Hello, everyone and welcome back to another video Shawn's, a name and Finance, is the game. Today. Let's talk about the recession. Most of you probably remember the 2011/2012 housing recession ah good times right good times it was basically the biggest reality check.

That's ever existed, at least in my lifetime, where everyone basically overextended themselves financially and then ended up getting slapped in the face this slap upon coming soon. More specifically, people were buying houses, they did not need and, more importantly, they definitely could not afford and don't get me wrong this time absolutely sucked 2011 2012 was miserable, but I actually think it was a good thing. I'll tell you why, in just a little bit the main focus of this video is you talk about the next recession when it's gon na happen and what we're gon na do about it? And let me tell you it's coming all right. So before we talk about the next recession, when it's going to be what we're gon na do about it, we need to know what a recession actually is.

A recession is an economic decline in GDP. Over the course of two consecutive quarters, a recession is not a holy moment where everyone is selling everything they own further cheap. In fact, the word recession should be banned because all it's been since 2012 is a headline that has absolutely banked for media companies. We've literally seen recession headlines every single year for the past ten years, and it makes sense because it raises their ratings.

A ton people want to know when the next recession is and fun fact no buddy knows no one knows when the next recession is not Elon. Musk, not the Pope and definitely not me, but you can speculate and, more importantly, you can examine previous trends, so you can get an idea of when the next recession will occur, which is what we are going to do today. So first you're going to hit that like button. Secondly, we're gon na be talking about when I think the next recession is going to occur based on the past and three we're gon na be talking about what we can actually do so we're prepared for this recession and we actually capitalize off.

It opposed to absolutely losing our booties, so like the video but okay, here's why the recession back in 2012 was actually a good thing now. This is the stock market for the last 100 years, not the real estate market, the stock market, each one of these discs can be classified as a recession and, more importantly, a correction correction in the market when fake money is constantly being pumped in shoved into our Economy, it leads to a falsified increase in the market, which basically makes everyone think. Oh our market is booming. Let's keep feeding the beast until everyone realizes oh shoot.

It's actually not way up here, everyone's getting slapped in the face going. We are over valuing everything. The market tanks back down - and everyone goes - oh, my god, we don't have any money, but then people go. Oh, we can actually buy some things for really cheap.

Now the martí starts correcting itself and bringing things back up to what they're actually worth. The important thing to note is: we are always bouncing back higher than we fall because our market goes like this constantly, but we're always moving in that upward trajectory. If we didn't have all this fake money, fake propaganda and all this bs going on in our market, we would see a graph that looks like this. Just a perfect graph, always moving upwards, because that's essentially the trends they always follow that trajectory.

However, we don't live in a utopian society, we're human, we make tons of mistakes, but that's why I'm trying to link the words, recession and correction, because that's essentially what it is once we make a mistake, we correct ourselves back up, so we don't make that mistake Again and we're always moving upwards, at least that's the goal, and that's how we've been doing for the past 100 years, so I'm assuming the next 100 years is gon na be fairly similar, but bringing us back to our main point: when is this recession going to Actually hit us, everyone is looking at graphs going. Oh, my gosh you've only been moving upwards, we're about due for a recession. It's been 10 years every 10 years. We have a recession, we're about to just tank back down into the Stone Age right now and that's why the year 2020 has a massive target on its back.

But does that mean that on January 1 2020 the housing market is going to take an absolute poo back down to where everyone thinks it's gon na go? No. In fact, I am confident that the housing market will not be the reason for the next recession, because remember how I said we always learn from our mistakes. Well, yeah! Back in 2012, there were like in no restrictions for home loans. Mortgage lenders could literally do things like stated income.

What stated income stated income is what it sounds like. It is written down income. So if you came to me - and you said, hey Sean - I want to get a home loan for this million dollar home. Can you hook me up I'd, be like hmm yeah? I guess I can get you something I mean I'm just gon na write down here that you make $ 25,000 a month.

You cool with that and you'd be like yeah. I really want this house so yeah. Just whatever you got to do to get me a loan and I go okay, cool here's, your million dollar loan for this home. You do not need and cannot afford, because all you actually make is $ 5,000.

A month go have fun with your home and this sounds absolutely crazy, but I promise you. This is exactly what was actually happening back in the day. Hence why'd the bubble. Absolutely burst.

People started foreclosing, they couldn't make their mortgage payments because they couldn't make it in the first place, so it wasn't that they had this major hardship. That happened, but you know the economy took a slight dip and everyone goes holy crap. I cannot make my mortgage payment. Well, just let the bank have it, then housing prices just went boom crashing down and honestly like.

Why did we think something good would happen out of that honestly, we are really dumb, but since then we have learned from our mistakes a little bit and we have gone. You know what 2012 really sucked. We don't want that to happen again, so we're gon na put in a bunch of restrictions and guidelines in the home loan process, so that won't happen again and I'm telling you guys that this happens regularly and it's been happening regularly. Since the crash, I get emails, probably once a month or twice a month from HUD or Fannie Mae, some of the high regulatory companies, and they are basically putting into effect these laws and restrictions.

So it's a lot harder to get a home loan. You cannot do stated income anymore. You cannot do some of these things that allowed pretty much anyone off the street to get a loan back in the day and a lot of people might find this kind of frustrating, because when you actually start the process to go qualify for a home, you're gon Na be like, why can't I afford this home it's very hard to buy a home and, like anything in this world guys it's a constant balance of when you go to look for a home, you're gon na want to qualify, so you can buy a home. So the dream of homeownership is a thing, but then at the same time we don't want to repeat of 2012, so it is a constant, constant balance.

So, to recap: the market is not going to repeat itself like it did back in 2012, but so many people are gon na say well, Shawn you work in real estate, of course, you're gon na say that every realtor, every escrow officer every mortgage lender, everyone always Says no, no, the mortgage strong, you should be buying. Everyone wants to pump in all this fake propaganda and you're, not wrong. You are totally not wrong. Everyone is going to be pumping fake propaganda down your throat till the end of the day, but I will say that I don't get paid as a mortgage lender unless you actually make your monthly payments.

So if I put you in a loan program that you don't make your monthly payment on, I have to give my Commission back anyway. So really what's the point in that bottom line, there's a lot of laws and regulations in place so that 2012 doesn't repeat itself. So wait Shawn. Are you saying that there's not gon na be a recession? Oh no, I'm 100 % saying there will definitely be a recession.

So what is going to cause it, and when is it going to happen? Well again, nobody knows, but if I had to drop my two cents into the bucket, I would say that it's going to be coming from the absolutely dumb loans that people are getting right now, whether it's in the vehicle market or the personal loan market or the Student loans or peer-to-peer loans, there are some stupid loans being offered right now and people are taking these stupid loans and I ultimately think that's gon na be our demise trust me. I see credit reports every single day, which means I see people's debt every single day and there are so many people in some really rough loans right now. So let's throw some toys on the other end of these loans, because no one likes a loan. Everyone likes the toy they get with the loan.

So look at this beautiful Tesla all right. You can get this bad boy for what twenty five hundred bucks up front and then nine forty one a month for 72 months. Not only is that monthly payment, absolutely insane for a car, but you're gon na be paying seven thousand four hundred forty-one dollars in 38 cents in interest alone over the course of that loan, and you know, what's the really sad part about this whole thing is, that Is a really good deal? Tesla has some of the best financing available with low interest rates in a low term, I'm seeing car loans that are like ninety six month terms and rates that are like three times as high as the Tesla interest rates, crazy. Okay, absolutely crazy, but let's look at something that looks crazy all right, so this is absolutely just ignorant my opinion.

Now I love wakeboarding so check out this epic boat, all right, it's not even brand new by the way. It's a 2017! Now, if you wanted this bad boy, you're, basically looking at the price of a cheap condo, at least in the Phoenix area - yes so you're, probably gon na - want to finance it. Now I've done a ton of research on the average interest rate for boat loans and we're pretty much looking at this. A four point: eight seven percent interest rate on a 20 year loan eight year loan.

That means over the course of the loan you're gon na be spending sixty seven thousand four hundred and thirty-eight dollars and 38 cents in interest alone on a recreational vehicle. I'm sorry, but these are some of the dumbest financial decisions you can possibly make, and it's because everyone says well: our economy is booming right now, we've got the money to do it, yeah. Why don't you go? Do that and then let me know where you're at in a few years and like honestly, I've even seen loans for like 25 years on a recreational vehicle 25 year term. Are you kidding me? That is absolutely insane look.

I know these toys are expensive. So if you want to finance it by all means, no finance and it's gon na be very hard to buy this cash. I totally get it so financed it, but don't finance it and do anything longer than a 10-year loan or like an eight year loan. If you can keep that term as low as possible, I'm telling you you're gon na be saving so much money over the course that loan, if you bring the term down a couple years, this is the kind of stuff that's gon na be causing the next recession.

People are not going to be able to make these payments once the market takes a slight dip. There's a little bit of some in certainty in the market. People are gon na go holy crap. I don't think I can actually make this payment they're, gon na start defaulting on their debt and then downhill spiral.

Here we come it's gon na hurt, but when is this going to specifically happen? Well, if you learn from the past, you'll notice that GDP, the stock market and the housing market all consistently have dips leading up to, of course, a presidential election. Why? Because elections cause massive uncertainty in the market? A president has a huge pull on the economics of a country. Okay, we don't know if this president is going to be promoting economic growth or, if they're going to be hindering economic growth, we really don't know which causes a ton of uncertainty in the market and what does uncertainty mean in the marketplace? That means that people don't know whether or not the economy's gon na be going up or down so they go. Oh I'm scared.

I'm gon na hold on to my money, I'm going to spend less in the marketplace. That means our GDP goes down. If our GDP goes down for more than two quarters, what does that mean? We get to bust out the word recession, and this isn't just a speculation. This is a tried-and-true trend that has consistently occurred.

Uncertainty in the market is huge when presidential elections come up and uncertainty is honestly the main determining factor in any financial endeavor. Look at Bitcoin, for example, when everyone thought Bitcoin was like the coolest and baddest thing alive, and there was zero uncertainty in Bitcoin. Everyone was like, oh my god, I need to buy as much Bitcoin as possible. Look how quick it's shooting up.

Everyone is pumping in all this fake propaganda and fake news, and all this BS and everyone's buying Bitcoin buying Bitcoin buying Bitcoin. But what happens? People go holy smokes. This is the highest it's ever been. I really don't think it's gon na go any higher, so I'm getting a little bit uncertain about it.

I'm gon na hold on to some money. Maybe I'm gon na pull some money out of my cell, so my Bitcoin and then what happened, Bitcoin corrected itself and it went way down and now it's starting to level itself back up guys. This happens in almost any financial market, there's only so much fake news and fake BS until that bubble, pops or until people go holy smokes I just got slapped in the face. Why am i spending $ 300 for a burger at McDonald's? It's way over hyped way, overpriced, no way.

That is why Corrections are a good thing. So when is a correction going to happen? When is this recession going to happen? Well again, nobody knows nobody knows not even me, but if I have to make an educated guess on it, I would say it's gon na be in q2 of 2020 because based on previous trends of the last ten to twenty years, that's more than likely what happens Once a presidential election comes up - and I say the odds are even better because we're the highest we've been in a really long time, so again, we're overhyping that Bitcoin we're overhyping that burger at McDonalds right now and I think it's going to be correcting itself soon. So q2 is gon na, be my estimate, but let's say I know what I'm talking about, which is probably not the case, but let's say I know what I'm talking about. That means it's coming up relatively quick.

How do we start preparing for that? Well, since it probably won't be a popping of a bubble or a bursting of a bubble like it was in the past, we really don't need to do a whole lot of things. There's two things in my mind that will set you up for success for this. Next recession and they're, very simple: one is gon na, be paying off your day, pay off any debt that you have start with the lowest debt and work your way up, just paying that sucker! Ah, look you do not want debt when a recession happens because you're gon na go underwater, you're gon na not be able to pay anything, and it's going to be a serious struggle for you. So just pay that debt off okay number, two you're gon na - want to start saving your money a little bit.

I'm not saying don't, spend any money, but you're gon na want to save a little bit of money in your bank account because, once the recession does hit, you're gon na want to capitalize on all the people who didn't save money and overextended their financial endeavors and Bought those really stupid toys that way when the recession does hit and people start defaulting on their Tesla loans and they start defaulting on their boat loans and they start foreclosing on their homes because they want to keep their boat over their home me included. You can start picking up these things for dirt cheap buying, low selling high because everyone's selling them the demand goes down. The supply goes up. Economics, 101, you're, gon na end up making some good money on that.

So I highly recommend you save some money and honestly, if you want to be prepared for the next recession, that's it pay off your debt and buy some undervalued assets. So you can turn a poor thing, a recession into a good thing for you. So you can capitalize on it because again we always learn from our mistakes, so the market will correct itself, so you might as well take advantage of things when it's cheap, like buying some cheap, real estate and building your wealth. That way.

So when the market does correct itself, you're in a better position than you were before yeah, so that's my two cents on the recession. Do you agree with me? Do you not agree with me? Let me know in the comments down below. I also spent a decent amount of time on this video, so I would really appreciate it. You can hit that like button also subscribe, if you're new around here guys, I'm always creating great content to not only grow and build your personal brand, but to also grow your bank account.

So hopefully you enjoyed the video and I'll see you the next one, dumb assets. Am i right dumb assets.