This post has been updated and republished with the latest economic outlook and recession strategies.
Read the latest version here:
Smart Money 101: How to Prepare for the Next Recession and Build Wealth in 2025
Recession Is Coming—Here’s How You Can Still Build Wealth in 2025
The Storm is Coming—Are You Ready?
Alright, let’s cut to the chase. The economy feels like it’s on a rollercoaster with no seatbelts. Trump’s trade war with the world is heating up again, prices are climbing faster than your rent, and inflation is making everything—from your morning coffee to your streaming subscriptions—painfully expensive.
According to CNBC, "High tariffs increase consumer costs and, in the long term, raise business expenses, accelerating the risk of a recession." (Source)
With inflation refusing to chill out, the Federal Reserve might have no choice but to raise interest rates again, making borrowing more expensive. Businesses might start cutting jobs, people will start spending less, and the stock market? It’s already throwing tantrums. A recession isn’t just possible anymore—it’s almost a given.
So, here’s the question: Are you just going to sit back and watch, or are you going to get ahead of the game?
Fear Creates Fortune—If You Play It Right
They say, "A financial crisis is a golden opportunity." But let’s be real—when your investment portfolio looks like a crime scene and everyone on Twitter is screaming "market collapse," that advice feels like nonsense.
Trust me, I’ve been there. March 2020, the COVID crash. Stocks were in freefall, people were panic-selling, and I was this close to doing the same. Then, a seasoned investor gave me one simple piece of advice:
"The biggest money is made when fear is at its peak. Those who buy when everyone else is panicking are the ones who win."
That hit me. So, I ignored my gut instinct to run and started buying little by little. Fast forward two years? My portfolio was thriving.
I wasn’t about to repeat my mistake from 2008. Back then, I hesitated, waiting for the "perfect moment" to invest. By the time I realized it, the market had already bounced back. Not this time. In 2020, I jumped in—and it paid off big time.
Now, everyone’s talking about a "Trump Recession." The economy is shaky, the stock market is twitchy, and the headlines are all doom and gloom. But this time? We see it coming. That means we can prepare.
What Even Is a Recession?
A recession happens when the economy shrinks for at least six months—businesses slow down, people lose jobs, and the stock market takes a nosedive. According to CNBC, "The 2024 global economic slowdown and interest rate fluctuations could significantly impact the stock market." (Source)
But here’s what most people don’t get: The rich don’t fear recessions. They take full advantage of them.
While the average person panics and sells at a loss, those with cash ready to deploy buy assets at massive discounts and come out richer when the market recovers.
I learned this lesson the hard way in 2008—I sat on the sidelines and missed my shot. In 2020, I changed my approach, took action, and completely transformed my finances. Now, with another downturn ahead, I know exactly what to do.
So, are you going to panic, or are you going to get strategic?
Step one? Start stacking cash now so you can pounce when the time is right.
How the Stock Market Moves in a Recession
According to The Wall Street Journal, every market downturn follows a predictable pattern: (Source)
Panic takes over. Investors freak out and dump their stocks.
Stock prices crash. But no one knows exactly when they’ll hit rock bottom.
Smart investors start buying.
The economy recovers, and stocks shoot back up.
In March 2020, I watched the S&P 500 crash. It felt like the end of the world. But I remembered my mistake from 2008, took a deep breath, and started investing. The result? The S&P 500 rebounded 76% in just one year.
Here’s another lesson: Just because a stock looks cheap doesn’t mean it won’t go lower. I once bought a stock I thought had "bottomed out"—only to watch it drop another 20%. Timing is everything.
What You Need to Do Right Now
1. Keep Your Cool
"The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett
When stocks are crashing, your instincts will scream at you to sell. Don’t. Every major downturn in history has bounced back. If you panic and sell at the bottom, you lock in your losses forever.
In March 2020, my portfolio was down almost 40%. I wanted to sell so badly. But I didn’t. A few months later? My losses disappeared, and my gains started stacking up.
2. Invest in Companies That Will Survive
Not all businesses make it through a recession. Stick to companies that people literally can’t live without.
Consumer staples: Food, drinks, healthcare products, and utilities (Coca-Cola, P&G, Johnson & Johnson, UnitedHealth Group, Pfizer, NextEra Energy).
Dividend stocks: Companies that keep paying dividends even in downturns tend to be more stable.
Low-debt companies: When interest rates rise, highly leveraged companies get crushed.
Cruise lines and airlines? Nope.
These industries drown in debt. Planes and cruise ships are insanely expensive, and when demand drops, these companies sink fast. During COVID-19, airlines were on life support. Bailouts, emergency loans, and mergers kept them afloat—but some still went bankrupt.
I made the mistake of buying airline stocks early in the COVID crash, thinking they were "too cheap to ignore." Then came mass layoffs, bankruptcies, and stock prices sinking even further. Lesson learned.
Stick with steady dividend payers—if a company can keep paying you in a downturn, that’s a good sign.
3. Be Patient—But Be Ready
When stocks start falling, don’t jump in too soon. Falling stocks tend to keep falling.
"Feel like buying? Wait. Prices drop more? Wait again. Still dropping? Wait one more time. Then, start buying."
Too many investors think "it can’t go lower." It absolutely can.
The best move? Buy when the trend shifts up—not while the market is still in freefall.
Final Thoughts: Will You Be Ready?
Recessions are part of the cycle. But the difference between those who struggle and those who thrive is preparation.
I wasn’t ready in 2008. I was ready in 2020. And now? I’m stacking cash so I can strike when the opportunity comes.
The smartest move right now?
Stack your cash. Cut unnecessary spending, save aggressively, and be ready to buy when the market tanks.
At some point, the market will crash again.
When it does, will you be freaking out, or will you be buying stocks at a massive discount?
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