Okay, so in this video we're going to talk about how to survive in a recession and what happens next, my name is tom nash and i'm here to try and help you make sense of this craziness and let's get this thing started right away. So the first question we got to answer is: are we actually headed to recession? Well, look the u.s gdp actually fell 1.4 in the first quarter of the year, which means we are headed to recession now. Look, the working definition of recession is two consecutive quarters of negative economic growth as measured by the country's gross domestic product gdp, which i just mentioned, and we're literally one quarter away. So how likely is another bad quarter, which is the same questions asking? How likely is the recession? Well number one? You got to look at the war in ukraine, it keeps on going, and you know the ukrainians are not going to give up.

They've proven not to putin cannot afford to lose so this war is going to go into this whole long, attrition war, which is going to drag on and on now. You have to understand that ukraine is a central producer of wheat commodities metals and, with fighting over there, there's absolutely no production of wheat going on make no mistakes about it and there's no expert at all out of ukraine right now and there will not be for The foreseeable future and you're already starting to see the beginning of it, what happens with the fertilizer prices with food prices, the entire sections of the world that rely on ukraine and russia will be completely destabilized now. The other part is that the energy sanctions on russia sent oil to over a hundred dollars per barrel and gas prices to the moon, diesel prices to the moon and there's no interest for opec to relieve this pressure, and maybe even no capacity. Now.

Iran and venezuela are also sanctions and they under invested in development of infrastructure, so they literally can't help now, even if they would want to help it's going to take years to actually build this infrastructure back now, you could go to the iranians and try to get More oil there, but the saudis which basically control opec, do not want this to happen because they have an issue with iran. So there's not gon na be any iranian oil and considering that energy is the most important component of most of the goods we're producing in any factory around the world. Further price increase globally are inevitable. Now, on top of that, add the fact that covert is still here.

China is still locked down. Zero tolerance policy is not going away, they're, locking down tens of millions of people and shutting down factories and major cities. The result is a slowdown in production and tons of ships stuck outside the ports and an entire global trade system, which is already suffering due to the russian ukraine situation is now taking another massive hit. This is like fighting canelo you're, getting well rather bible.

At this point right, so interest is also going berserk. You know the party is over. The cheap money era is no more, the fed is actually raising interest, the qe is done less money in the system and, yes, even though it might even ruin the economy, but there is no choice. The fed knows that they have no choice.

We have to slow down inflation because essentially the market has become a junkie for free money, and that has to stop before we go to hyperinflation, which is literally the end of civilization. I've been there once in russia. Trust me there's nothing worse now. The result is very, very simple: here: everything is going to be more expensive and you feel it at the gas station at the grocery store.

Does it feel like an eight percent inflation? You know it's much higher wage inflation is adding to the problem, while the real estate market is going absolutely berserk. I mean the stock market took a massive hit when corona hit the market and it went down and bounced back up. Maybe this can happen again sure, but it's very likely because look the last time what caused this bounce was massive money printing, which is not an option right now because of the things that just explained. So the money supply is actually drying up.

It's getting smaller as the fed reduces asset purchases and reducing balance sheet. Things are not looking good now. Historically, bear markets only tend to last about 10 months, and the drop in s p. 500 is about 37, so we're about halfway there historically, but look.

The one thing you need to understand is that the end of the drop isn't the recovery, even though the drop usually takes 10 months to a year. The recovery can take over a decade and it actually did multiple times now what to do in this crazy situation. If we're headed to recession, what should you do? Well, number one cut back on discretionary spending to a maximum maximum of 20 percent of your free cash flow drinking coffee at home. Cooking, your own food instead of takeout, would be a nice start.

Maybe cutting down on my patreon would be another start. Who knows if you need to do it, do what you got to do. The remainder of 80 should be allocated as such housing. Food utilities are first, these are essentials.

You can't negotiate in those now. Ideally, this should be 40 of your free cash flow. Now, with the remaining 40 20 goes to defense, that's the emergency fund build cash positions that will allow you to survive for six months without any income. Another 20 is your long offensive play which you actually dca into good companies you're building for your future.

To do that, you got to max out tax advantage. Accounts such as iras for one case by going into long-term conviction, plays like tesla for me right volunteer for me, but there's other examples, and since you can put about twenty thousand dollars a year into this, without any issues for most of you, that's going to be Enough now, if you have loans or credit card debt, now would be a good time eliminating those because eliminating that would be the first priority before investing, since that costs are going to go up significantly much much higher. Now what to do if you're stuck in a bad position now, don't panic number one? You need a tough stomach for this look. The market will probably fall.

Another 20 30 40, who knows but remember a recession, is a tremendous buying opportunity and if you have a long time horizon, that's not an issue. That's why i am not selling now do not make any changes that are going to jeopardize your long-term financial security based on short-term market volatility and emotions. The s p has never been down for over a couple of years. It can be down for two three.

Four years, but if you stretch it out, you see that over the long horizon the s p 500 always goes up now. 40 of my portfolio is in the s p. 500.. It's a really good time to stay in safe in the ics and just let the money sit there and not worry about it.

But you know it's just my opinion. It might be an accurate might be wrong. My dear evans is a madman. You talk to a professional, you decide for yourself.

As always, i hope this was helpful for you. Let me know in the comments below, if you have any further questions, if you want me to do a follow-up video, if you disagree with me whatever let me know below, i'm going to read it and in a second i'll show you on the screen, our newest Channel members and pages - thank you so much for supporting the channel really means a lot to me see you tomorrow, 30 hertz straight up.