How to be a recession GURU! (Isaac 5X)

The plunge in world economies last year has made people fearful and skeptical on how to spend their beloved money. There are various ways that both consumers and producers can employ to reduce costs and increase productivity.

As a consumer, I always wanted to have luxurious goods like shoes and bags. However, with the markets so volatile, I have to spend carefully. One method of reducing costs is to buy less expensive alternatives to the good desired which can handle the same job. An example of this would be bags. I wouldn’t need a three thousand dollar briefcase from Hermes to carry my books and worksheets to school – all I need is a $200 Oakley bag that has more capacity and is more durable. Besides playing my ‘cheap’ card, I can eat less frequently at restaurants and go for more hawker food, cut down on my entertainment expenditure e.g. going to the movies, clubs, etc , switching to public transport like taking a bus (as my mom always tells me) and practicing simple things like having a daily budget. These would help tremendously in reducing costs. But since I loathe sitting for hours on end studying, it would not be harmful to unwind sometimes to relieve myself of the stresses in life.

As a producer, reducing costs is essential as it may mean a matter of life and death for the company being operated. Current methods being used at the moment include moving production to countries such as China and India where the labor and production costs are lower. Big firms such as Apple ply such measures to lower costs and increase profits earned. Producers would also want to use cheaper alternative raw materials in their production and cut down on variable costs like electricity usage.

Large banks such as Morgan Stanley and Goldman Sachs which lost millions have been forced to resort to more drastic, faster methods of reducing costs. These banks have to ask their employees worldwide to go on no-pay leave for a few months (though I know there may not be sufficient time for the banks to fully recover), retrench workers, reduce the number of working days (say from five to three) or have their employees undergo wage cuts.
It’s a cruel world, but if you know how to spend and save wisely, you can still enjoy life when there’s an economic recession and enjoy it even more when times are good. Who knows, one of us may become a billionaire someday!...