Recession Millionaires…Really?!

Reuters recently ran an article stating that the World’s millionaire ranks will be seen soaring through to 2020, it referenced a report by Deloitte which predicts the bulk of the world’s wealthiest families will continue to be found in the United States and Europe, despite the wealth management industry’s obsession with emerging markets.

But how is this possible while we are in the teeth of a mighty global recession?

If you look back in history to the 1930’s, not everyone suffered during the Great Depression. More people became millionaires in America during this time than in any other time in history. Opportunities, that were not present during the 1920s economic boom times, suddenly became available.

According to Channel 4’s Secret Millionaire Kevin Green, the next couple of years will present the opportunity of a lifetime and, as before, with so many new problems to solve, there are many opportunities that didn’t exist until recently.
Horizon are hosting Kevin for an event in Dublin on Saturday November 6th, titled “Restart Your Finances, Rebuild Your Wealth”. More Information Here

Kevin also states that an economic downturn is a great time to start a business for the following reasons:

  • Start-up costs are much lower in a recession than in boom periods.
  • Many poorly run businesses close during the Depression/recession years and their equipment and assets can be bought at hugely discounted fire sale prices.
  • Commercial rents are cheap and wages are low.
  • There is also time to get the business fundamentals right before increased orders make it too hectic for the entrepreneur to build and test their business model.
  • It was these ‘if you can dream it, you can do itGreat Depression entrepreneurs that made the best of their crisis to provide a service, or product, for new markets. We have now entered this period in time and to those with the will to adapt to a new business environment, great opportunity awaits.

The Millionaire Mindset

There are key differences between the ways people look at money which determines their success in wealth building:

  • Wealthy people look at money in positive terms and as an opportunity, whereas most live in fear of being laid off or not having enough money for retirement.
  • Instead of worrying about running out of money, soon to be millionaires are thinking how to make more money. World-class performers are finding problems that are profitable to solve. They know that just because a solution hasn’t been discovered yet doesn’t mean it doesn’t exist.
  • Millionaires tend to move towards what they want, rather than move away from what they don’t want, which is what the masses most often do.
  • World-class thinkers have the guts to be optimistic right now in these shaky times and reject the middle-class cynicism that plagues the masses. It’s not comfortable for a millionaire in the making to forge ahead when everyone around him or her is negative, cynical and unsupportive, yet the great ones push forward and are rewarded with riches for the rest of their lives.

Take inventory of your consciousness and the way you think about money and ask yourself: Is this the way a rich person thinks or someone in the middle class thinks about money?”

Who were some of these maverick entrepreneurs of The Great Depression?

Some very famous names made their money during the Depression era. In Kentucky, a grandfather, called Colonel Sanders, started serving fried chicken at his gas station. By 1937 he had expended to a 142 seat restaurant due to popular demand. Two young electrical engineering graduates stared an electrical machine business in a rented garage during the 1930s. Bill Hewlett and Dave Packard officially became business partners in 1939 with only $538 in investment money.

Many people with small amounts of liquid cash were able to buy bankrupt businesses at bargain prices. Towards the end of the 1930s some business people watched the upsurge in military spending by some countries. The world was preparing for war and those that invested in companies that made in-demand products for the government stood to make lots of money.

Companies dealing with shipping, military vehicles, textiles (for uniforms, tents, etc.), metals (copper, steel, aluminium and iron), and petroleum products made a fortune. Well-known companies that were bought at this time were John Deere, Reynolds Metals and Douglas Aircraft.

Another huge opportunity was real estate. During the Depression years, demand was low and thus prices were low as well. Visionary business people knew that real estate values would go up in the future and when they did they used the equity to leverage their business growth and expansions. Those wise folk that were not caught up in the stock market frenzy in the 1920s, and saved their cash, were well positioned to snap up bargain businesses and became millionaires as a result.
Link to the Reuters story here

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