How to Make Money During a Recession

Last Updated: September 14, 2022 References

Recessions are generally times of economic hardship, when companies cut staff and prices on the stock market fall and stay low. If you’re looking for ways to make money during a recession you could consider selling and renting things you own, as well as earning more money in the evenings and weekends to bolster your income. If you have cash, there are smart investments that can help you make the most of the recession.

Method 1

Method 1 of 3:

Making Money Investing in a Recession

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Invest in government bonds. If you have some assets and you are interested in how best to invest to both protect and increase your assets during a recession, a good place to start is government bonds. Bonds are very safe and reliable in a recession, when other investment options may be more volatile. There is also a good chance that the value of the bonds will increase during a recession. The most common high quality bond is the United States Treasury Bond.^{[1]
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- You buy can Treasury Securities, including bonds, directly from the Treasury website: http://www.treasurydirect.gov/indiv/myaccount/myaccount.htm
2
Invest when prices are low. If you are still in stable employment and your income has not suffered during the recession, some smart investments can help you make money and take advantage of the depressed stock market.^{[2]
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Expert Source

Benjamin Packard
Financial Advisor
Expert Interview. 11 March 2020.} If you can comfortably put more money into your portfolio when the prices are low, you could see excellent returns when the economy moves out of recession.^{[3]
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- There's a mountain of data that says if you buy stock in US companies and it's diversified, it will make you a lot of money in the long run. Stock can be inconsistent in the short tun, but in the long run it goes up and up and up.^{[4]
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  Benjamin Packard
  Financial Advisor
  Expert Interview. 11 March 2020.}
- You can't predict the stock market—you just have to be patient and wait for profit over time.^{[5]
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  Expert Source
  
  Benjamin Packard
  Financial Advisor
  Expert Interview. 11 March 2020.}
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3
Invest in precious metals. The prices of precious metals, especially gold, may move inversely to other assets during recessions. Like other investments, however, there is no guarantee that these investments will hold their value, especially during a global recession.
- The price of gold tends to rise during a recession as investors look for safe options, so if you can invest in gold early you may see excellent returns.^{[6]
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  Trustworthy Source
  US Bureau of Labor Statistics
  U.S. government agency that collects and reports labor-related information
  Go to source}
4
Pay more into retirement savings. A great way to make the most of lower stock prices in a recession is to maximize your contributions to your 401(k). During a recession, the money you put into your 401(k), or other retirement savings account, may have more purchasing power in the financial markets than it would outside of a recession when asset prices will generally be higher.
- Once the recession ends and the value of the assets in your portfolio increases, the value of the contributions you made during the recession will increase accordingly.^{[7]
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Lend money. If you have cash assets and you are looking for a good investment opportunity but don’t want to play the stock market, you could consider becoming a money lender as an individual. The peer-to-peer lending model has grown in recent years, and there are a number of websites that act as interchanges for lenders and borrowers.
- This can be risky, but it is up to you how much money you commit and how risky a borrower you are prepared to take on.
- You can lend to individuals or businesses.
- Average returns tend to be between 6% and 8%.^{[8]
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Invest in real estate. A recession provides a good opportunity to purchase properties at depressed prices. These properties can then be sold at a higher price, without any modification, when the economy recovers. However, a buyer must be careful to properly analyze the housing market to determine a fair price for the property. This will ensure that they are getting a good deal and will be able to flip the property for a profit later.
- Real estate investing also requires you to be prepared to jump on a house when needed with a pre-approved mortgage and dedicated home inspector. Otherwise, you may miss your opportunity.
- Look for sellers who are desperately looking to sell by locating empty houses or houses with frequently-reduced offer prices. This situation gives you the upper hand in negotiations.
- When buying homes in a recession, have a lawyer do a title search on the property to make sure that they are not any liens on the title. If you don't, you may buy the property only to find out that you now owe money to a contractor or the previous homeowner's lender.^{[9]
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Method 2

Method 2 of 3:

Selling and Renting to Make Money

1
Rent out a room. If you own your own home, it will probably be your biggest asset and something you can certainly make some money from in a recession. The easiest way to do this is to rent out a spare room to someone. This can make a serious dent in your mortgage repayments as well as reducing the amount you have to spend on utility bills and taxes.
- You can rent a room through an estate agent, or do it independently.
- Operating with an estate agent should give you more protection, but the agency will take a significant cut from the rental income.
- Whatever you decide, be sure to thoroughly vet potential housemates and ask for references from previous landlords.
- Alternately, you can rent out a room through a website like AirBnB or HomeAway. These websites will also take a small cut from your rental income, but allow you to easily post your residence, get to know potential renters, and accept payment.
- If you want the house to yourself at weekends, you may be able to find someone who only needs a room Monday to Friday.^{[10]
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2
Rent out your parking space. If you live in a big and busy city, parking spaces may be very valuable. If you have a parking space outside your apartment, renting this out can be an easy and recession-proof way to make some extra money. Your ability to do this will depend on where you live and what the local parking situation is like. Some factors, such as being near a train station, or a place where a lot of people work like a commercial or business centre, can help.^{[11]
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- Be sure that you’re not violating the terms and conditions of your parking permit or residency before you go ahead with it.
- Once you are sure you are free to do it, you can advertise your parking spot online.
3
Sell unwanted or unused items online. A straight-forward way to make some money during a recession is selling old or unwanted things you have around the house. This could be anything from expensive electronics and jewellery, to old furniture or clothes. In a recession, people may be more inclined to buy second-hand so it’s a good time to sell.
- You can sell things online via internet auction sites like Ebay, or more specialist websites if you have something rare or collectable.^{[12]
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- Consider listing your items on multiple sites, but remember to remove duplicate listings when the items sell.
- Do some research on how much similar things are being listed and sold for before you price your items. Look for similar items both on the website you are posting on and on others, including eBay and Amazon.
- Be accurate and truthful in descriptions of the goods you are selling. A good picture can really help your items sell more quickly.^{[13]
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4
Sell to second-hand shops. An alternative or supplementary way to make money selling your stuff is to visit some local second-hand stores to see if the store owner is interested in buying any of it. Second-hand stores normally buy and sell items, and if you go there in person, you can talk face-to-face and find what kind of items the owner is interested in. This requires more leg-work, but saves you the hassle of listing items online.
- With these stores you can generally opt for consignment or selling outright. With consignment you’ll receive an agreed percentage of the resale price. If you sell out-right you get the money up front.
- Consigning is generally a higher risk, because if it doesn’t sell you mightn’t get anything. If it sells well, however, you may get more than you would from selling out-right.
- Vintage clothing or furniture can fetch a good price in specialist stores.
- Visit a few shops first to investigate the prices they are charging for items that are similar to what you want to sell.
- Sports stores may buy second-hand sports equipment if it is in good condition.^{[14]
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- Specialist second-hand book stores will generally be quite selective about what they buy.^{[15]
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Method 3

Method 3 of 3:

Earning Extra Money in Your Spare Time

1
Try tutoring. Employment can be hard to come by in a recession, with employers generally looking to shed staff rather than expand. If you find that you are struggling a bit and want to make some more money in your spare time, think about how you can use your skills and knowledge to do this. An ever-popular way to make more cash is by tutoring in the evenings or weekends.^{[16]
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- Tutoring may most often mean teaching kids after school and helping with exam preparations, but there are many more ways to use your knowledge to make extra cash.
- Perhaps you could give some music lessons, or teach a foreign language.
- Maybe you could teach a cooking or baking class.
- You may even be able to get part-time work as a driving instructor if you complete the necessary requirements.
2
Sign up for mystery shopping. You may be able to make some extra cash in your evenings and weekends by completing some mystery shopping assignments. These tasks won’t earn you big sums of cash, but they are relatively easy to come by if you sign up with a reputable company and show them that you are reliable and do the work properly. You can find listings of opportunities in your state online.
- Mystery shopping will generally involve you visiting a store or business and asking questions or getting a specific product.
- You will fill out a form evaluating things such as the customer service and your experience in store.
- Beware of scams, and steer clear of any mystery shopping company that has a membership fee or tries to charge you for anything.
- Don’t pay fees and don’t respond to unsolicited emails.^{[17]
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Participate in paid online surveys. An easy way to make money at home in your spare time is by taking part of various online surveys. This is not, however, a way to make a lot of money quickly as you will often only receive a few dollars for a five or ten minute survey. The advantage of these surveys is that they are more or less recession-proof and they quick and easy to fit around your other commitments
- Look at some independent information that compares and rates online survey companies before you sign up for one.^{[18]
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- Make sure you know all the details before committing as some places pay with vouchers rather than cash.
4
Use apps to make money. There are a number of smart phone apps that you can use as an easy way to make a little extra cash. Generally these apps give you a chance to earn small amounts of money, but are quick and easy to use. The requirements will vary depending on the app, but some of the possibilities include quick surveys, checking prices of goods in stores, or photographing your receipts.
- There is even an app that pays you just to install it.
- The app will collect anonymous statistics from your phone about the websites you visit, how long you spend on Facebook and other information.
- You can also get cash rewards for correctly predicting a string of sports results.^{[19]
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Be a private cab driver. If you have a car, it is now easier than ever to earn money as a private driver. Uber has made it easy to use your car to make some more in your spare time. You will need to sign up to the website and complete all the necessary forms, including information on you and your car, and pass the background check, before you can start taking fares.^{[20]
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Complete odd jobs. If you are looking to earn a little extra cash, you can look online for short tasks that you will be paid for. Many of these are things which you will be able to do from your computer at home, and might include things such as testing a website, transcribing some audio, doing a translation, or some data entry. Other opportunities for skilled freelancers include writing, voiceovers, explanatory videos, graphic design, web design, coding, or any other skilled service.
- Websites like Guru, Freelancer, Elance, Upwork, and Toptal connect talented freelancers with paid work.^{[21]
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- You may not get a lot of money per task, but they will most often be quick and easy to finish.
- Be alert to potential scams, and only sign up to work with trusted websites.^{[22]
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