Seemingly everyone is panicking lately about the possibility of an impending recession. President Donald Trump’s erratic moves on tariffs and his sharp comments about Federal Reserve Chair Jerome Powell have led to some wild moves in the stock market.
Many financial experts warn that a recession is coming.
Will it come to pass? Only time will tell. But even if a recession doesn’t occur relatively soon, one thing is a sure bet: At some point, America will experience a recession again.
And when that happens, the following advice from financial experts might just help you get through the rough times so you can enjoy the better days that will follow.
Stacy Johnson
Millionaire and Money Talks News founder Stacy Johnson, a certified public accountant, has worked in personal finance for 40 years and has many times offered advice on weathering recessions. Over the years, he has recorded multiple podcasts and written many articles on the subject.
Here is something he says in “The 10 Commandments of Wealth and Happiness“:
“Wealth is realized when the economy is booming. But wealth is created when times are tough, unemployment is high, everybody’s freaking out, and there’s nothing but economic misery on the horizon.
Would you rather buy a house for $450,000 or $250,000? Would you rather invest in stocks when the Dow is at 35,000 or 10,000?
Nobody wants their fellow citizens to be out of work. But the cyclical nature of our economy all but ensures this will periodically happen. If you still have a job when the next downturn arrives, it will be the time you’ve been saving for. Don’t listen to all the Chicken Littles in the media. The sky isn’t falling. Put your cash to work and create some wealth.”
Stacy’s point is that bad times are inevitable, but they won’t last forever. Recessions also provide a tremendous opportunity to make investments when prices may be lower.
So you should plan for the worst — saving up money in case you end up out of work — and hope for the best: That you’ll be OK and able to use your rainy day money to make it rain money.
Warren Buffett
Billionaire Warren Buffett might be the best investor of all time. And he’s certainly one of the great American optimists.
So, what advice does the Oracle of Omaha offer that might help during a recession? For one thing, don’t trust anyone who tells you what to buy, or worse, tries to sell you on secret knowledge. Speaking of his sister Bertie, Buffett writes in one annual letter: “She is sensible – very sensible – instinctively knowing that pundits should always be ignored.”
He also says:
“Speed of communication and the wonders of technology facilitate instant worldwide paralysis, and we have come a long way since smoke signals. Such instant panics won’t happen often — but they will happen.”
His point is that bad news travels faster than ever, but just because everyone else is freaking out in near-real time doesn’t mean you should panic.
A few years ago, at an annual meeting of shareholders, he also said this:
“Nothing is sure tomorrow, nothing is sure next year, and nothing is ever sure, either in markets or in business forecasts, or in anything else.”
And as we note in “Warren Buffett’s Sane and Simple Plan for Surviving a Bear Market,” perhaps his most famous saying is this: “Be fearful when others are greedy and be greedy when others are fearful.”
So prepare for the worst, ignore the experts and don’t just copy everyone else.
Suze Orman
Millionaire Suze Orman has a long history of doling out financial advice on TV, in her podcasts, in books and more. Recently, the personal finance guru and two-time Emmy winner warned everyday investors not to let fear derail your financial plans when a recession or down market looms:
“When we are fearful, we tend to follow our emotions rather than use our brains to focus on what we need to do — and not do! — to reach our long-term goals.”
Orman also urges folks to remember that “stocks fall from time to time, and stocks recover.”
What you can do — either to prepare for or weather a down market — is brutally evaluate your spending and cut back on any that isn’t strictly necessary. Orman also says it’s smart to reduce your debt and think twice about taking on any new debt for a mortgage or car, for example.
She recommends having enough cash for eight to 12 months of living expenses set aside in an emergency fund. And if you’re within five years of retirement, consider maintaining a cash fund for living expenses that can tide you over for at least three years.
You need to think long-term, Orman says, and when stocks drop, you could have an opportunity at hand.
“When markets are down, your money buys more shares. More shares that history has shown us eventually rebound.”
So, don’t let fear drive your financial decisions, keep your emergency coffers full and remember your long-term goals.
Mark Cuban
In 2019 — a few months before we entered a global pandemic — billionaire Mark Cuban offered advice for young people who could soon face their first recession.
One key tip from Cuban: “Live as much like a student as you can. The lower your bills, the lower your stress.”
In other words, your income — not your spending — should be your source of financial well-being.
He had more to share, too. “The greatest opportunities come when you are one of the few with cash,” Cuban says — so, “save as much as you can.”
Cuban also recommends becoming indispensable at work, saying “do all you can to be great at your job” and be aware of your strengths and weaknesses. Then, use your skills to make your boss’s life easier.
“The people that tend to work for me a long time, not only are smart, not only are driven, not only are learners, but they understand that the greatest value you can offer a boss is to reduce their stress,” Cuban says.
Jeff Bezos
Jeff Bezos — one of the world’s wealthiest people — also has advice. For one, if you’re worried about a downturn, now is not the time to buy that new car or even a huge new TV on Amazon.
Postponing large purchases is just common sense when times are tight.
But the billionaire also says it might be time to pull back from the stock market a bit, in anticipation of prices plummeting or of needing the cash:
“Take some risk off the table. Just a little bit of risk reduction could make the difference.”
You’ll be able to reinvest when the time is right.
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