A Recession is Just a Transfer of Wealth
By Rachel Victoria, MSFS, former CFP
December 14, 2008
I've been reading some of the ongoing troubling headlines: more bailouts for the automakers, the Dow still under 9,000, a U. S. Senate seat being "sold" by a Governor, and Chief Economists say this recession will definitely last another year or more.
Yet, while most of the world is struggling financially, a few others are beaming and enjoying the additional wealth that is coming to them right now. Why?
In every Economic Downturn or Recession,
Wealth doesn't "vaporize", it just changes hands.
Let me give you an example. My husband's grandfather, William, built the largest theater in all Hawaii right before World War II. He patterned it after the glamorous "Roxy Theater" in New York, which he had seen in its glory. Many ridiculed him for building such a large, audacious theater, "The Roxy", saying that the movie business wouldn't be able to get enough patrons to fill it up on the sparsely populated Island of Kauai, he wouldn't be able to pay the mortgage, and he wouldn't be able to keep the theater open and stay in business.
They were right - for a period of time. His business
struggled. At one point, William was actually six months in arrears on his
mortgage payments. But just then, Pearl Harbor was bombed, the war
broke out, and 25,000 troops suddenly arrived on Kauai. First of all,
fortunately for him all foreclosures were frozen during the war, so he was not
foreclosed on for the moment. Secondly, his theater was now full almost every
night with 25,000 soldiers on the Island looking for entertainment. He was
suddenly cash rich! His business prospered brilliantly. So much so, that within
a couple of years he had completely paid off his mortgage in full and had excellent cash flow from his daily business.
And now that he had one of the few thriving businesses on Kauai, he was in a position to expand his business, buy real estate, and enroll his children in elite schools.
Was there an economic hardship during this same time that the "The Roxy" was so successful? Yes! Were many around William faced with business and job losses at that time? Yes! In fact, there was even rationing of certain foods in the Islands and many of the women were sent to the Pineapple Factories to work during this war period.
Then, Why
did William and "The Roxy" survive while other businesses failed?
Good timing and a little luck didn't hurt. But his vision brought him substantial cash flow while everyone else was struggling. And, being one of the few who had cash flow during the war years brought him substantial opportunity.
When you have Cash during an economic downturn, you can do amazing things. You can buy equipment, assets, stocks, businesses, and real estate that everyone else is liquidating at sale prices. You can buy your business supplies at discount prices. You can create new businesses for pennies on the dollar and make even more Cash Now. You can even grow your business (while other businesses close) during a recession, if you only have Cash. (By the way, have you noticed lately that people who have cash during this recession only speak about the Lucrative Opportunities all around them and give very little attention to the perceived adversity that others without cash are lamenting about?)
Having Cash Now is the key to minimizing your investment risk, because you are buying almost everything at bargain prices and, of course, you can buy what you need to help you and your business make more money.
If you have Cash now, you Can Take Advantage of these Lucrative Opportunities!
You can Be THE ONE to take advantage of this Recession
and Transfer the Wealth to You!
And as you know, I believe it's easy to obtain the cash you need now through unsecured corporate credit (no personal guarantor or good personal credit required) to create whatever dream cash cow business you want now (like a passive income business), before this recession ends. It's a fire sale! Be the buyer! Transfer the Wealth to You Now!
To learn more (if
not already here), please go to my website:
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