I am of two minds on how to handle finances during a severe recession. Or more accurately, I think about the last recession and this one and how different my situation was compared to today.
In 2009 I had just graduated University, my family had just lost their house and I was deeply in debt and making minimum wage. For me in that situation, the only possible financial plan was to try and acquire and hold onto every penny I could.
Today we are in an even worse economic recession, but personally I am in the pest financial position I have ever been in. My income and assets have increased significantly in 2020, which makes me very privileged. But it also makes it very easy for me to stick to my financial plan.
If I was in the same situation today that I was in 2009, or even somewhere in between I don’t know if I would have the guts or the bucks to stick to the plan during times of such uncertainty.
For Mark Cuban, a billionaire, it’s easy to say stick to the plan when he is personally insulated from feeling any real impact of the recession. Sure, some of his businesses may suffer, but his personal financial situation is basically untouchable.
The better your financial situation, the easier it is to “stick to the plan.”
I think it comes down to a combination of your financial situation going into the recession, how the recession has impacted you personally and your level of “fearlessness” for lack of a better term.
I’m an economist and Mark Cuban is an entrepreneur so we probably have widely different levels of financial “fearlessness.”
At any rate a great article, I always enjoy when someone takes a strong position on an important issue.