895. What To Do If You're Afraid Of A Recession Coming

Stop the bleeding. Anytime that we enter into an uncertain economy, anytime that there's fear being talked about, this is everybody's chance to pull out their budget, to pull out their last couple months of bank statements and credit card statements, and to say, where can I stop the bleeding?

And we're back with another episode of He Said, she Said. And today I'm excited to be asking Chris some questions about money, the economy, how things are changing. Should you be in fear? Should you be excited? How should you be feeling? And this came because the other day, I was actually out shopping for our trip to Italy, and I was feeling super abundant that day. I was really excited because I was going to go and get these pair of Gucci slides that I really, really wanted for my Italy trip, you guys. And all of a sudden, out of the blue, it like, just totally struck me because of a podcast that I had listened to. Like, I felt this overwhelming fear come over me and lack. And while I was spending this money, I had this moment of, wait a minute, I just listened to a podcast where they were talking all about this changing economy coming. And it just kind of hits you in these moments where all of a sudden you're feeling so good. It hits you when you feel good, right? It's like, oh, I'm feeling joy, I'm feeling abundant. And I think that people listening can all relate. And I wanna share with people, like, this happens. No matter what level you're at, you'll have these moments that kind of attack you. In the moments where I'm, like, celebrating, like, oh, my gosh, how awesome that I can go and purchase whatever I want whenever I want to do that, that was something I have always strived to do. And in this moment, at the cash register, I'm purchasing and I'm like, oh, my God, that podcast that I listen to, I'm not sure if I should be doing this. Should I start saving? Should we start backing down? Should we even be going to Italy? Like, all of a sudden, all of these things came in and I texted Chris and I'm like, you're never gonna believe this. Like, all of a sudden, I had this moment of complete lack. Like, we're okay to do this. Like, tell me about what's going on. Like, I wanna know everything. In that moment, I literally said to Chris, I'm like, I want to educate myself more. I wanna be so on top of things because I to feel like I'm not sure of what's coming and that I haven't prepped myself for it. So as much as I feel like we make sure that we diversify ourselves, there can always be these moments where I'm like, how can I arm myself with even more information so that I feel good about it? So, Chris, I want to know. Because you're obsessed with studying this stuff, you're obsessed with learning about it. You stay up. Sometimes I have to tell you to get the hell off your phone because you're reading article after article after article on your iPhone. Tell me about what you think is coming in the future and how we can prepare ourselves.

Well, it's interesting. I first want to touch on what you said, how you're having this great day shopping and all of a sudden something you heard in a podcast triggered you and took you from feeling totally abundant to totally fearful. And that's what I call negative propaganda, right? And we have been crushed lately, and not just this past week or two, but quite a bit. We've been crushed in the news and on social media lately with a whole bunch of doomsdayers talking about record inflation and how it's hurting the bottom line for the average consumer. And it is, by the way, and how home rates are going up. They used to be 2.75% to 3% and now they're at five, five and a quarter, five and a half percent. Right? And this impending possible recession, is it going to happen? Is it not? And when will it be? And just all these challenges that when the news and when social media, and then worse yet, when people trying to sell you something, leverage these things, then it can really sink into you and cause you to take pause. And when you take pause in feeling abundant, then what's the opposite of that? You feel scarcity and fear. And when you feel scarcity and fear, what do you do? You stop making bold moves. You stop making moves whatsoever. Sometimes people freeze in fear and it becomes a self fulfilling prophecy of ending up in a tough financial situation. And by the way, that's where recessions typically come from, is you see Wall street, the stock market that's been crashing lately, and crypto, that's been crashing lately. You and I have taken a bath in these things. But what happens is Wall street typically precedes a possible recession. So what that means is before you're in a recession, Wall street, because it's the smartest of the smartest of the smartest, simply betting on the future, they will start to pull their money out of all the stocks. The stocks will start to go down significantly and quickly. And that is where some of the fear and panic, and some of the signs start to set in. It gets everybody talking about recession this and recession that. And so when Wall Street's going down, you're typically not in a recession yet, but then the recession is usually shortly afterward. And Wall street, ironically, is going up during a recession. That's because, once again, the smartest of the smart of the smart, they are ahead of the average household. Way ahead. So they're selling while things are high, and then they're buying back up when they're low and when things are tough on Main Street. You follow me so far, or am I rambling?

Totally.

Okay, so a couple things to remember is this. You have to have recessions to have a healthy, balanced economy. If something went up, up, up, up, up, up, up, like picture a pot, and you're boiling water, and the steam is getting hotter, hotter, hotter. The pressure's getting higher, higher, higher, and all of a sudden the top explodes off and the water boils over everywhere. Right. The recession is the relieving of that inflation. And you're hearing a lot about inflation lately. Inflation just happens when times are good, when there's a lot of money in the economy, and there's more money in the economy right now than there's ever been. So it's really bad. But when there's a lot of money in the economy, for a very long time, things just become more expensive, AKA inflation, because more people have more money to throw around.

So there's more demand for things.

Yes, absolutely.

So when there's more demand, prices increase.

Yep.

Because you need to make more.

So this is interesting right now, the average American household. And by the way, I'm very sensitive to the fact that there's different situations in every household listening right now. Okay. But the average American household has more than two times the average amount of money in their checking and savings than they've ever had any other peak before.

Interesting.

And so that may not be you, if you're listening, but that's the average. When you average, how much money is just sitting in checkings and savings accounts in all the banks across America, that means that there's a lot of money to be spent, and that's what's causing the price of everything to go up. Think about at home. If you want to pay $300,000 for a home and somebody else wants at home as badly as you, and they have twice the amount of money than they've ever had before, what are they going to do? They're going to say, you know, I'll give you 305.

Yeah.

And you're going to say, well, dang it, I've got a little bit more money than I've ever had before. I don't want to part with it, but I'll go 310 and they're going to go 315, and someone else could come and go 320. And that's how you end up with this rapid inflation situation. Too much money in the system.

And there's also less houses.

Yep.

They can't build from right now.

Yep. They can't build them as quickly as it goes up. So here's what we're facing. A stock market that's declining, you know, crypto assets that are declining, inflation that is going up, housing mortgage interest rates are going up, which means to buy the same house a couple months ago, your payment would have been significantly less. Now it's higher. Other rates on debts that people have will be going up because they are right now. And all of this creates a likely situation where it's time to have a little bit of a recession. And I think people get fearful around that word because we're still scarred from 2008, 2009. And for context, I want people to realize that was the Great Recession. That thing was so damn bad, you and I lost everything in that. Right. We were in banking, living beyond our means, had to hit the reset button. That thing was so bad that it was almost a depression. It was just a hair away from being a depression. And we've only had one depression ever. That's the Great Depression. Yep. So all the other recessions that you've lived through or heard about, they have not been as bad as the most recent one that we have, that we have ingrained and burned into our memories. The 2008, 2009, when housing crashed and jobs disappeared in the whole nine yards. So you know what's interesting about if a recession shows up? Number one, we don't know when here, everyone's running around scared, taking pause. They're stopping what they're doing. Right. They're freezing in their tracks. Except it may be 6 months away, 12 months away, 24 months away. So you're freezing for no reason right now.

And some people. We were talking about this. Some people will start a recession and some people won't necessarily know because sometimes recessions only impact certain sectors. Sectors, yeah.

So that's the thing to remember, number two, is by the time that the news says, yes, we are officially in a recession, and everybody really freaks out.

Yeah.

Guess what? You've already been in it for six months because they can't tell you you're in a recession until they, it's a look back measurement. Until you've had two quarters, six months of negative growth in the gdp. And the GDP is just overall spending for the whole United States.

Interesting. So that actually when it goes into the news, that propaganda, it's seven months old and it must extend it a little bit longer because doesn't it create more fear?

And so what do people do? They're telling you old news, they're saying it's official, we're in a recession. And everyone panics and they freak out and they pause and they stop spending. And that's the kiss of death. That's where it becomes a self fulfilling prophecy. And that's what extends a recession, is because when you stop spending and your neighbor stops spending and everyone stops spending, the economy grinds to a halt. People should keep spending when they make that announcement. You know why? When they make that announcement, that means you've already been in the recession for six months and nobody told you because it's a look back measurement. So don't panic when they finally say one day, whether it's in 6 months, 12 months, 24 months, well, it's official, we're in a recession. Yeah, no shit. I felt it, right? This was tight or that was tight or I felt the fear here and I felt the fear there. Your life doesn't have to freeze or stop or change. Now the third thing is what you asked about. Recessions are not a blanket disaster where everybody suffers again. We still feel burnt and scarred from the 08091, which was the only great recession. That thing was so bad everybody got their tails handed to them. And even that's a false statement. I have so many friends in my life, they got incredibly wealthy during that recession. I'll talk about that in a little bit. But most people, they really felt the pain of 2008, 2009. But in other recessions, most people don't even know what's going on. If they wouldn't watch the news or if they wouldn't talk to their neighbor. Because you can have a recession where housing goes down but manufacturing is way up. You can have a recession where manufacturing is getting crushed and people are losing jobs in a manufacturing session, but housing, because of a low supply like we have right now continues to go up. Yeah, you can have a recession where liquidity is tight. Right. The banks are tightening up and they're not lending. But if everybody has a significant amount of checking savings Runway and good paying jobs, meaning jobs have not disappeared. Then liquidity is tight, but the job market's strong. You're probably not going to feel the recession unless you go to borrow. And so just because a recession happens doesn't mean that you're going to feel it. Your neighbor can feel it and you can't. That's how most recessions go. So you don't have to be in fear. It may not even affect you.

How long do recessions last? I think some people are like, oh my God, is this going to be like a 7 year reset? What does this look like?

This is the best question ever, you guys. The average recession since we've been tracking them only lasts 10.9 months. 10.9 months, not even a year. And so here we are thinking this is the one, this is the worst one yet. This is where everything goes to hell. Not really. This is just where they told you in the seventh month that we've been in a recession for the last six months. And that means if it's the average one, there's only three or four months left.

This is so interesting when you think of it in terms of every single domino that is involved here. And I just want to point out, you know, for people who are watching the news while this is happening and it's not to turn a blind eye because you want to be smart about it, but you have to remember that people who are at the news, news stations, they all want to make sure that they thrive during this and they have jobs. So they're going to, to make sure that they are fear mongering and keeping you so distracted, sensationalizing it and so consumed by this so that they can make sure that they are safe. So the more fear that you have in terms of being so glued to all of these news stations and things like that, it is benefiting them.

Yep, absolutely. And so you gotta be really careful where you're getting your, your propaganda from. Yeah, I call it positive propaganda, negative propaganda. Make sure you seek out the things that make you feel and reinforce how you want to believe and ignore as long as you're educated the things that make you feel like crap.

Ignore, they say dot com.

Yes. You know, they say so they say.

We'Re always like, who is they?

Yeah, who's they? Who's this they that they? You know what they say? So, okay, so here's three things that people can do regardless of their situation if they feel like they've got a little fear around an uncertain economy. And that's what I call It. Yeah, guys, economies are up and down even when they're not called a recession.

Right, Right.

Sometimes it's crushing it and sometimes it's moving kind of slow. As a matter of fact, you can. The definition of a recession I mentioned earlier is just means negative growth in the gdp, the overall spending of the whole United States, everyone combined for six months in a row. What that means is if we have positive growth, even 1%, even a half of 1% in spending overall out of everybody, that means we're not in a recession. The problem is, do you think you're really going to feel like, woo, got the wind behind my back when you know GDP is growing by half a percent per month? No, you're not going to feel that boost either. Right. So it's just silly to get lost in the terminology of it. Sometimes it's going to be easy, sometimes it's going to be a headwind. You got to keep moving forward regardless. But here's what you do. Here's three steps you can do to not be very fearful. Number one, stop the bleeding. Anytime that we enter into an uncertain economy, anytime that there's fear being talked about, this is everybody's chance to pull out their budget, to pull out their last couple months of bank statements and credit card statements, and to say, where can I stop the bleeding? Now, some people have a little bit of bleeding to stop, like put a band aid over it. Other people, they need like a tourniquet and an ambulance and airlift and everything else.

When you say bleeding, what's considered bleeding?

Where are you spending money that may not be wise or appropriate or even necessary in an uncertain economy? So do you need all those different streaming subscriptions or could you cut all but one back? Do you need that many cars in your garage with car payments, or could you get rid of one? Do you need that boat for the next 10 to 12 months, or could you maybe sell it now and then pick one up right at the tail end of the recession for cheaper? Right. So look where you can stop the bleeding. Try and get that monthly outgo. I call it your monthly nut. Try and get that monthly nut down as low as you possibly can. That's number one, stop the bleeding. Number two, invent new income. If you guys take anything out of this episode, here's the most important bulletproof thing that you can do. Invent new income. Let me be crystal clear. Let me demonstrate how real this is. When a company goes bankrupt, it's not because they were profitable or not profitable. It's because they ran out of cash flow, income. Did you know Amazon did not make a profit for their first 11 years in business? Not one profit. Same with. Oh God, was it Airbnb for like their first seven years? Most major companies do not make a profit, but as long as they have cash flow or to the regular person, that cash flow is called income. As long as they have enough income or cash flow, they can and will stay afloat. Well, this goes for you too. Your personal household is your personal economy. Who cares what's going on in the big economy? Doesn't matter if everyone in your neighborhood has lost their job, as long as you still have your cash flow, your income. Now what that means if there's two breadwinners in your household right now and you're each on salary somewhere, it's time for you to invent a side hustle. It's time for you to monetize maybe something that you are good at. The skill set, the talent, some experience you have. It's time for you to start that small side business. Low overhead, high payoff. Because when you invent new income, that becomes your safety net. Now, if one of you loses your job, sure you might gotta tighten the belt a little bit. But because you proactively invented some new income, Even if it's $500 a month, $1,000 a month, $2,000 a month, which is relatively easy to get up to, then that will mitigate the extent to which you're gonna feel that financial pain. So that's why, number two, when you and I lost everything in 2009, that was not because we. Well, it was because we lived beyond our means. But technically speaking, had I not lost my income, we would have been just fine. Am I being an advocate of you being financially irresponsible? No. Am I saying, yeah, who cares? Go in debt and do dumb things? No. But what I am saying is, even if you've done that already, if you look and say, oh boy, economy is a few months away, or economy, sorry, recession is a few quarters away, I'm staring it down in the face and boy, I have not taken care of my finances. That doesn't mean you have to collapse. As long as you continue to have enough income. Income is the blood flowing through the body.

And again, this most likely is not going to affect every area. So I was just thinking, in 2009, if I would have had a more stable job or something, that was where I was. The breadwinner in a different department that wasn't mortgage and finance, we would have been totally fine.

Exactly. We would have been diversified in our income. Yep.

And we were not, Deborah. We had one. One income stream. I was making some money at the time, but I was trying to get a business up. Yeah. And that just. It was not enough to support.

So I can't stress number two enough. And then number three is this when you have stopped the bleeding. So that means less is going out each month and now increased your income by inventing new income side hustle, second job, whatever it is. Now you've got a nice gap there. Think about expenses went down, income went up. Use that gap not to go out and get something fancy, but to build up 12 months reserve. 12 months Runway, as I call it, as fast as you possibly can. Whatever your household outgo is, let's say it costs you $5,000 a month for your mortgage and your car payments, your groceries, your everything, then $5,000 a month times 12 months of Runway would be $60,000. Your goal is how quickly can you get $60,000? In that example, 12 months of Runway put away into the bank account. Because the average recession only lasts 11 months. So even if somehow you were on the bad side of the recession, even if you were in the sector where the jobs were cut, or if your home tanked, whatever it is, you wouldn't have to suffer because you have 12 months Runway. And anybody can reinvent themselves, find a new job, put themselves in a better situation when given 12 months. Months to do it. That's it. There's three steps. Stop the bleeding. Number two, invent new income. Number three, use that new gap to build up 12 months of Runway as soon as you possibly can.

Yeah. And I just want to point out, like, we are in such an amazing time in history right now. And when I say that, I mean, because I just got a message from Instagram that they are, you know, now paying for reels. And I know it's not everyone, but I know that some of you do have it, and I know some of you can get it. This is an example of when that happened to us in 2009. There wasn't a way to get paid online for creating content.

There wasn't.

There was MySpace.

It was like people were not creating coaching memberships or fitness memberships. Like, I was one of the first people, along with some other people in the fitness arena with Kathy Savage and some other people to do an online fitness program. Like, there are endless things that you can do right now if you really get creative. Like if somebody held a gun to your head. And I'm just being so honest. And said, if you have to create income within the next 30 days online, you would figure it the f out. You would figure it out and we just get comfortable.

I just had a conversation with a good, really smart, really economically educated friend of mine and we were talking and I asked him, I said, what's your take on the upcoming economy over the next 12 to 18 months? And as specifically I said, I said, do you think it could be a really bad like ass kicking recession or is it just going to be a couple sectors? And he said, I don't think we're ever going to experience something like we did in 0809 again in our lifetimes anyways. And here's why. One major thing has changed. One significant thing exists today that did not exist back then and that's the iPhone. And with the iPhone came what? The ability to make money on apps everywhere. So what can you do in 2008, 2009 when people are like, oh no, I can't pay the mortgage anymore. They couldn't go drive Uber.

Yeah.

Imagine if they could have gone and drove Uber when they lost their job.

Uber. And doordash, they couldn't have doordashed.

They couldn't have done TaskRabbit.

Yeah.

Right. Where you go around do all these different things to get paid for it. You could do it on. Not that I'm condoning it or not condoning, but only fans like you could. There's all of these modalities out there that did not exist when 2008, 2009 hit. So now when a bad patch hits, guess what? People aren't going to throw their hands in here and say, well, I don't know how to pay for this apartment. Well, I don't know how to pay for this car. Well, I don't know how to pay for this home. They're going to say, well, I don't want to do it, but I guess I'm driving Uber. I don't want to do it. I guess I'm doordashing. I don't want to do it. I guess I'm going to go to TaskRabbit and start monetizing my skill set. Right?

Yeah.

And there's a million ways to make money. And then add to that teaching what it is you're good at. Yeah. And here's another thing people don't realize. When income opportunities dry up and when people are feeling financially strapped, things like network marketing explode.

Oh my God, this is so right. As you were saying that it was our version of the apps back then because I remember being like I don't want to do it, but I have to do network marketing because we are fricking broke. And there was no other. I wasn't educated. I didn't have a high school education, you guys. There was no other modality for me.

Besides network marketing that did not require.

Some diploma where I could make more money. And now it's nothing is required. Nothing.

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Do you remember? Because this is exactly. By the way. Now, this is not a promotion for network marketing. We're just explaining how opportunities exist when you are facing down times. Remember, we're walking around the lakes in Minneapolis trying to figure out our financial situation. Start from below zero. And you said, hey, I think I'm gonna. I've been using products forever. I think I'm gonna start selling them. And I said, oh, God, you're going to do that?

Yeah.

You literally shamed me. It was bad.

And I remember this so clearly. You said, well, you know what, my brand, we need to do something. I'm going to do it. I'm just going for it. And I said, and you asked for my help. I would really love if you'd kind of help and support this a little bit. I said, I'll tell you what, if you can make my car payment, because I had that one car payment I stuck with. It was like $810 a month, right?

That's right, the Audi, Right.

Tell you what, if you can make my car payment, then maybe I'll consider this to be a real deal. And a month goes by and you make my car payment. And then what I do, I move the finish line. Ah.

Take the damn finish line.

That was luck. If you can pay our rent payment in that little condo where we were starting over three grand a month, if you can pay our rent payment, then I'll believe it. 60 days go by, you make the rent payment. All right. Tell you what, if you can make $5,000 in one month, then I'll support you. Believe. And I remember, not only did you do It. But then you didn't come to me and say, would you support me? You came to me, you said, listen, asshole, this is working. You're either in or you're out. Right.

I was like, I need your help.

Yes.

I sucked at the coaching part.

Yep. And so, guys, I was good at.

The selling, I was terrible at the coaching.

Why do we share this? We have so many opportunities for you to build up that 12 months Runway. There are so many opportunities for you to invent new income. That is the single thing that will set us apart from another 2008, 2009 situation. And it wouldn't even be that bad anyways. But now it's really not going to be that bad because there's still income streams afloat.

Yeah. You guys, I hope that this helped. I hope that this shed some light on just even the perspective of how you can walk into these things. And I think what I wanted when I was talking to Chris about this and when we were talking about this episode, the biggest thing we want to get, want you to feel from this is just empowered, like, to know that ultimately, at the end of the day, whether everything we said was right or wrong, that it is always about your perspective and your action going into these things.

The news will tell you that you're not in control, but you're in control. Right? What do you do? Number one, stop the bleeding, get the monthly outcome down. Number two, invent new income as fast as you can, Roll up your sleeves, get uncomfortable. And then number three, start building up that Runway. And even if you don't get to number three, guys, imagine if you just stop the bleeding, reduce your monthly oco and then invent some new income and something bad does happen. Now you're equipped for it. Now you're equipped for it. Last year, we filmed BE Online, which is every single step that you and I have ever used in order to build our personal brands and monetize them. Right? It's the course that we filmed and put together last year, and we weren't going to release it this year, but with an uncertain economy coming, we are going to get this into people's hands and it's one of the best things ever. It starts from how do you come up with your idea, to how do you package it, to how do you price it, to what platforms do you execute it on, to how do you launch it and then how do you grow your audience and how do you scale it from there? Literally, all those things in order. And anyone listening, if you're worried about the economy we're going to blow this thing out the doors at like an absurdly anybody can get their hands on it type of investment. But especially you guys for being listeners this entire time. You have the opportunity to text us the word bulletproof. Text us the word bulletproof to 310-421-0416. Again, text us the word bulletproof to 310-421- 0416 because here's what we're going to do. Anyone that does that, we're going to support you by giving you a no brainer price that'll be lower than early bird and a 24 hour head start to grab it before anybody else can. So you'll get your hands on it first. There's some neat things I'm not going to reveal yet that'll help you. Let's just say you would definitely want to get your hands on 24 hours before other people get a chance to and we're going to give it to a price as like a thanks for listening. Anyone can get their hands on us because we understand that there's financial uncertainty in some form coming. So text us the word bulletproof to 310-421-0416. You don't have to freaking worry. You are in control of this outcome.

We're so grateful for you. We love to hear what your biggest takeaway was.

If this helped, if this made you feel empowered, give us a tag you guys. We love to shout you out too. And until next time, we will see you next week. Bye everyone.