When you hear a news announcements predicting an imminent economic crisis or see a report describing the credit crunch, what is the initial feeling that you have relating to money? For the ‘average’ person it is likely to be to identify possible ways to reduce their yearly expenses. This would be logical, as fear is a powerful emotion for determining how and where we spend our hard-earned wages.
House owners decide that it is a bad time to sell their home to buy a new house, Drivers decide that it is the worst time to buy a new car, parents vow not to spend too much on Christmas gifts for their children. Basically, demands for many products and services decline.
As an example, when less individuals are prepared to buy houses, the cost of the average house drops. What happens to the rental industry? The irony is that this is a fantastic time to buy a property if you have capital and do not need to sell your current property to buy the house.
Those people with capital to invest are grateful for the current economic 'crisis'! They can buy rental properties at a much lower price and there is a greater likelihood that they will find tenants. Hence, they are able to profit greatly from the changes in the economy.
Banks have suffered as a result of the economy and many have needed financial support from the government, but the government will benefit from these 'deals'. They will own equity in the banks and the economy 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 struggling, another group is benefiting. When retail sales drop, direct sales increase, when the property market falls, the rental market improves. When banks struggle, the government capitalises. The trick is to be on the gain side of the equation!
Now I know what you may be 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 gloabally, that it could be as much as 6 years before property prices reach an all time low and 3 years for the stock market to reach its lowest point. These are only the findings of one study, but if you take ownership of your finances now, you may be better equiped to invest within the next 3 to 6 years. This could be the final opportunity you get during your working life to capitalise on these economic shifts!
By Dr. Andrew Smith. To learn more about making extra money online please visit our Blog at http://www.winonline.biz/blog/. Don't miss out on your free E-book "Escaping the 9 to 5 working way of life forever!" at http://www.winonline.biz/. Don’t delay, learn how to make money online today!
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