Yup, you heard me right; there is an awful lot of money to make in 2009! This is actually one of the best periods of your life money wise. This is exactly when you think that the whole world is going to fall apart that you see true opportunities rising. Here’s a few reason why I see money everywhere.
People will surely debate on this point as some people think that we will never see the Dow Jones at 10,000 point again (and that the USA will go bankrupt 😉 ). I actually looked at newspaper front page during important crisis and it’s always the same thing; the stock market has plunged and will never come back. Guess what, it always come back up ;-). You know what? Since November 2008, Canadian market and US market went up about 15% each!
I heard several persons (and bloggers) saying that Smith Manoeuvre fans and other leverage strategy evangelists will finally shut their mouth. Well too bad for them! I think this is actually the perfect timing to jump in the market while you can borrow at a very low rate and stack some great stocks aside and wait for them to jump in a few years. I personally keep going with my Smith Manoeuvre strategy and seriously considering borrowing more money and invest into a TFSA (however, money borrowed to invest in a Tax Free Savings Account is not tax deductible in Canada).
Other kind of leverage opportunities
You think that leverage is only for investing on the stock market? Well you can actually get great mortgage rate and buy a rental property. The catch is that banks are getting tighter in their credit norms. However, if you can qualify for an additional mortgage, you may find great deals out there.
You can also decide to borrow money to invest into your own company. We are currently looking to buy more website and using our line of credit to do so. Websites are selling for almost nothing and there is still a lot of potential in the Web 2.0. (By the way, if you think of selling your blog or other websites, please send me an email at thefinancialblogger (at) gmail (dot) com).
Pay down your debts
Another way of getting richer is by paying down your debt faster while the interest rate is low. Your payment will be directly applied to your capital and you can save a lot of years of amortization on your mortgage.
Become an extraordinary employee
If you are working your ass off while your company is going through a rough time, you won’t get much in return the very same year. Promotions are rare when there are layoffs and bonuses are thin when the income is decreasing. However, if you are patient and wait for better days; guess who’s going to be the next guy in charge… you! Rough economic times will always clean up a lot of people in front of you 😉
The only detail about most of my ideas is that you need to already be in a good position before a year like 2009 happens. If you were note positioned properly (we don’t always have the chance of choosing anyway!), this year may be pretty rough as well… Therefore, I would rather pay down revolving credit or build an emergency fund if you can’t access to revolving credit in order to create a buffer. We never what can happen and if you are not ready to take risk, paying down debts is always a great option!
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