that is not just the cliche go pay off debt although that helps as well but open up credit lines that is if you own real estate or you bought a house to live in consider going to local credit unions and opening up a home equity line of credit these let you take out a line of credit up to eighty nine point nine percent sometimes keep looking until you find a credit union that does that Bank of the West in the western part of the United States imagine that does that these are really good tools to have on a rainy day or in case the market is a little bit volatile another thing I like to do is I like to have credit cards multiple credit cards open that are all fully paid off now while I never recommend paying credit card interest the more credit cards I have the more I realize that one of the credit cards always seems to be offering some kind of very enticing introductory rate for a period of 18 months and sometimes they're not even introductory see for example the city double cash card keeps sending me these interest rate emails saying hey you know for the next 18 months why don't you just go ahead and enjoy this really low interest rate below oftentimes what people's mortgages are for an interest rate of like huh all right well if I needed to pull out some money really fast to do some fix-up I guess I could do that and finance it over 12 to 18 months because I don't mind paying really low interest rates so having that fluidity having paid off debt having credit lines while at the same time having more income and increasing your investments it's really a strong way to prepare yourself for a recession worse case if it happens and best-case scenario you enjoy the ride in the gains see another thing that this actually does for you is of the more money you invest the less money you spend on crap and the less money you spend on crap with the more money you invest statistically the richer you're going to be in life now if any of this makes you nervous consider parking your money into some things that generally do well in a recession these could be things like gold or a Vanguard bond market index fund even a fidelity bond market index fund or even just consider and leaving your money and that regular high-yield savings account over at wealthfront I wouldn't necessarily put all of my money into something like this especially remember the recession roulette table is tilted against the odds of these doing very well in the long term and that's why to me buying below market real estate and buying stocks that I like or index funds that I like on red days are the things that I'm going to keep doing in the meantime I kind of laugh in the background at what I call the Trump or session in fact if you haven't watched my video on the Trump recession consider checking of that out it's a pretty incredible theory that I actually strongly think will hold true especially with news over the last week continues to sort of reiterate that yeah this is just the Trump recession not a real recession t's all next time