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How to Thrive in a Recession

Op-Med is a collection of original articles contributed by Doximity members.

As we find ourselves on the brink of an economic downturn, it’s normal to be experiencing a little anxiety. The headlines are dominated with news of job losses, syndication deals not meeting projections, and businesses closing up shop, all painting a pretty grim picture of the financial landscape. 

The fear many have in times of economic uncertainty often stems from not knowing the future. However, history has shown that those with the right mindset and strategy can succeed during these downturns. Some even look forward to such challenging times with excitement and optimism. 

I believe that as a community, we can do better. 

We can choose to face these challenges bravely. The key is not just surviving a recession, but to thrive by having a healthy mindset that embraces challenges and perceives this season not just as a crisis, but an opportunity. 

Recognize the Reality: Embrace the Economic Winter 

Last year the GDP showed multiple quarters of negative growth. The last few months have seemed split: tons of negative news, but showing some positive signs (S&P 500 approaching a fresh 52 week high) at the same time. To navigate these uncertain times, it's essential to form a plan. This approach can help ease some of the uncertainty that naturally accompanies a recession. 

Fear can swiftly become all-consuming. It's constantly echoed in news reports, chats with neighbors, and discussions with colleagues. When fear is in the driver's seat, it blinds us to potential solutions, ideas, and future opportunities. Rather than viewing this upcoming period solely as a recession, a term filled with negativity, let’s adopt a different perspective. Think of it as entering an economic "winter." Now I know that “winter” might not seem that much better. However, many people find ways to enjoy and thrive in winter — they ski, climb mountains, and enjoy time with their loved ones. 

Like any season, this time will bring challenges. This will likely be a season of distress for many sectors; like real estate, credit, or any of your assets. It also presents unique opportunities for those who are prepared. Prices are falling, and I am already witnessing deals with potential discounts of up to 30%.

No matter what we call it, realize there’s not much you can do to change it. All you can control is your perspective on it and actions you take as a result. 

Maintain Liquidity: Understand Your Cash Flow 

The adage "cash is king" holds true during a recession. This means you should always have capital on hand to sustain your family and your investments, or to invest in new opportunities. 

Take a careful look at the stability of your cash flow. Is your employment secure? How might a worsening economy impact your practice? What is the sustainability of your business model in a downturn? Can this continue to support your family and lifestyle? 

Assess your investments. Will they continue to provide a steady cash flow? Will they require further cash infusions? Do you have liquidity? Where could you pull from in a pinch? Do you have assets you can sell if required, or funds that can be redeemed? Can you access credit if necessary, perhaps through home equity loans or lines of credit? 

Understanding your cash flow and liquidity during a recession is fundamental. Protecting your assets is the priority. You’ve probably heard the saying, “You only lose if you sell.” This never rings truer than in an economic winter.  At the same time, investment opportunities will arise and having access to the capital will be key. 

The Power of Networks: Connections Matter 

The next significant aspect to consider is your network. Are you linked up with others who are detecting opportunities and have the right mindset to not only survive but thrive in these uncertain times? 

Community is everything. Find a network who aligns with your outlook and who are forward-thinking. You need a community that fosters open dialogue about opportunities and ideas, a community that educates, provides resources, and enables possibilities. Consider joining a Facebook group such as Passive Income Docs, or, if you're not sure where to start, start with furthering your own education. Read books and blogs, listen to podcasts, take courses, and go to conferences to thrive in this season. 

Choose To Thrive In A Recession 

The one guarantee you have is how you show up during this time: your mental preparedness, your community, and your cash flow management are all under your control. Check these things off your list and ensure they're set up and ready. 

Winter is something that we don't need to fear, but it's a great season to set ourselves up and prepare for the future. Let's thrive together. 

How do you prepare for a recession? Share in the comments.

Peter Kim, MD is the founder of Passive Income MD and the creator of Passive Real Estate Academy.

Image by Crystal Eye Studio / Shutterstock

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