Mark Cuban's Recession-Proof Advice To Help You Navigate Economic Uncertainty

Markets have turned volatile this week after US equities jumped on news of a two-week ceasefire in the Middle East, only to fall again after reports emerged that Iran halted tanker movement through the Strait of Hormuz. West Texas Intermediate crude futures shot up 5.3% to $99.42 per barrel on Thursday.

Moody's Analytics' model recently raised its recession forecast for the next 12 months to 48.6%, while Goldman Sachs boosted recession odds to 30%. Elsewhere, Wilmington Trust has the odds at 45%, while EY Parthenon sees a 40% chance of a recession, with the warning that those odds could rapidly rise in case of a more severe or prolonged conflict between the US and Iran.

Higher living and healthcare costs, an uptick in unemployment, and threats to the continuity of retirement benefits like Social Security are troubling already stretched US households. As people increasingly seek financial advice in uncertain times, a 2008 blog post from billionaire Mark Cuban recently started trending, which detailed how people can manage money better during the Global Financial Crisis and even grow their wealth.

'Times like we are facing now, with complete financial uncertainty are perfect times to start on the road to getting ahead financially,' Cuban had noted over a decade ago at the height of the '08 recession.

Save as Much as You Can

Cuban believes that the version of getting rich during a recession could simply look like saving more by ditching outings, closing credit cards, becoming a smart shopper, and fine-tuning monthly costs through consistent discipline.

'Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you don't want to be rich,' Cuban had stated.

While Cuban acknowledged that you must give things up, which isn't possible for everyone, he anyway urged people to save as much as possible in low-risk instruments such as short-term certificates of deposit (CDs). For Cuban, the first step to getting rich is having cash available for when you need it before any other priority, like retirement.

'Those who have put their money in CDs sleep well at night and definitely have more money today than they did yesterday. And because they are smart, disciplined shoppers, their personal rate of inflation is within their means. Cash is king for those wanting to get rich,' Cuban had explained.

Get A Job In The Business You Are Passionate About

If you have hobbies and interests, Cuban recommends choosing one and becoming knowledgeable about it before applying for jobs that support it. 'It could be as a clerk, a salesperson, whatever you can find... It may not be the perfect job, but there is no perfect path to getting rich,' Cuban had said.

He highlighted that the US business infrastructure is destined to be 'boom and bust,' which will introduce uncertainty in your line of work. However, with knowledge about your business, continuous upskilling, and savings in CDs, Cuban believes you will be better equipped to deal with a recession.

'With all the change and uncertainty in the financial markets, there are people right now making more money than they ever dreamed of... Boom and busts happen to every industry. The question is whether you have the discipline to be ready when it happens for you?' Cuban concluded.