Illustration: Lindsey Bailey/Axios
This article originally appeared in Axios Finish Line, our nightly newsletter on life, leadership and wellness. Register here.
During a bull market, most of us feel like financial geniuses, writes Jim.
- And most of us feel wiser with our money when we have more of it.
Why it matters: The true test of good business, or responsible personal budgeting, is what happens when a shaky economy—or worse—hits you.
🖼️ The big picture: Everyone from Bloomberg economists, who see a 100% chance of a recession, to Jeff Bezos, who posted on Twitter this week that it’s time to “flatten the lids,” thinks 2023 will be a very difficult year for the US and global economies.
- Running a company, we constantly calibrate costs and risk based on economic conditions. We all do this personally, too.
Here are some lessons learned from past riots:
- Don’t let a crisis go to waste. Rahm Emanuel coined this concept during the financial crisis of 2008, shortly after the election of President Obama. The idea is to use the unfortunate moment to clean up spending, or focus on tough decisions that may be more difficult in boom times.
- Get the big things right. Tighter times focus the mind on what matters most and what will provide real value in the future. There is no better exercise than asking yourself this question, in good times and bad.
- Don’t overreact. When COVID hit, we were afraid we would need layoffs. So we first sought and then canceled plans to utilize the wage protection program in 2020. The truth is, I should have trusted our creativity and resilience. We ended up sharpening our focus and beating our target that year.
- buckle forward you fall down. You don’t need to overreact if you don’t wait too long. If there are small things to do while economic forecasters sort out the severity of the storm, do them.
Ultimately: In business and personal finance, you’ll find that everything you do to prepare for tougher times is what you probably should have been doing all along.
- Focus + wise decisions = profitable results.
