What Does It Mean To Be In A Recession

What does it mean to be in a recession? So we're going to break that down today, and big spoiler alert, we are in one. I'm going to define why we're in one, define how many we've been in. This is not like lights out, folks. I mean, honestly, the pandemic in March of 2020 in April was worse than what we're going to experience. So get a pen and paper. Let's get into this so you understand what a recession is. So we're going to talk about three things. What is a recession? We're going to talk about how long they last. And then the big one, which is the fun one, is all the opportunities that are available during a recession. And at the end, I just got to clarify, because a lot of you are collapsing, the two things that are going up, which is interest rates and inflation, and they have nothing. I shouldn't say they have nothing to do. They're all different, right? Inflation, recession, interest rates, all different. So let's get that unpacked. All right. What is a recession by definition? All right. So I do the dictionary thing here. So a recession, by definition, is a significant widespread and prolonged turndown in economic activity because recessions often last six months or more. One popular rule of thumb is that two consecutive quarters of decline in the country's gross domestic product, which is the GDP, constitutes a recession. So we have had that. We've had that since January 2022. We are in July recording this and we are officially in a recession. So welcome. So why am I sort of a little funny and snarky about it? Well, it drives me crazy that the media is having this ridiculous conversation of trying to delay the narrative of, I don't know that we are. I don't know what's going to happen. It's the same narrative that goes around in politics. It's the same narrative. It's not even news anymore. I don't know. I mean, when I grew up, you're supposed to be reporting the truth. Who the hell knows the truth right now? So I know the truth from and how I get my truth. I get it from economic advisors. I get it from world-leading economists who guide and direct this conversation. So I feel like, you know, we have a lot of truth here. So how long have we been in a recession? How long do they last? Again, usually six or more months. I think this one, what I've been told also, this one probably will last through the next presidential election. It's going to be a little rougher because of all the drama that's going on and we aren't even going to get into that. So how long do they last? Usually again, like I said, six months or more. What caused this one? COVID, the pandemic. The pandemic caused it. The demographic movement across this country was just unprecedented. People moving to states, real estate prices went crazy. I also kind of looked back and think, dang, I should have maybe sold. Could have more than doubled, almost tripled my house, but just wasn't willing to pick up and re-navigate out of Northern Nevada yet. How many times have we been in one? Let's talk in history. So I'm actually going to read off history here. 1980 to 82, the feds caused the recession by the rising interest rates to combat inflation. It reduced the business spending extraordinarily. I really aggravated the economic conditions by reducing the US oil supply, which drove prices up. Now, what's interesting about all of that, because I am a gas and oil millionaire, is we have enough gas and oil in North America to last over 500 years. So why our prices are this high is a complete political move. We could just open up the pipeline and let the oil and like oil and gas in this industry flow. This green conversation that's going on is interesting, because if you ever really noticed, you green people, this is super opinionated. So you can click off and not like me forever, or just listen through it and say, interesting. Go research what it takes to get a lithium battery out of the ground. And then what do you do with it afterwards? We've just actually lived through, in this recording, a little blackout of electric. So how is everyone going to be electric when the grid can't take it? And I have a whole bunch of other opinions about it. Do I like green? Absolutely. Do I have things that are green in my life? And do I organize around it? Absolutely. So that's up to you how you want to think about that. I just think you're probably sick of the high gas prices and diesel prices. 2021, we had another recession. That one only lasts eight months. That was March to November, was caused by a boom and subsequent bust in the dot-com businesses and the Y2K scare, right? There are people freaking out, having all sorts of crazy stuff. So by the time all that craziness and drama came down again, we were in two quarters of decline. The end of Q1 went into a very, very short recession. 2008 and nine, we know that one, right? That was the greatest recession we've been in since, I mean, it really lasted December, 2007. It says nine in the statistics. I would say the impact having coached millionaires through it. A lot of people didn't even get out of the number one. And if they did, it was really 10, 11, and 12. That was a very long one. The interesting financial instruments, the subprime, you know, mortgage crisis. I mean, it triggered a global bank financial crisis instigated by the United States. It was a great one, but I can tell you like why I'm so, I'd say confident about living through this again, right? The 2020 recession we know is a pandemic. Now we're in 2022. So just because we're in a recession, I wanted to give that history because I think it's an interesting perspective. We've lived through them. We've been through them. Some of them have been bigger. Some of them could have been prevented. You're still going to live through it. Where I want you to start looking is let's look to the opportunity. I thought it was an interesting history lesson to go back through that recessions are pretty frequent, more frequent than I think most of us remember. So I wanted to go through that just to give you that backstory. And now let's transition and focus on what can you do about it? What are the opportunities that are available in this recession? So before we go into all the opportunities and what I think is the real fun upside of all of this, please subscribe to my channel. If you're enjoying this, click the notification button and get it five days a week. We're here Monday through Friday. Every morning, a new video comes out, new content, business finance. And if you're not finding the content that you're enjoying, tell me what you want to talk about. I have a huge, huge breadth of business and finance conversation and family financial literacy. I just launched a book, how to make your kids millionaires. And where you notify me as you put those in the comments. So go to the comment section, say, Hey Laurel, talk about this or talk about this. And you can always go to asklaurel.com. There's another place to ask a question and join a membership. You can text me 24 hours a day and talk to me twice a month. So we're really clear about the understanding in this conversation. So I look forward to having you be part of our community and joining. Share this with your community, right? Remember you're like the five people next to you. And if you're all in weird conversations, it's just opinions. Come here for your content, the truth. And then, uh, let's start changing behavior around it. So you get any results in your life. All right. We're in the recession. Now what? Look for opportunities. There's tons of opportunities. Now the market has done a rock and roll since January. So I hope to God, you did not park and just pray with somebody who's going to take care of you. Good traders. My son included have made quite a bit of money. This has been a rock and roll time. Same with cryptocurrency traders. So if you're a good trader, you're probably going to do okay. If you're not, you probably just lost again in a huge way. Just like in March and April, 2020, when the market was down the largest crash since 1920s that we've ever seen, you lost 33% on average. I lost 2.8%. This last roll lost less than 2%. Why? Because I use a software. I don't have a financial planner. I don't have a manager. I have a software built by one of the biggest geniuses and economic leaders, just mathematicians, phenomenal gentlemen. And it's just a software. You load your money into it. It takes you in and out of the market appropriately and it protects you from the downside. Your financial planner is going to say, it's okay. You're in for the long haul. Really? You just made up maybe from the 30% you lost in 2021. Now you're down another 20 something percent. Interesting choice to stay there and live on a roller coaster. Real estate. Yes. It's had a huge ride, but it is not done. And what's going to happen probably in the fall, because interest rates are coming up and anybody that had a variable mortgage is going to be in trouble, right? Because if interest rates keep climbing, their mortgage payment, unless they're an entrepreneur and know how to turn it on and make more money, which by the way, you should be an entrepreneur, even if you're a great employee, you aren't going to be able to afford that mortgage payment. So what's going to be different about the foreclosures coming in this recession, it's going to be a higher priced house. It's group of people are going to, we're going to see more foreclosures. It'll be a higher valued house is probably a way to say it. Then a foreclosure of just like something sub a hundred K that's really broken down and you got to put some repairs into it. So it's going to be a different foreclosure market. There's still going to be opportunities. RV parks, storage parks, still just jamming, long-term apartments, still jamming, Airbnb, short-term rentals, all that stuff's going to work very segmented, different markets. So there's going to be great opportunities. Let's talk about my favorite one, business. There's going to be so many businesses that will not know how to navigate. They didn't probably pivot right in 2020. They're going to have to pivot a little bit differently in this recession. So again, when you think about the recession, you can look up here macroly and say, what do I do? I would say, get micro. What do I do for me and my family? What do I need today? How do I stay sustainable? What do I need to shift? And what do I need today? So to answer those questions, go to askloreal.com. Let's get in a conversation, ask any question and join me two times a month, text me 24 seven, and let's make sure you're not stopped because this recession is just a thing. It's all is, it's a thing. Don't let it affect you. Find the opportunities. We'll talk tomorrow.