how to get rich during recession (following 1% strategies)

Summary

This video explores the duality of recessions, revealing how the wealthy leverage economic downturns to their advantage. It highlights historical examples like Joseph Kennedy during the 1929 Great Depression and modern strategies employed by firms like Blackstone in the 2008 housing crash. The script also addresses insider trading by Congress members, showing how those in power use recessions as opportunities to accumulate wealth while the general public suffers. The key takeaway is that while most people panic and sell during a financial crisis, the elite use it as a time to invest, reshaping the economic landscape for their benefit.

Takeaways

• 😀 Recessions can have drastically different outcomes: While some lose everything, others profit immensely from the crisis.
• 😀 During recessions, the wealthy use the opportunity to invest in undervalued assets, such as stocks, real estate, and businesses.
• 😀 Joseph Kennedy's strategy during the 1929 market crash shows that when the public is investing, the rich take a step back and prepare to profit from the crash.
• 😀 The elite understand that privilege is not just about wealth; it's about having access to insider knowledge and using it during economic downturns.
• 😀 While the public suffers during financial crises, large firms like Blackstone strategically buy homes at rock-bottom prices, becoming major landlords.
• 😀 Blackstone and BlackRock profited by purchasing homes in collapsing housing markets and renting them out, making them some of the largest property owners in the U.S.
• 😀 Congress members historically faced no penalties for insider trading, legally benefiting from knowledge of upcoming recessions and market crashes.
• 😀 Even after the 2012 STOCK Act aimed to curb insider trading by Congress, the system still allowed lawmakers to profit through well-timed investments.
• 😀 The COVID-19 pandemic saw a surge in new billionaires while millions of people were pushed into poverty, demonstrating the widening wealth gap.
• 😀 During a recession, the best strategy is often to stay calm, think long-term, and avoid panic-selling investments that could recover over time.

Q & A

What is the central theme of the video script?

The central theme of the script revolves around how the elite, particularly the top 1%, leverage recessions and financial crises to their advantage, while the majority of people suffer. It also discusses the disparity in knowledge and power between the wealthy and the rest of society.

How did Joseph Kennedy benefit from the 1929 stock market crash?

Joseph Kennedy, a savvy businessman, recognized signs of an impending crash when a shoe shine boy mentioned a stock tip. He bet against the market, sold off his stocks, and bought up assets at incredibly low prices during the Great Depression, ultimately thriving while most others lost everything.

How do the wealthy view recessions differently from the general public?

While the general public fears recessions and tries to protect their assets, the wealthy often see them as opportunities. They are prepared to buy assets at a fraction of their value during a crash, securing long-term wealth by leveraging their knowledge of the system.

What role did Blackstone play in the 2008 housing crisis?

During the 2008 housing crash, Blackstone, along with other financial firms, bought homes at rock-bottom prices in distressed markets like Arizona, Florida, and Nevada. They didn't flip the properties but instead became large-scale landlords, profiting from renting out these homes.

How does the system benefit the top 1% during economic downturns?

The system is designed in a way that makes it difficult for ordinary people to understand and engage in wealth-building strategies. Meanwhile, the elite have the knowledge and resources to take advantage of recessions, securing deals, acquiring properties, and investing in ways that the majority of people can't.

What happened with Congress members and insider trading before the STOCK Act?

Before the STOCK Act was passed in 2012, members of Congress were legally allowed to engage in insider trading. They could use private knowledge from briefings about the economy to buy or sell stocks before the market reacted, which was completely legal.

How does the concept of insider trading still affect American politics today?

Although the STOCK Act was passed to prevent insider trading by Congress members, it has not been fully effective. Many members, like Nancy Pelosi, have made millions by timing their investments in alignment with future legislation, raising questions about the fairness and transparency of the system.

What financial strategy is suggested for people during a recession?

The script suggests staying calm during a recession and focusing on long-term investments. Instead of panicking and selling off assets, it encourages people to invest when the market is low and even consider side jobs or second sources of income to take advantage of the financial downturn.

What advice does the script give regarding money management during a recession?

The script emphasizes the importance of not spending your own money. It suggests that wealthy individuals typically do not use their personal funds but instead borrow money to reinvest. This strategy protects personal assets while still engaging in profitable ventures.

Why does the script claim that the system is designed to be confusing?

The system is intentionally made complex and layered with jargon and legalities that most people don't understand. This design prevents the average person from engaging in investment strategies and financial planning, keeping the system in favor of those with knowledge and power.