Despite the financial stress, uncertainty and knock-on impact the covid-19 crisis is causing for the economy, businesses and households, there are also multiple opportunities for people to create wealth for themselves amid the crisis. Looking at history various companies that have grown into massive multi-national companies were in fact born during a time of recession – Microsoft, General Electric, General Motors, Disney, IBM and the Hyatt Hotel Group to mention a few.
Quite often a change in perspective can change your life for good. Look beyond the challenges to see the opportunities. Here are a few opportunities to look at:
- The current situation is certainly changing the way we are living, working, communicating, learning and looking at the world. This in itself creates multiple opportunities for new ventures identifying current needs and coming up with solutions to cater for those needs. Starting a new business or side hustle during a time of economic downturn gives you the advantage to start off at rock-bottom and you can only grow from there if you can survive this period.
- For current business owners this is an opportunity to be creative and add a new business line, product or service to your current offering especially focussing on the world of online business opportunities that has opened up for us.
- Many businesses are really struggling during this time and would be keen to accept assistance in the form of funding or capital investment (equity partner). Recent research indicated that there are multiple businesses needing less than R100,000 to help them survive. This is an excellent opportunity to support small businesses by investing in those businesses or borrowing much needed funding to them. Keep in mind that good performing businesses are one of the few investment types that can give you double digit returns over a prolonged period.
- With the interest rate been cut with another 1% (4,25% repo) on 14 April following the cut by 1% (5,25% repo) in March 2020, this is the perfect time to remain paying the higher instalments to repay your debt quicker and become debt-free.
- The interest rate cuts also create opportunity for investors to invest in property. With lower bond instalments it is more affordable to buy an additional property now. In locations where there is a high demand for rental property and being in close proximity to businesses less affected by the financial crisis, there is a good possibility that rental income will remain the same, resulting in investors receiving a bigger return on their investment taking into account the lower bond instalment.
- Current homeowners in distress might sell their homes and accept a lower price for it. That creates the opportunity for investors to buy property at a lower price and resell it at a higher price in future once the markets have turned or rent the property out.
- Due to financial markets not performing well and many companies being under pressure, there are plenty of opportunities to invest in shares and unit trusts due to lower share or unit prices. The cryptocurrency price is also on the rise. However do some research to ensure you buy in at the right time when the price is at a low and that you understand the risks attached to the investment. Also ensure that the company you want to invest in is taking a plunge because of the pandemic but will most likely survive and continue to grow. You don’t want to invest in a company that might close down sooner than later. Also look out for companies in industries that will thrive post-lockdown because of the new way of living and doing for example e-commerce, technology and distant learning.
- When the Rand is weakening Forex trading is benefiting largely and earning dollars is a huge benefit to your portfolio.
- History has shown that commodities like silver and especially gold are performing well during a recession or times of uncertainty and prices have already increased.
This crisis emphasizes how important it is to pay attention to creating financial fitness and to educate yourself about finances. Financial fitness assists largely to experience a lot less stress during times like this. The more informed you are, the better financial decisions you will make and the brighter financial future you can create for yourself and your family.
Invest in yourself, your wellbeing and your health during this time. Times are tough and we all face multiple different challenges, but we will survive and we will get through this. You want to be in a healthy state of mind and have a healthy body to hit the ground running after all of this.
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