More people became millionaires during the great depression in America than at any other time in history.
The stock market crashed in 1929 and hit its lowest point in 1932. The depression continued, but those who invested in 1932 became millionaires when the stock market exploded.
Sir John Templeton borrowed $10,000 and invested it when Hitler was invading Europe and there was a global sense of fear. His investment exploded and made him a multi-billionaire. He did the same thing in Japan after the war and in South America when inflation was exploding.
More people became millionaires during the great depression in America than at any other time in history and more people get rich when the economy is down than at any other time. “How can that be?” you wonder. Well, it’s easy to explain.
When the media reports that a recession has hit, most people fall into a perceptual trap. They believe that times are going to be tough, no investment will be secure and they will have to hold onto their money. They act out of fear and insecurity and eliminate risk-taking. It’s common knowledge that in a recession you save your money and you don’t take risks. Many fall into the trap of believing that the recession affects everyone everywhere and no one in safe. I call it “The Recession Illusion.”
Want some evidence of The Recession Illusion? The Economist magazine has an index to gauge an economic downturn, by counting the number of times the word “recession” appears within stories in the New York Times and Washington Post. That means the more it is talked about in the media, the more we think we are in one. The more we think we are in one, the more we cut back and save. The more we cut back and save, the more companies decrease production, and the more layoffs are reported. So we save more and cut back more and companies cut back more and lay off more employees. It’s the notorious self-fulfilling prophecy.
But not everyone falls into this trap. A select few don’t see it this way at all, and when the economy declines, they profit.
The Canada Government website defines recession as “a significant drop in economic activity, lasting more than a few months, as measured by employment rate and real gross domestic product (GDP). They are undesirable, but in a market economy such as Canada’s cycles of recession and prosperity are recurrent features of long-term economic growth.”
There is a natural cycle for everything. Nature, human beings and history all exist in a flow from season to season. What this means is that nothing ever stays the same. The economy too flows through seasons and cycles. It is never static, but in constant flux. Winter comes every year, but so do spring and then summer. The same is true of the economy; recessions comes, but they pass.
Those who profit during a recession recognize merely that winter has come. They see it as a time to plan, to strategize and to look for hidden opportunities. They see that there is opportunity in any challenge and in any season- they just need to discover it. They are able to take advantage of any season and thrive no matter what circumstances are thrown their way.
The season doesn’t determine your experience. What does is how you respond to the season that will determine your results.
What so many fail to realize is that even now, in one of the worst recessions in Canadian history, not everyone has been affected. I know many business owners whose business has improved in the past six months. While some are worrying about the economy, they are celebrating. I know others whose jobs have been unaffected and while many worry, they are out shopping. And then there are those who realize this. They are rolling in the cash because they looked for ways to capitalize on all the markets waiting to be tapped into in this economy.
When the recession first hit, Warren Buffet was quotes as saying he was “on the lookout for opportunities.” While he scouts out possibilities, everyone else buries their heads in the sand. Why should we leave all the profit to him? Right now, many are becoming millionaires.
Empowered Entrepreneurs model someone with a proven track record. They study the Trumps and the Rockerfellers and the Buffets and they adopt their beliefs and strategies. When everyone else is excited, I’m fearful. When everyone else is fearful, I’m excited,” said Warren Buffet. Take his advice and you will get pretty excited!
Consider the impact of your beliefs about the current economic situation. If you believe that the economy is suffering, that customers won’t buy and that there is nothing you can do, what effect will this have on your business? What actions will you take?
And what if you believe that there are hidden opportunities to profit? What if you believe that there are plenty of markets just waiting to be tapped into and that the recession is filled with opportunity? What impact will such perceptions have on your business?
The truth is that perceptions lead to actions. Limited and limiting perceptions lead to limited action and limited results. Empowering perceptions lead to impressive results. The difference between those who profit in the recession and those who do not comes down to perception. How they perceive the economy determines their results.
The recession is all about perception. How do you perceive it? In fact, if you tell me how you perceive the recession, I will predict your financial future for the next year. It’s that simple.
If it weren’t for the media, would any of us even know that the economy is in a recession? Read the newspaper, check the web or watch the news and you will find plenty of reports of declining profits, layoffs and an increasing rate of unemployment. But walk down some of Montreal’s streets and you see crowded restaurants, bars and people merely going about their lives. Some have firsthand experience of the recession; those who have lost their investments or their jobs have lives a real and true effect. But most people would be completely in the dark if it weren’t for the media.
Our perceptions of the economy determine our actions and our actions determine our results. What perceptions are you choosing?
More than ever before, having the right mindset and tools is key to financial success. While economy continues to suffer, many people are rubbing their hands together with anticipation and excitement at the opportunities available to them. If you’re prepared for difficult economic times and have the right beliefs, attitudes and mindset, there is no reason to worry about your financial future. You can create your own micro-economy and thrive.
Attend The Empowered Entrepreneur Event July 14th in Montreal. Visit www.E2Connect.net for details and tickets.