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When you see a news announcements forecasting an imminent economic crisis or read a report discussing the credit crunch, what is the initial feeling that you have regarding money? For the ‘average’ person it might be to identify possible strategies to cut their monthly expenses. This would be logical, as fear is a powerful emotion for determining how and where we spend our money.
House owners decide that it is the worst time to sell their house to purchaselook for a new home, Drivers decide that it is the worst time to order a new car, parents vow not to spend a lot on Christmas gifts for their children. Basically, demands for a number of products and services drop.
For example, when fewer people are deciding whether to buy houses, the cost of the average home drops. What happens to the lettings market? The irony is that this is the best time to acquire a home if you have money and do not need to sell your home to buy the property.
Those people with capital to invest are enjoying the current economic situation! They can buy rental properties at a much lower cost and there is a greater likelihood that they will find tenants. Hence, they are able to benefit greatly from the trends in the economy.
Banks have suffered as a result of the credit crunch and many have needed financial backing from the government, but the government will capitalise from these 'deals'. They will own equity in the banks and the economic trends will bounce back over time. As an example, in November 2008 the government acquired 57.9% of the Royal Bank of Scotland in the UK.
Usually, whilst one section of people is suffering, another group is capitalising. When retail sales drop, direct sales increase, when the property market falls, the lettings market grows. When banks struggle, the government capitalises. The goal is to be on the gain side of the equation!
Now I know what you are probably thinking: “I don’t have capital to invest”. A recent report on the BBC news website (22nd January 2009), detailed a study from two leading US trend forecasters. They suggested that by researching the outcome of 18 similar financial events around the world, that it could be as long as 6 years before property prices reach rock bottom and 3 years for the stock market to reach its lowest point. These are only the findings of one project, but if you take responsibility for your financial situation now, you may be in a position to become an investor within the next 3 to 6 years. This could be the last opportunity you have during your working life to capitalise on these economic changes!
Author: Dr. Andrew Smith. To learn more about making extra money online please visit our Blog at www.winonline.biz/blog/. Don't miss out on your free E-book "Escaping the 9 to 5 working way of life forever!" at www.winonline.biz/. Don’t delay, learn how to make money online today!
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