In the last part of this series, I talked about some simple ways to make money during a recession. I’ll continue the discussion in this post, giving you even more ideas to make money during an economic downturn. The key is to implement different tactics and diversify your efforts. Making money when things seem down isn’t impossible and thinking outside the box can help you make great strides.
1. Find Passive Income Opportunities
You can create passive income in many ways, but first, let’s define it. Passive income is money you earn without doing any active work. For example, your job earns active income. However, an investment in a real estate property would be passive. You don’t have to do something to the home daily to make money. Other passive income opportunities include opening a high-yield savings account, investing in a CD, or putting money in a crowdfunded investment. With these options, you can make money even when the economy suffers.
2. Continue Investing in your Retirement Account
A recession might feel like a time to pull back on retirement investments but don’t. On the contrary, this is the best time to invest because you might get many stocks at much lower prices. Buying low and selling high is always ideal, and there’s no better time to buy low than during a recession. Because retirement savings are long-term, you’ll have time for the stocks to return to their normal levels. But for now, enjoy the discounted prices.
3. Take Advantage of Higher APYs
Typically, during a recession, interest rates on savings accounts drop, and interest charges to borrow money decrease too. However, today’s economy faces a recession with inflated rates, making it much more expensive to borrow money but more rewarding to save money. Don’t overlook the opportunities to invest in a high-yield savings account or CD for your short-term goals. Then, your money will grow, and it won’t be at risk of a loss in the market.
4. Invest in Real Estate
In a recession, housing prices typically fall. If that happens, it’s a great time to invest in real estate. You can buy them at a lower price, rent them out and earn rental income. This checks two boxes – you’ll have passive income and acquire the capital gains when the house appreciates when the market stabilizes again. Fortunately, you can leverage your investment by borrowing a portion of the sales price, allowing you to buy real estate without having cash to pay it in full.
As I’ve outlined, it’s easier than most people think to make money during a recession. But, of course, the ideal situation would be that your job remains stable and you can continue life as you’re used to living. However, it’s best to protect yourself and set up ways to continue making money or to increase the money you make during a recession. There are many opportunities for capital gains even when things seem at their worst.