Surviving an uncertain economy doesn’t require clairvoyance; it requires practicing Mark Cuban’s savage advice for the average employee.
Expensive debts
Think of high-interest debt as an emergency drain on your finances.
Cuban advises taking care of it as soon as you can. By refinancing high-interest debt to lower-interest accounts or eliminating it completely, you free up more of your monthly income to put towards savings and investing.
Cuban calls that simply the functional aspect of the strategy. You don’t want your cash frittered away on interest payments.
Cash reserves
When the stock market craters, a lot of financial advisors will tell you to “buy the dip.” Cuban isn’t one of those people. “If we do go into a major slowdown or even a recession,” he says, “people with cash have the most opportunities.”
Cash is freedom. When everything around you is chaotic, having cash on hand will prevent you from feeling the need to make panicked decisions.
Wealth is preserved by not trying to make cheap trades during tough times, but rather by having cash on hand when true, generational buy opportunities surface.
Changing winds
During tough economic times, most people are concerned with paying their immediate living expenses and neglect to analyze how stable their employer is.
Cuban notes that in order to ensure your own job security you must evaluate how macroeconomic factors affect your industry. By knowing how large-scale economic trends will affect your employer, you can see the opportunity well before your company starts laying off employees.
With this advance notice you have time to improve yourself and find a new job before your company’s finances impact you.
Student mode
Life during a recession means bills that pile up and job security you can’t feel confident about.
Waiting until you’re forced to tighten your belt can create unnecessary panic. Cuban suggests making the choice to live like a student beforehand.
Remove all lavish expenses you’ve grown accustomed to like costly cable packages, dining out, and buying new products. The lower you can drive your monthly overhead, the less stressed you’ll feel about your bank account.
Plus, budgeting should be empowering, not a dreaded punishment.
The noise
If you watch or listen to financial news, you’ve been bombarded with fearful speculation designed to keep you clicking.
“Don’t let outside noise influence your daily operational decisions,” Cuban says. “This isn’t a guessing game.”
Fixating on predictions will only drain your energy and distract you from factors you can control. The best defense against a recession is silently building your wealth by focusing on saving money, investing in yourself and paying down debt.
Beyond average
If your boss needs to reduce payroll to weather a downturn, they will look beyond the responsibilities listed on your job description.
Cuban says most businesses fail from “a lack of intelligence and effort,” so you better own your performance like it’s an official audit. Assess what you do each day, excel further at your strengths, and improve on the weaknesses that prevent you from adding value.
If you become the employee who delivers tangible results, they’ll have to let you stay around while chopping away at the hierarchy.
The stabilizer
When times are tough at work, things get stressful. Everyone is worried about layoffs and budget cuts, and especially the people at the top.
Cuban says that job security often goes to whoever just makes life easier for others. Be that person.
Show up and help out without being asked. Be someone your colleagues know they can count on. Listen well, communicate clearly, and do your work without drama.
During times of crisis, your leader will remember who helped them weather the storm.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
