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You Can Make Money in a Recession

By Paul Johnson

1,383 words. Abstract: You can make good money even a recession. However, you can’t do that using the same approach and the same strategy as everyone else. Help people get the 3 things they focus on in a recession and you can prosper now.

Of course you can make money in a recession. That’s not really a question. You’ll most assuredly make SOME money. The real question is: Will it be enough? You’ll be happy with the answer to that question with the right approach and a solid strategy.

A Healthy Approach to Earning
If you are like most of us that are not independently wealthy yet, you need to find a way to keep on earning right through this down economy. Let’s first face the reality of a recession so we can adopt a healthy approach that will give us hope and help us deal proactively with our need to make money during this recession. This first step will help you avoid worry, hardship and sleepless nights.

Accept the reality that earnings in a recession, on average, are down about twenty percent. That means that companies and the people who work for them will secure — on average — only 80% of the dollars they could have earned before the recession for the same kind of effort.

If you’re out of a job, your earning are temporarily zero. If you still have the same job you had a couple years ago, you’re probably working 25% harder with the hope you can hang onto your paycheck. Of course, some folks are doing even better than they did a couple years ago. If you’re not among them, you have an opportunity to make a few changes and join these people who are making good money despite the recession.

A Plan to Earn More
If you can’t afford to lose your job, you probably can’t afford a 20% pay cut either. If you want to come out ahead during this down economy, you need a new plan for earning. I used this plan over 25 years ago when I was caught up in the last great recession. In 1980 the inflation rate was 13.58%, in 1981 mortgage rates were 16.63%, and in 1982 the unemployment rate was 9.71%. Yet I was buying new cars and new houses despite the fact that I was a working greenhorn in my early 20’s with a growing family. If you’ve never been through a down business cycle like this before, having hope means having a plan.

To do well in a down economy, reorient yourself to pay attention to the three things that people in a recession care about: Secure, Save, and Augment.

Secure: People will spend money in a down economy to hang on to what they already have. We work hard to acquire assets and our first priority is to protect them. In a recession people will gladly invest in firearms, security systems and The Club. They also prefer to spend their money on sure bets with near-zero risk of loss. While banks around the country were closing, Synovus Bank came up with a new plan that enabled large depositors to have their accounts insured for up to $7.75MM, far above the FDIC insurance cap of “just” $250,000. As a result, they saw their deposits mushroom by $1.4BB in just 6 months. Because Synovus Bank has a plan to make their customers feel secure about their money, their future through this recession is secure as well.

Save: After assets are secure, cutting costs becomes a top priority for many. The promise of saving money is a much-used selling strategy that becomes especially effective when buyers are short of cash. However, if all you do is lower your prices you’ll likely just make your situation worse. A more successful strategy is to come up with a way to offer a less expensive product or service in place of a more expensive one. Self-service car washes can replace full-service washes. In-home entertainment options can replace nights out on the town. Geico has aggressively gone after the car insurance market with the premise that, since you have to have car insurance anyway, you might as well replace your more expensive policy with a comparable Geico plan and save hundreds each year. Their offer to help us save is apparently working; as of January 2009, they report that their growth will enable them to add 870 employees in Q1 ’09 alone.

Augment: With revenues and income down an average of 20%, more people will be looking for ways to augment their earnings. If you’re a business, it means finding neglected markets to develop new sources of revenue. For individuals it might mean a part-time job or developing a business to run “on the side.” When the economy is down, people are not only more receptive to considering new ways of making money; they’re actually looking for it. Avon Products, Inc. reported that active representatives grew 7% from 2007 to 2008, resulting in record revenues for 2008, up 8% over 2007.

Your Personal Earnings Plan
For you to make more money in a recession, create your own plan to help OTHERS to Secure, Save and Augment. They will pay you to help them achieve their objectives in these 3 areas. Depending on your situation, you may have up to 3 different ways to develop and execute your own plan.

The first area is in your own job. If you are currently employed, your employer is eager to find ways to Secure, Save and Augment. Take the initiative and come up with ideas in these 3 areas. Can you find a way to help the company Secure existing paying customers? Do you see a way to replace a current process with a more productive one, resulting in Savings for your company? Could you pioneer a method for accessing new markets to Augment revenue for your company? Once you identify the idea, make the extra effort to execute it so that you are undeniably connected to the successful outcome. When you help your company succeed, keeping your job is often one of the rewards.

The second situation to consider for your earnings plan applies if you serve customers directly. Perhaps you are in sales, or you have your own company. In a recession you have to consider reworking your value proposition. Perhaps your previous success was connected to your innovation, quality or timely delivery. Now it’s time to reframe your offer to appeal to buyers who are looking for opportunities to Secure, Save or Augment. Don’t take the easy route and just offer your customers lower prices; all your competitors have already thought of that. Perhaps your quality enables you to offer a risk-free guarantee that will make buyers more Secure. Your innovations might enable customers to discover a new way to Save through using your product or service. You could offer your best customers an opportunity to augment their incomes by paying them for leads they refer to you. You’ll enjoy big payoffs for creativity in a recession.

Third, supplement your own income by offering a product or service that will help people Secure, Save or Augment. Those new Avon representatives were looking to Augment their own incomes by selling Avon products to others. However, Avon products do little to help others Secure, Save or Augment. While their customers may continue to buy cosmetics, cosmetics in general are not a significant growth market in a recession. Repair services become more popular during recessions; if you can sew, or fix shoes or appliances, you’ll be in demand. Perhaps you could offer a dog-sitting service so that others can take a part-time job to Augment their income. You could sell energy saving devices or do-it-yourself instructions. It all depends on your expertise, and everyone is a relative expert in something.

Focus There
Unless you’re willing to accept a drop in earnings of 80 percent — or more — you need a recession-ready plan that’s based on a realistic approach to what’s on peoples’ minds today. Cutting your own costs won’t be enough; you can’t save your way to prosperity. Instead of focusing on personal cost-cutting, focus on ways to help OTHERS Secure, Save and Augment. Do that with some creativity and you can join the folks who are making good money in spite of the recession. Then your question will be: should I spend it on a car, or a house?

© 2009 Paul Johnson. All rights reserved.

About The Author:
Paul Johnson of Shortcuts to Results LLC collects business shortcuts and shows people how to find and apply them for performance improvement at Learn how to become a niche marketing expert at

Note: This article is available for reprint at no charge. We only ask that you include our copyright notice in your reprint, along with the About the Author information we provide at the end of the article.

A Question for your Comments: What are people doing to earn more that is working during the recession?

Posted: under Achieving Results (Production).


  1. Paul Johnson Says:

    Do people really want to Secure? In the May 11, 2009 issue of Fortune Magazine on page 12, they note that the ammunition business has gone through the roof. Shares of Smith & Wesson have gone up 338% since October 2008. Remington reported a $296 MILLION backlog in unfilled orders. Even if money in your neighbor’s 401K isn’t safe, you can bet the cash stuffed in their mattress is.

  2. Gary Says:

    Paul, thank you for this most informative article. This is the exact question I googled and needed answered. I will build on these ideas to get myself going so I can avoid disaster. Thanks.


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