How to ride the recessionary tide?



Recession is on every persons mind these days. Since 2008 the job market hasn’t been doing good globally, except in some sectors or in some countries. The earning potential of an average earner has gone down due to cost cuts by large & small organizations. The annual inflation of 6-8% is eating away the value of dollar, pound, sterling, Yuan, Rupee every year. Human population on the earth is growing almost at same rate as before and in some countries even faster. That means demand for resources is on the rise. Depletion of natural resources (pure air, land, water, plants, minerals) is causing rise in prices of consumable items. Unplanned expense adding burden to the monthly budget. Tax burden cutting the net salary available to spend. The recessionary tide doesn’t seem to be easing out since past 5 years and how long would it continue is left for anyone to guess.

Though the problems of recessionary economic conditions look distressful, there are ways to ride on this recessionary tide. Surfers usually ride on the surfing board in sea till the point they cannot surf ahead. Then what do they do? They wait for the big tide to come along to ride underneath it using its force to navigate. This practice is now extended to ride the financial tide. Let us look at it in detail.

 Many people expect miracles to happen with economy. miracles happen, however they are rare. If there is one in 10 million chance of winning a lottery why waste time.

Solution to riding the economic tide of recession is distributed in easy steps.

Step1. Calculate your net worth. While most people aren’t aware of how to calculate their net worth let me give you a simple way to calculate it. Have pen and paper handy. Write down all the assets (current property value, cash, bank balance, current value of your investments in mutual funds, stocks, bonds, current value of gold, silver etc). Sum it up. The write down what you owe. How much is the balance loan amount – personal, home or commodity loan or any other outstanding. Subtract the assets total from the debt total, that will give you your net worth. If your net worth is close to zero you aren’t saving enough or you have taken loans that are beyond your capacity to digest.

Step2. Once you know your net worth, look at what returns you are making from your investments. If you have a home in addition to where you are living, check if it is giving you a return of 5-6% minimum of the property value as rent. If not, then re-rent it or sell it. People hold on to their property waiting for the ideal price and that rarely happens. If your property is worth say 100,000$ which these days might be the lowest price in most of the towns. When you sell it and earn a handsome cash, this cash now can be deployed to income generating sources. Divide investments in to 3 buckets. viz. aspirations bucket, Growth bucket and safety bucket. Invest 1/3rd of the amount in high returns and high risk avenues like buying blue chip companies bonds (*they should be high trade volumes). China has booming housing demand. You may consider buying a commercial property in Shanghai. It will give a decent cash flow. Yet another good investment is buying foreclosure property and selling it at a premium price. You do not have to invest in to entire price of the property. Consider funding a business (*Do it with the help of someone who has already done it successfully). The second bucket is an investment in Gold, or land or food. You may consider setting up small kiosks (coffee/coke vending machines). This  investment will also generate cash flow. The third bucket is safety bucket. Put 1/3rd of your money in government bonds, fixed deposits. If you aren’t in job you could incorporate yourself and get tax advantages on the income you draw from your business.

Step3. Look at alternative means of income generation. Work part-time. Working 2 hours part-time every day will give you an extra income of 5 days in a month. If you are earning say 3000$ a month, working 2 hours extra gives you an additional cash of 600$ a month. Not bad isn’t it. This is the minimum you could earn. Extra 600$ means it will take care of your monthly food expense, travel if you are taking bus or train plus it will leave you some spare cash.

Step4. Work on your skills. Most people do not know when they polished their axe. Their skills are outdated and they are less productive. Spend some time polishing or brushing up the skills you get paid for. Along with it acquire new skills. If you optimize on 1 hour each day and spend 1/2 hour learning new skills you will easily acquire a new skill in 3 months. You increase the probability of landing a better job, better pay or creating your own job.

Step5. Work on your body. If you are overweight, you are carrying extra weight, extra lethargic attitude, extra discomfort with you. It will always limit your potential to grow. Spend at least 1/2 hour exercising. You could join a gym, yoga class or simply run in the morning. This will give you that extra energy you need to go extra mile in your career.

Step6. Keep a tab on expenses. Divide them in to Absolute Must, Desirable and Luxury. Spending on grocery is a must, spending on medical expenses is a must. An absolute must is an expense bucket which is without money will make your living impossible or uncomfortable.

The desirable expense is paying for cable TV, dining out expense. The last bucket is expense on a cruise, on dining in 5 star hotel, on buying Armani coats, on buying Tag Heuer watch.

 Use the golden rule. Create an asset to pay for liabilities.

Step7. Form a habit. To acquire new skills, to do the workout, to invest regularly a habit is required. It requires a character to resist temptations to buy expensive items. Set goals and accomplish them through executing daily tasks. This will create momentum and take you closer to the realization of goals. Read books.

These 7 steps are the steps for riding the recessionary tide. Good Luck!


Apply Law of Probabilities

law of probability


I don’t believe in providence and fate, as a technologist I am used to reckoning with the formulae of probability. – Max Frisch


When in school we all studied the Law of probabilities. This law states that the possibility of a number to occur at any given time is 1/(The total count of the numbers). That means if the expected outcome of an action is positive, negative or neutral, the probability of outcome being positive is 1/3rd.

This law is crucially considered to decide the outcome of an event, action or process to know what are the chances of the outcome favoring the seeker. In other words if you presented an idea to your manager to increase productivity of the team and 2 of your colleagues also submitted ideas, the probability of your idea getting selected is 1/3rd unless the manager decides to select all 3. Similarly if you are in sales and you are out on the field to sell your product, not everyone’s going to buy it. If you talk to 10 people in a day, and for this product the ratio of prospect converting to customer is 1:10 then 1/10th is the probability.

The law of probability is useful in preparing action plan to meet the target. If the target is to get 5 customers each day and the conversion ratio is 1:10 then you ought to meet and talk to 50 people to have 5 customers. If you need some funding for your project or raise money for charity, you have to use this law to ensure that you reach your target. It is a myth that those who do well in sales are great  in presentation. They are able to close most of the prospects. Some people may have mastered the art of presentation and closing, however the secret of their high sale is they simply talk to more people.

If you want to succeed in exam, you have to solve sample papers at least 10 times to get better at the subject. Your probability of solving the test paper successfully is high.

How does law of probability help in reducing risk?

Risks are integral part of life. Risk becomes an issue if it is not anticipated and mitigated. The law of probability predicts the occurrence, the higher the probability of occurrence the greater is the focus given on the risk to mitigate.

Share prices roll on the stock market and their volatility is a cause of concern for many investors. A decision could mean a gain of millions or even billions of dollars or loss of it. Fortunes could turn tables with a single decision. This decision is taken based on the analytic recommendations and historical performance. The law of probabilities support the decision to buy or sell a scrip based on its probability to outperform its price considering number of variables that influence its price movement viz. index movement, govt. policy change, demand for the product in market, law of nature.

Thomas Edison failed a 1000 times before he invented the light bulb. Every failure he stated that he got closer to the solution, because the probability of success increased as he kept failing. Similarly if you are at a goal to achieve something in your life and aren’t being successful in achieving your goal, it only means that god wants you to try a couple of more times before you embrace success. That is the reason failure is considered to be stepping stone for success.

When the most successful surgeon is asked about how does he ensure that he succeeds operating a critical patient, he always mentions that his experience suggests 99% probability that he will be able to do well. The 1% probability of failure is there, however it is rare in occurrence.

To cut down the probability of failures one must:

Increase their numbers, increase number of rejects to get a Yes from the prospect.

Solve more number of papers to increase probability of answering the exam paper well.

Do more iterations of action to get closer to desired result.

If you want to find an address, what do you do? You ask people on the road for direction. You go a little ahead and then again you ask one more person. Why? To increase probability of being in right direction.

Cricket batsman or bowlers practice several times before they play real game. Practice reduces the probability of hitting a wrong shot or bowling a loose ball.

The astronauts are put in simulator for months before they actually go on mission. The simulated environment makes them prepared for the possible challenges they would face while in space.

Mastering the law of probability is a step closer to success. It gives a definite direction to take action to produce desired result. Apply law of probability in daily life.

To know what it would take to succeed at any goal ask yourself.

  • What is my specific goal. Is it to make 3 new customers every day or make 2 goals in a match.
  • What is the probability of succeeding? One in 10 for making new customers. Or Out of 10 ball kicks you hit the goal post twice.
  • What do you need to do to meet your goal? Talk to 30 new people every day or hit the ball towards goal post 10 times at the least.

Then prepare daily TO-DO list based on these numbers and execute them every day. This is a sure shot way to succeed in any challenging task that is bound up by uncertainties.

To know more insight to SUCCESS in Life, visit

Power of Change


Yesterday the power of Persistence was revealed in a quick blog. The power of persistence can be complemented with the power of Change.

Change is automatic yet it could be rewarding or frustrating. One could flip on either side of the coin if he doesn’t know how to ride a change.

What is a change?

Change is anything that transforms a current state of person, place or thing in to a new state. 

Change could come as a surprise to those who aren’t prepared for it or who close their eyes and say everything around is calm and serene when the storm is raging and those who get ready for it & face it.

Whether a person accepts it or rejects it depending on his personal gain, change comes through. It doesn’t wait for a conducive time or place. Change is natural. From the change in body cells every single day to a change in weather that creates storm, every change is automatic, 

People lose jobs, they get new jobs, people lose their belongings and they create new ones. People lose their loved ones and they get a new person in their life. The earth’s atmosphere changes a million times in a day. Every 4 years a person has a new body, it looks the same more or less yet all the cells in the body have been replaced by then.

Why does change drive people to Nuts?

Is it the complacency people acquire to stay comfortable in the place they are? Is it the fear of losing what they already have acquired over years?

Reasons could be many, yet the basic underlying reason is the fear instilled in mind that change will bring along mis fortune along. The fear of being uncomfortable, the fear of uncertainty, the fear of being worst off than before. Sometimes it is relating to the person we know of who went through misery.

How to deal with Change?

First, there is a lot of cleaning work required to cleanse the predominant thoughts about change in mind.

It is a change in perception about CHANGE. Perceptions are formed over a period of time and they become reality of mind afterwards. To get to the root of the problem we have to clear our understanding of change. Change doesn’t happen with the intention of doing good or bad. It is just a transformation agent that is doing it role. What’s opposite of change is Death. Death is a reality and that is the final change a person undergoes to transition him from this planet.

Hence, change in itself doesn’t have any agenda of its own. We attach meaning to it by measuring it within our parameters of good or bad.

Second, understand that change is necessary. If we were to stay in our mother’s womb forever cos that is the safest place with a lot of nutrition and protective layers, would we survive? This change was required to take birth. So, if the fundamental source of change is bringing one to life how could it be Bad?

Change could bring discomfort for some time but that is to realign our mind or body. For e.g. If tomorrow morning when you are taking your regular route and the road is now closed and you have to follow a new path, it would mean discomfort but that was done so that the traffic could be balanced out. You discovered a new route that is even more pleasant or has something unique you never saw. May be you find a repair shop for your car you were searching for long on that road.

It is how we see the change. When people lose job or are about to lose job they get extremely tensed and for that part it is natural. However, what is the point in working being redundant at a place where your value is only to fill in an empty space. You might as well explore something that is personally rewarding, something you always wanted to do and in the long run it will create total abundance for you and your family. I talk to a many people who go through this stage and they express deeper resentment while leaving job especially when they are asked to leave. When we walk over the opportunities putting it on the board that are waiting for them, they feel better. I spoke to one such person who lost his job and after 3 months when I again talked to him, he was happy he got a job in another city. See, there was a bit of discomfort of moving from his city to a new city (Bangalore), yet he had a job he wanted and the kind of salary etc. What appeared to be a Bane was in fact a boon. The little discomfort is always there but it takes you closer to another comfort.

Third, when such change is happening it is very important to make a chart of what is good that will come as a result of this change and what is it the momentary discomfort that it will bring along. Write it in details. For each discomfort areas write down one action plan or a provision you will make to take care of this discomfort. In this case the discomfort of having to manage with whatever money one has until he gets a new job, the action plan could be cutting down unnecessary expenses, using the savings more smartly, meeting more people to explore new job opportunities.

When you have a provision for the temporary discomfort its gravity drops down.

Fourth, step is being proactive. That means anticipating what changes could come along the path and being ready with the mitigation chart. Taking action is imperative. Take small action steps every day to get stronger at the mitigation. When you know you have OPTIONS you are relaxed. Write them down.

Fifth, measure progress. Change is automatic but progress isn’t. One has to be making progress to reach a goal. Hence, to make a progress take every day steps to move closer towards your goal. Measure the progress impartially. Consider asking someone for a feedback. Incorporate action steps to correct you. Feedback will re direct you to your right path. Do not shut down your brain while working on feedback. If you doubt the feedback is biased ask more people.

Sixth, once you successfully ride a change, you are set to manage any change in life. Maintain victory log that will remind you of how you rode the change to be successful. Share it with people. When you share your success story people get motivated to get out of their comfort zone and second, they start liking you for who you are.

The art of Kaizen states that “Change for Better”.

Good Luck!