All Things Recession, Part 2 with Brock

Katelyn Magnuson: 00:00:15

Welcome back to the confident money podcast.

Katelyn Magnuson: 00:00:17

I'm your host, Caitlin Magnuson.

Katelyn Magnuson: 00:00:19

And we have Brock our tax strategist over at the freelance CFO here

Katelyn Magnuson: 00:00:23

with us again today for part two of all things recession, which

Katelyn Magnuson: 00:00:28

is such an interesting title.

Katelyn Magnuson: 00:00:30

But last week we chatted all about what a recession is, what it can mean

Katelyn Magnuson: 00:00:34

economically, what it can mean for you as an individual and what to expect.

Katelyn Magnuson: 00:00:38

And today we're gonna be chatting about the tangible.

Katelyn Magnuson: 00:00:43

And what you can be doing to prepare.

Katelyn Magnuson: 00:00:45

So, you know, actual steps you can be taking Brock welcome back.

Katelyn Magnuson: 00:00:49

I'm excited.

Katelyn Magnuson: 00:00:50

I'm actually really excited to be chatting about this.

Katelyn Magnuson: 00:00:51

Cause I think so many people go straight into anxiety and fear mode.

Katelyn Magnuson: 00:00:55

And for me, I think taking some action from a healthy place can

Katelyn Magnuson: 00:00:59

feel so much more productive.

Brock: 00:01:00

Oh, absolutely.

Brock: 00:01:01

And just make you feel more prepared.

Brock: 00:01:04

I mean, like we kind of mentioned on the last episode, all of us that remember

Brock: 00:01:07

the last one, um, you know, we have our guards up and we kind of know what

Brock: 00:01:12

happened last time and we don't want, uh, maybe even if it affected us on

Brock: 00:01:16

a personal level, we don't want those kind of things to, to happen again.

Brock: 00:01:20

So there.

Brock: 00:01:21

You know, I'm excited to talk about these tips that, uh, we can kind of

Brock: 00:01:25

take in the preparation and know how to navigate while we're going through

Brock: 00:01:32

the actual recessionary period.

Brock: 00:01:34

Um, and just kind of know what to expect.

Brock: 00:01:36

Of course we never know what to expect, but we have the history and history

Brock: 00:01:41

repeats itself and so we can best utilize what we've already learned.

Brock: 00:01:45

Going forward and I think that's probably the best place that we can start.

Brock: 00:01:49

Do you.

Katelyn Magnuson: 00:01:50

Oh, absolutely.

Katelyn Magnuson: 00:01:51

No.

Katelyn Magnuson: 00:01:51

I, I think taking the info that we have and making some educated

Katelyn Magnuson: 00:01:54

decisions with it is really important.

Katelyn Magnuson: 00:01:56

And the way that we're gonna be laying this out today is, you know,

Katelyn Magnuson: 00:01:59

kind of a building block set up.

Katelyn Magnuson: 00:02:01

Right.

Katelyn Magnuson: 00:02:02

So we're gonna cover what we think is sort of the foundational

Katelyn Magnuson: 00:02:05

spot that all of us should be at.

Katelyn Magnuson: 00:02:07

And then we'll give you steps for cool.

Katelyn Magnuson: 00:02:08

If you have that foundation covered, maybe this is your next

Katelyn Magnuson: 00:02:11

step that you take to be prepared.

Katelyn Magnuson: 00:02:13

And then maybe this is the next step.

Katelyn Magnuson: 00:02:14

And if you've got all of those handled cool, we can have a little

Katelyn Magnuson: 00:02:17

bit of, I'm gonna say fun, right?

Katelyn Magnuson: 00:02:19

Because there can be, you know, millionaires can be

Katelyn Magnuson: 00:02:22

made during recessions.

Brock: 00:02:24

opportunities are.

Katelyn Magnuson: 00:02:26

Yes.

Katelyn Magnuson: 00:02:26

They, they abound for people that are able to take advantage of them and.

Katelyn Magnuson: 00:02:31

I'm gonna just dive right in with the number one building block that you

Katelyn Magnuson: 00:02:34

and I were chatting about offline, and that's an emergency fund and there is

Katelyn Magnuson: 00:02:39

so much information out there about emergency funds and my take on it.

Katelyn Magnuson: 00:02:43

And I'm gonna explain why I recommend a little bit leaner

Katelyn Magnuson: 00:02:46

emergency fund than maybe a lot of other people recommend out there.

Katelyn Magnuson: 00:02:50

So what I look for is three months worth of average expenses.

Katelyn Magnuson: 00:02:56

So if you look.

Katelyn Magnuson: 00:02:58

Over the last, like let's say six months and take your

Katelyn Magnuson: 00:03:01

expenses, divide them by six.

Katelyn Magnuson: 00:03:04

That gives you your average monthly spending report.

Katelyn Magnuson: 00:03:07

Take that.

Katelyn Magnuson: 00:03:07

And you wanna have three times that so three months worth in.

Katelyn Magnuson: 00:03:12

I like a high yield savings account.

Katelyn Magnuson: 00:03:13

We will link a couple that we like in the notes of this episode.

Katelyn Magnuson: 00:03:17

and the reason that that's a little bit lower than a lot of

Katelyn Magnuson: 00:03:20

people recommend is because I'm a big proponent of most people.

Katelyn Magnuson: 00:03:24

If you lose your job, you're not losing all of your income.

Katelyn Magnuson: 00:03:27

You still would qualify for unemployment potentially, or you would

Katelyn Magnuson: 00:03:31

have a side hustle, or if you are partnered, you may have, you know,

Katelyn Magnuson: 00:03:34

a partner that has income coming in.

Katelyn Magnuson: 00:03:36

And for most of us, we have expenses that we could cut if we needed two and a pinch.

Katelyn Magnuson: 00:03:41

So that three month emergency.

Katelyn Magnuson: 00:03:44

For most of us can look like six to nine months.

Katelyn Magnuson: 00:03:46

And the reason I recommend a smaller emergency fund is because high yield

Katelyn Magnuson: 00:03:51

savings accounts while they can be great while they have higher interest than

Katelyn Magnuson: 00:03:55

say a traditional savings account, still don't generally keep up with inflation.

Katelyn Magnuson: 00:04:00

So there's an opportunity cost to having your money parked in

Katelyn Magnuson: 00:04:03

a high yield savings account.

Katelyn Magnuson: 00:04:05

And I personally would rather be investing that money.

Katelyn Magnuson: 00:04:10

Or putting it into areas that get a higher return that may not be quite as

Katelyn Magnuson: 00:04:14

safe or quite as stable or risk free.

Katelyn Magnuson: 00:04:17

But for me, three months of expenses makes the most sense.

Katelyn Magnuson: 00:04:20

Everyone needs to be doing what feels best to them.

Katelyn Magnuson: 00:04:23

And that may look like four months to you, or that may look like 12 months, but three

Katelyn Magnuson: 00:04:27

months is a really good rule of thumb.

Katelyn Magnuson: 00:04:28

And for most people I would not go under.

Katelyn Magnuson: 00:04:31

So that would be number one, you're working to build an emergency fund.

Katelyn Magnuson: 00:04:34

You're parking it somewhere safe in something like a

Katelyn Magnuson: 00:04:37

high yield savings account.

Katelyn Magnuson: 00:04:38

And once you've gotten there, you can move on with your finance journey.

Brock: 00:04:42

Absolutely.

Brock: 00:04:43

I think that you're, you're a hundred percent right there

Brock: 00:04:46

because you don't want to.

Brock: 00:04:49

Be too scared.

Brock: 00:04:50

I think a lot of, a lot of what happens is people get very scared of

Brock: 00:04:54

the stock market get really scared of their investments and everything.

Brock: 00:04:57

And while we are going to go through a, you know, a negative period and your

Brock: 00:05:03

stocks might not be growing, there is still opportunity to get in on some of

Brock: 00:05:07

these stocks at this time that can, you know, really make a huge difference.

Brock: 00:05:14

Later on, as we saw with COVID, there was tons.

Brock: 00:05:18

Of areas of the stock market that just expanded, you know, I think, um,

Brock: 00:05:24

obviously with the rise of technology and everything, you know, there's a

Brock: 00:05:27

lot of companies out there who are more prepared than they were last time.

Brock: 00:05:31

Um, and I think that companies, especially going through

Brock: 00:05:34

COVID have kind of seen this.

Brock: 00:05:37

And so they are kind of preparing themselves, as far as their labor

Brock: 00:05:41

force and everything like that.

Brock: 00:05:42

So you kind of mentioned.

Brock: 00:05:44

That not everyone, you know, loses their jobs and they definitely don't.

Brock: 00:05:47

And even sometimes when they do, they have protections there, um,

Brock: 00:05:51

they get severances or they have employers are, or very understanding.

Brock: 00:05:56

We hope that, that they're, they're a little bit more understanding.

Brock: 00:05:59

It's not as, as cutthroat as it was in the last recessionary period.

Brock: 00:06:03

That being said, you have to have that emergency fund up because.

Brock: 00:06:08

Anything and everything can happen during a recession as, as we've seen.

Brock: 00:06:12

And, you know, we all saw what COVID did to us.

Brock: 00:06:15

The effects of a recession really are, you know, just so strong in every

Brock: 00:06:21

market that you know, we really just don't know exactly what's gonna happen.

Brock: 00:06:25

And I, and I agree that having too much of your money pulled aside, um, and

Brock: 00:06:31

stockpiled doesn't help you out, you know, We need to look at the recession as an

Brock: 00:06:37

opportunity, as well as a detriment, um, you know, while we are prepared for it

Brock: 00:06:42

and, um, ready to combat it, we also want to take from it and get the opportunity

Brock: 00:06:49

because a lot of businesses can really thrive later on by, you know, navigating

Brock: 00:06:55

it right at the beginning, you know?

Brock: 00:06:58

And, um, let's learn from the mistakes that we made in the last recess.

Katelyn Magnuson: 00:07:03

No.

Katelyn Magnuson: 00:07:03

Absolutely.

Katelyn Magnuson: 00:07:04

And I know you and I were chatting Brock offline about what we expect

Katelyn Magnuson: 00:07:08

from a lot of large cor corporations.

Katelyn Magnuson: 00:07:09

Right.

Katelyn Magnuson: 00:07:10

And we saw some of this during the pandemic.

Katelyn Magnuson: 00:07:11

We saw a lot of corporations that moved towards, you know, eliminating a lot of

Katelyn Magnuson: 00:07:16

entry level workers in a lot of arenas.

Katelyn Magnuson: 00:07:18

Like you have, um, oh my God.

Katelyn Magnuson: 00:07:21

Self-serve checkout.

Katelyn Magnuson: 00:07:23

You have, you know, where it decreased the number of cashiers

Katelyn Magnuson: 00:07:25

that were needed at a lot of places.

Katelyn Magnuson: 00:07:27

And I think we're gonna see additional technology that continues to do that.

Katelyn Magnuson: 00:07:31

And I think that a lot of us that are business owners should be doing

Katelyn Magnuson: 00:07:34

the same thing regularly, that a lot of the larger corporations are

Katelyn Magnuson: 00:07:37

doing in as much as we are looking at inefficiencies and we are assessing our

Katelyn Magnuson: 00:07:43

products, our services, our team, and you know, what we bring to the table.

Katelyn Magnuson: 00:07:48

Two, and I really hate this phrase, but I don't have a better

Katelyn Magnuson: 00:07:51

one, but to trim the fat right.

Katelyn Magnuson: 00:07:53

Is a really common phrase.

Katelyn Magnuson: 00:07:55

And to basically eliminate the, the fluff, the things that aren't needed

Katelyn Magnuson: 00:07:58

in your business, maybe you haven't raised prices in a year or two.

Katelyn Magnuson: 00:08:02

Especially with inflation, you're making a lot less than you were making, you

Katelyn Magnuson: 00:08:06

know, are you sure what your products or services that you're offering?

Katelyn Magnuson: 00:08:09

Are you sure what the most profitable one is?

Katelyn Magnuson: 00:08:11

And , I've told this before, but I had a client years ago that had a

Katelyn Magnuson: 00:08:16

product that she was going to eliminate because it felt old, it felt sale.

Katelyn Magnuson: 00:08:19

She'd had it around for five or six years and we looked at it and not

Katelyn Magnuson: 00:08:23

only was it her best selling product, it was her most profitable product.

Katelyn Magnuson: 00:08:27

And so looking at things from a financial perspective, instead of just

Katelyn Magnuson: 00:08:32

an emotional perspective, I think can be really important as business owners, but

Katelyn Magnuson: 00:08:37

also as individuals with our finances.

Katelyn Magnuson: 00:08:39

Right.

Katelyn Magnuson: 00:08:40

And I think Brock when I know, cause I've read a couple of articles

Katelyn Magnuson: 00:08:45

on it, the psychological hit.

Katelyn Magnuson: 00:08:46

If you go look at your investments or your retire, The psychological hit

Katelyn Magnuson: 00:08:52

of seeing them go down in value is so much greater than the positive,

Katelyn Magnuson: 00:08:56

psychological impact of seeing those grow.

Katelyn Magnuson: 00:08:59

it's gonna sound a little bit like head in the sand here, but to an extent during

Katelyn Magnuson: 00:09:04

recessions and even for a while after I wouldn't be checking your investments all

Brock: 00:09:09

Nope.

Katelyn Magnuson: 00:09:10

If you have a good method, like once a quarter,

Brock: 00:09:13

I second that and given that we're coming up on Q3, um, Q3 typically is just

Brock: 00:09:20

not a great quarter for the stock market.

Brock: 00:09:23

Um, so we're already kind of preparing, I typically like to start my year,

Brock: 00:09:27

end planning around the end of Q3.

Brock: 00:09:30

We'll see where we are with the recession then.

Brock: 00:09:33

Um, but I agree When we react to panic and we start pulling everything out and

Brock: 00:09:37

everything, you know, the, the negative repercussions are quicker and they grow.

Brock: 00:09:43

And I think that with you talking about, you know, kind of the trimming, the

Brock: 00:09:48

fat in everything, that's absolutely.

Brock: 00:09:50

We need to look at this as a reevaluation period.

Brock: 00:09:53

Maybe, you know, the great revaluation of our business, our practices, our costs.

Brock: 00:09:58

And it's not necessarily when we say cost cutting, we don't mean cut your offerings.

Brock: 00:10:03

We mean, Offer them smarter, offer them at a more cost advantageous perspective.

Brock: 00:10:09

I mean, look at the different opportunities out there.

Brock: 00:10:11

We have seen such technological advancements since the last recession.

Brock: 00:10:16

And while some of those technological advancements have led to a reduction

Brock: 00:10:22

in the workforce in certain sectors, they have opportunities there for other

Brock: 00:10:27

businesses and especially small business.

Brock: 00:10:30

You had mentioned kind of like self-service and everything like that.

Brock: 00:10:34

I mean that, and we look at customer service roles.

Brock: 00:10:38

We look at the app development, you know, on our phones and everything.

Brock: 00:10:43

We didn't have these options the last time.

Brock: 00:10:46

So.

Brock: 00:10:47

I would say now more than ever is a time to look at your technology and

Brock: 00:10:52

look at your opportunities there.

Brock: 00:10:54

And if you have the ability to kind of start to invest in that technology to save

Brock: 00:11:00

you some costs later, um, you know, even three months down the road, six months

Brock: 00:11:05

down the road, a year down the road, you're gonna appreciate the time that you

Brock: 00:11:09

took now to reevaluate and look at where you have the opportunity to kind of go.

Brock: 00:11:15

Utilize technology and combat some of the costs that you could

Brock: 00:11:20

be incurring in the future.

Brock: 00:11:21

Of course I never like am a big proponent of increasing unemployment,

Brock: 00:11:26

um, by, you know, reducing your workers of your small business.

Brock: 00:11:31

How would, um, however, you know, sometimes that is a

Brock: 00:11:34

necessary consideration.

Brock: 00:11:37

If it's something that your business has to go through, be prepared, know what,

Brock: 00:11:40

know what you have in front of you.

Brock: 00:11:42

And that's why I love freelance CFO, because we can go in there, digest

Brock: 00:11:47

your financial position right now, know what your goals are for the next

Brock: 00:11:51

year, know where you're at in, in the process of achieving those goals and

Brock: 00:11:55

know what, you know, the set back of a recession is gonna have maybe on your

Brock: 00:12:00

business, how it's going to affect.

Brock: 00:12:02

And I think that this is the.

Brock: 00:12:04

To really get in there, get into your finances, both business and

Brock: 00:12:09

personal, get comfortable with them.

Brock: 00:12:11

So you know, what is coming ahead of you?

Brock: 00:12:14

So, you know, like you had said, get in there, make sure you have your savings,

Brock: 00:12:18

make sure you really do understand what your three month, cost is because

Brock: 00:12:23

I think a lot of us understate it.

Brock: 00:12:25

I think a lot of us overstated it.

Brock: 00:12:27

I.

Brock: 00:12:28

even, there's, there's a lot of times that, you know, you and I spend our

Brock: 00:12:33

whole day in finance and then there's some days I, you know, I'm like, I

Brock: 00:12:38

need to reevaluate where I'm at just personally and, and look at things,

Brock: 00:12:43

make sure that I'm fully prepared.

Brock: 00:12:45

And I think the thing that we saw on the last one was that panic and.

Brock: 00:12:52

Panic drives us to make rash decisions and everything like that.

Brock: 00:12:55

And really, we need to take this time to make educated decisions.

Katelyn Magnuson: 00:13:00

Absolutely.

Katelyn Magnuson: 00:13:00

I couldn't agree more.

Katelyn Magnuson: 00:13:01

And I think so step number one, being that emergency fund.

Katelyn Magnuson: 00:13:06

Step number two, being gaining clarity, right?

Katelyn Magnuson: 00:13:09

Whether you're a business owner, whether you know, you're not a business

Katelyn Magnuson: 00:13:12

owner and you have personal finances, I think understanding and something

Katelyn Magnuson: 00:13:16

that we've both been recommending to clients recently is identify, identify

Katelyn Magnuson: 00:13:21

your expenses, your income, get comfortable with your numbers so that,

Katelyn Magnuson: 00:13:25

you know, you don't necessarily have to change your spending habits, right?

Katelyn Magnuson: 00:13:29

This second, right?

Katelyn Magnuson: 00:13:30

If you have your emergency fund, if you feel like you're in a, a relatively

Katelyn Magnuson: 00:13:33

good financial position, I'm not saying.

Katelyn Magnuson: 00:13:37

Stop getting Botox or stop going and getting a facial or, you know, shopping

Katelyn Magnuson: 00:13:41

at whole foods or wherever you want to go, but you can identify things that

Katelyn Magnuson: 00:13:45

might be discretionary spending for you instead of necessary spending that.

Katelyn Magnuson: 00:13:51

Should you need to decrease things you already have that sort of list that can

Katelyn Magnuson: 00:13:55

empower you to make decisions versus.

Katelyn Magnuson: 00:13:58

Oh, my God, something happened.

Katelyn Magnuson: 00:14:00

I'm stressing out.

Katelyn Magnuson: 00:14:01

The recession is here.

Katelyn Magnuson: 00:14:02

What do I do?

Katelyn Magnuson: 00:14:03

You already have a plan?

Katelyn Magnuson: 00:14:04

You have your emergency fund.

Katelyn Magnuson: 00:14:05

You know what?

Katelyn Magnuson: 00:14:06

You can cut if you're feeling like you need to cut something.

Katelyn Magnuson: 00:14:09

And then I think step three Brock you touched on is number one of step three.

Katelyn Magnuson: 00:14:14

So 3.1, we're not making rash financial decisions, especially

Katelyn Magnuson: 00:14:19

with our investments, I think.

Katelyn Magnuson: 00:14:22

And I know that so many people in 2008 that panicked and pulled their money.

Katelyn Magnuson: 00:14:28

Had they left their money in there.

Katelyn Magnuson: 00:14:29

It would've taken, I believe it was less than six years to have fully recovered.

Katelyn Magnuson: 00:14:33

And then it would be significantly higher than what it had been now.

Katelyn Magnuson: 00:14:37

So by pulling that money, when you, when you put money into investments, stocks,

Katelyn Magnuson: 00:14:42

you know, EFTs, et cetera, I think of it a little bit as monopoly money, right?

Katelyn Magnuson: 00:14:47

Because what you put in does have a cost to you, however,

Katelyn Magnuson: 00:14:50

any of the increases you see.

Katelyn Magnuson: 00:14:52

Are only hypothetical until you withdraw the money.

Katelyn Magnuson: 00:14:56

Any of the decreases you see are only hypothetical until you withdraw the

Katelyn Magnuson: 00:15:00

money and make either of those real.

Katelyn Magnuson: 00:15:03

So if we can hold off, I'm assuming if you're listening to this podcast, you're

Katelyn Magnuson: 00:15:06

probably not of retirement age yet.

Katelyn Magnuson: 00:15:08

You're probably 10 years or more away from retiring.

Katelyn Magnuson: 00:15:11

If that's the case.

Katelyn Magnuson: 00:15:13

the stock market has always recovered over any 10 year period.

Katelyn Magnuson: 00:15:16

So it sucks.

Katelyn Magnuson: 00:15:18

It's a little uncomfortable.

Katelyn Magnuson: 00:15:19

We don't love it.

Katelyn Magnuson: 00:15:20

It feels uncertain, but the goal here would be to not change your investing

Katelyn Magnuson: 00:15:25

strategy through the recession.

Katelyn Magnuson: 00:15:28

You continue to invest because if anything, right now, if you're in a

Katelyn Magnuson: 00:15:30

financial place, stocks are on sale.

Katelyn Magnuson: 00:15:33

So you can buy in at, at lower rates.

Katelyn Magnuson: 00:15:35

I will be continuing to invest at the exact same rate that I've

Katelyn Magnuson: 00:15:37

been doing for the last three.

Brock: 00:15:40

Exactly like the other thing that we we see right now is the

Brock: 00:15:44

importance of diversification in the stock market that really not having

Brock: 00:15:48

all of your money into one thing.

Brock: 00:15:50

And you know, of course I'm no stock market expert or anything.

Brock: 00:15:53

But the diversification is so important right now, so that you do kind of

Brock: 00:15:57

have that flexibility and you can take some hits in different areas.

Brock: 00:16:02

And like you said, that stock market will recover, it absolutely will.

Brock: 00:16:06

Um, and I almost think of it, what we're going into kind of like a credit score.

Brock: 00:16:11

If the stock market's really high and we have, you know, things are going.

Brock: 00:16:16

Something like a recession or a cut is going to drop that so

Brock: 00:16:20

significantly, but we don't have a great credit score right now.

Brock: 00:16:23

Our stock market has really suffered, you know, through

Brock: 00:16:27

COVID in the last couple years.

Brock: 00:16:29

So this recession isn't going to have the same effect that it

Brock: 00:16:34

did last time, at least not yet.

Brock: 00:16:36

Um, and so, you know, that that drop isn't going to dramatically

Brock: 00:16:40

hit us as hard as it did last time.

Brock: 00:16:43

And so I think that shock that you, that you're, um, that you

Brock: 00:16:47

mentioned of us looking at our investments and looking at that drop.

Brock: 00:16:50

Yeah, it is.

Brock: 00:16:51

It's a lot and it, it feels like dollars just getting pulled from

Brock: 00:16:54

your pocket, but you, you know, when you're in the stock market,

Brock: 00:16:58

you have to remember it is volatile.

Brock: 00:17:00

And it, you know, it goes up, but it come, it comes back and it, again, a

Brock: 00:17:06

lot of the smarter business owners out there are looking at this as opportunity.

Brock: 00:17:11

So get out there, look at your investments, look at

Brock: 00:17:14

what you're interested in.

Brock: 00:17:16

I think this is also a great opportunity for individuals.

Brock: 00:17:19

I think if you were considering looking at doing something on the side, this is the

Brock: 00:17:24

perfect time to have a side gig, a side hustle, whatever it may be, or, you know,

Brock: 00:17:29

if this is like you were waiting for that thing to kind of tell you, you know, what

Brock: 00:17:34

let's go forward with with my passion, I would, I really wanna get more into this.

Brock: 00:17:39

I wanna get more into this.

Brock: 00:17:40

This is a time to invest in yourself.

Brock: 00:17:43

Most certainly.

Brock: 00:17:44

I think that, Looking at, you know, the different options out there

Brock: 00:17:48

and everything, and, and knowing that we are in a time that we're

Brock: 00:17:52

gonna, our needs are gonna change.

Brock: 00:17:54

Look at how that relates to you.

Brock: 00:17:56

Look at that.

Brock: 00:17:57

However that relates to your business, make informed decisions with your

Brock: 00:18:01

business now, and you'll get through this.

Katelyn Magnuson: 00:18:06

No, I, I do think that this brings a

Katelyn Magnuson: 00:18:07

really good opportunity and we.

Katelyn Magnuson: 00:18:10

it, what you said reminded me a lot of the seasonality that I chatted about

Katelyn Magnuson: 00:18:13

in an earlier episode and there's seasonality to everything, right?

Katelyn Magnuson: 00:18:16

There's cycles, there's seasonality.

Katelyn Magnuson: 00:18:18

I notice it in my energy a during the month B during the year, but this

Katelyn Magnuson: 00:18:22

is on an even larger scale, right?

Katelyn Magnuson: 00:18:24

We see periods of a lot of growth and all, and the doing and all the

Katelyn Magnuson: 00:18:28

things and recessions are kind of that period for lack of a better

Katelyn Magnuson: 00:18:33

term of kind of rest and rebuilding.

Katelyn Magnuson: 00:18:37

And it can be scary and it can be horrible for some people, but as a whole,

Katelyn Magnuson: 00:18:42

it sort of allows us to reconfigure a lot of what COVID did as well.

Katelyn Magnuson: 00:18:46

Right.

Katelyn Magnuson: 00:18:47

Allowed a lot of us to sort of reconfigure where our priorities

Katelyn Magnuson: 00:18:49

are, what we wanna be doing, uh, how we wanna be making our money.

Katelyn Magnuson: 00:18:53

And it also a little bit of.

Katelyn Magnuson: 00:18:55

Fear or uncertainty, I think can be healthy for our finances and ourselves,

Katelyn Magnuson: 00:19:00

because it does push us to diversify.

Katelyn Magnuson: 00:19:02

It does push us to not, I'm gonna use a chicken one here to not have

Katelyn Magnuson: 00:19:06

all of our eggs in one basket, right.

Katelyn Magnuson: 00:19:08

Because we want to have stability whenever we can, you know, humans

Katelyn Magnuson: 00:19:13

want

Brock: 00:19:14

There's a lot of sectors that are gonna get hit harder than others.

Brock: 00:19:18

You know what I mean?

Brock: 00:19:19

But you know, kind of like what we were talking about.

Brock: 00:19:21

I think a lot of businesses, because they've just gotten beaten so hard

Brock: 00:19:25

through the last couple years.

Brock: 00:19:27

Are ready for the fight.

Brock: 00:19:28

You know what I mean, are ready to, to combat this and have the tools available

Brock: 00:19:34

that they either gained or learned about, um, in the last couple years.

Brock: 00:19:39

And this is the time that those really come into play.

Brock: 00:19:41

I mean, really understanding, um, how your business operates and, and

Brock: 00:19:48

where your, your necessary costs versus your discretionary costs.

Brock: 00:19:53

Lie, um, is, is a huge thing.

Brock: 00:19:55

And really being able to budget out and project out your income to

Brock: 00:19:59

know what to expect going forward.

Brock: 00:20:01

If you say, you know what things are going great right now, but say we have

Brock: 00:20:04

a decrease in income of X percent, you know, how is that going to affect

Brock: 00:20:09

just the general business operation?

Brock: 00:20:11

How can we better prepare for that now?

Brock: 00:20:14

Um, rather than dealing with it, head on at, you know, in three months, six

Brock: 00:20:18

months, two years, whatever it may be.

Brock: 00:20:21

And.

Brock: 00:20:22

There couldn't be a better time to really dive in, understand your

Brock: 00:20:26

finances personally, professionally, and, and your family in general.

Brock: 00:20:31

You know, I, my parents are a little bit older now than they

Brock: 00:20:35

were in the last recession.

Brock: 00:20:37

And so retirement can be scary.

Brock: 00:20:40

Retirement's, you know, terrifying for all of us anyway.

Brock: 00:20:43

But if you are age with a lot of the, the boomer generation and everything,

Brock: 00:20:48

getting close to retirement, Recessions push people into retirement, you know,

Brock: 00:20:53

um, a lot of times just like we saw with COVID, you know, people made that

Brock: 00:20:58

decision a couple years earlier than they, than they probably would've before.

Brock: 00:21:02

And are we, you know, are you ready for that decision?

Brock: 00:21:05

Like, can you make that decision right now?

Brock: 00:21:07

Um, and getting a, a, you know, a great look at your finances can help you

Brock: 00:21:12

determine that, um, But it's all about understanding them and, and making sure

Brock: 00:21:17

that you're looking at all the avenues look at the potential costs or the

Brock: 00:21:21

potential effects of this recession.

Brock: 00:21:24

Um, but just another reminder why it's important that we, you know,

Brock: 00:21:28

have a full understanding of what's going on financially in our lives.

Katelyn Magnuson: 00:21:32

Right.

Katelyn Magnuson: 00:21:33

And I think that for us, well, not for you and I, but for us generally.

Brock: 00:21:37

mm.

Brock: 00:21:38

And

Katelyn Magnuson: 00:21:38

finances can be shame filled.

Katelyn Magnuson: 00:21:40

They can be scary.

Katelyn Magnuson: 00:21:41

They can be something that we avoid.

Katelyn Magnuson: 00:21:43

We don't wanna look at, we attach stories to them.

Katelyn Magnuson: 00:21:46

Yeah.

Katelyn Magnuson: 00:21:46

Especially with debt, everything else that comes through, you just don't.

Katelyn Magnuson: 00:21:49

Do you have enough money and you're bank account to pay

Katelyn Magnuson: 00:21:51

for what you need to pay for.

Katelyn Magnuson: 00:21:52

Okay, cool.

Katelyn Magnuson: 00:21:52

Maybe we don't look further than that.

Katelyn Magnuson: 00:21:54

And I'm challenging anyone listening to this that doesn't know their

Katelyn Magnuson: 00:21:59

finances that doesn't check their bank regularly, or that doesn't

Katelyn Magnuson: 00:22:01

know where their money's going.

Katelyn Magnuson: 00:22:04

We have two really great offerings for you.

Katelyn Magnuson: 00:22:06

So, number one, if you haven't signed up, we have a free five day

Katelyn Magnuson: 00:22:08

money challenge on our website.

Katelyn Magnuson: 00:22:11

It walks you through some really basic steps in less than 15 minutes

Katelyn Magnuson: 00:22:14

a day, where you will have a much better grasp on your finances.

Katelyn Magnuson: 00:22:19

Number two, and we're gonna link both of these in the notes here.

Katelyn Magnuson: 00:22:21

Number two, Brock is doing financial strategy sessions with our clients

Katelyn Magnuson: 00:22:26

and with anyone that's interested over the next couple of months before we.

Katelyn Magnuson: 00:22:31

Head first into tax season preparation.

Katelyn Magnuson: 00:22:33

So they are going to be limited over the summertime.

Katelyn Magnuson: 00:22:36

If you were wanting an outside opinion that can look at where you're at

Katelyn Magnuson: 00:22:40

financially, you know, maybe you have business finances, maybe you're in

Katelyn Magnuson: 00:22:43

corporate and assess and give you kind of, you know, the green light,

Katelyn Magnuson: 00:22:47

the yellow light, the red light with some action steps for improvement.

Katelyn Magnuson: 00:22:51

I highly recommend booking one of those over the summer so that you can decrease

Katelyn Magnuson: 00:22:56

the anxiety and the stress that you feel about where we're at right now.

Katelyn Magnuson: 00:23:00

And instead can feel like you have.

Katelyn Magnuson: 00:23:02

The confidence that comes with an action plan and clear steps moving forward.

Brock: 00:23:07

absolutely just navigating through this recession, knowing that you do have,

Brock: 00:23:11

you have safeguarded your assets, you've safeguarded, your family and everything

Brock: 00:23:15

that, that panic doesn't really hit you the same way it might hit others.

Brock: 00:23:20

Um, is, is immeasurable.

Brock: 00:23:22

I think just, you know, having that security and feeling aware and in,

Brock: 00:23:27

in, in the know of your finances and your comfort, um, is just so critical.

Brock: 00:23:33

Caitlin and I have really felt, um, felt less recession, uh, coming out of

Brock: 00:23:39

school, going through college, getting into the, you know, the corporate

Brock: 00:23:42

world and now into working with so many small businesses and everything.

Brock: 00:23:47

We have a little PTSD, so we, we, I don't wanna say we over prepare,

Brock: 00:23:53

but we definitely don't let.

Brock: 00:23:57

Things kind of slip through the cracks.

Brock: 00:23:59

When we, when we consider, what do we need to make sure that, you know, we

Brock: 00:24:05

get through this and that we can, you know, we can keep our, our head above

Brock: 00:24:10

water and also, you know, keeping your head above water, but being able to see

Brock: 00:24:15

those opportunities and grasp at them, um, when available, because we might as

Brock: 00:24:20

well make money from this, if we can.

Brock: 00:24:22

Right.

Brock: 00:24:23

Um, that I think this strategy calls are really going so well so far.

Brock: 00:24:28

I think people are really bringing up a lot of questions, um, that are great.

Brock: 00:24:33

And we're really looking at a lot of different avenues that probably we,

Brock: 00:24:36

you know, might not have looked at.

Brock: 00:24:38

Um, had it not been in this, uh, pre-recession period.

Brock: 00:24:42

I think it's a, you know, it's a great time to start the conversation.

Katelyn Magnuson: 00:24:47

Absolutely.

Katelyn Magnuson: 00:24:47

It feels, uh, a little spring cleaning ish to me, which I,

Katelyn Magnuson: 00:24:50

I actually really like, right.

Katelyn Magnuson: 00:24:52

Um, yeah, I've, I've been doing it in my house.

Katelyn Magnuson: 00:24:54

We've been doing it in our business and, you know, looking

Katelyn Magnuson: 00:24:56

at what makes the most sense.

Katelyn Magnuson: 00:24:57

And then also that leads to me doing it in my personal finances.

Katelyn Magnuson: 00:25:00

And so I think being able to do this for our clients and for our listeners

Katelyn Magnuson: 00:25:04

here is really fun because I mean, okay, that's why we do what we do, right.

Katelyn Magnuson: 00:25:09

Because we think it's fun.

Katelyn Magnuson: 00:25:10

Not everyone does.

Katelyn Magnuson: 00:25:11

Um, but not everyone gets excited about retirement or taxes E either.

Katelyn Magnuson: 00:25:15

And with that, I think that we have a really unique.

Katelyn Magnuson: 00:25:18

Skillset in that we get to see the behind the scenes of so many small businesses

Katelyn Magnuson: 00:25:23

and so many individuals, finances that, you know, you might talk to your

Katelyn Magnuson: 00:25:28

friends and you might get a feeling for where your friends are financially,

Katelyn Magnuson: 00:25:30

but like, are they being truthful?

Katelyn Magnuson: 00:25:32

Are you getting the full picture?

Katelyn Magnuson: 00:25:33

Because there is there.

Katelyn Magnuson: 00:25:34

Right there.

Katelyn Magnuson: 00:25:35

There's shame.

Katelyn Magnuson: 00:25:36

There's keeping up with the Joneses.

Katelyn Magnuson: 00:25:37

There's everything that comes into like those interaction with friends

Katelyn Magnuson: 00:25:39

and family versus having someone that's like, Hey, I've seen 20 other

Katelyn Magnuson: 00:25:43

people that are in a really similar circumstance where you are financially

Katelyn Magnuson: 00:25:47

business Lifewise age-wise et cetera.

Katelyn Magnuson: 00:25:49

Here's what we've seen work for them because we get to pull such

Katelyn Magnuson: 00:25:52

a larger sampling of people that are in, you know, similar age

Katelyn Magnuson: 00:25:56

ranges, tax brackets, all of that.

Katelyn Magnuson: 00:25:58

And it makes it fun because it almost feels to me like.

Katelyn Magnuson: 00:26:03

we can we get the cheat codes to an extent for it, right?

Katelyn Magnuson: 00:26:06

Like we, we get to see what works and we get to pass that along,

Katelyn Magnuson: 00:26:09

which I think is really valuable.

Katelyn Magnuson: 00:26:11

So,

Brock: 00:26:11

The, the one I, I heard this quote, uh, years back when I was in college.

Brock: 00:26:17

Uh, and I don't know it exactly, but basically it just, it, it says,

Brock: 00:26:21

you know, there is so many languages of business, but all languages,

Brock: 00:26:26

you know, Talk through money.

Brock: 00:26:29

And so you, you know, really going through the numbers of your business,

Brock: 00:26:33

it's gonna tell your story, regardless of what industry you're in, everything,

Brock: 00:26:38

we can look at past data and kind of help project what the future is gonna

Brock: 00:26:43

look like and, you know, prepare for, um, different scenarios and everything.

Brock: 00:26:48

And I think that, uh, we're walking through that with some of our

Brock: 00:26:52

clients that we've done in the past.

Brock: 00:26:54

I think has been, you know, so valuable to them because they can

Brock: 00:26:58

really feel so prepared and confident.

Brock: 00:27:01

Um, the recession is not a time that you wanna kind of feel, you know,

Brock: 00:27:05

discouraged or, or scared or panic.

Brock: 00:27:08

You know, we wanna go through this and be like, Hey, we're prepared.

Brock: 00:27:12

This is what we're gonna do.

Brock: 00:27:13

This is our plan.

Brock: 00:27:14

And, and, you know, come up the other side and I think.

Brock: 00:27:18

Despite what kind of business you're in, we can help you go through

Brock: 00:27:23

fully understand it and, and really prepare yourself just in general.

Brock: 00:27:29

Um, there's and there's, there's so much to a recession, um, that there's just

Brock: 00:27:35

a lot of different areas to look at.

Brock: 00:27:37

Uh, but in general, you know, making sure that you're comfortable with your

Brock: 00:27:41

finances is, is at the foremost priority.

Brock: 00:27:45

Mm.

Katelyn Magnuson: 00:27:45

Absolutely.

Katelyn Magnuson: 00:27:46

I think, you know, There's the saying that money, money can't buy happiness.

Katelyn Magnuson: 00:27:49

However, I think money can buy a lot of freedom, a lot of access.

Katelyn Magnuson: 00:27:53

And I think that for those of us that may have issues with, well,

Katelyn Magnuson: 00:27:57

I don't wanna be rich because you know what, X, Y, Z, through

Katelyn Magnuson: 00:28:00

stories we tell ourselves around it.

Katelyn Magnuson: 00:28:02

I think that taking some time to step back and examine what access to money provides

Katelyn Magnuson: 00:28:08

for you, your family, your partner, your loved ones is really important.

Katelyn Magnuson: 00:28:12

And I think it allows a lot of us to make.

Katelyn Magnuson: 00:28:15

A little bit less emotional decisions when we're looking to make changes in our

Katelyn Magnuson: 00:28:18

lives, because it is money's emotional.

Katelyn Magnuson: 00:28:20

We have all of, all of these hangups that come with it, or, you

Katelyn Magnuson: 00:28:23

know, all of these things we've been told stories we've been told.

Katelyn Magnuson: 00:28:26

So I know that the idea of a recession can be scary.

Katelyn Magnuson: 00:28:30

We look at it.

Katelyn Magnuson: 00:28:32

As a potential for growth as a potential for reconfiguring, for

Katelyn Magnuson: 00:28:37

streamlining, for efficiency, for just feeling aligned in your life and

Katelyn Magnuson: 00:28:42

in the direction that you're going.

Katelyn Magnuson: 00:28:44

And as it having the potential to really boost you forward financially, right?

Katelyn Magnuson: 00:28:48

Buying stocks at a discount or on sale, or however you wanna look at

Katelyn Magnuson: 00:28:51

it, um, setting your future self up for success and just continuing.

Katelyn Magnuson: 00:28:56

And I know that investing for the long term is not sexy.

Katelyn Magnuson: 00:29:00

Right.

Katelyn Magnuson: 00:29:00

Putting $300 or a hundred dollars or whatever it is a month towards

Katelyn Magnuson: 00:29:03

investments every month for every year for 30 years is not, it's not

Katelyn Magnuson: 00:29:08

the get rich quick scheme that we all really would love, but it's consistent

Katelyn Magnuson: 00:29:12

over time and that's what matters.

Katelyn Magnuson: 00:29:13

And so I think doing that with all of your finances is good.

Brock: 00:29:17

Absolutely.

Brock: 00:29:17

Absolutely.

Brock: 00:29:19

And I think that we need to approach this recession, not so much as a

Brock: 00:29:24

nightmare, but as you know, the great opportunity and let's come out of this

Brock: 00:29:29

stronger than when we started, you know, let's, let's learn about our business,

Brock: 00:29:34

learn about where we wanna see our future and do what we can to attack it.

Brock: 00:29:38

Now, I think, the idea of, long term investing it's not a get

Brock: 00:29:44

rich quick scheme, but you don't wanna get rich quick scheme.

Brock: 00:29:47

You want something that is sustainable, something that's gonna be there in

Brock: 00:29:51

the end, something that protects your family and something that's informed.

Brock: 00:29:54

Making these informed decisions is what gets you to the finish line.

Katelyn Magnuson: 00:29:59

Absolutely.

Katelyn Magnuson: 00:30:00

I couldn't agree more so reminder to everyone.

Katelyn Magnuson: 00:30:02

The five day free challenge is gonna be linked in here.

Katelyn Magnuson: 00:30:05

The sessions with Brock will be linked in here as well.

Katelyn Magnuson: 00:30:08

They're going to be happening over the summer.

Katelyn Magnuson: 00:30:09

No guarantees once September hits, because that will be subject to availability.

Katelyn Magnuson: 00:30:15

And if you want to feel more prepared, If you want to better

Katelyn Magnuson: 00:30:18

understand your finances, go take a look at one or both of those.

Katelyn Magnuson: 00:30:21

They're great resources Brock.

Katelyn Magnuson: 00:30:23

Thank you for being here for part two of all things recession, we're gonna be

Katelyn Magnuson: 00:30:28

chatting next week about student loans, which I'm really excited for as well,

Katelyn Magnuson: 00:30:33

which is again, a weird phrase to come out of my mouth, but looking forward to.

Brock: 00:30:38

Thank you so much, Caitlin.

Brock: 00:30:39

I look forward to it and, I'm so excited to start the conversation

Brock: 00:30:44

and, and get through this recession and change the outlook.

Katelyn Magnuson: 00:30:48

Yes.

Katelyn Magnuson: 00:30:48

No, I think that's great.

Katelyn Magnuson: 00:30:49

I love that.