What a month! Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, AIG...
Now on to some better news... Did you know that more millionaires were made during the great depression than any other era in U.S. history? Although many of us consider the Great Depression a bleak time in our history it was actually a pivotal turning point for our country both economically and innovatively.
Here is a little history lesson: The Great Depression actually began several years before the 1929 stock market crash and lasted until World War II brought the country out of it. In the years prior to 1929, greater and greater amounts of credit were extended to individuals and businesses. The economy was sliding over the edge from available cash to excessive amounts of credit debt. When the amount of extended credit reached a critical level, and companies could no longer pay their credit bills, the businesses crashed (the 1929 stock market crash.) When employees lost their jobs they could not pay their credit debts and the banking industries and housing markets crashed.
The difference between a depression and a recession is the length of time that they last; otherwise, they are essentially the same. A recession typically lasts about 2 years where the Great Depression lasted 10. I have always believed in making lemonade out of lemons and I suspect that many people will be making a great deal of money in the coming years. Do you think you could be one of them?
In order to successfully benefit from a recession; do not follow the crowd! You will need to be proactive and watch for opportunities. Many people will stop investing but this is the time that prudent investors build wealth! When it comes to buying real estate during a recession it is not a question of how low will prices go, but more so, how much can you buy before prices go up. The more you buy, the more you will make when the market recovers. This certainly is not a recommendation to go out and buy everything you can get your hands on. The same general investment rules still apply and in purchasing a home the number one rule is location, location, location. Next you will want to look at the condition and see if the price compensates for any deficiencies. I can help you to locate the best opportunities and negotiate the best possible price!
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