Investing is a fundamental strategy to generate wealth. Everyone you know is talking about mutual funds, stocks, bitcoin, cryptocurrencies. And if you’re like me, then you have friends bragging about their high returns on investing in IPOs (initial public offerings) and how that extra money they earned is helping pay the bills in light of how high inflation is in this moment.
Now more than ever, it’s critical that everyone invest wisely.
We cannot afford to make financial mistakes in an environment of high inflation and rising interest rates because these mistakes will inhibit your future financial prosperity.
It is becoming more and more likely that there will be a recession in the US later this year or early 2023. The contagion of this recession will impact the entire world. I want you to take action and not let your financial situation worsen as the economic outlook becomes more challenging.
Here are three practical and easy strategies you can consider implementing so that you can financially withstand the negative shocks of a recession ahead.
Tip 1 – Switch to a high-interest savings account
Your emergency fund, that “rainy day” money, should be about three to six months of income. Start building your emergency fund by saving 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’ll 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 per month, and with consistency, you can have the emergency fund and be ready to weather any “rainy day” that comes your way.
Tip 2: Get rid of your high-interest debt so you can have more money to save and invest
You can start by paying off that credit card with the lowest outstanding balance while making minimum payments on the other credit cards (that’s if you have multiple credit cards and loans). Gradually work to pay off all credit cards, and then you can free up more money to save and invest. To stay disciplined, set up standing orders or automatic withdrawals to your credit card account so you can stay current.
Other types of high-interest debt are your lines of credit, your payday loans, and installment payments. With rising interest rates, these products are expensive debts, as you pay a lot of money in interest costs to be able to repay the amounts you borrowed. Use the same principle and pay as soon as possible and to the best of your ability.
Tip 3 – Change your investment strategy to focus on quality companies
Start learning what types of stocks work well during a recession and pick a group of three to five companies that you’re really familiar with. These will be the stocks you research and add to your portfolio.
As an experienced investment strategist, this is where I can really get you to a place of abundance with your investment money. Imagine having passive income each month from dividends or capital gains on your investments. This can definitely 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 get back time by investing in stocks. You can reach her at [email protected]