The benefits of an economic recession

Most people do not believe in the benefits of an economic recession. They see rising unemployment and declining economy and assume it all bad news. But even when 10% are unemployed, the other 90% still earn a living and to lucky 90% which is good news. Here some things to consider. 

Same income + Lower prices = wealthy 

As we write this (early 2009) we are in a deflationary recession. Prices are generally going down, which is very rare, and probably not last long. But in any recession there are companies and entire industries that have fallen in price to sell their products and services. Why not exploit that? 

If you have the same income, but you will pay less for some - or many - of the things you buy, you are actually richer. It's like getting a pay raise. 

To find the best deals, look to those areas of the economy that have been hit hardest. For example, the price of some holiday packages has been cut in half. Or if you've been waiting get a car, this may be the time. Alternatively, if you can spend less money on necessities, this may be an opportunity to use the savings to start setting aside more in the future, or to pay down debt. 

Real Estate Gets Cheaper

Real estate prices are declining at present, but even in recessions, not lower prices, interest rates go down. Whatever you have to buy a home or other property for less. You may also be able to refinance your current home and lower your payments. 

What about loss of value that you suffer at your house? If you do not move soon, it may not matter. Petition for lower property taxes based on the new lower value. So wait, and the value will eventually go up again. Also remember that if you had plans to upgrade, you can save more on the more expensive homes have fallen 20% in price than you lose in your. 

Stocks Get Cheaper

A good recession usually drive down the price of stocks. It has certainly been the case this time. No one can predict with certainty how the stock market will go from here, but you can be sure that if you buy a few good mutual funds when the Dow is at 8000 you can do better than those who bought near 14,000, right? 

If you still have a job or a business income, there are some real benefits in an economic recession. If the recession has affected you personally in the form of a lost job or lower business income, try to see it as an opportunity to explore new ways of doing things. Maybe you find your dream job or discover new ways to grow your business. More than one person has gone from good times to rough times only to find that the path leading to an even better future.