Economic trend analysts are forecasting recession, economic crisis for 2016: will you survive or thrive? Many will fare worse if unprepared for the upcoming economic instability and volatility.
A Side Note: Income Solutions During Recession
This blog entry offers hope and solutions to help people not only just survive but thrive during an economic downturn if they use economic uncertainty and personal discomfort to propel them to take appropriate action to make a change for a better, more abundant life. So open your mind and read this blog through to the end where you will learn about a vehicle that will allow you and those you care to survive and thrive during a financial crisis in your personal life.
Recession: What You Need To Know
I decided to write on this topic, “Recession, Economic Crisis: Will You Survive or Thrive?”, because of a recent conversation my husband and I had with our investment manager. He informed us that his contacts on Wall Street and the Securities and Exchange Commission (SEC) are forecasting a very turbulent recession for 2016 and that we should plan our finances accordingly.
The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP); although the National Bureau of Economic Research (NBER), a USA private nonprofit research company, has been shown to announce an alternative economic status at their own discretion in order to curb a psychological “fear factor” in the population which could drive the economy into a worse state.
Recessions usually coincide with financial crisis and cycle through about every 8 years. Recessions are a normal part of economic cycles and normalize naturally, without government intervention, as people adjust their spending and saving habits based on the ebb and flow, boom and bust, of the economy. The modern history of the United States depicts this economic expansion and retraction cycle, showing consistency over the past 20-30 years.
The result of recessions are loss of jobs, layoffs, unemployment, underemployment – being forced to accept work for less pay than you’re qualified for, reduced consumer spending resulting in closure and bankruptcy of small businesses and large companies.
Signs Of 2016 Recession
Current periodical reports support concerns that were are in for a rough economic road ahead:
- Severe lack of Chinese exports and market instability has destabilized Asian markets and will impact US and Western markets.
- The S&P 500, a leading indicator of economic strength, reported its worst January in 2016 since 2009 with oil pricing falling well below $30 a barrel and remained near 12-year lows. Countries with oil based economies are having to print money to cover their growing deficits.
- Reuters recently reported that the number of U.S. executives announcing 2016 recession concerns to analysts and investors is up 33% from last year.
- The Federal Reserve is asking banks to consider the possibility of negative interest rates in its attempt to export the $ multi-trillion value of junk securities it still holds.
- Yahoo just announced a 15% payoff of its workforce and energy companies have scheduled hundreds of layoffs for 2016.
What Do You Mean “Another” Recession?
Some would say that we’ve never completely recovered from the Great Recession of 2007-2009. These are the people who currently have to work 2-3 jobs to make ends meet, or work for wages well below their qualifications, or Baby Boomers needing to delay retirement for years due to the devaluation of their retirement funds (if they have one), or Millennials (age 18-35) facing a jobless economy and stuck with student loan debt after getting an advanced education with the promise of a well paid, bright future, and still being supported by their parents. People are feeling the impact of this lengthy recession at a very deep personal level, being forced to make huge compromises at huge personal costs.
What Recession? Smart Planning
Perhaps you have been fortunate and the economy hasn’t personally impacted you to the point of discomfort yet. However, everyone will face a financial crisis at some point in their life due to some event like job layoff/termination, company down-sizing, obsolete skill sets, reduced sales or non-payment of receivables for business owners, health problems, divorce, or some other reason. There is no stability in the workplace or self-employment where you alone are holding everything together in your small business.
The Silver Lining In Financial Crisis
When financial crisis hits home, such an event can actually be considered a blessing, providing you with opportunity when used to move you into action to achieve something better. It’s human nature to become complacent when things are comfortable. When events happen that cause you discomfort, like losing your job or your business becomes insolvent, you have a choice on how you will respond to alleviate this discomfort. Those who are entrepreneurial minded and resourceful jump into action to find other ways to generate income with the objective to, first, regain stability in your life, second, continue a course of action to bring about abundance, or increased comfort.
How Personal Financial Crisis Impacted Me
I was one of those people who had an advanced education and licensed as a CPA, a savings, a retirement, a CPA career I thought was secure, medical and disability insurance and a very comfortable life. I did everything I was told in school and by my mentors on how to build a secure, comfortable life. Then in 2006, I had a ski accident that severed my ACL. Reconstructive surgery led to complications that resulted in additional surgeries and rehabilitation over a period of 3 years.
Then the 2009 recession hit. Clients weren’t paying their bills and companies weren’t hiring consultants or employees. I was forced to liquidate my savings and retirement funds to pay my mortgage and bills. Facing foreclosure I was forced to consider other forms of generating income. This is when I was introduced to network marketing and would realize later that my financial crisis turned out to be a huge blessing in my life, giving me a fulfilling life of purpose and opportunity to bless and change the lives of others.
Network Marketing’s Inverse Business Cycle
Throughout the modern history of the United States, network marketing is the industry which has proven to grow and flourish during economical downturns or recessions. (Network marketing is also known as multi-level marketing and direct sales.) In other words, network marketing has an inverse reaction to economic downturns.
It’s important for you to understand the relationship between low-cost entrepreneurship and economics. When economies are good people are less interested in career alternatives since they can purchase and consume goods according to their needs and desires so long as they have a steady income source.
When financial crisis, or recession, hits and income options are limited, those who are resourceful and smart will seek out alternative sources of income. If they’re lucky and smart, they’ll find the best option is network marketing which provides a low-cost entrance investment to start their own business, making it affordable. Business ownership provides tax incentives making network marketing very attractive. In addition, network marketing provides a business plan with years of proven success and mentors in the industry eager to help them succeed.
Network Marketing: A Legitimate Profession
There are two ways for a company to move their product or services to end consumers like you and me. Companies must spend marketing funds to reach, inform and educate consumers of their products and services through either (1) a traditional advertising model which pays for media advertising and other advertising outlets, or (2) a network marketing model (direct sales, word of mouth) where independent contractors, or distributors, are paid when friends and family (end consumers) purchase. All companies and service professionals know that the best effective form of advertising is word of mouth.
Proof: MLM Thrives During Recession
The following are examples of network marketing companies which thrived during recessions and economical downturns in the United States:
- Wachter’s, a marine-vegetable (seaweed) supplement company which started in 1937 near the bottom of the Great Depression.
- Nutrilite experienced exponential growth in 1945 during the recession immediately following World War II.
- Shaklee and Neolife did very well in the 1953 post-Korean War recession.
- Tupperware found its niche with home parties, exploding its growth during the recessions of 1953 and 1958.
- Amway got a good start building with the recession of 1958, spiked in growth during the recession of 1980-1982, and has experienced continued global growth during the recessions of 2002, 2009.
- Mary Kay started around the recession of the 1960’s.
- Hearbalife grew in revenues from $2Milliion to $423Million during the recession of early 1980’s, grew to $1Billion sales during the recession in the 1990’s and grew an additional billion in revenues during the 2002 recession.
- Alliance, Kaire, Life Plus, and a number of other companies started up and boomed during the recession of 1990-1992. (Many failed afterward due to legal problems, partnership disputes, and mismanagement after the recession. This resulted in changing some industry standards, thereby strengthening the industry.)
- Nu Skin hit its momentum growth phase with exponential growth just before and into the 1990 recession.
- LifeVantage nearly went bankrupt in 2005 when its flagship product was sold on retail shelves, being marketed through traditional marketing channels. When the company was facing bankruptcy in 2008 for failure to move product, the company changed its sales model to network marketing in 2009, during the 2007-2009 Great Recession. As a network marketing company, the LifeVantage grew from (-$5Million) to over $200Million in annual revenues in 3 years, growing over 300%. The company attributes its growth and survival to network marketing leadership, coupled with the economic recession where people are open to alternative income sources.
What this demonstrates is that Network Marketing is a great business during good economic periods, providing a residual income stream now and for years to come. Even more importantly for this discussion, network marketing thrives during times of recession and economic downturn.
It’s Important To Have a Plan B
Fortunately for me, the 2002 recession had no impact on me. Personally, I was financially thriving in my career as a CPA. However, I was not so fortunate with the 2009 recession which totally destroyed me financially. If I had a Plan B, an alternative source of income, in place before financial crisis hit my home, I would have been in a stronger position financially. I would have been able to help other people build a business that would carry them through financial turbulence and crisis.
The key point I want to drive home to you is that there is no such thing as security in the work place. Nor is there security in self employment when your level of involvement in the business will make or break the success of the business. I better model is to use a leveraged resource model where you and a team mutually benefit from the work of the team and everyone benefits, creating a residual income for everyone. This is network marketing.
Now that I have discovered this very legitimate, respectable profession of network marketing, I feel that I have a responsibility to educate people about this amazing profession that will allow anyone, regardless of their education, age, race, or history find success according to their definition with a low-cost financial investment so long as they are coach-able, hard-working and determined to help others do the same.
I encourage that you watch the video, The Secret. Click here to watch if now. You can also watch this on Netflix.
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Alycia Skousen
Email: Alycia@alyciaskousen.com
Facebook: https://www.facebook.com/alyciaskousenabetterway/
Twitter: @imagineyourbest
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Financial References:
Direct Selling Association
US Census Bureau
Network Marketing Booms When Recession Hits The Economy
MLM Boom Report
Economy References:
U.S. Reuters: CEOs unleash RECESSION fears in earnings calls
KWR Special Report: A Quick Look For 2016
BloombergBusiness: The Fed..Banks…Negative Interest Rates
Fed Revisits $4.5 Trillion Quandary
World Affair News Brief
Yahoo Layoffs Spell Hard Times At Yahoo
Energy companies detail hundreds more layoffs
List of Recessions in the United States
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