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How to Prepare for the Next Market Reset

It’s amazing that so many people have already forgotten about the 2008-10 financial crisis.

It’s 2017, some 8 years later, and we have the media pundits, the political pundits, the federal reserve, and the mainstream economists saying, “Hey, it’s all good. The economy’s up. People are working again. And we’re even seeing little bits of inflation out there.”

And I say, baloney.

 

 

It’s not all good. In fact, in some ways, I think things are worse than they were in 2008.

Here’s the point. We will always have market resets.

It’s not isolated. Everybody is affected. You probably were too back in 2008-10. Think about it.

I’ve weathered through those resets over 37 years of being an investor, businessman and professional practice owner, and I’ve learned how to prepare for them.

So, what’s signaling a recession?

In the real estate markets, I start getting lot of cards and letters in the mail that are sent to people that own investment properties.

These are what we call “yellow letters” in the business. They’re commonly used, and good marketers use different ways to get people to open them.

I’m getting a lot of these right now, which is telling me that the market is getting to a high point, exactly like in 2008.

The writing’s on the wall. It’s just a matter of when. Not if, but when.

I think we’re probably going to see a reset possibly later this year. If not this year, I think for sure in 2018.

So how can you get ready and position yourself? How can you not only survive the next reset, but actually thrive?

First thing: Get your house in order.

If you have consumer debt — lifestyle stuff, vacation homes, car leases, car loans, credit cards, other consumer items — start getting those paid off.

Not refinanced. Pay those off.

You don’t need it, and you don’t want it when there’s a downturn.

Second thing: In your business sector, if you’re using lines of credit, get those paid off as rapidly as you can.

I think we have a window of 12 to 18 months to get this stuff in order.

I don’t have a problem with using debt, but I’m talking about good debt.

If you’ve got debt that’s fixed rate, long-term, that’s fine. But no short-term, no balloons, no lines of credit.

If they’re reliable cash-flowing assets — business, practice, real estate — all good in my opinion.

Last thing: Develop your relationships.

I’m going to tell you right now, most people miss this.

My network is my biggest insurance policy.

If I lost it all today — if something calamitous took all my net worth — I could rebuild it.

Not because I’d have to go back to work, but because I’m a connector. I can orchestrate deals. I know how to put things together.

But to be a connector, you’ve got to know people. Don’t rely on the banks.

Real people are your best friends — your best insurance policy — so position yourself now.

Trading time for dollars, scrimping and saving, and trying to pile it up isn’t going to work, especially when we get hit with the big wave of inflation that’s coming.

Mark my words. We’re in store for it.

You can either ride it or you can get beaten down like a tsunami. It’s your choice.

Very few of you will take my advice on this. Probably less than 3%.

But those of you who do, you’ll be well-positioned. Those of you who don’t, I told you so.

It’s your choice. Which one are you?

 

 

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