How to Profit in a Depressed Economy

To not just survive, but profit from a depressed economy, you must first understand what a depressed economy is. A depressed economy is a temporary period of economic stagnation. In a deep economic recession or a true depression, people hesitate to take risks, either with their investments, their spending or their jobs. The economy stagnates, and in a stagnant economy, opportunities are few and far between, assets get lost and the outlook for many families looks bleak.

Recessions and depressions are part of the economic rhythms of any dynamic economic system. Similar to the way geological tectonic plates rub against each other and cause earthquakes, when elements of an economic system fail, an economic shake-up occurs. Eventually the financial world settles down into a new--and usually improved--shape. This may be what is happening in the world now, and it means that you can not only survive a depressed economy, but emerge from the shake-up better off than you were by taking advantage of profitable ventures.

Difficulty: Challenging

Instructions

1. Do your homework. Study business books written in the last few years about the financial changes going on in the world in order to understand what has happened to the global economy and the changes that have ensued.

2. Look at the changes happening in society as a whole. See what opportunities are disappearing, then look at what opportunities are opening up or just beginning to be tapped.

3. Make a career change, if necessary. Even if your career path is looking good, take stock and decide if that's really true. If not, consider at least expanding on your skills so you're qualified to do other things if your current career path goes bust.
   
   And if you're thinking a career change is necessary, then follow your instincts--it probably is. Learn the skills you need to take advantage of opportunities that open up during and after a depressed economy.

4. Survive now by trimming the budget. Well, of course--obvious advice. But don't think of scrimping and saving as sacrifice; think of it as investment for a better future. In order to take advantage of the opportunities that present themselves, you may need to maintain a low standard of living for a time.

5. Take risks to survive a depressed economy. What, those very things that people avoid during a recession or a depression? Yes, indeed. Moderate the risks and don't risk everything, but know that every change you consciously go after involves at least some risk.

6. Avoid falling victim to scams. Because financially hurting individuals with debt, credit or employment problems often need to take fast action, unscrupulous agents will play on their fears and try to take advantage of those interested in earning a quick, easy buck.
   
   Online opportunities for making money are a perfect example--although they definitely exist, so do the scams. Telling the difference between a scam and an opportunity might be something only time and further investigation can tell. Although there are exceptions, know that most sound opportunities that others offer will not require significant monetary investment during a depressed economy.

7. Balance your ambition with practicalities. Start small if necessary, knowing that you can build on a sound idea. If you want to go into business for yourself or work at home, for example, start in a small way. Don't quit your day job until you're sure that your new opportunity will provide at least as much security as the job does (which, in these times, admittedly may not be much).

8. Be innovative. To survive a depressed economy, you need to think outside of the box. The same principles that got the world into an economic depression are not necessarily the principles that will take it out of one. Think up new models for making money based on the changing nature of the economy.

Resources

• Article About Understanding the Great Depression from Dow Jones Data

[Rachellewms]

on 6/27/2009 Excellent Advice for these trying economic times. 5*

[2enjoylife]

on 4/9/2009 Great advice! I like your idea of thinking of saving as investment. There are still oportunities, but they may be in different places!*****

[ladym33]

on 4/9/2009 Very good common sense information and very well written. 5