6 Reasons How Recession Benefits You   Leave a comment

The moment one hears the term ‘recession,’ one would probably get a fever. This term ranks top among the nightmares of any government. However, recession is not a very bad entity on its own. The trends that follow this are the real impediments. Loss of employment is the worst result of recession. Reduced consumption by the citizens of the affected country is another drawback. The only upside of recession is that the prices of various commodities plummet. The winner in this economic pitfall is the everyday buyer. This is so because commodities just lie in the go downs as consumption comes down. So, sellers reduce the prices of their goods to push sales. So, here are a few win-win areas for the buyer during recession, as given by MillionDollarJourney.Com –

1) Abundant Value Stocks – The stock market is among the first things that gets hit by recession. This lowers the strength of stocks trading on various stock exchanges and so, their market values get lowered. Stock prices of even big shot companies tumble. This is the time when people can actually buy the stocks they had always dreamt of. It is probably the ideal time to buy them. There is, however, a catch here. The one buying the stocks should have adequate cash to buy them as discretionary income of people suffers during recession. Still, the only upside to this is that one can own the stocks of big companies without paying a fortune for them.

2) Lower Real Estate Prices – Real estate is a finder’s paradise during recession as very few people are interested in properties during this time. Since, the real estate prices go down during recession, real estate agents promote the available properties by selling them at lesser rates. This is a golden opportunity for people who have adequate cash to buy land. If the prices drop to a very low, then people might have to fight over the land in concern due to a very large number of buyers bidding to buy the land. Buying land during recession is a good way to bank for the future as available land in hand will come handy when the economy of the country stabilizes. So, it is a good decision to buy property during recession, provided the land is worth it and one has enough cash to buy it.

3) Economical to Borrow – What if people do not have enough money during recession? Does this mean they cannot save for the future? One does not have to forego the wish to buy land during recession, even if one does not have adequate cash. This is so because banks lend at a lower rate of interest during recession. This equates to the borrower paying less interest on the principal amount. This is good news for people who want to buy land but are running short of cash. However, people must have a sound source of income in the coming years to be able to repay the loan, else this step becomes futile. Lower lending rates of banks help them stay in the business even during recession. So, this is a win-win situation for both the lender and the borrower, namely the bank and the customer.

4) Cheaper Retail Goods – After buying land for their dream homes, people can then concentrate upon objects to beautify their homes with. Lowered discretionary income compels people to spend and purchase less during recession. Since, consumption falls down drastically during recession; the prices in the retail sector also come down. This means that the items which used to tax one’s wallet would be available at a much lesser price. This is a way to push sales by the retailers. A common man will not shirk away from this opportunity to stock one’s home with things one has always wanted. People can but things at very less prices during recession. However, one should mostly go for everyday things than luxury goods, though buying luxury goods becomes possible for the common man too. Buying luxury goods may become high maintenance when the economy bounces back.

5) Lower Fuel Prices – When a country faces recession, its demand for fuel comes down as the government vouches for saving money. Since, people tend to look for alternative modes of fuel, crude oil prices fall. This in turn reduces the overall demand for fuel and so, its prices come down. Since, demand for fuel comes down in the country, their rates are affected. Reducing fuel prices to boost sales is the only logical way out by the government. As fuel prices get cheaper, people tend to buy them in bulk. If this buying amount is not limited, then this over-buying of fuel might lead to a shortage of available fuel. As the saying goes, one should always go for moderation as excess of anything will sink a ship. So, buying just the right amount of fuel during recession is advisable.

6) Cheaper Holidays – Which person in his/ her right mind would not want a nice vacation without spending a fortune on it? Maybe, not many would. People can actually go for the vacation they had always hoped to go for during recession. If your own country is undergoing recession, then holidaying in your home country will be cheaper. If the country you have always dreamt of going to is facing recession, then planning a vacation in that country is advisable. Going the other way around would spell disaster. Since, a country undergoing recession is in need of money, it will lower its prices to promote tourism. This equates to cheaper air-tickets, hotels rooms and food items. Recession is seemingly the ideal time for a vacation.

However, one should not start praying for recession to happen to our country because this situation hits employment big time. Even government jobs are unstable as organizations go for mass reduction in the strength of the employees. These points just help people to see the upside of this economic nightmare. Moreover, it hints at saving money as a penny saved is a penny earned.

Posted January 21, 2012 by avinash2060 in Economy

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