To call our era the time of uncertainty is an understatement. Other observers like the writers from the Harvard Business Review have raised the stakes by calling it an era of volatility, uncertainty, ambiguity, and complexity. How do you manage your money during these times?
Analyses like these tend to make investors, fund managers, and business owners hedge their bets and be more conservative when it comes to their expansion plans. Without a certain level of predictability and security, investments and activities designed to trigger growth can entail a greater chance of risk as compared to when things are “business than usual.”
Still, rapid unforeseen changes such as Brexit, the presidential victory of Donald Trump, and the advance of machine intelligence have triggered the wake-up call for preparation. Regardless of the tides of transformation, businesses cannot simply be immobile. Neither should investors and business owners hold themselves back in instinctive fear. The question lies then as to how they can maneuver, safeguard their assets, and continue their plans during a time of frequent unpredictability.
Individual professionals struggling with fearful prospects of sudden unemployment and the reduction of their net worth ask the same thing. Here are some answers from innovators, pioneers, fund managers, and industry leaders who have survived economic cataclysms and emerged stronger for it:
Establish a means of passive residual income
Check your assets and see what can make money for you without having to pour in a lot of time and energy. Unused properties can be converted into units for rent. Content can become material for e-books or learning courses that can be sold. Warehouses can be leased to partners in ancillary industries.
Fund Rise names Pat Flynn as the master of passive income. After being laid off from work during the 2008 financial crisis, he turned to blogging for extra income. He built it into an industry with several models, one of which is a website that can earn annual revenues of $250,000; all the owner has to do is put in five hours of work a day.
Innovate and experiment, but hedge your bets
Eric Ries, the author of The Lean Startup and Silicon Valley startup guru, says that one flaw of big companies is that their success makes them a bit fearful of experimentation and innovation. As reported by Acuity, he says that productive failure’ is an essential aspect of entrepreneurship. Learn from mistakes you make today to improve your products and processes for tomorrow.
Applying this principle to financial and investment practices means studying the opportunities that emerge during these uncertain times, and placing calculated bets and investments that would not incur major risk. It is during these unpredictable eras that game-changing innovations like Facebook, Tesla, and Amazon are birthed. Imagine if you had the wisdom and the money then to invest in these giants while they were starting, and the kind of windfall you would be enjoying today.
Always have a healthy cash flow or an available line of credit.
In her interview with Inc.com, Minda Zetlin of Start Me Up says that both will help you deal with financial emergencies such as the sudden pull-out of a major customer. Business owners also need both to keep up with operational expenses. Finally, funds that are on hand can also help you lock on those rare opportunities and investments when they come your way.
Financial agility can help you deal with a time of economic turbulence. That means creating a base of passive income, establishing a pipeline of healthy credit or cash flow, and doing small but low-risk steps in innovation.
3 things business travelers need in their travel plans
Unsurprisingly, travel buyers are setting goals like reducing costs, improving compliance, and boosting traveler satisfaction in 2019. To meet those...
Pay-As-You-Go vs. Subscription: Which model is best for your business?
Netflix does it, Spotify does it, and even razor companies have gotten on the bandwagon by offering subscription services. How...
US crude oil tankers headed to China as trade talks resume
With trade talks between the U.S. and China resuming, several ships have been identified as oil tankers likely delivering U.S....
Gambling outlook for 2019: Will the UK’s crackdown have an impact on investors?
Regulatory changes in the UK's gambling industry are set to take effect this year. How would these affect potential investors?
How to make your next vacation meaningful
Don't waste your next trip by just sitting around your vacation destination. Do something you'll remember for the rest of...
- Business4 days ago
How AR and VR are changing EdTech
- Featured4 days ago
Banking tech trends to watch for in 2019
- Business5 days ago
SEKO Logistics makes first ever full acquisition
- Business5 days ago
5 great real estate markets for investors in 2019
- Entrepreneurship3 days ago
Why and how to invest in healthcare app development
- Business5 days ago
More shareholders could sue Alphabet over alleged Andy Rubin cover-up
- Business3 days ago
What zero trust security will mean for the payments industry
- Commodities3 days ago
Newmont Mining agrees to all-share takeover of Goldcorp Inc.