People who diversify their income are in better shape to withstand downturns.
The world economic situation is nasty. There’s a lot of uncertainty, and it’s not the typical “we’re in a funk economically” certainty.
Companies that sell domain names and web sites seem to be holding up reasonably well. You can thank subscription-based services and people shifting their businesses online for some of this.
At the same time, GoDaddy has warned that aftermarket domain sales, which carry a higher price tag, might be at risk.
During the last downturn, a lot of domain investors said that domains would do well in the recession. But the reality is that when people are concerned, and cash is in short supply, pullbacks tend to hit almost all businesses.
This reminded me of two things that I’ve long felt about how individuals should protect themselves against economic downturns.
First, you shouldn’t count on one source for all of your revenue. I know that executives at companies might not be able to do something on the side, but rank and file employees should have some sort of business or revenue stream on the side. Maybe it’s just an online blog about a hobby that makes advertising money. Perhaps it’s a YouTube channel. Something they can pivot to if they lose their job.
As a solopreneur, I’ve diversified. Domain Name Wire is holding up strong so far, but a prolonged downturn could impact its revenue. Thankfully, I started my podcasting service a few years ago and it now makes about the same amount of money as this site. Domain investors can diversify by developing one of their domains into a revenue-generating site.
Second, rank and file employees shouldn’t own shares in the companies they work for. I’m not talking about stock options at a startup. I’m talking about people at established companies getting matching funds in their 401(k) that are in company stock, or buying company stock in retirement or other brokerage accounts. If your company hits the skids, that means you probably lose not only your job but also a big chunk of your savings. Whenever you can, diversify your holdings.
No matter what your business is, think about how you can diversify to weather the storm.
lifesavings.online says
I buy gold, silver, BAT (basic attention token), domains & make websites.
When market settles I’ll buy Clouldflare (NET) it’s newly listed, didn’t pump on IPO. I think it’s going to get bought out someday…This is how they are doing it, though market.
BAT is great, I have all my site published since they started. I was promoting it on nampros, let all them know all along. There’s a thread since then and they are published too. I did a lot for namepros. I suggested many things including the extra auctions/bumps for gold members.
Since it turned to hell though via rob monster, I can only say bad things about it đ I digress.
I like stocks, lucky I didn’t get burnt. I was in AMD from $3.50. Have #2 ranked tech article on seeking alpha concerning AMD call – 7 years ago. Only have 2 articles there, the AMD one and TRUMP / Inflation…wrote it all years ago…before everything transpired, and came true.
Seeking Alpha isn’t right tho, the editors don’t like me writing about market manipulation. Since they didn’t allow me to write what I wanted, I started making my own sites, and got into domaning as a result.
http://bat.watch
nTLD are gaining bigly.
Mogreen says
Have to disagree on the premise that “rank and file employees shouldnât own shares in the companies they work for” . If you believe in a company enough to work there and think they are doing great things definitely own.
Based on your logic employees of Google, Apple, Amazon , should sell their vested shares ior exercise options and sell immediately and not participate in long term appreciation of company stock.
What about ESPP programs. just do not participate ? or sell immediately and get hit with short term tax versus Long Term Cap Gains
Granted I think people need to diversify and not hold all their eggs in one basket (their company) , but not owning shares is too much of a blanket call
Andrew Allemann says
It’s definitely a blanket statement and won’t apply to everyone. But suggesting Google, Apple and Amazon as example of companies where people should hold on to their stocks is an example of survivorship bias. For every company that’s been a success story, there are many that have been high flying and then collapsed. People should definitely consider discounts they get buying company stock tax implications of selling. But, in general, it’s a bad idea to own a big chunk of your net worth in a company you work for if you are what I’d describe as a rank and file employee.
lifesavings.online says
Well markets are shot. Just front-run the FED now. They are already bailing out hedge funds.
There’s a lot to say, but in the spirit of internet – trust me.
Bailouts coming for:
1) Hedge funds (ETFS via direct purchases [see japan]). If they don’t do this, there’s a thing called IV crush, which will happen. See recently: natural gas.
2) Farmers (the big ones).
3) Student loans.
4) Real-estate (Keeps this HUGE market ‘liquid’…stagflation is the worst. to stem stagflation now, must inflate…bank own most R/E [credit], so this is another bank bail out.)…don’t want plebs to throw in towel and default on loan when they see ‘market crash’ – gives plebs ‘hope’.
5) Auto.
6) Health care.
7) Insurance companies.
This is my presumed order of events. I am usually right.
It’s socialism, and it bails out the biggest…so the rich stay rich.
Better figure some things out…if you don’t know WTF I’m talking about.
lifesavings.online says
#1 now happening in full:
“State Street Now Selling ETFs That Will Be Bought By The Fed”
Farms are next, interestingly for a couple reasons.
lifesavings.online says
“The Trump administration announced on Friday that it would be providing $19 billion in aid to farmers as part of the Coronavirus Food Assistance Program (CFAP) as American farmers deal with the fallout of the coronavirus pandemic.”
19 billion isn’t enough. they’ll be more. It’s a targeted, direct intervention none the less. Check the timeline.
1) check.
2) check
3) student loans.
Next up: student loans? probably. along side with $2000 monthly socialist checks, which is a newly proposed bill with lots of backing.