Opportunities to be Recession-Proof After the COVID-19 Pandemic

First things first: surviving and thriving during a recession isn’t easy, but you can do it.

Plus, the earlier you start, the easier it is.

And a recession can even be an opportunity

Get in the Game

You want to recession-proof your life sooner rather than later. Your first goal is to get mentally in the game. Be alert, pay attention, and think strategically, even before the recession has hit. It’s like hitting the gym before a big game. Here’s how to get in shape now, so that you’re lean and mean when the economic you-know-what hits the fan.

Weigh Your Options

Do you want to own a dream home, learn a new language, travel the world, or start a company?

You might be thinking that you couldn't possibly afford to own a dream home or travel around the world when the economy is doing poorly. You may wonder how you can start a successful company when no one’s buying anything. And you may even ask yourself who has time to learn another language or do something selfless when they are struggling just to make ends meet.

Some ideas might sound unrealistic or even delusional when you’re looking down the barrel of a recession. But this line of thinking is completely backwards.

Believe it or not, a recession can be the best time to do all these things, and the easiest time to make them happen. Let’s take each skeptical question in turn.

“How can I possibly afford to own a dream home or travel around the world when the economy is doing poorly?”

Let’s turn that question on its head. How could you possibly afford to buy a house or go traveling when the economy is doing well? In up years, everyone wants to buy a house and the real estate sector goes nuts. It becomes a seller’s market. Just ask anyone who tried to buy a house in San Francisco in the middle of the dot-com bubble in the late ’90s. It sounds like the best time to buy, but it’s actually the worst. Any financial advisor will tell you to buy low and sell high.

When it comes to buying a house, that means: buy during a recession.

If you can swing it financially, this is the time to do it.

As for traveling, remember that tourism, leisure, and hospitality are industries that are exceptionally vulnerable to a recession. When people have less money, they’re going to cut back on these luxuries. That means that in down years, hotel rooms and plane tickets get much cheaper. If you have some money tucked away for that round-the-world adventure you’ve always dreamed of, a recession is the perfect time to get maximum bang for your buck. When the economy stinks, what are you giving up in order to do that? Not much.

“How can I start a successful company when no one’s buying anything?”

Simple: because when no one’s buying anything, stuff is cheap. When stuff is cheap, your start-up costs for a business are low. By the time the economy picks up again, your business will be ready to rock.

“Who has time to learn another language or do something selfless when I’m struggling just to make ends meet?”

Again, turn the question on its head: who can afford not to be building their skills through education and volunteering at a time when you need to stand out from the crowd of other applicants? Learning another language isn’t just a hobby; it’s a resume-builder and it shows employers that you’re still growing, learning, and hustling.

Volunteering for your community isn’t just a good deed; it’s a great opportunity to gain professional experience in a new field. Since you’re not being paid, it’s easy to get the organization to say yes to “hiring” you. Then, with that experience under your belt, you’re poised to get a job doing that same thing for money.  

Opportunity Cost

There’s a concept in economics called opportunity cost. Basically, it’s what you give up in order to get something. If you adopt a cat, you have direct costs like cat food, vet bills, etc. You also have opportunity costs: all the things that you can’t do now that you have a cat, like leave town at a moment’s notice, or invite your allergic mother over, or have an open tank full of goldfish in the living room. Just as other costs go down during a recession, so do opportunity costs. If no one’s hiring, what do you have to lose by taking a few months off for that trip to Colombia you’ve always dreamed of? Nothing. If you’re out of work, what are you giving up when you decide to spend your time learning Japanese and volunteering for the Red Cross? Nothing.

Low opportunity costs are one of the big reasons why a recession isn’t just a threat, it’s an opportunity. If you were always itching to try out a new city, a new career, a new hobby — really, any change at all — a recession is the time to do it.

Your Career is Like a Sculpture

I had a career counselor when I was finishing my undergrad in 1999. One of her greatest kernels of wisdom was this: your career is a sculpture. When you’re figuring out what to do with your life, you’re like a sculptor who starts out with a big block of rock. That block of rock is all your possible careers—plumber, pilot, pianist, and everything else.

How does a sculptor work?

Not by adding things, but by taking things away, until the only thing remaining is what should be there. When you go out into the world, try a job out, and decide it’s not for you, you’re chiseling a piece off of that block. If you do that enough times, you’re left with all the things you do like and are good at. That’s your sculpture; that’s your career. That’s why those “negative” questions are so important.

Of course, looking back, I sometimes wish that career counselor had just told me to get a job while the economy was hot. If she had told me that, maybe I wouldn’t have fallen prey to the second dumbest thought I ever had.

Downsizing is an option

Of course, I wrote the book Recession-Proof: How to Survive and Thrive in an Economic Downturn in 2016 to help people avoid that situation where you have to downsize.

But if all else fails, downsizing is an option.

Housing is often the best place to cut your costs. Whether you’re living a five-figure lifestyle or a seven-figure lifestyle, your biggest cost is probably your housing. You can massively reduce that cost by moving in with relatives or living with roommates. That’s not always the most pleasant option, but it does come at a huge savings to you.

For some people, the idea of downsizing may even be attractive. Maybe you’ve recently become an empty nester. Your last kid just left for college and you’re tired of having three bathrooms to clean, and you are looking forward to trading in that old, musty family home in the suburbs for a sleek new condo in the city.

Whatever your situation and your priorities, you need to ask yourself what downsizing might look like and how far you’re willing to take it.

You are a business — You, Inc.

When recessions come, businesses cut costs, and you can do the same. The most successful businesses don’t just freak out when the recession comes and cut everything — they plan ahead and cut smartly.

You should do the same.

Ask yourself: Do I need that new BMW, or is last year’s Toyota just fine? After COVID-19, many people are likely to ask themselves if they need a car at all.

Do I actually need or want a five-bedroom, three-bathroom home that I bought to house my kids who have now flown the coop?

If I telecommute, do I actually need to live in this expensive city, or can I move somewhere more affordable without sacrificing my job? In the wake of the COVID-19 pandemic, this will become a critical consideration for many people.

Downsize Your Expenses — Not Your Life

You will notice that I wrote “downsizing your expenses,” not “downsizing your life.”

Reducing costs doesn’t necessarily mean reducing your standard of living.

When I founded Prestige Economics, I was living in Houston. I often travel long distances for work, so where I live doesn’t actually make that much difference to my career. So I decided to move to a city with higher bang-for-your-buck. I relocated to Austin, Texas and I’ve never looked back.

Overnight my housing costs and the price of my car insurance were cut in half. I was living just as rich a lifestyle, but spending less money for it. In the wake of the COVID-19 pandemic, it will be important to cut your costs wherever possible.

But you may be able to keep your lifestyle.

You just need to be able to hold on until the recession ends. And the good news is that recessions are often much shorter than the economic expansions that both precede them — and follow them.

Recession-Proof Book

This article includes some content from Jason Schenker's book Recession-Proof: How to Survive and Thrive in an Economic Downturn, which was released in February 2016. The book has been a No. 1 Best Seller on Amazon.

This book can be ordered at Recession-Proof.

Jason Schenker is one of the world's leading futurists. He is the Chairman of The Futurist Institute and the President of Prestige Economics. Jason is also an instructor for LinkedIn Learning.

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