Bear market checklist is everywhere these days. Many people did not see the sharp decline in equity prices as a result of the 2022 bear market. It didn’t just decline sharply, it declined sharply quickly. You are not sitting ducks and there are ways to prepare and defend against bear markets.
Only when the tide is out, do we get to see who was swimming naked in the water. We will get to see who got to the top by taking on excessive risk such as leverage. When interest rates were near zero, people took on debt like candy.
Then once the bear market arrives, we get to see who employed good financial strategies in order to move forward. There were many people who even mortgaged their houses to buy bitcoin and that wasn’t a financially prudent thing to do.
The bear market checklist is designed and intended to financially protect you from ruin from sharp declines in asset prices. The bull market of 2009 – 2021 spoiled investors rotten. We thought the good times were going to last forever! Then 2022 hit us with reality.
There has never been a better time to employ prudent financial strategies in order to move forward in life. Even though times are tough, there definitely are things you can absolutely do in order to protect yourself and come out ahead. I am personally employing these strategies myself.
Bear markets are no fun for anybody.
Bear Market Checklist to be Richer by the End of It
Below are the 9 bear market checklist to financially protect yourself and your family.
1) Build Your Emergency Fund
There were many people who invested their emergency fund through 2010 – 2021. They thought, well, I already have a steady job. What’s the point of an emergency fund? The cash flow’s going to keep coming in forever! W-2 cash flow keeps coming in until one day, it doesn’t.
Bear market checklist means padding up your emergency fund to float you through the bad times. When the good times roll, people think it’s going to roll on forever. That’s not how reality works. The bad times come whether we want it to or not.
Then emergency funds become the savior with which will protect you from any job losses, loss of income, and the like. I padded up a year’s worth of emergency funds in order to protect myself from this bear market. Navigating through bear markets will be very complicated.
There’s nothing wrong with having a safety net to guide you through this complicated road. 3-6 months worth of emergency fund isn’t enough. A good rule of thumb is to have 6 – 12 months worth of leeway.
2) Increase Income
In September 2022, I got an off cycle 5% raise. It was totally unexpected and it was a result of my performance that I got the raise. That was a very nice unexpected surprise. However, I’m not done. I will continue to increase my income to protect myself as much as I can from this recession.
These days, income generating opportunities are everywhere. Side hustles isn’t just a nice thing to have, it’s necessary these days. It’s going to take a lot of time but there’s plenty of opportunities to build up your income level. I’m working as much as I can on this blog and Twitter.
This bear market is scaring me to its core and having a financial safety net is on my top list of priorities in order to navigate through it all. I’m doing everything I can and working every single day in order to increase my income. Some days are harder than others but it’s important to keep going.
It’s time to start the side hustle that you’ve been putting off. Now’s a better time to start than any. Increasing income is the bear market checklist to check off.
3) Provide Value to Your Employer
Don’t cut off the money supply. Now is not the time to take vacations and complain to your managers about your teammates. Now is the time to provide as much value to your employer to justify why they should keep you around during these hard times.
Bear market checklist includes providing value to your employer. There are plenty of people who’ve gotten laid off during bear markets and started ginormous businesses. However, why start a business out of necessity when you can start a business with minimal stress while having a job?
Now is the time to stay later than peers and work weekends. Now is the time to go above and beyond. Job security will matter in these times. It’s easier to find a job when you already have a job. Providing value to your employer will be a good way to go.
You won’t regret putting in the long hours and providing for yourself and your family.
4) Bear Market Checklist: Keep Investing
Obviously, don’t invest if you need to pad up your savings. However, if you have the money to invest, then it’s a good idea to deploy that capital when the valuations and asset prices are cheap. I’m currently not invested in anything at the moment. I’m waiting to pounce on opportunities.
I expect this bear market to provide some fire sale prices to take advantage of later down. Patience will be key in these times. More money is lost anticipating downturns than the downturn itself. Many people who get out of investing altogether during this market will regret it down the road.
Bear market checklist still includes investing if you have the means to do so. There’s a reason why this is a number 4 priority. Padding up your emergency fund comes first. Then comes investing and looking for opportunities to earn more income through your money.
That is the way to riches. When everyone is getting out of investing could possibly be the best time to get into investing.
5) Start a Side Hustle
Now is not the time to depend on one source of income. Now is the time to diversify your income sources as much as possible. The dirty truth is, most businesses and side hustles take at least six months in order to be successful. After those six months is when the breakthrough happens.
Some even take years!
A bear market checklist is to start a side hustle and diversify your income sources as much as you can. You are in survival mode. Even if the side hustle forces you to trade hours for dollars, it’s a good idea to take it when you need the money. Some side hustles do not take a lot of money to start.
They just require a lot of time and effort. My blog currently takes up a lot of my time to operate. Same goes with my Twitter. I just hope that they pay off one day. I am working as much as I can on them because I do not want to fail. Starting a side hustle to prepare for a bear market is great.
6) Spend Less Money
Now is not the time to spend as much money as you possibly can and keep up with the Joneses. Now is the time to increase and get those saving rate up. There’s no need to buy the Nicholas Cage pillow if it’s not even going to make you money. You already have plenty of pillows already.
A bear market checklist is to spend less money and prepare yourself. Spending a minimal amount of money is an underrated hedge against inflation. My credit card bill in August 2022 only came out to be $800. $800! That’s a steal!
There’s always a way to trim the fat and cut costs somewhere in the budget. People don’t understand just how much money they can cut back on until they start doing so. My utility bill for August 2022 came out to be only $45. I share with a roommate so that’s only $22.50 that I’m spending.
If there’s a way to save money, then it’s time to implement those steps. Every dollar counts towards your financial safety.
7) Ignore Others
Some people are going to THRIVE in a bear market. Or they may even mock your decision to save as much money as you possibly can. Ignore them. Work on your own goals. Follow your own path. There’s no need to compare yourself to others.
Maybe the next few years after a bear market will be your investment years.
Whatever the case may be, ignore others. You are working on making your own path, not following in the footsteps of others. Jeff Bezos remained king by sitting in the #1 spot as the richest person in the world. Then out of nowhere, Elon Musk came in and swooped on that title.
Not by following Jeff Bezos’ path but following his own.
Bear market checklist should be following on your choices and your path to surviving a bear market. Not focusing and trying to copy other people’s strategies that works well for them, not you. It’s going to be hard with social media usage on the rise. However, it’s a necessary component of the bear market.
You have your own path to make.
8) Bear Market Checklist: Aim for Consistency
Now is not the time to do Hail Mary bets. That’s the quickest and easiest way to end up in bankruptcy. Now is the time to do what you’ve been doing this whole time. Doing good work, working on your side hustles, and giving good value to the people who are paying you money.
It’s difficult to beat the consistent person. The ones who show up every single day, with a smile on their face, ready to tackle the challenges of the day. A bear market checklist is to be consistent with everything you’ve been doing. Consistency will get you to success.
All-in acts are dangerous. If there’s a surefire way for you to get to the top, why would you risk deviating away from that sureness? You don’t need to risk everything you have to start a business on a margin loan that may or may not work out by the end of it all.
You can take your time and take it day by day as time passes. Eventually, you will get there.
9) Stay Calm
If the worst comes to worst, there’s always unemployment insurance. The person who is the most responsible for getting you out of a financial hole is you. No one else is going to do it for you, it’s going to be up to you in order to get there. The captain of the ship has to remain calm.
You’re the captain. There’s going to be turbulence in the sea or in the air. You’ve made it this far already. You didn’t come this far to only come this far. You came this far because you had the foresight to make it this far already. There’s no reason why you can’t come this far again.
Masayoshi Son has the dubious honor of losing the most amount of money by a single person in history. Yet, he’s still a multibillionaire today. He remained calm and realized what he needed to do in order to make his dreams happen. There’s always a way out and for you to come out ahead.
Whatever the way out is, it’s up to you. A bear market checklist is to keep your emotions in check.
Bear Market Checklists are Especially Important Today
The bear market checklist is designed to support you and float you through the hard times. We had it easy for far too long after the global financial crisis of ’07-09. Then people spent like there was no tomorrow, thinking the good times will last forever.
Good times NEVER lasted forever and history will repeat itself. It’s hard to justify, “this time is different” when historical data suggests otherwise. Now is not the time to spend as much money as you can on the family vacation. Now is the time to employ the billionaire spending habits and protect yourself.
Whether it’s cooking food at home or going out to dinners less, there’s a way for you to save as much money as you possibly can. The bear market checklist will be a way to get your family through to safety as you navigate through the turbulence. Job losses are brutal.
No matter how much the financial independence, retire early crowd loves to say how bad having a job is, having a job actually feels amazing and great. Especially if you have a good one. During hard times such as this, it will be very difficult to find another job when no one else is hiring as well.
Bear market checklists are important. There were many people who understood just how hard bear markets are in ‘2007-2009. Bear markets last an average of 9.6 months. However, that doesn’t mean that they can’t last longer than that.
It will be difficult to get through but it can be done.
Bear Market Checklist Shortlist:
- Build your emergency fund
- Increase income
- Provide value to your employer
- Bear market checklist: keep investing
- Start a side hustle
- Spend less money
- Ignore others
- Bear market checklist: aim for consistency
- Stay calm
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