NEXT BIG MARKET CRASH: 7 Ways To Prepare For An ECONOMIC COLLAPSE | Lewis Howes

You know, the last crash was 2008. I made more money than in my whole life. Really? Whether you're making 250k or 2.5 million for the high earners here, don't get too smart for your own good.

This could be the best thing that ever happened to you. There's a lot of good that comes out of this much pressure because it forces you.

It can be a scary thing when the market crashes. That's why in this video, I bring together some of the top money experts in the world to talk about how to master and manage your finances. If you enjoy this, make sure to like the video, leave a comment below of your biggest takeaway, and subscribe for more greatness in your life. Why is a time like this a great time to make money?

Well, it's a great time to be introspective and to pivot and to do resets. and to try stuff you never tried before. Because you might as well, right? We're all sitting at home, we got to try some. We got those free samples. I mean, we pivoted a whole bunch of product lines here at Ramsey and all kinds of things and we could throw all these offerings out there. Stuff that we might have messed around with split tests for a year or whatever, instead we just dumped it on the street, let's just try it. Let's see if we can help some people and give some people something to do while they're at home with some digital products. And so that's exciting. You may have a situation where you hated your job. I mean, statistics tell us that 68% of Americans hate their job. And some of you don't have that job anymore, so you get the opportunity to get one you like now. And you might not have done that on your own. So this could be the best thing that ever happened to you. There's a lot of good that comes out of this much pressure because it forces you to reset. It forces you to rethink. And two or three, four crises ago, I don't know, back, I'm an old guy now, I had a personal crisis of losing everything. I decided I was never going to be the victim of the things I can control when one of these things that I can't control come at me again. And so we got out of debt and we built an emergency fund and we were in the last downturn of 2008, we were in a position of we had piles of cash. And so I was able to buy real estate at a nickel and a dime on the dollar. It was a wonderful time. But there were other times I was broke and couldn't take advantage of stuff being on sale. But if you're in a position, you got money right now, the stock market's on sale, real estate's not moved much yet. But if you're buying even consumer items other than toilet paper, most things are on sale. I know.

How much how much deeper down do you think this will take in terms of you said real estate's not on sale yet, but it probably will be. How much farther down do you think things are to go and for how long with your just your guess on this?

I mean, you know, weather forecasters and economists, only people can be wrong all the time and still keep their job. So I have no idea. But I do know there's going to be a direct correlation between how long we stay out and how long it takes us to recover. No kidding. It's kind of common sense. The obvious is every week that we're out, there's another series of businesses that will never reopen that will close. And so, and that's a recession is two consecutive quarters of the gross domestic product, all the goods and services produced in the US. shrinking rather than growing. That's all it is. It receded rather than expanded. And so recession sounds like a big scary depression type word, but it simply means two quarters. We've not had one quarter yet. Shrinkage. So it would have to be up into the fall before you can officially declare this a recession or what results from the Corona shutdowns, a recession. So I don't know. But I'm sure hoping that that the folks are not ill and that nobody dies and it's a horrible thing.

And.

The juxtaposition with that is the sooner we can get back to work, the fewer people are gonna be affected by the economics of this. And it's not saying I'm trading a dollar for a life, but today actually we've lost about 100 jobs per case of corona right now.

Wow.

So the Corona shot in America.

In America or in America?

In America, yeah. We've lost about, you know, the Corona shutdowns affected 100 families jobs for every case, not, not death, for every case of the virus. And I don't want anybody to be sick. I don't want anybody to die. And I don't want the hospital bills and the beds and the ventilators running out. I don't want any, I don't want any bad stuff. Okay, I'm not a medical person, but, but I am an entrepreneur and I'm, you know, every day we're not working is a trade off and it is a good trade off because you don't want to kill people, believe me, I'm not saying that. But man, it's painful to watch these people lose their businesses.

Yeah. From your, you mentioned you've been through three or four recessions, I don't want to say your age out here, but it sounds like you've been around the block, you've experienced some stuff. You know, I only went through really, you know, I guess it's my adult life, when I was 24, I guess it was the 2008 to 2009 timeframe. When I was just got out of school and I was trying to figure out my life, I had three credit cards I was living off of, I was living on my sister's couch for a year and a half. I was in college debt and I didn't have any skills that I thought were usable to get a job or do anything. And when I look back, you know, 11, 12 years ago, that was actually the greatest time and the greatest gift for me to develop skills, to work hard, to hustle, to try to see how can I make a hundred here and there and then turn that into a business. And it was the greatest, it was the hardest time and the greatest time for me. I'm curious with your experience in watching these over the years, what were the greatest lessons you learned from each one that you applied in the last three weeks with your personal business?

Well, it is cliche, but cliches come from truth that, you know, that you know, it's the greatest time and the worst time in your life. You don't go back there. No, good Lord, no, I don't go back there. I went bankrupt. I lost everything in my 20s. I don't go back there. But the lessons that I learned from that pain were so thorough. Pain is a thorough teacher.

Yes.

That, you know, I, it was a rich time. The fertilizer was everywhere. Lots of place to grow stuff, you know, lots of poop. So, you know, and, and that's, you know, that's what you had there in 2008. There weren't any jobs. You couldn't like you could just, I mean, there was a contraction of the economy, a recession, and you're there you are on your sister's couch. And so you found out that the secret sauce in your life is the guy in your mirror. Mm-. That it's not some outside variable that's going to come and save you. The calvary is not coming. Santa Claus doesn't live in Washington, DC. It's up to you, baby. Get up off the couch. I got to go leave the cave, kill something and drag it home. You found that truth in that moment. I found that truth that, you know, what doesn't kill you makes you stronger. You know, that old saying, I found that truth. And so nowadays, now that I've been through, you know, Y2K or 911 or all these initials come at you, you know, the horrible thing of 2008, now the corona, the only thing I am sure is we're gonna get through this.

Yeah.

You get hope because you go, it's not gonna kill you. Well, I guess you could get the virus. I don't mean that, but I'm saying the economic stress that we're under, the fear that we have, the concern or the worry that we have, you don't die from it. But you feel like there's this hopelessness and the truth is that's unfounded. The truth is there's a lot of reason to have hope. By September, where do you really think we're gonna be? By this time next year, are you not 90-something percent sure that the economy will be roaring again and your life will be back to some level of normalcy? you think it's going to be 10 years for you to personally recover from this? No, that's absurd. And you know that once you've walked through several of them. And so it's just to me, it's like, yeah, you're going to make it. We're going to be okay. Yeah.

And so your personal, I guess I'm just curious about your personal thoughts. Do you think to yourself, like, I'm fine because I've followed my seven steps for years and I've got, you know, cash and I feel safe and protected. So now how can I shift and adapt and pivot and serve my community and customers more? Or do you feel any anxiety personally at all or? Oh, no, none.

No, I mean, we're in fabulous financial shape. It's not a... I've got a lot of money invested in the stock market. It's going down. I'm gonna put some more money in while it's on sale. You know, I mean, if real estate goes on sale again, I'll buy some more. So, no, I mean, my personal stuff, it's not arrogance. It's just, I've been doing this a long time. You're the king of it. Yeah. I'm the little pig in the brick house, you know, I mean huff and puff baby. And so, but I do, it does put you in a position to serve then, and truthfully you get more joy even in a crisis and serving than you do in sitting in the basement and counting your coins. I mean, so the opportunity, I got a thousand folks on our team and the struggle and the scratching and the scrappiness and the clawing to keep this place running and all of them not have their incomes interrupted in any way during this time. That's an act of service in leadership. The act of service of speaking hope and life into the communities around America right now is an act of service on my part. It's being on the air three hours a day, the Dave Ramsey Show, saying it's gonna be okay, it's gonna be okay, it's gonna be okay over and over and over again. Right now that's my job, that's what I do. and it's, that's just so much more satisfying than counting coins. Yeah.

Now, I followed your steps when I was, you know, 25, 26, when I started making some money, when I was like, it's hard to, it's hard to follow a step when you feel like you're, you're living off credit cards and in debt and you're not making any money. You feel like this sense of helplessness, really. And I know I've listened to a lot of your shows with people where they feel helpless and it takes that initial momentum to kind of kick start it and, see little savings here and there and then pay off one thing here and there. But I tell you, once I finished those, I guess really the, the first five to six steps, I don't have a home still. I still rent for personal reasons, but the first five to six steps and then building wealth and giving, giving. Once I got through these, it's just like, man, you feel so much more bulletproof. I feel so much more bulletproof now, after 10 years of building into this recession, I feel safe. I feel fine. I feel protected. And it gives me so much more peace of mind since I did follow your steps. So I would first want to acknowledge you for that, for creating something so simple for us and providing this three hours a day for everybody. I think it's amazing. You sound like a preacher and a motivational speaker to me in the last few minutes. Just speaking life and hope into us. So I appreciate that. What are you telling the people right now who are saying, you know what? I didn't follow your advice. I didn't do what I should have done. I still love off of credit cards. I overbought, paid for my house, and I've got this expensive lifestyle and credit cards that I know I'm wrong. I made a mistake. I own it, and now I'm screwed. And I just got 50% cut of my work. I might lose my job in two months. I got all these bills. How do you even respond to something like that?

Well, I certainly don't say I told you so. That's not, that's not the message because I've been there. I've done stupid stuff, too, and that's not helpful. And it doesn't bring, it doesn't bring any healing. The thing is this. We all get wake-up calls. We get wake-up calls in our relationships, our spiritual walk, our leadership Styles. We get wake-up calls in our finances and. Some people, the phones ringing off the hook right now. They're getting wake up calls on a bunch of things. They're at home with their family and they're starting to realize, I was disconnected from my family. I haven't been plugged in a month. They got a wake up call on their relationships at home. They've gotten a wake up call on, you know, I don't have any savings and I'm deeply in debt. This isn't working. And so the cool thing is when you get the call, then you have to make the choice. Are you going to answer the phone? If you pick the phone up, that means, baby, it's time to change. And you can look back and you might be 27 years old right now watching this, and you're screwed. You lost your job. You got no money, you got no savings, and you feel like it's all over. And I remember in 1970, I was 10 years old, and I was in my grandpa's backyard. We were tearing down an old deck. and I pulled some nails out of those old boards as we were taking the boards off and he taught me to put them down and straighten them with a hammer and save those used nails in a coffee can. Now my grandpa Ramsey was one of my favorite people on the planet. This is 1970 and he was still answering the phone that rang in the Great Depression. It changed his life. He was frugal. and careful and wise with money the rest of his life. And so someday, 27 year old, you're going to be sitting on the back porch with your grandkid and you're going to remember back in alt 20, there was the coronavirus and it changed my life, you know, and that you're going to be that guy. You're going to be giving dad jokes, you know, and grandpa jokes, right? Like I am now. and you're going to get that opportunity. I was 28 years old when I lost everything. It was my fault. It was the SNL crisis, the banking climate changed, I'd built a house of cards, I was stupid. And the phone rang. It was my wake up call. Are you going to answer the phone? Are you going to change your life to where you say, never again, I'm going to control the controllables to where I'm the little pig in the brick house. Never. Again, that may be the only thing you get out of this crisis. And if it is, you got enough.

Preach to me, Dave. Come on now, I love this. What's the biggest wake-up call for you that this has had? Maybe it's not the financial side of things or business because you guys are thriving. Is there something, you know, relationship, family, friendships, health, is there anything that's woken you up now or in the near future? recently?

Well, I've spent the last 15 years pouring into our leadership team and the Ramsey personalities creating the succession plan of and so it's not a wake up call is more of a source of pride as to how our leadership team and our Ramsey personalities are reacting in the moment here without me coaching them. They already knew what to do.

They're leading.

They're out there doing it. They're doing it. They're out there.

They're not waiting for Grandpa Dave to say, what do I do?

Tell me the steps. They already did it. They already did it. And then I found out about it, you know, and that's, that's awesome. And so it's just a sense of, ah, this is starting to work, you know, I mean, when Rachel Cruz and Ken Hogan and these guys are doing, Ken Coleman are doing all these hits and Chris Hogan, all these guys are doing all these hits, these radio and TV and appearances and all this stuff everywhere and the networks are calling and asking for them. which is awesome. And so, you know, that kind of thing is, I don't know if it's a wake-up call as much as it is, it's very satisfying to say, you know, all that work of the last decade and a half of getting everybody ready to win because we were winning in a winning environment, but then when you get the pressures on and you get squeezed, you see what comes out and it's good stuff coming out.

What was the last, I mean, what year would you say was the last big wake-up call for you? around, you know, one of the main areas of your life. Do you remember when that was where you're like, oh, you know, I'm eating a little too many candy bars or, you know, my relationship or, you know, what? It sounds like you've had the finances down for many years, but is there another?

Yeah, yeah.

Where you're like, oh, you know what? I really didn't do as good as I should have done here.

I I guess it's probably leadership, and I probably get one of those calls every day. There's some days I'm a world class leader and some days I'm just a butt.

In what way? Like how are you?

I mean, sometimes I do a better job than other times as a leader.

And.

I own it. I get it. But you'd think as old as I am, I'd be doing better. But I know what I'm supposed to do, but sometimes I just don't have the energy to do it. I don't care. Yeah. And I should just care more. I really shouldn't be such a grouch.

Oh, no.

You care a lot about a lot of people. I'm curious, what's the best dad joke you share?

Oh, Lord. I can't. I have no idea. Oh, you got me. I'm not a dad joke guy, really. Other than just stupid stuff off the cuff that doesn't even make sense generationally. So, yeah.

No good dad jokes.

What?

What is the most common thing that you're hearing with the people that are calling in for you right now? What's the thing that you hear over and over again that they need the most support with?

I think there's a sense, I think when hope gets gut punched the way it has for folks right now, the answers fall, a lot of them fall in the category of this is not going to last forever. because there's this sense that, you know, stock market's down, do I take my investments out? Well, only if you think it's going to stay down forever.

Right.

Because, you know, you're 35, you're going to be investing for 30 more years. You don't think it's going to come up in 30 more years? I mean, really, you're predicting the end of America? I mean, that's silly, but your emotions tell you lies when they're based in fear and when they're based in anger. and they tell you lies and, and they tell me lies. We believe those lies in situations like this. So, you know, I lost my job. I know, but that's happened before and it probably happened again. Just get you another one. Well, yeah, there's a lot of people hiring right now.

There are a lot of people hiring.

Amazon. Amazon's hiring 100, 000 people right now.

Yeah.

So, I mean, there's jobs. It may not be the one you want, but you can get some food. Yeah. I mean, get you a leaf blower and rich people are afraid of leaves. You know, I mean, you can make some money, so there's some stuff to do out there, but. so the thing that the sense that the thing you're afraid of is going to last longer than it is. Yeah. Whether it's the actual virus, whether it's the shutdowns, whether it's the economic repercussions of the shutdowns, whether it's the employment situation, whether it's the quarantine, it feels like it's gonna last forever. But I mean, the chances of you being in the exact situation you're in, in a few months is almost zero. Your life is not a snapshot. You're not trapped in this moment. It's a film strip. The story is going to continue to unfold. And so that when hope takes a gut punch though, and we get down in that fear or we're mad or however it is we manifest that stuff, that those negative things, the emotions that we all have in these situations, that's where a lot of my questions are coming. They're all built in that. And I'm spending all my time going, Yeah, but it's not gonna last forever. Yeah, but it's not gonna last forever. Yeah, but let's visit this in May. I think you're gonna be okay. By June, are you even gonna remember this? It's the great toilet paper shortage of this planning. I don't know. I mean, what is it? You know, it's, you know, some people are gonna have devastating, horrible things that are gonna be life changing, but that's a very small percentage compared to the number of that are worried about it.

Yeah.

And so, you know, you- and you're.

Going to get out of it. You're going to get out of it.

You're going to be okay. I mean, you're going to be okay.

I like Preacher Dave, man. This is a big preacher show. You know, I like this. What is the worst investment people should be making during this time? And what's the best investment they can make?

In my life, when I have become desperate, Right after that's when I become stupid.

Yeah.

And explain the other one. The other one is when I get. Well, when you know, when you get scared and you go rushing towards something out of fear, that sense of desperation, this thing, when you do that, you're getting ready to screw up. I mean, just count on it. And the other time you do that is if you're greedy. If you think you, okay, I got this one. I can take advantage of this. And I mean greedy as a lack of virtue greedy. I don't mean greedy in a positive way where I'm being ambitious, okay? I mean the negative sides of greed. And so if you're functioning in desperation or in this no holds barred, I've I'm gonna just clean up on other people's pain thing. That's when you're getting ready to screw up and you're getting ready to make a major mistake. And so you're set up also for con artists when you do that. And so if you're functioning in high emotion, your brain just doesn't work good. My friend Art Laffer says, when you're panicked and when you're drunk, you don't make good decisions. And so, you know, When you're on high emotion, your brain is, your critical thinking skills shut down. And so that's when I've made the biggest mistakes in my life is when I was desperate and the few times that I was greedy where I thought, oh, I'm gonna slip in there and that's gonna be easy money.

So how do we.

Invest without fear of, oh, it's going down, I need to take it out or like trying to time it? How do we do that?

Great question. It's one of the main reasons I wrote the book. I always tell people, if you just read the second chapter of the book and nothing else, it'll change your life. You can do that with multiple chapters, but that chapter is really about teaching people that winter is coming. We all know winter's coming, right? To coin a phrase. But that winter is the best time on earth. And I know that's counterintuitive, and I don't mean like being a positive thinker, I mean pure facts. So in the book, I take you through 10 facts. I'll give you a couple of them right now. The first fact I give people is why do people not invest? They're afraid of failing. You're a millennial, right? So you grew up witnessing 2008 when you were still relatively young. How old are you now?

33.

Okay, so you were, what, 27?

2008? Yeah, 27.

Yeah, 27, 28 years old. So you're a young man and you're watching the world melting down in front of you. For most millennials, they are the, First generation since the generation that went through the depression that is not investing at the ratio they need to, even close. And they have more debt than everyone probably, right? With all the- They have more college debt than everyone.

Absolutely true. I have a friend that has $400,000.

In debt, dental school. President Obama just paid off his debt five years ago while he was still president.

What? No.

I swear to God. Oh my gosh. It's mind boggling. And he had a bunch of scholarships, but the last bit, it took him that long. So what I tell them is, listen, Debt, paying off your debt's not enough. You've got to become an owner or you're always going to be in that place. So yes, pay off your debt, but here's what you need to know. You got to become an owner. You got to get in the game, but you got to understand the rules of the game. You don't know the rules of the game, the old phrase is, when a person with experience meets a person with money, we know the phrase. The person with the money ends up with the person with experience. The person with experience ends up with your money, right? So I teach people the rules of the game so they don't get screwed, but the most important thing is this. Winter's coming, but people react. So let's take last year. Last January 2016, we had the worst stock market opening in the history of the stock market. Worst first, I think it was 10 days. There was a drop of $2.3 trillion with a T. Crazy. Everybody's freaking thinking the bear market's here, the market's over, the crash is here. I think the market dropped 800 points one day. And on that day, all the richest people in the world were in Davos, Switzerland, you know, for the big conference that they do every year. And they went there, MSNBC went there and everybody's freaking, what's happening? What are we going to do? And they said, let's go ask Ray Dalio. Now, your listeners may or may not know Ray Dalio as, if you're not in the financial business, probably never heard of him. You've probably heard of Warren Buffett, but Ray Dalio has done more. You have to have a $5 billion net worth and $100 million to give him where he wouldn't talk to you 10 years ago. Now, he doesn't care for shit how much money you have, he won't talk to you because he's got a close fund. But they go and they put Dalio on television, CNBC, he's the king. What do we do? And he says, well, you don't need to panic. Corrections happen all the time. But you need a strategy that when markets go up and down, you don't go up and down. And he said, I spent 15 years of my life to perfect such a strategy. All of my money's in that plan. And he said, it's called All Seasons, and I've never revealed it before, but I gave it to Tony Robbins. He extracted from me, and it's his book. So you gotta go read his book. This is what he says on National Television, the data markets are crashing. And that day to give you an idea, which is the beginning of February, I think it was nine days into February, the market was down 9% in the first five weeks of the year. His strategy, which he gave me, which is made money 85% of the time for the last 75 years. It's averaged a 10% return just under, and the average loss, 15% loss was 1.6. So if you go to Vegas and you could spend, 85% of the time make money and when you made money it was 10%, you lost is 1.6, you can go forever. His plan made 2% while the market was down 9. So it was up 11% difference. Now, I'm not suggesting that's the only strategy to do, there's many. His is the smoothest ride with the least risk. But what it did was combination of that and then right after that I interviewed Fed Chair Alan Greenspan. He was the head of our economy, the most powerful man of finance for 19 years, four presidents, he was there running. I was just with President Clinton this last week. He was the Fed chair for him. And I interviewed him for like two hours, you know, or three hours off stage, two hours in front. And I asked him, in the very beginning of this thing, I said to him, I said, look, if you could put the Fed today, what would you do? And he looks at me and as I said, he leans forward and he says, resign. So I look at that and go, oh my God, I need to write a book that'll free people. So here's what will free you. Everyone's afraid of the crash. So Here's what you need to know, two terms you should understand. Correction versus crash. Anytime the market drops from its high by 10% or more up to 20, it's called a correction. If it drops 20% or more up to 80%, like in the Great Depression, then it's called a crash or called a bear market. So how often does a correction happen? How often do we have to be prepared for it? Since 1900, we've had a correction on average every year for 116 years. So, when is winter coming? This year on average. It's like how often does winter come? You wouldn't be surprised if it stormed and rained. Now, some winters are long, some are short, some are harsh, some are light, but winter always comes. So, I wasn't panicked when this happened last year. I'm not panicked whenever it happens because I know it's supposed to be. How long does it last?