8 Signs You're NOT Ready For The Upcoming Recession

Hey there, real quick, before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Everybody's talking about the next recession like it's the Hollywood sequel. The big scary music, the doom, the gloom, the headlines. But here's the thing. Most people think a recession is about the stock market crashing. It's not. The market is just Wall Street's mood ring. The fact is, a recession is the ultimate stress test for your money. And if you're not ready, it will find every crack in your financial foundation. And here's the twist. The moves that protect you in a recession are the exact same moves that will build wealth in any market. So which means that if you're panicking now, it's not the economy, it's your money habits. I'm Mel Abraham, a financial expert and an entrepreneur and a guy who's actually navigated through economic storms since the 80s without losing my shirt or my sanity. Now, in this video, I'm going to show you eight clear warning signs that you're not ready for the downturn and the exact steps that you need to turn that around, starting with the most important thing, which is wiping out your debt before it wipes out your options. Okay? It's exactly why I built my debt breakthrough calculator, which is a free calculator you can get if you go to melabraham.com nodebt and I'll put the link below so you can grab it. All right, in the meantime, let's jump into the episode.

All right, let's get one thing straight before we jump into the meat of the episode, and that is this. A recession is not the same thing as a stock market crash. The stock market is literally like a moody teenager. It's up one day, it's down the next, and nobody knows why. I mean, we've watched it dive 1100 points in a day, jump 900 points the next day. And so it is this temporary swing. But is it a recession? And the answer is no. A recession, that's when the whole economy hits the brakes. Opportunities shrink. People who didn't prepare, they get eaten alive, okay? I've watched it happen. I've seen it happen. People that didn't have things set up properly get buried if they're not careful. So here are eight signs that you're not ready. But more importantly, how to fix them before the next downturn happens. And the reality is it will happen, okay? Because it's just part of the economic cycle. So there will be a recession. We just don't know when. We don't know how deep, and we don't know how long. But when you navigate through these eight signs, you'll be okay. All right, so let's start with sign number one, and that is you actually have too much debt. If it's your credit card balances, if it's your student loans, if it's other loans, personal loans, all those things. If your credit card balance could double as a phone number or a zip code, it's probably too much. And we need to talk. Cause the debt is the silent cash flow killer. We have been indoctrinated as a society into payments after payments. You go on a car lot, and they say, well, what payment do you want? Because they know that that smaller number is easier for us to swallow. But then we get. We get death by a thousand paper cuts or a thousand payments, if you will. And. And everything. We got to be careful about it. And so payments are like the relatives who show up for dinner and never leave, okay? Because you're paying for something you bought for years. Here's the thing to think about. If the enjoyment of the thing you bought is far less in time than the payments to pay for it, then it shouldn't be on a credit card. It shouldn't be on a loan, okay? And so this is the thing that we need to do. We got to get your debt under control. And I already mentioned the debt breakthrough calculator. So make sure you get yourself on a debt payment plan to do that. Because if a recession hits, or when a recession hits, if you don't have the debt that's. That's bogging you down, you'll be better prepared to navigate through it. All right? That leads me to sign number two. You don't have control of your income. See, if your money leaves faster than it arrives, you're not in control, okay? You're simply just the middleman that's handing it over to Starbucks, to Amazon, to the mortgage company, to the credit card company, to the subscriptions that you have. Okay? Okay. I remember coaching a guy who was making $300,000 a year. On paper, when you looked at it, he was killing it, okay? But in reality, he literally had $42 in his checking account at the end of every month. He was spending it as fast as it came in. Okay? We need to follow a system. It's one of the reasons I. In chapter 12 of my book in Building youg Money Machine, I talk about the whole idea of the wealth priority ladder. It literally tells you what to do with each dollar when it comes in to create that unshakable financial foundation, to start to build wealth that's sustainable and to take care of the debt in the proper way. So we got to pay ourselves first. We got to let our future get fed before our lifestyle does. Okay, sign number three. You don't have an emergency fund or a peace of mind fund, as we call it in my book. See, if your emergency plan is a credit card, you're not prepared. You're praying, okay? And I'm being direct here. But here's the thing. I get it. Putting money in a savings account and a high yield savings account, it's boring, okay? It's boring. And you're sitting back saying it's not really making money. I'm making 3, 4, maybe 5%. And yet the stock market's going up at 8, 10%. Or I can get more in other investments. But remember, having an emergency fund is one of the bottom rungs of the wealth priority ladder is not about building wealth, it's about protecting wealth. And in a typical emergency fund are three to six months. Okay? That's going to keep you out of the ditch in my book. I talk about the emergency fund, but then I talk about the peace of mind fund, and that is a bigger emergency fund. A peace of mind fund is nine to 18 months. I want you to have the peace of mind that if, God forbid, something happens and you are out of work for 9 months, 10 months, 12 months, you are. You are good. Or you get hit with a big, big unknown, a health scare, something like that. Those things take care of you. I want you to be. Be prepared not only for emergencies, but I want you to have the peace of mind to navigate through it. Okay? So that's sign number three. Sign number four. You rely on a single source of income. One paycheck, one client, one contract. That is not stability. That's a cliff with your name on it. Okay? Multiple streams of income. They're not a luxury anymore. They're literally your lifeline. Now, I'm not saying that if you're working a full time job that you have to work multiple jobs. I am saying that you need to think about what, what are the, the elements in that job that I might be able to use to create a side gig that creates income or building assets that create income. Because the challenge is that when we are, we are relying on a single source of income and that source gets impaired, that source gets taken away. And then you combine that with debt and no emergency fund, we're doomed. We're absolutely doomed. Now if you have an emergency fund or a peace of mind fund, it might get you through it, but I'd rather you not have to deal with it. So from the get go, you're going to have your core income streams. Then you're going to look at how can I make some additional income streams that maybe don't take as much effort taking your expertise, your knowledge, selling it as a digital product, maybe doing some tutoring on the side. Those kinds of things that allow for, for additional sources of income will help you out if and when a recession hits. Okay, and the other side of it is when we get to sign five, which is the next one. You'll see how this starts to build in and they all layer on top of each other. And sign number five is this. You're not indispensable to your employer or your clients. See, in a recession, the rule is simple. Keep the most valuable people, cut the rest. That's what businesses do. So the question we should be asking ourselves is how do I make myself the person they can't afford to lose, whether it's a client or an employer? Okay, how do you become indispensable and invaluable? What are the skills that you need that are unique and distinct? What are the things that you can do to train yourself to put yourself in a position that you are the last one they think about letting go. See, when you start to look at how we layer these together, because if you're indispensable and invaluable to your clients or your company and you have multiple streams of income and you have an emergency fund and you've got your debt under control, you see how what this is doing is making you this armor that becomes literally recession proof in the process. Okay, that leads me to sign number six. Your portfolio doesn't match your age or circumstance. Listen, if you're 60 years old and your portfolio looks like you bet it all on a high tech startup, yeah, that's gambling. That's not investing. Because your portfolio should fit your age, stage and circumstance, your life stage, your Goals, your risk tolerance, your risk profile, not your emotions in the moment. See, my portfolio at 63, 64 years old is very different than my son's portfolio at 35 years old. My portfolio with me and my wife and our two dogs is different than my son's with him, his wife, two daughters. Okay? The point is, is that there isn't one size fits all. The question that you gotta ask yourself is, have you looked at your portfolio, have you looked at your assets, have you looked at your investments and say, is it appropriate for your age, stage and circumstance and will it sustain you during a downturn or recession? Listen, I get it. If a recession hits and the stock market goes down, I will get hit and, and it will hit my portfolio, but it will not hit my portfolio at a level that will damage the plan. And that's why the portfolio is structured based upon my plan. And you need the same. So here's the thing that I want you to think about is if you haven't done a risk tolerance assessment, I want you to do a risk tolerance assessment. I want you to know what your number is. I want you to have a dynamic plan in place. I want you to stress test it. We do a lot of this for our clients in, in our money machine master plans where we build it out and we test it out and what happens if things happen, and they are, they get comfortable. But the key here is this. If you haven't looked at your portfolio lately, if you haven't really reallocated it or looked at it based on your age, stage or circumstance, then now's the time before anything hits. Okay, sign number seven. You think a recession planning is different from wealth building? Here's the reality, okay? The things that you need to do to prepare for a recession and get you through the recession are the exact same things you need to do to build sustainable wealth. It's not about panic moves, it's about consistent moves. And remember, 80% of your wealth creation, your financial freedom is driven by behaviors, habits and decisions. And only 20% is driven by the money you have. And so the habits, the behaviors, the decisions that you're making to build wealth, to do the right thing. And if you don't know exactly what they are, grab my book, go through it. I have a process in there, frameworks that allow you to do that because they're the exact same things that will keep you safe and allow you to survive recession. They're not two different games. You don't turn around and say, oh, well, we're in a Recession. Now, I gotta. I gotta invoke this. I gotta do this. No. Building sustainable wealth means that you're building wealth that will work in boom times and bust times, in recessions and accelerations. Okay? So they're the same thing. But the question is, are you doing it? That leads me to sign number eight. Sign number eight is this. You haven't built your money machine. You need a system. You need a system that makes your money whether you're hustling or hiking. You need a system that doesn't come from reacting. It comes from creating. You need a system that is proven and a process. Your wealth will only rise to the level of the processes and systems you have in place to put your money to work for you. I know people say, well, it's not how much money you make, it's how much money you keep. It's not even how much money you keep that matters. What matters is how much money is working for you. So, yes, I got to make money, yes, I got to keep money. But then I got to do this. I got to get the money to work for me. That is your money machine. And if you're not building a money machine, then one of a few things is going to happen. You are imprisoned to the earnings treadmill, meaning that you're constantly going to have to earn because you are living to the edges of your check each and every month, each and every week. Okay? Or you're going to have to go into debt. But when you turn around and build a money machine, that's the chance that you get to separate your earnings from the efforts to earn it. That gives you choice in life. That's what I call freedom. Okay? So those are the eight signs that I would go through. Use this as a checklist. If you saw yourself in any of these signs, then it's time to start tackling them. And probably the first place to start tackling it is your debt. If you're sitting with credit card debt, or destructive debt, as I call it, then do me a favor. Grab the debt breakthrough calculator. It's totally free. Go to melabraham.com nodebt I'll hook it up below. And get yourself on a debt payment plan. Let's get that albatross off your neck while we're we're managing the other elements of these eight signs, okay? Because this isn't just about you surviving the next recession. It's about making sure the economy never decides your future. That allows you to take control of it, that you are the one with the Hands on the wheel, because that's where you belong. All right. I truly believe that financial freedom is everyone's birthright. We just got to understand the process, the systems, and the way to claim it. And that's why I had this channel. So if you haven't subscribed, make sure that you subscribe to the channel and leave me a comment. Let me know which one of these eight signs maybe hit you that you think you need to take care of. And if you got questions, let me know that, too, because that's what I'm here for. I'm here to light the path to financial freedom for a million families. And I want one of them to be you. All right. Till I get a chance to see you on your path to financial freedom and on one of the next episodes or on the road, as I'm speaking out there, live, as I always say, always, always strive to live a life that outlives you. See you in the next one. Cheers. For now, thank you for listening to the affluent entrepreneur show with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

And that's it for this episode of building your money machine, where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright, and I want to help each and every one of you claim it. Thanks so much.