Making the Best Out of a Bad Economy

18
January

Over the past few years the economy in both the United States and across the world has been in poor shape and caused one of the most significant recessions since the Great Depression in the 1930s. Due to poor economic conditions millions of people have found themselves without a job, unable to retire due to the decreased stock market and investment balances, and unable to obtain financing due to increased credit requirements. While the economy has been in bad shape and made life more difficult, there are several ways to both get you into a better financial position by taking advantage of great financial opportunities.

The first way to make the best out of a bad economy is take advantage of low interest rates. While getting a mortgage or other loan has become more difficult in recent years, those who can obtain low interest financing could save a considerable amount of money. In the summer of 2010 mortgage interest rates were as low as 4.50% for a 30-year fixed rate mortgage. This rate, compared to 6% mortgage rates from just a couple years ago, could save a person about $150 per month on a $200,000 mortgage. Over the course of a 30-year mortgage, this could lead to savings of more than $50,000.

The second way to make the best out of a bad economy is to purchase a home that can be found at a discount. As mentioned earlier, the incredibly low mortgage rates make purchasing a home now a great idea. Purchasing a home now is also a great idea because housing prices are at their lowest level in years. In many markets across the country, housing prices are less than half they were just four years ago. This may make your dream home, which was once unaffordable, now a very realistic option. While purchasing a home will no longer be considered a good short term investment, it is still an excellent way to build long term equity and hedge against inflation.

The third way to make the best out of a bad economy is to take advantage of bargain investments. In March 2009, the Dow Jones Industrial Average was around 6,500, which was less than half of its 14,000 high that was achieved just a few years earlier. This significant drop in value led to many stocks to be completely devalued. For a savvy investor looking for bargains, this was an amazing opportunity. Within a few months the stock market increased nearly 50% and many stocks increased by 100% or more.

The fourth way to make the best out of a bad economy is to take advantage of significant discounts. Due to the poor economy, the travel and entertainment industries have been hurt. Because of this, many airlines, hotels, resorts, and restaurants are offering specials to potential customers. This could allow you to take a vacation at a price that is half of what you would have paid just a few years earlier.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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