Today’s Wall Street Journal (1/22/08) contains three articles on the coming recession. Two are headlined at the top of the front page and one is on page two. This isn’t good. The WSJ is a serious business newspaper which does not “cry wolf.”
The first article is about the general credit crunch that’s occurring across the economy. Small and start-up business are particularly susceptible. The second article is about foreign reactions to the coming recession. The third article is about the breath and depth of the coming recession.
What this states to me is that it is time to play defense, in business as well as in your personal finances. This recession won’t be as light as the past two. Be very, very careful how you handle your money, that includes your lines of credit.
Be less aggressive and less optimistic. If you were planning on quiting your job to work full time on that start-up, don’t. Keep the job and work some extra hours until the start-up is on a firmer financial footing. If you were going to take out that second mortgage, don’t. Keep your personal and business debts under control.
If you are in the business of helping others cut costs, this will be a good time for you. If you rely on business expansion for your prosperity, things will be tight.
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