March 18, 2025 • 28 mins
Let's talk about to to prepare for a recession in 2025. With this current administration, the effects of their decisions are having some negative economic impacts. This may lead to a recession. So how do you recession-proof your finances? I break down how to prepare for a potential 2025 recession with practical strategies anyone can implement.
I also cover:
• Understanding what recessions are and why we might be facing one in 2025
• Building a 6-12 month emergency fund in high-yield savings accounts
• Identifying unnecessary expenses to cut while building financial reserves
• Paying down high-interest debt and avoiding new major purchases
• Managing investments without panic-selling during market downturns
• Recession-proofing investments like real estate
• Developing additional skills and income streams to recession-proof your career
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Disclaimer:
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
He says things like oh, yeah, there's going to be a
little disturbance.
The problem is that a littledisturbance means two different
things Because it's going to bea little disturbance for him,
his billionaire buddies, hisrich buddies and, yeah, it's
(00:20):
going to be something little forthem Because they have the
funds, they have the money, theyhave all these assets and stuff
like that to ride out thislittle disturbance.
Right, but for the averageperson like me, it's not a
little disturbance.
Hola mi gente, welcome to theMoney Chisme Podcast, where we
(00:43):
spill the real chisme onbuilding wealth without the
bullshit.
Whether you're trying to invest, grow that side, hustle finally
, get your money right or, myfavorite, buy rental properties,
you're in the right place.
I'm your host, violeta, afirst-gen Mexican immigrant,
real estate investor,entrepreneur, and your financial
(01:06):
hype woman.
Get ready for tips, tricks andexpert advice straight from
nuestra comunidad, porque eldinero es power and we're here
to claim it.
Don't forget you can alwaysfind helpful resources down in
the show notes and indescriptions, so make sure you
check that out.
Yay, we might be going intoanother recession.
(01:30):
You're starting to see it onTikTok, on YouTube and social
media.
Some of these news sources arealready putting out blogs and
articles that we might be goinginto a recession in 2025.
And I want to go over, first ofall, what is a recession.
(01:51):
You know what to look for, whatmay cause a recession, why do
we think that we might be goinginto one in 2025?
And I want to go over some tipsand share what I am doing to
prepare and help protect myfinances in case we do go into a
(02:11):
recession in 2025 or 26.
So first let's talk about whatis a recession and, just to keep
it simple, it basically justmeans's there's a slowdown in
the economy.
Uh, you have, like you know,less people spending money on
(02:33):
things that they don't reallyneed.
In a booming economy, we'rejust buying whatever you know,
living our best lives.
But with a recession, peopleare being more frugal, which
means that there is less moneybeing spent in businesses, which
, of course, is going to have aneffect, and those businesses
(02:55):
are not going to make enoughsales, so then you might have
layoffs happening, so then, ofcourse, the unemployment rate
goes up and some of thesebusinesses may go out of
business, and we kind of alreadystarted seeing that and then,
of course, that has a snowballeffect and basically then the
market starts to suffer, theeconomy and everybody's just
(03:18):
kind of, you know, struggling,it's not, it's not a fun time.
Depending on the severity ofthe recession, you know, it can
last a few months, two years.
I think.
The 2008 recession lastedalmost two years and, you know,
then we had 2020.
(03:38):
That just lasted a few monthstechnically, and that's why you
had kind of all those stimuluschecks go out, because we were
trying to boost the economy,because nobody was spending, so
we wanted to avoid a bigrecession and so stimulus checks
went out to help, you know,boost that economy.
(03:59):
People's, you know, used up thepaychecks and businesses made
money, and so that was one ofthe things that was done to
ensure that we didn't go toolong into this recession.
And with this one is a littlebit different, because the the
cause of recessions can vary.
(04:20):
The the cause of recessions canvary.
A recession is a you know, it's, it's part of the economic
cycle and so you're going tohave times.
Of course, we can't be up hereall the time and, you know,
living our best lives and theeconomy is going to slow down
(04:42):
for whatever reason.
Sometimes it's just a normalpart of the cycle and in this
case, a lot of it is comingbecause of the decisions, of
what this administration isdoing with this, all these
executive orders, without itfeels like a care of what the
(05:02):
effects are.
Feels like a care of what theeffects are, especially with the
tariffs which you know.
A tariff is just a tax onimported goods and he was saying
he was going to do 25 percent.
That tariff affects theconsumer here.
It's going to affect you and me, regular people.
He says things like oh, yeah,there's going to be a little
(05:24):
disturbance.
The problem is that a littledisturbance it means two
different things because it'sgoing to be a little disturbance
for him, his you know,billionaire buddies, uh, his
rich buddies.
And yeah, it's going to besomething little for them
because they have the funds theyhave, have the money, they have
(05:47):
all these assets and stuff likethat to ride out this little
disturbance.
Right.
But for the average person likeme, I was like it's not a
little disturbance, it's a bigdisturbance and even though,
like I take steps to like setmyself financially, that still
takes some time and I'm notquite there yet.
(06:08):
But the real thing is that weend up paying that cost because,
let's say, right now he'sthreatening 25% right to, let's
say, mexico, and the thing isthat it is the company that's
bringing in those goods.
They're paying that 25 tax forimporting goods from mexico.
(06:31):
So it's not mexico paying that,it is american companies that
are here, you know, importingand they're paying that 25.
And guess what?
We you know, we, you know fromhistory, and you know, uh,
understanding how businesseswork is that they're going to
pass that cost onto the customer, the consumer, which is us.
(06:54):
So then it ends up, you know,driving up, you know prices of
things that we buy, everydaythings, and so then our cost of
living goes up, and so we arethe ones that ends up suffering,
and so it's not a littledisturbance for us, it is a big
disturbance, because now, I mean, goods are everything that
(07:18):
groceries, the grocery bill ishigher, everything's higher,
everything's higher.
So because of that, it hascaused the stock market to
basically, you know, fall, takea nosedive, which is another
warning sign of an oncomingrecession.
A lot of people want to say,like you know, the stock market
(07:40):
is on sale, which, yes, like ifyou're investing in the long
term, yes, and because of this,then you'll start seeing layoffs
, and that's another thing thathe is doing?
He is over here, uh, well, dogeis that is headed by elon musk
and he is just firing peopleleft and right Like it doesn't
(08:02):
even matter, like which sucks,because I have my own thoughts
on that.
So you have those layoffs, soyou have the stock market going
crazy because of his tariffstuff and all the executive
orders that he's doing withoutthinking of the consequences.
So all of these will combineand create a whole snowball
(08:26):
effect and can lead us into arecession, which is why there is
more talk now.
So great, yay, we might beheading into a recession.
What is it that we do?
How can we prepare?
You do always want to prepareyourself for the worst because,
like I said, recessions canhappen as part of the normal
(08:49):
economic cycle, so it's always agood idea to prepare for them
anyways.
And we'll start off with, ofcourse, building an emergency
fund.
Now, here's where thedifference lies, because usually
you want to have an emergencyfund.
They always say like three tosix months of whatever your
(09:10):
living costs are.
The problem is that withrecessions, it may take a little
bit longer to find that job,especially if you have, you know
, a lot of layoffs.
You're having more competition,uh, might not find a job that's
going to cover all your livingcosts.
So now I would say that,extended between six to 12
(09:33):
months of your living expenses.
It's a little bit harder, ofcourse, to think of having to
save that much, but do what youcan and it's better to have
something than nothing, even ifit's half of that of your living
expenses.
That may, you know, help,because the last thing you want
(09:54):
is to not be able to afford yourgroceries or have to pick
between your groceries and, youknow, paying your rent and all
that.
So with this currentadministration so, for example,
with COVID, we went through alittle bit of that recession but
we also had, you know, like thestimulus checks and we also had
rental assistance that youcould apply for to help you pay
(10:20):
your rent if you had lost yourjob because of COVID or whatever
it may be.
But with this administration, Iam expecting that we're not
going to have those types ofprograms available.
The states might provide it, soit might be possible, but you
don't want to rely on that.
It's better to prepare yourselfand have your emergency fund
(10:41):
and have your emergency fund.
And another thing you want to dois definitely don't keep this
money in just a regular savingsaccount, like from your bank.
You want to move it over into ahigh yield savings account and
it's just like a savings account.
The only difference is that youget a higher return like
(11:03):
interest.
So, for example, in a bankyou're going to get maybe like
less than 1%, like it's nothing.
It's not even enough to combatlike keep up with inflation, and
that's the problem because withthe recession, inflation is
going to get higher, so you'regoing to be you know your
money's going to be worth lessif you keep it in that savings
account and you don't want that.
(11:25):
So switch it over to a highyield savings account.
I use Upgrade.
It's pretty simple, it's notcomplicated.
I had my mom switch over to it.
She was so skeptical of itbecause, again, she, you know,
don't know what a high yieldsavings account is and
everything.
But a lot of these are FDICinsured, right, because they go
(11:46):
through an actual bank.
I'll link upgrade down belowand if you use that, you know we
both get a bonus, depending,you know, of the type of account
you create.
But you don't have to use thatone, just find one that works
for you.
I think mine right now is at4.5% that I get back.
(12:09):
I'll have to double check, butthere's other ones as well.
Whatever's comfortable to you,the point is to move that
emergency fund into a high yieldsavings account so at least
you're not losing as much or atleast keeping up with the
inflation.
Now here comes the ugly part,because I really hate frugality
(12:30):
in terms of like how it's beenused before, of like making you
feel bad of yourself for havinga freaking coffee and in normal
circumstances.
I don't like to promote thatbecause it's a small joy.
It's not going to make a hugedifference in the long run
versus you just like increasingyour income and investing and
(12:52):
stuff.
But this is kind of a differentscenario and in order to build
up your emergency fund, you willhave to cut back unnecessary
expenses.
Whatever you can subscription,start with subscriptions.
I already started cutting backa lot of subscriptions that I
use for this podcast and formany cheese man and things like
(13:14):
that, and it's gonna suckbecause a lot of them and
actually a lot of them I didn'teven use as much as I thought I
would.
So I just cut them out becauseit's not worth it at this moment
and I'm also reducing a lot ofother subscriptions that I could
live without, right, and justto like, boost my emergency fund
(13:38):
.
And you don't have to go longterm.
I think the goal here is tobuild up that emergency fund and
if you can already figure outwhat expenses you can cut out if
we do end up getting into arecession, you already know what
to cut off, right.
But the point is to do it atleast until you have that
(13:58):
emergency fund there, and then,if you want to go back, if we're
not in a recession, then you'regood, you have your emergency
fund.
You could go back and enjoyyour cup of coffee, whatever
subscription, netflix orwhatever it is it may be.
The other part of the cuttingexpenses is that you want to do
it not just to build up youremergency fund, but to pay off
any debt that you may have,cause you don't want to have
(14:21):
that if we go into a recession,you want to at least, if it's
not possible to uh, completelypay it off, at least pay enough
of it to where, like, it's nothurting you as much, and figure
out which one has the higherinterest rate and maybe move it
to a lower interest rate if youknow you're not going to be able
to pay it off right away andthen that way you still start
(14:45):
reducing that amount.
You have a less interest.
That one's a little bittrickier because I understand
that some debts just requirelong term.
But if it's possible, figureout what it is that you can pay
off by cutting back on expensesand definitely don't get into
new debt like cars like I amdriving around.
(15:06):
La viejita I call her la viejita.
She's an old 2010, uh, honda,honda civic.
She's beat up, rusted, but youknow what.
She gets me from point a topoint b.
I only drive that car to go towork.
If me and my husband go on adate or whatever, we use his
truck.
(15:27):
So at this point in time andI'm so glad that I resisted
buying a car, because if arecession hits, then that's one
less thing I don't have a carpayment.
My husband still has a carpayment, but we're going to try
to figure out if we could stillhas a car payment, but, um,
we're going to try to figure outif we could pay it off.
That's one of the things we'regoing to do.
I think I'm just going to keepthe viejita, la viejita.
(15:49):
She's just going to probablytake her to Texas and drive her
around over there for a littlebit until I am a little bit more
sure of where the economy isgoing to go, because I don't
need a car right now.
I don't.
I would like a car, but youknow what?
I'm okay driving her.
The next thing that I want totalk about is stocks.
(16:11):
I'm not going to go too indepth with it because I am not a
stock expert.
I am.
I always say that I am a lazyinvestor.
I always say that I am a lazyinvestor.
I like to do things that areeasy, that don't require me
being a freaking expert.
I just need a generalunderstanding of stocks, and so
(16:33):
I invest in index funds andthings like that, so I can just
set it and forget it.
I have a lot of time, you knowat least you know 20 plus years
before I'm going to need that.
So I have the luxury right nowto not be too worried about
what's going on with the stockmarket.
(16:56):
I'm just I'm not selling mystuff.
So if that is you, you you havetime.
Do not sell your stuff, becausethat is one of the things that
you know the rich people aretaking advantage of is that they
are taking advantage thatpeople are selling off their
stocks and buying them at acheaper price so that they could
(17:17):
just keep scooping up morewealth and more stocks and
building their wealth.
And meanwhile us, we kind ofgot screwed because we panicked,
sold our stocks that we didhave, and now, when we want to
get back, if we do now, we'repaying a higher price.
So definitely, if that issomething that you have been
(17:37):
thinking about, do not sell yourstocks.
If you have time, now again, ifyou have a certain strategy,
then that's on you.
Again, I'm not an expert.
I just know that I am puttinginto my TSP, which is the
military version of a 401k,basically.
So I'm leaving it there Now.
If you're closer to retirementagain, because I'm not an expert
(18:02):
, I'm not going to speak toomuch on it but you may want to
talk to your financial advisorsor something or somebody that's
an expert in that, and figureout what you can do, maybe
moving it into safer forms ofmaybe like bonds or something
like that, because I do know afew people that are retiring
(18:24):
soon.
But if you are one of thosethat are retiring soon, yes,
talk to a financial advisor, seewhat they can do, what strategy
you can implement to reduce howmuch you lose.
That way you're, you know, notlosing as much as you're coming
into retirement and I mean, ifthat's something that you want
(18:46):
to do, as even if you're notretiring in the next few years,
you just don't want to lose asmuch Just Find the expert that
will help guide you, because youalso have to remember of the
taxes, the tax implications ofselling your stocks, or whatever
.
So make sure you do itstrategically, otherwise just
(19:09):
don't even look at it.
I, right now I don't even lookat it anymore, because at the
beginning I was looking at itand just getting stressed out.
And now I'm like you know what,I have time, I have time, I
have time, I will recover.
I'm okay, I'm going to continuebuying.
Matter of fact, I set up anaccount for my daughter because,
you know, taking advantage,finally got around to it and
(19:34):
going to take advantage that Icould buy her some cheaper
stocks and in the future she'llbenefit from that.
So, yeah, that's all I'm gonnasay about stocks because, again,
not you know an expert in that,but just, I guess we'll just
ride the wave right now.
Now the next tip is more forpeople that are investing in
real estate.
(19:54):
So I am a real estate investorand with your rental properties
it's kind of difficult becauseat this point you already have
the rental property, so you wantto make sure that you set
yourself up for that as well.
So, just like you're doing anemergency fund for yourself,
(20:15):
have one for your rentalproperties.
So that's what I'm doing.
I do it anyway and have anemergency fund, but now I'm
going to like increase itbecause now I have to account
for people not being able to paythe rent and things like that.
So I want to uh ensure cause Idon't want to kick out tenants
my tenants have been good, so Iwant to be able to have the
ability to work with them.
(20:36):
Uh, so that's one of the thingsthat I am doing as far as my
rental properties.
But I also accounted for enoughcash flow that you know, even
if I just break even, I will beokay, at least in the meantime,
to ride out this recession.
The next tip is that find waysthat you can maybe create kind
(20:57):
of like a hustle.
Start building up skills thatmight help you in case of this
recession.
That may cost you your job orwhatever.
Figure out what you might beable to do on the side, like,
start thinking about that, uh,you don't have to do it now if
you can definitely do it now, sothat way you can, you know,
(21:17):
build that emergency fund faster.
But at least start figuring outand have a plan, so that way,
if we do go in a recession andyou unfortunately get laid off
or maybe you know you need extracash because now everything's
more expensive, you have thatavenue and know what to do
(21:39):
already.
And it's a good idea to startbuilding like skills and start
figuring out how to makeyourself irreplaceable at your
company, whatever it is.
I know it's annoying because weare in the mentality right now
that you know, get paid whatyou're worth and stuff.
But that mindset has to shift alittle bit as we go into
(22:03):
recession if we go into one,because the first thing they're
going to start doing as theirsales drop is figuring out who
they can cut out.
That's not as valuable thatthey can do without, because
they're going to be trying toreduce their costs.
So build up skills and try todo things or try to figure out
(22:23):
what other jobs are available.
Maybe you might want to see adifferent career field that's a
little bit more stable.
Just start thinking about that.
Start building skills thatmight be transferable and easier
for you to find a different job.
And also plan in case you get alower salary, which is part of
(22:44):
the cutting back cost, becauseyou never know, you might not be
able to get the same salarythat you were getting.
And then, if you do own abusiness is you're going to have
to recession proof yourbusiness as well.
What is it Same thing like?
Build an emergency fund foryour business.
Figure out what you can dowithout with cutting back costs.
(23:05):
Start building that customerloyalty to hopefully have them
continue to buy from you.
It's going to be hard.
It's going to be hard becauseif you are kind of like a, for
example, I teach people how toinvest in real estate, you know
people are not going to be ableto just, like um, pay for that
(23:26):
service, for my course.
At that time they, becausethey're going to be cutting back
costs.
But I have to build that, thatemergency fund to you know, ride
out this wave, this recession,if it happens, and, you know,
just diversifying your servicesor products.
Yeah, it's a lot of justcreating a strategy for your
(23:49):
business and figuring out howyou can recession-proof your
business.
And, lastly, the key thing is toremain calm.
It is all mindset and buildingthat mental toughness, because
the last thing you want to do ispanic and that's going to cause
(24:09):
you to make a rash decisions.
Like you know, a lot of peoplesold their stocks and stuff, you
know, cause they didn't want tolose money.
But you really don't lose moneyuntil you sell is the idea with
stocks, and you don't want tomake rash decisions, uh, with
your business, with your job orwhatever.
So it's important to uh, staycalm.
(24:32):
Part of it is creating a planand that way you are, you don't
have to rely on creating a plan,and that way you don't have to
rely on making a decision ortrying to figure how to survive
while it's happening, becauseyou're already kind of like oh
well, actually I already knowwhat I could cut back, I already
know what I can do, you know,and you already have a plan, and
(24:53):
also maybe shifting yourmindset into a more positive
side it's, I hate to use, likepositive.
That it's, you know, like takeadvantage, because you are like
you know people are going to behurting during the recession,
but you know, the saying goesthat, you know, millionaires are
(25:15):
made in recessions and it'sbecause a lot of opportunities
come up.
For example, with me as a realestate investor, there's going
to be, um, maybe other investorsthat decide to let go of
properties because they justcan't, um, keep them or they
want, they need cash forsomething, uh, or people just
can't pay for them anymore.
(25:36):
Businesses you might be able tobuy businesses, especially with
commercial properties.
You're going to have businessesthat just aren't going to make
it and there's an opportunity inthere and, as sad as it is, it
might be an opportunity for youto start building wealth.
(25:56):
And even if that's not theroute you want to take, like I
said, with the stocks, you mightbe able to just see it as they
are on sale and start buying upstocks and ride, you know, the
wave back up.
But yeah, those are basically mytips.
What I am planning on doing I'mgoing to save up for an
(26:18):
emergency fund, cutting backunnecessary spending, paying
down any debt, like getting ridof anything extra that I might
have figure out what I can dowith my investments in my case,
it's just going to be my rentalproperties, because I'm not
going to touch my stocks besidesjust continue buying more.
(26:39):
Going to figure out what skillsI can learn, what other sources
of income I can create besidesrental properties.
I'm going to have to create aplan and then just develop more
skills that might make me moremarketable in case I lose my job
(26:59):
or whatever.
But yeah, those are the thingsI'm doing.
Those are my tips.
Let me know what you are doingto prepare for this possible
recession.
Do you think it's going tohappen?
Do you think it's hoopla?
Whatever like it's bullshit.
Let me know down below.
Other than that, I will seeeveryone in the next one.
Bye.
He says things like oh, yeah, there's going to be a
little disturbance.
The problem is that a littledisturbance means two different
things Because it's going to bea little disturbance for him,
his billionaire buddies, hisrich buddies and, yeah, it's
(00:20):
going to be something little forthem Because they have the
funds, they have the money, theyhave all these assets and stuff
like that to ride out thislittle disturbance.
Right, but for the averageperson like me, it's not a
little disturbance.
Hola mi gente, welcome to theMoney Chisme Podcast, where we
(00:43):
spill the real chisme onbuilding wealth without the
bullshit.
Whether you're trying to invest, grow that side, hustle finally
, get your money right or, myfavorite, buy rental properties,
you're in the right place.
I'm your host, violeta, afirst-gen Mexican immigrant,
real estate investor,entrepreneur, and your financial
(01:06):
hype woman.
Get ready for tips, tricks andexpert advice straight from
nuestra comunidad, porque eldinero es power and we're here
to claim it.
Don't forget you can alwaysfind helpful resources down in
the show notes and indescriptions, so make sure you
check that out.
Yay, we might be going intoanother recession.
(01:30):
You're starting to see it onTikTok, on YouTube and social
media.
Some of these news sources arealready putting out blogs and
articles that we might be goinginto a recession in 2025.
And I want to go over, first ofall, what is a recession.
(01:51):
You know what to look for, whatmay cause a recession, why do
we think that we might be goinginto one in 2025?
And I want to go over some tipsand share what I am doing to
prepare and help protect myfinances in case we do go into a
(02:11):
recession in 2025 or 26.
So first let's talk about whatis a recession and, just to keep
it simple, it basically justmeans's there's a slowdown in
the economy.
Uh, you have, like you know,less people spending money on
(02:33):
things that they don't reallyneed.
In a booming economy, we'rejust buying whatever you know,
living our best lives.
But with a recession, peopleare being more frugal, which
means that there is less moneybeing spent in businesses, which
, of course, is going to have aneffect, and those businesses
(02:55):
are not going to make enoughsales, so then you might have
layoffs happening, so then, ofcourse, the unemployment rate
goes up and some of thesebusinesses may go out of
business, and we kind of alreadystarted seeing that and then,
of course, that has a snowballeffect and basically then the
market starts to suffer, theeconomy and everybody's just
(03:18):
kind of, you know, struggling,it's not, it's not a fun time.
Depending on the severity ofthe recession, you know, it can
last a few months, two years.
I think.
The 2008 recession lastedalmost two years and, you know,
then we had 2020.
(03:38):
That just lasted a few monthstechnically, and that's why you
had kind of all those stimuluschecks go out, because we were
trying to boost the economy,because nobody was spending, so
we wanted to avoid a bigrecession and so stimulus checks
went out to help, you know,boost that economy.
(03:59):
People's, you know, used up thepaychecks and businesses made
money, and so that was one ofthe things that was done to
ensure that we didn't go toolong into this recession.
And with this one is a littlebit different, because the the
cause of recessions can vary.
(04:20):
The the cause of recessions canvary.
A recession is a you know, it's, it's part of the economic
cycle and so you're going tohave times.
Of course, we can't be up hereall the time and, you know,
living our best lives and theeconomy is going to slow down
(04:42):
for whatever reason.
Sometimes it's just a normalpart of the cycle and in this
case, a lot of it is comingbecause of the decisions, of
what this administration isdoing with this, all these
executive orders, without itfeels like a care of what the
(05:02):
effects are.
Feels like a care of what theeffects are, especially with the
tariffs which you know.
A tariff is just a tax onimported goods and he was saying
he was going to do 25 percent.
That tariff affects theconsumer here.
It's going to affect you and me, regular people.
He says things like oh, yeah,there's going to be a little
(05:24):
disturbance.
The problem is that a littledisturbance it means two
different things because it'sgoing to be a little disturbance
for him, his you know,billionaire buddies, uh, his
rich buddies.
And yeah, it's going to besomething little for them
because they have the funds theyhave, have the money, they have
(05:47):
all these assets and stuff likethat to ride out this little
disturbance.
Right.
But for the average person likeme, I was like it's not a
little disturbance, it's a bigdisturbance and even though,
like I take steps to like setmyself financially, that still
takes some time and I'm notquite there yet.
(06:08):
But the real thing is that weend up paying that cost because,
let's say, right now he'sthreatening 25% right to, let's
say, mexico, and the thing isthat it is the company that's
bringing in those goods.
They're paying that 25 tax forimporting goods from mexico.
(06:31):
So it's not mexico paying that,it is american companies that
are here, you know, importingand they're paying that 25.
And guess what?
We you know, we, you know fromhistory, and you know, uh,
understanding how businesseswork is that they're going to
pass that cost onto the customer, the consumer, which is us.
(06:54):
So then it ends up, you know,driving up, you know prices of
things that we buy, everydaythings, and so then our cost of
living goes up, and so we arethe ones that ends up suffering,
and so it's not a littledisturbance for us, it is a big
disturbance, because now, I mean, goods are everything that
(07:18):
groceries, the grocery bill ishigher, everything's higher,
everything's higher.
So because of that, it hascaused the stock market to
basically, you know, fall, takea nosedive, which is another
warning sign of an oncomingrecession.
A lot of people want to say,like you know, the stock market
(07:40):
is on sale, which, yes, like ifyou're investing in the long
term, yes, and because of this,then you'll start seeing layoffs
, and that's another thing thathe is doing?
He is over here, uh, well, dogeis that is headed by elon musk
and he is just firing peopleleft and right Like it doesn't
(08:02):
even matter, like which sucks,because I have my own thoughts
on that.
So you have those layoffs, soyou have the stock market going
crazy because of his tariffstuff and all the executive
orders that he's doing withoutthinking of the consequences.
So all of these will combineand create a whole snowball
(08:26):
effect and can lead us into arecession, which is why there is
more talk now.
So great, yay, we might beheading into a recession.
What is it that we do?
How can we prepare?
You do always want to prepareyourself for the worst because,
like I said, recessions canhappen as part of the normal
(08:49):
economic cycle, so it's always agood idea to prepare for them
anyways.
And we'll start off with, ofcourse, building an emergency
fund.
Now, here's where thedifference lies, because usually
you want to have an emergencyfund.
They always say like three tosix months of whatever your
(09:10):
living costs are.
The problem is that withrecessions, it may take a little
bit longer to find that job,especially if you have, you know
, a lot of layoffs.
You're having more competition,uh, might not find a job that's
going to cover all your livingcosts.
So now I would say that,extended between six to 12
(09:33):
months of your living expenses.
It's a little bit harder, ofcourse, to think of having to
save that much, but do what youcan and it's better to have
something than nothing, even ifit's half of that of your living
expenses.
That may, you know, help,because the last thing you want
(09:54):
is to not be able to afford yourgroceries or have to pick
between your groceries and, youknow, paying your rent and all
that.
So with this currentadministration so, for example,
with COVID, we went through alittle bit of that recession but
we also had, you know, like thestimulus checks and we also had
rental assistance that youcould apply for to help you pay
(10:20):
your rent if you had lost yourjob because of COVID or whatever
it may be.
But with this administration, Iam expecting that we're not
going to have those types ofprograms available.
The states might provide it, soit might be possible, but you
don't want to rely on that.
It's better to prepare yourselfand have your emergency fund
(10:41):
and have your emergency fund.
And another thing you want to dois definitely don't keep this
money in just a regular savingsaccount, like from your bank.
You want to move it over into ahigh yield savings account and
it's just like a savings account.
The only difference is that youget a higher return like
(11:03):
interest.
So, for example, in a bankyou're going to get maybe like
less than 1%, like it's nothing.
It's not even enough to combatlike keep up with inflation, and
that's the problem because withthe recession, inflation is
going to get higher, so you'regoing to be you know your
money's going to be worth lessif you keep it in that savings
account and you don't want that.
(11:25):
So switch it over to a highyield savings account.
I use Upgrade.
It's pretty simple, it's notcomplicated.
I had my mom switch over to it.
She was so skeptical of itbecause, again, she, you know,
don't know what a high yieldsavings account is and
everything.
But a lot of these are FDICinsured, right, because they go
(11:46):
through an actual bank.
I'll link upgrade down belowand if you use that, you know we
both get a bonus, depending,you know, of the type of account
you create.
But you don't have to use thatone, just find one that works
for you.
I think mine right now is at4.5% that I get back.
(12:09):
I'll have to double check, butthere's other ones as well.
Whatever's comfortable to you,the point is to move that
emergency fund into a high yieldsavings account so at least
you're not losing as much or atleast keeping up with the
inflation.
Now here comes the ugly part,because I really hate frugality
(12:30):
in terms of like how it's beenused before, of like making you
feel bad of yourself for havinga freaking coffee and in normal
circumstances.
I don't like to promote thatbecause it's a small joy.
It's not going to make a hugedifference in the long run
versus you just like increasingyour income and investing and
(12:52):
stuff.
But this is kind of a differentscenario and in order to build
up your emergency fund, you willhave to cut back unnecessary
expenses.
Whatever you can subscription,start with subscriptions.
I already started cutting backa lot of subscriptions that I
use for this podcast and formany cheese man and things like
(13:14):
that, and it's gonna suckbecause a lot of them and
actually a lot of them I didn'teven use as much as I thought I
would.
So I just cut them out becauseit's not worth it at this moment
and I'm also reducing a lot ofother subscriptions that I could
live without, right, and justto like, boost my emergency fund
(13:38):
.
And you don't have to go longterm.
I think the goal here is tobuild up that emergency fund and
if you can already figure outwhat expenses you can cut out if
we do end up getting into arecession, you already know what
to cut off, right.
But the point is to do it atleast until you have that
(13:58):
emergency fund there, and then,if you want to go back, if we're
not in a recession, then you'regood, you have your emergency
fund.
You could go back and enjoyyour cup of coffee, whatever
subscription, netflix orwhatever it is it may be.
The other part of the cuttingexpenses is that you want to do
it not just to build up youremergency fund, but to pay off
any debt that you may have,cause you don't want to have
(14:21):
that if we go into a recession,you want to at least, if it's
not possible to uh, completelypay it off, at least pay enough
of it to where, like, it's nothurting you as much, and figure
out which one has the higherinterest rate and maybe move it
to a lower interest rate if youknow you're not going to be able
to pay it off right away andthen that way you still start
(14:45):
reducing that amount.
You have a less interest.
That one's a little bittrickier because I understand
that some debts just requirelong term.
But if it's possible, figureout what it is that you can pay
off by cutting back on expensesand definitely don't get into
new debt like cars like I amdriving around.
(15:06):
La viejita I call her la viejita.
She's an old 2010, uh, honda,honda civic.
She's beat up, rusted, but youknow what.
She gets me from point a topoint b.
I only drive that car to go towork.
If me and my husband go on adate or whatever, we use his
truck.
(15:27):
So at this point in time andI'm so glad that I resisted
buying a car, because if arecession hits, then that's one
less thing I don't have a carpayment.
My husband still has a carpayment, but we're going to try
to figure out if we could stillhas a car payment, but, um,
we're going to try to figure outif we could pay it off.
That's one of the things we'regoing to do.
I think I'm just going to keepthe viejita, la viejita.
(15:49):
She's just going to probablytake her to Texas and drive her
around over there for a littlebit until I am a little bit more
sure of where the economy isgoing to go, because I don't
need a car right now.
I don't.
I would like a car, but youknow what?
I'm okay driving her.
The next thing that I want totalk about is stocks.
(16:11):
I'm not going to go too indepth with it because I am not a
stock expert.
I am.
I always say that I am a lazyinvestor.
I always say that I am a lazyinvestor.
I like to do things that areeasy, that don't require me
being a freaking expert.
I just need a generalunderstanding of stocks, and so
(16:33):
I invest in index funds andthings like that, so I can just
set it and forget it.
I have a lot of time, you knowat least you know 20 plus years
before I'm going to need that.
So I have the luxury right nowto not be too worried about
what's going on with the stockmarket.
(16:56):
I'm just I'm not selling mystuff.
So if that is you, you you havetime.
Do not sell your stuff, becausethat is one of the things that
you know the rich people aretaking advantage of is that they
are taking advantage thatpeople are selling off their
stocks and buying them at acheaper price so that they could
(17:17):
just keep scooping up morewealth and more stocks and
building their wealth.
And meanwhile us, we kind ofgot screwed because we panicked,
sold our stocks that we didhave, and now, when we want to
get back, if we do now, we'repaying a higher price.
So definitely, if that issomething that you have been
(17:37):
thinking about, do not sell yourstocks.
If you have time, now again, ifyou have a certain strategy,
then that's on you.
Again, I'm not an expert.
I just know that I am puttinginto my TSP, which is the
military version of a 401k,basically.
So I'm leaving it there Now.
If you're closer to retirementagain, because I'm not an expert
(18:02):
, I'm not going to speak toomuch on it but you may want to
talk to your financial advisorsor something or somebody that's
an expert in that, and figureout what you can do, maybe
moving it into safer forms ofmaybe like bonds or something
like that, because I do know afew people that are retiring
(18:24):
soon.
But if you are one of thosethat are retiring soon, yes,
talk to a financial advisor, seewhat they can do, what strategy
you can implement to reduce howmuch you lose.
That way you're, you know, notlosing as much as you're coming
into retirement and I mean, ifthat's something that you want
(18:46):
to do, as even if you're notretiring in the next few years,
you just don't want to lose asmuch Just Find the expert that
will help guide you, because youalso have to remember of the
taxes, the tax implications ofselling your stocks, or whatever
.
So make sure you do itstrategically, otherwise just
(19:09):
don't even look at it.
I, right now I don't even lookat it anymore, because at the
beginning I was looking at itand just getting stressed out.
And now I'm like you know what,I have time, I have time, I
have time, I will recover.
I'm okay, I'm going to continuebuying.
Matter of fact, I set up anaccount for my daughter because,
you know, taking advantage,finally got around to it and
(19:34):
going to take advantage that Icould buy her some cheaper
stocks and in the future she'llbenefit from that.
So, yeah, that's all I'm gonnasay about stocks because, again,
not you know an expert in that,but just, I guess we'll just
ride the wave right now.
Now the next tip is more forpeople that are investing in
real estate.
(19:54):
So I am a real estate investorand with your rental properties
it's kind of difficult becauseat this point you already have
the rental property, so you wantto make sure that you set
yourself up for that as well.
So, just like you're doing anemergency fund for yourself,
(20:15):
have one for your rentalproperties.
So that's what I'm doing.
I do it anyway and have anemergency fund, but now I'm
going to like increase itbecause now I have to account
for people not being able to paythe rent and things like that.
So I want to uh ensure cause Idon't want to kick out tenants
my tenants have been good, so Iwant to be able to have the
ability to work with them.
(20:36):
Uh, so that's one of the thingsthat I am doing as far as my
rental properties.
But I also accounted for enoughcash flow that you know, even
if I just break even, I will beokay, at least in the meantime,
to ride out this recession.
The next tip is that find waysthat you can maybe create kind
(20:57):
of like a hustle.
Start building up skills thatmight help you in case of this
recession.
That may cost you your job orwhatever.
Figure out what you might beable to do on the side, like,
start thinking about that, uh,you don't have to do it now if
you can definitely do it now, sothat way you can, you know,
(21:17):
build that emergency fund faster.
But at least start figuring outand have a plan, so that way,
if we do go in a recession andyou unfortunately get laid off
or maybe you know you need extracash because now everything's
more expensive, you have thatavenue and know what to do
(21:39):
already.
And it's a good idea to startbuilding like skills and start
figuring out how to makeyourself irreplaceable at your
company, whatever it is.
I know it's annoying because weare in the mentality right now
that you know, get paid whatyou're worth and stuff.
But that mindset has to shift alittle bit as we go into
(22:03):
recession if we go into one,because the first thing they're
going to start doing as theirsales drop is figuring out who
they can cut out.
That's not as valuable thatthey can do without, because
they're going to be trying toreduce their costs.
So build up skills and try todo things or try to figure out
(22:23):
what other jobs are available.
Maybe you might want to see adifferent career field that's a
little bit more stable.
Just start thinking about that.
Start building skills thatmight be transferable and easier
for you to find a different job.
And also plan in case you get alower salary, which is part of
(22:44):
the cutting back cost, becauseyou never know, you might not be
able to get the same salarythat you were getting.
And then, if you do own abusiness is you're going to have
to recession proof yourbusiness as well.
What is it Same thing like?
Build an emergency fund foryour business.
Figure out what you can dowithout with cutting back costs.
(23:05):
Start building that customerloyalty to hopefully have them
continue to buy from you.
It's going to be hard.
It's going to be hard becauseif you are kind of like a, for
example, I teach people how toinvest in real estate, you know
people are not going to be ableto just, like um, pay for that
(23:26):
service, for my course.
At that time they, becausethey're going to be cutting back
costs.
But I have to build that, thatemergency fund to you know, ride
out this wave, this recession,if it happens, and, you know,
just diversifying your servicesor products.
Yeah, it's a lot of justcreating a strategy for your
(23:49):
business and figuring out howyou can recession-proof your
business.
And, lastly, the key thing is toremain calm.
It is all mindset and buildingthat mental toughness, because
the last thing you want to do ispanic and that's going to cause
(24:09):
you to make a rash decisions.
Like you know, a lot of peoplesold their stocks and stuff, you
know, cause they didn't want tolose money.
But you really don't lose moneyuntil you sell is the idea with
stocks, and you don't want tomake rash decisions, uh, with
your business, with your job orwhatever.
So it's important to uh, staycalm.
(24:32):
Part of it is creating a planand that way you are, you don't
have to rely on creating a plan,and that way you don't have to
rely on making a decision ortrying to figure how to survive
while it's happening, becauseyou're already kind of like oh
well, actually I already knowwhat I could cut back, I already
know what I can do, you know,and you already have a plan, and
(24:53):
also maybe shifting yourmindset into a more positive
side it's, I hate to use, likepositive.
That it's, you know, like takeadvantage, because you are like
you know people are going to behurting during the recession,
but you know, the saying goesthat, you know, millionaires are
(25:15):
made in recessions and it'sbecause a lot of opportunities
come up.
For example, with me as a realestate investor, there's going
to be, um, maybe other investorsthat decide to let go of
properties because they justcan't, um, keep them or they
want, they need cash forsomething, uh, or people just
can't pay for them anymore.
(25:36):
Businesses you might be able tobuy businesses, especially with
commercial properties.
You're going to have businessesthat just aren't going to make
it and there's an opportunity inthere and, as sad as it is, it
might be an opportunity for youto start building wealth.
(25:56):
And even if that's not theroute you want to take, like I
said, with the stocks, you mightbe able to just see it as they
are on sale and start buying upstocks and ride, you know, the
wave back up.
But yeah, those are basically mytips.
What I am planning on doing I'mgoing to save up for an
(26:18):
emergency fund, cutting backunnecessary spending, paying
down any debt, like getting ridof anything extra that I might
have figure out what I can dowith my investments in my case,
it's just going to be my rentalproperties, because I'm not
going to touch my stocks besidesjust continue buying more.
(26:39):
Going to figure out what skillsI can learn, what other sources
of income I can create besidesrental properties.
I'm going to have to create aplan and then just develop more
skills that might make me moremarketable in case I lose my job
(26:59):
or whatever.
But yeah, those are the thingsI'm doing.
Those are my tips.
Let me know what you are doingto prepare for this possible
recession.
Do you think it's going tohappen?
Do you think it's hoopla?
Whatever like it's bullshit.
Let me know down below.
Other than that, I will seeeveryone in the next one.
Bye.
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