Diversify is such a generic word and term, that is often used to describe an investment position or strategy. But in today’s climate, this could not be more prudent. If you are invested in just one place, then you can expect to lose some or a large portion of your wealth in the near future. Why? Well, firstly we’re all in a recession. Nobody expected it but here we are. The pandemic has shut down the world and the economies have all ground to a halt. This is bad news for everyone, but especially for families. It’s probably a given that one of the adults in the home will lose their job. But, if this isn’t enough incentive for you to save and invest in better areas, then these reasons will be.
How you could end up in debt
Things may be going fine for your right now, but what happens when the global economy crashes? Then these things will occur that could slide you into debt.
- Whole sectors crash. The airline industry has literally plummeted because the lockdown has meant, no one is flying anywhere. Boeing, British Airways and travel agencies are all in the news, all the time for the massive amount of job losses. Thus, your industry is also affected and you suffer either pay cuts or redundancies.
- You lose your job. Now you’re stuck with the bills and no income. You will slowly but surely slide into debt and this means you will spend more time breaking even than making money for saving or leisure.
- Unable to pay your rent or mortgage, you’re forced to take out a loan. These short-term loans are always high in interest rates, and you end up sinking into more and more debt.
It’s so easy to fall prey to any of these things right now. This recession is very abrupt and nobody has financially prepared for it. So what can you do about it?
How to get out of debt
You have a number of ways you can get out of debt. But first, consider the argument of debt consolidation vs debt settlement. Consolidation just means you make things simpler, but pay for that convenience. The consolidator will just form all your debts into one payment. The interest rate will be lower but your payment plan will be longer. Thus, you actually end up paying more to your lender. But debt settlement is when you regain the legal title to your body and thus your CQV Trust. Then you can take control of your Trust and put a lien on it, which allows you to no longer be part of court cases financially speaking of course. You won’t be subject to traffic tickets either, among other things. So you can actually change the legal status of yourself as an entity and no longer need to be subject to some financial clauses.
Precious metals galore
Gold is by far the biggest bet against debasement. What does this mean? Well, experts in the economy predict that the US Dollar will actually lose its world reserve currency status in this decade. This is because of a number of things. Firstly, the US’s stance on the world economy. It’s having a trade war with China, which is its main importer and exporter of foreign debt. This has some people very worried because the only reason why China buys US foreign debt is that the US buys its goods. If one of the pairs stops this relationship, the US Dollar will lose its value.
Secondly, the US is very heavily in debt. $26 trillion and counting, soon to be $46 trillion in 4 years. That means that every year the national debt grows by $4-5 trillion. How is that sustainable? It’s not! That’s why Peter Schiff and Warren Buffet are both imploring everyone to take a look at gold. It hit all-time record highs this month, going beyond $2,100 per troy ounce. Innovatively, other precious metals are joining the rally. Silver is on a spectacular bull run, going from $18-20 to $28-30 just this month. Gold has gone from $1,300 to $2,000 in just 6 months! This is unheard of and it’s not just because of the pandemic. The world is changing and people are catching on.
Stocks to watch
If you had your wits about you, when you heard about the lockdown you would have immediately bought Amazon stock. Online shopping has risen by over 200% and that also means that Amazon stock has risen by 40-50%. Going from a value of $1,800 12 months ago to now $3,297 is incredible for just one year’s performance. This wholesaler has been the go-to for many investors, especially families that want something solid. Everyone knows about Amazon, everyone uses it and its Prime subscription has skyrocketed in the past few months. Over 50% of its Prime users, regularly buy from Amazon and it’s usually over $40 each time. If you want to know how to get started check out different investing platforms like Motley vs Morningstar it offers more in-depth analysis, and is better for new investors.
You should also seek to invest in Apple stocks. It’s the first company with a market cap of $2 trillion! It’s gone from $212 for its stock last year, to now, $473! As you can expect, this is something that has taken even seasoned traders by surprise. It’s highly recommended that you start to invest in Apple, as it will only go up further as it brings out new technologies to compete and win over customers against its rivals.
Invest in startups
As the recession lessens in intensity, there will be plenty of investment opportunity, particularly in the startup field. Look for new companies that are seeking investment, by working with investment firms that offer portfolio and individual investing. Venture capital firms are great for affluent families who have a lot of savings they can invest. Asking for a piece of the business is very viable in these types of investments. It’s time for your family to look elsewhere for its wealth creation opportunities. Don’t pin your hopes on government bonds and seek out startups with promise.