Avoid These 5 Mistakes During An Economic Crisis

07-12-2020 Home  »  Money  »  Avoid These 5 Mistakes During An Economic Crisis

To be quite frank... I am sick and tired of what is going on right now. GYMS ARE CLOSED. BARS ARE CLOSED. WHAT ARE PEOPLE IN THEIR 20s SUPPOSED TO DO!? All we did before was eat, sleep, workout, and party. So now we just eat and sleep? If you’ve been following, I set a goal a while back to bulk up but damn I’m about to be really fat.

Which leads me to what I want to talk about today...

FIVE mistakes that you should avoid as we go through this economic crisis. Unfortunately it looks like we’ll be in this situation for quite a while, since there is no end in sight. Money is about to get real tight because of the increasing unemployment rate. However, there are a few things you can do to set yourself up for success during this time.

Let’s not forget that millionaires have been made during an economic crisis. History shows millionaires have been made during an economic crisis and it’s mainly due to the fact that the vast majority of people fall prey to these 5 mistakes we’re going over today. When others make mistakes, the few who don’t rise to the top. 

So… here we go!

Mistake #1: Most people don’t cut their overhead soon enough.

What do I mean by that?

When I say overhead, I mean the things you have to pay every month no matter what. We’re talking rent/mortgage, utilities, car payments, student loans, insurance, phone bill, gym membership (RIP), ANYTHING that is a cost to you no matter what is going on.


Most people will pay these things until they no longer have enough money to do so, which is why things start selling for DIRT CHEAP aka home prices tanking and car prices tanking.

Don’t wait until you’re underwater on these things before you cut them. Forecast what you absolutely need and what you can afford before it’s too late.

Cutting simple things out. For example, getting rid of that $600 a month car payment. Get yourself a cheaper car, or you could cut down on your phone bill by selling the latest and greatest phone you have and pick up last year's model instead.

There are a lot of EASY ways you can cut your overhead down really quickly. And while it’s not the most luxurious lifestyle, it’s the smartest lifestyle you could live especially during an economic crisis.

Plus if possible, pay off some debt so you don’t have to make as much money to survive.

I’m a huge supporter of living WAY below your means, even in good economic times.

Mistake #2: Buying things you do not need. 

Soon, some items will go on sale as businesses and individuals struggle to stay afloat and lots of people will see something really discounted and pounce on it! For no reason at all besides the fact that it’s cheaper than usual!

When in reality, “price” is a transmitter of information to display scarcity. Think about it. What is incredibly scarce in regards to finished goods? Like what don’t you see everyday? Bugattis – Pavatis – Maseratis?

Are expensive items typically luxurious and high end? Yes. But they also are marked up insanely high in comparison to things we see and consume every single day.

Like water, eggs and toilet paper, because those are bought more frequently than a damn Bugatti.

So while my examples were extreme, think about when high end finished goods start going on sale, people will WANT to buy them if they can because they think they’re getting a good deal. When in reality you’re not because it’s no longer a scarce item.

Bottom Line: It’s important during an economic crisis to only buy things you absolutely NEED. Not that you want. Plus you should never buy a depreciating asset during an economic crisis. Dumbest thing you can do. Well that and getting your triple venti chocolate goodness at Starbucks.

Mistake #3: Not investing in yourself or making yourself more valuable. 

Number three is something I do whether we’re in crisis mode or not, and that is to invest in yourself. To make yourself more valuable to your employer to avoid getting laid off.

Or if you’re self-employed, then better yourself by learning more so you can adapt to what’s going on. Start taking online courses or learning about things that increase your worth and increase your ability to make money.

I teach online courses and I constantly get employers reaching out to get a bulk discount for their employees. Why not skip that step and go out and take some courses on your own so YOU can be more valuable than the coworker next you.

Massive layoffs are happening so invest in yourself. Another reason I mentioned my courses is because it segways us into my next point...

Which is #4: INCREASE the amount of revenue streams that you have. Diversify your income.

I ALWAYS talk about this. Pick up some side hustles. That way if you get laid off or your main income stream gets throttled, you’ve still got some side hustles to fall back on.

Whatever you’re an expert in, I highly recommend teaching an online course about it or writing a book. I’ve actually got a video with plenty of side hustle ideas  – so definitely watch that. 

But lastly #5, during an economic crisis you do NOT want to panic invest like how most people are doing right now. Don’t just buy a stock and cross your fingers.

Instead, you want to STRATEGICALLY invest. The best strategic investment strategy is what I call, playing the field.

Every crash in the stock market has eventually bounced higher than before. So with that in mind, set a strategy to dump $100 or $1000 or whatever you’re comfortable with every week or every day into a specific set of stocks or investments like 401k. That way when things start going upwards, you’ll have a low average cost and you’ll end up profiting off it.

I’m not a stock market investment guru, so I don’t try to get lucky. I play the field as it’s the lowest risk.

Long story short, if you can avoid these 5 mistakes that a majority of people make during an economic crisis, you will come out much further ahead than most.

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Hi, I'm Shawn Malkou. I'm determined to help you succeed. My question is, are you ready?

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About Shawn Malkou

He is the shawn-of-all-trades. Starting his entrepreneurship journey at the age of 14 with a dream and a single YouTube channel, he’s then since broken into countless industries. As the founder of Dream2Succeed, co-founder of DishTheDeal, co-founder of DirectionDesk, and lover of all things media – Shawn prides himself in picking up a new skill quickly to then share with others.

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Ready for the
next level?

Hi, I'm Shawn Malkou. I'm determined to help you succeed. My question is, are you ready?

Let's Do It