8 Tips to Stockpile Cash Before the Next Economic Downturn – #TomFerryShow

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I think you know me and my personality. I’m an optimist. I like positive thinking. I do not like negative, energy-sucking vampires and naysayers.

But I’m also a realist.

And I’ve been around long enough to know that the economy will not just continue its upward trajectory indefinitely.

Winter is coming, whether it’s later this year, next year, 2021 or beyond.

As an independent contractor or business owner, you are extremely vulnerable when things turn south.

Especially if you haven’t prepared.

So that’s what today’s #TomFerryShow is all about – helping you make the adjustments necessary now so you’re in a prime position to capitalize on an economic downturn instead of becoming a victim of it. I’ve got eight tips to help you stockpile cash between now and whenever that shift occurs.

Let’s get started…

 

Tip No. 1: Develop A Laser Focus on Top-Line Revenue

On a daily, weekly and monthly basis, you need to be thinking about how much money you’re bringing in YoY.

Pay attention to those leading and lagging indicators, and ask yourself every day “What am I going to do today to move the needle on revenue?”

  • How can you attract more clients?
  • How can you convert more clients?
  • How can you deliver more value to the marketplace?

 

Tip No. 2: Become Ruthless about ROI

Focusing on a specific return on investment for every dollar you spend on your business will make you a better businessperson.

Not only because you’re spending money more wisely, but because that awareness will increase your focus and motivate you to do whatever is necessary to hit your ROI goals.

 

Tip No. 3: Never Give Up on Leads

The old cliché is that good agents follow up until their leads “buy or die.”

It’s a great approach to emulate if your goal is to stockpile cash. Become relentless in your follow up and see what it does for your revenue stream and cash flow.

 

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Tip No. 4: Start Living Off Less/Stop Buying Dumb Shit

You ever open your bank or credit card statement and amaze yourself with all the unnecessary purchases you made over the last month?

The impulse purchases. Eating out more often than you probably should. New gadgets you don’t really need. Fifty bucks here, twenty there, a hundred over there…

That stuff adds up quickly!

Most of it is caused by unchecked emotions. You buy stuff for a momentary thrill, but what you’re really doing is setting yourself up for disaster when winter arrives.

Make smarter decisions. Be more frugal. Make sure you have something meaningful to show for all the hard work you do instead of spending it on dumb shit you don’t really need.

 

Tip No. 5: Save More

If you’re barely able to keep your head above water right now, you’re going to be underwater when the market turns.

If you remember just a decade ago, good people lost everything they had because they were unprepared for the global economic crisis.

So if you’re not thriving and saving in today’s market, I’m fearful for your future.

Pay yourself first! No matter how much or how little you’re bringing in, set a percentage of every check that goes straight into savings!

 

Tip No. 6: Consolidate All Stupid Debt

One of Kathy and my proudest achievements early in our marriage was getting rid of all the debt we’d racked up.

It started by taking a good hard look at what we owed and getting it up and visual… in my case, that meant actually writing it and keeping a running tally on my bathroom mirror. We made it a goal to eliminate all that debt, and it actually became quite a thrill to watch as we incrementally worked our way out of that hole and into financial freedom.

Now’s the time for you to do the same thing.

Go to your bank and talk to them about getting a consolidation loan, especially for the high-interest loans and credit cards.

Then set your intention and make the elimination of that debt your first financial priority. Believe me, you’ll love how you feel and you’ll sleep better at night once you achieve this objective.

 

Tip No. 7: Secure Lines of Credit from Your Bank

When you’re desperate for cash, how willing are banks to extend credit in favorable terms?

Not very.

That’s why NOW is the time to secure a line of credit from your bank. Not to use it, but to have it there as a safety net if you need it.

Don’t wait until the vultures are circling. Put it on your schedule to go see your bank this week.

 

Tip No. 8: Line Up Investors for the Next Five Years

There are a lot of people out there looking to invest in good businesses and good real estate opportunities.

Don’t wait until “winter” to start courting these people and getting them in your circle.

Just like the line of credit above, the longer you wait, the less favorable your terms will become. Come from a position of strength now – or from a position of need later.

Who will be your investors or investor clients in 2021, 2022… 2024? Start thinking (and acting on) this now!

 

I hope you see my intent here. I’m not being pessimistic. I’m being real. The market has proven its cyclical nature for decades, if not centuries. That means we’re due for a downturn sometime in the next few years. I don’t want to see anyone get devastated the way I did a decade ago. The more you prepare now, the better you’ll be able to weather winter’s storms when they arrive.

Let me know your thoughts in the comments below!



 

 

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