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Ask HN: How are you preparing for the recession?

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Re: Ask HN: How are you preparing for the recession?

#61

Post by tomcam »

mackatsol wrote: post #29
Clampower wrote: post #15

I’d like some advice please. I am currently freelancing with one major client. I only work 3 days a week which is great and I make a good amount of money. Client is a small company, seems financially secure, but eh could also go belly up I suppose. They offered me a fixed contract but it would be for less money than I now make freelancing, +4 days a week. Should I take less cash and less freedom for the security that…

I'd say no.. go fill the other days in the week with more clients. Keep the flexibility to say no. My 2 cents. 20+ years of consulting experience working mostly with single clients or small business.

Analysis: True. Depending on a single client is one of the worst mistakes you can make as a freelancer

Re: Ask HN: How are you preparing for the recession?

#62

Post by MacsHeadroom »

muzani wrote: post #45
ankaAr wrote: post #30

Don't save cash, invest. Inflation will eat your money if you save the cash under your bed. Open new business, people will stop spending on unnecessary things, but think what every people needs every day. Labor will be cheaper, think about that. 38 years living in Argentina, you move fast or you die.

With stuff like crypto and stocks plummeting, they might be worse than holding on to the cash. Personal skills are always a great investment IMO. If a country's economy implodes, there are still other countries doing better and hiring. Someone with good skills is going to have an easier time.

No, they're better for holding* (and buying). So long as you won't need to cash out during the recession, it's the ideal time to hold and to buy.

Conversely, a bull market is the ideal time to cash out.

aka "Buy low, sell high."

*Assuming they'll still exist after the recession. For example, I would be weary of equity in the subset of relatively young companies which DON'T have record lay-offs in the next two quarters. (Failing to preemptively trim more than just fat is a big red flag.)

Re: Ask HN: How are you preparing for the recession?

#63

Post by tluyben2 »

bladegash wrote: post #38
slyall wrote: post #27

Earlier quoted context omitted.

Reduced competition. Fewer other businesses are trying to start up at the same time and existing companies have less money to spend to compete against you. Suppliers will also be eager for new business, same with landlords if you have a physical store. Also easier to hire.

Wouldn’t there also be reduced market/customer demand though as well? Guess it depends on the startup and business model, but could see a challenge with actually selling whatever it is your business is providing (e.g., services, product, etc.).

The economy won’t stay depressed; you have time during the recession to build up, get ready while there is less competition or your competition is very weak. When the market moves up again, you can go full in. It is just a lot cheaper to do the startup part of the startup (building the product, market research, hiring, or, marketing, sales, getting first clients, etc) part of the startup. After the recession, you are the one ready, the ‘old ones’ are licking their wounds (they lost trust by alienating clients with sudden price hikes or policy changes and alienated employees by firing large portions of them etc) or gone.

Re: Ask HN: How are you preparing for the recession?

#64

Post by icedistilled »

toomuchtodo wrote: post #6

1. Keep 6-12 months of expenses in cash on hand. Cash. Not SPY, not I bonds, not HELOCs or lines of credit. Cash. When you are in financial peril, you don’t want to deal with a closed credit line, deeply depressed assets, or locked up instruments. 2. Don’t lose your job. 3. Network in case #2 doesn’t pan out. (lessons learned from the 2001 and 2008 crises)

not I bonds? Why not? after 1 year they are not locked up.

Re: Ask HN: How are you preparing for the recession?

#66

Post by hunter-2 »

If you have always wanted to start up or build your own product, consider the layoffs a blessing in disguise. That is, of course, assuming that you have the means to weather the financial challenges of not having a job. Make arragements for either savings that will last a year, or move back with parents depending on where you are in life at present.

I was single and unmarried in 2008. Was working in a startup that made an innovative new kind of ads (SMS ads!!). Was laid off and spent the next year building the next TechCrunch. It flopped, of course, and I moved back to a day job later. But I would have never made that move had I not been fired.

My personal circumstances are different today and would not make such a move now. But if you are young and financially-covered, you should see that as an opportunity.

Re: Ask HN: How are you preparing for the recession?

#68

Post by shetill »

kradeelav wrote: post #14

- aggressively trim unnecessary expenses like media subscriptions, the "extra coffee", immaterial luxury goods. you don't have to live like a monk, but all of us could easily trim our fun spending by 20-50%. - have 6-12 months of emergency cash that can sustain you if your main source of income fails. something will always happen, whether it's an appliance or car that breaks down, or an unexpected medical expense. sl…

imagine being able to save for 6 months

Re: Ask HN: How are you preparing for the recession?

#69

Post by radicality »

kradeelav wrote: post #14

- aggressively trim unnecessary expenses like media subscriptions, the "extra coffee", immaterial luxury goods. you don't have to live like a monk, but all of us could easily trim our fun spending by 20-50%. - have 6-12 months of emergency cash that can sustain you if your main source of income fails. something will always happen, whether it's an appliance or car that breaks down, or an unexpected medical expense. sl…

Why not sell stocks? Suppose you’re already at a loss, might perhaps sell to tax loss harvest and rebuy after the wash sale period.

Re: Ask HN: How are you preparing for the recession?

#70

Post by ddorian43 »

MacsHeadroom wrote: post #49
noobrunner wrote: post #17

Earlier quoted context omitted.

I am shocked. No one has yet said 'Buy Crypto' :)

Unironically, my friends who ran up their credit cards to buy Bitcoin during the last recession are rich and secure now because of it. They thank me for turning them onto it. Unfortunately for me, I followed conventional advice. I saved a cash emergency fund and only allocated ~20% of my investment budget to Bitcoin. The cash inflated away and I have orders of magnitude less Bitcoin than my friends.

You can do it now again if you're feeling risky...
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