6 Reasons Why Recessions are a Good Thing!

Yes you read the title right, a recession can be a good thing!  With all the doom and gloom talk of recessions, I think it’s time to look at the other side of the coin.  That is, the positive aspects that recessions can bring.  Even though recession means the shrinking of the economy, it can have many benefits to the everyday person and family.

Who benefits the most from a recession?  The Buyer!

  1. Value Stocks are Plentiful – With recession comes fear in the markets.  The human emotion of fear is usually a bad thing for the stock market except if you are a buyer!  With strong stocks trading at historically low prices, it can be a field day for investors who have cash.
  2. Real Estate Buyers Market – If you are fortunate enough to be in the market for a home, then there is no better time to buy real estate than during a recession.  With fewer buyers out there, houses are sitting on the market a little longer.  This creates a little more motivation in the seller which typically results in lower house prices.
  3. Cheaper to Borrow – A slower economy typically means that the central banks will jump in and lower interest rates in an attempt to encourage spending.  Lower rates means lower debt servicing payments such as mortgages and investment loans.  This is another reason why it’s a great time to be a home buyer!
  4. Retail items are cheaper – With retail sales slower due to consumers cutting their discretionary spending, retailers try to boost their sales by slashing prices.  It’s a great time to buy items that you have been saving up for at a reduced price.
  5. Gas is cheaper – With a global recession, there is a lower demand for oil thus lower oil prices.  As oil and gas prices usually go hand in hand, a recession means that gasoline prices are reduced.  As of today, I haven’t seen gas prices this low since 2003!
  6. It’s Vacation Time –  Lower gas prices along with less people spending money on luxuries (like travel), makes it a perfect environment for a lower cost vacation.  Airline tickets, hotel stays and even car rentals are all reduced in price.  Want an example?  Disney is currently offering 3 nights free if you book a 4 night package with them.

Recession proof your life by balancing your household budget and create a savings for yourself.  The cash will come in handy when things get cheap.

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Frugal Trader

FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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WittyArtist
9 years ago

Nice points. :) You’ve shown us a positive side of recessions. Just want to add that it’s nice to take advantage of the offers, provided you still have a source of income and can keep things balanced.

???
11 years ago

I thought recessions were good time to buy a condo (Me renter for over 6 years and finally saved up a down payment) I found no recession over here in this part of town, North York (Toronto). The condos are going up $10k each month since Victoria Day. I lost 3 bids and I was putting the offers over asking price. Someone always out bids me by a few hundred or thousand… It’s crazy over here. DOM is less than 1 week. I saw the condo on Friday and it was sold on Saturday with no conditions. There was no availability over a few weeks, and boom, one comes out and over 6 offers were in……. Soon the prices will be out of my budget… Don’t know what to do.. ppl said to wait, but the longer I wait, the prices just get higher and higher..

Stephen
11 years ago

I have to say it is really positive for an online business and there are certainly some recession proof verticals out there, I have seen an increase in traffic as people look to save money online.

Bankruptcy Saskatoon
11 years ago

A very positive outlook on recession. Definitely a great time for someone who has not severely suffered the repercussions of the economic downturn to take advantage of the various opportunities!

Roger
12 years ago

While I will agree that there are some good points to a recession, if you happen to be unemployed (like me), you tend to focus more on the negative. It’s small consolation that I can travel more inexpensively when I’m worried about how to best pull money from my savings and investments in order to meet my expenses. To say nothing of trying to find a new job when the number of available positions is contracting.

But, enough complaining; back to job searching and attempting to add to my income through blogging.

nice
12 years ago

Gtes VP:
do you believe the current deflation will soon be replaced with a big inflation?
and the interest rates will be up(in 3yrs or later)? and the US$ will be deeply down?
that is what I can see.
thanks.

Danielle
12 years ago

I read a blog similar to this the other day and the author got ripped a new one by many people listing sob stories of people they know well who have lost jobs, had expensive health costs and various other unfortunate stories.

I think that this recession has the power to open up our eyes to the fine line there is between making it and not making it in this country. The benefits of this are twofold. One it puts fiscal responsibility back on the top of the list. Two it raises the social consciousness that people out there need help, because more of these people are your neighbor, your co-worker, you sister… it personalizes the plight of poverty in America.

I can’t articulate many reasons for it, but I also feel that a recession is a great time to bring the focus to your family. Finding things to do together as a family that are not expensive, that bring back some quality time to your life that might have been slipping away in the “boom”. I also think this particular recession is a great time for my husband and I to start a family. I lost my job recently and am finding it might be quite a while before I find a new one. As long as we can survive on one income this it is a good time to take some time off from my career without the stigma of having done it solely for having a child.

richerandslimmer.com
12 years ago

You certainly have an interesting way of looking at recessions. I agree that most things are cheap now. But personally, I don’t feel comfortable spending money on consumer goods and vacations now because if I lose my job tomorrow, I will have a nice big TV, and lots of pictures from my Disney vacation, but not enough savings to keep me afloat until the recesssion is over.
I wrote a blog post about deciding not to go on vacation recently that you can find here:

http://www.richerandslimmer.com/2009/01/24/vacation-update/

However, I do agree with you that if one has already saved up a sizeable chunk of money, and has safe job, this is a good time to buy and go on vacations.

fathersez
12 years ago

Yes, the recession offers great opportunity for those who prepared for this eventuality. The vast majority of us never ever prepare. This is the precise reason why the prepared few find the vast opportunities.

Regards

newb2
12 years ago

Recessions are not good things… deleveraging, regulation, fiscal responsibility and throw in some marks for a black president… are good things. But it shouldn’t take a recession to get these things.

If you lose your job, there is nothing *good* about a recession. Especially if you lose your job that was productive for the real economy (i.e. we could do with a few less people in the financial sector).

Funny, what are the jobs that people have here that they feel so secure in? I’m curious, cause I know mine’s not safe…