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An optimist’s playbook for surviving a recession (and thriving on the other side)…
4 core principles:
4 core principles:
It’s no secret that we are in uncertain times.
Inflation, markets in turmoil, layoffs—and that’s just this week.
But I’m an optimist, so I try to see the light.
This thread shares what I’m focusing on in the days and weeks ahead:
Inflation, markets in turmoil, layoffs—and that’s just this week.
But I’m an optimist, so I try to see the light.
This thread shares what I’m focusing on in the days and weeks ahead:
Principle 1: Get to “Default Alive”
There’s a famous @paulg essay that frames the concept of default alive or default dead.
The essence of it:
During a prolonged period of low/no growth, with your current expense load, how long will you survive without going bankrupt?
There’s a famous @paulg essay that frames the concept of default alive or default dead.
The essence of it:
During a prolonged period of low/no growth, with your current expense load, how long will you survive without going bankrupt?
He conceived it with respect to startups and the need to extend runway and get to “default alive” status, but I think the same applies to individuals.
Ask yourself:
If I experience no income growth—or if my income declines—how long will I survive with my current expense load?
Ask yourself:
If I experience no income growth—or if my income declines—how long will I survive with my current expense load?
You can even run a few scenarios to get some baselines:
Catastrophic Downside Scenario: Total income loss.
Moderate Downside Scenario: 25% income decline.
Baseline Scenario: Current income holds.
Under these scenarios, how do you fare?
Catastrophic Downside Scenario: Total income loss.
Moderate Downside Scenario: 25% income decline.
Baseline Scenario: Current income holds.
Under these scenarios, how do you fare?
If it doesn’t seem like you can last long, look at your expenses and see what levers you can pull to extend your personal runway.
The goal of the exercise is to firmly place yourself in “default alive” status.
This allows you to be comfortable heading into Principles 2-4.
The goal of the exercise is to firmly place yourself in “default alive” status.
This allows you to be comfortable heading into Principles 2-4.
Principle 2: Long-Term Orientation
Humans are funny creatures.
When times are good, we fail to envision them ever becoming bad.
When times are bad, we fail to envision them ever becoming good.
We need to zoom out!
Humans are funny creatures.
When times are good, we fail to envision them ever becoming bad.
When times are bad, we fail to envision them ever becoming good.
We need to zoom out!
During tough times, remember:
The world belongs to those who play long-term games with long term people (and know how to take a punch).
When in doubt, zoom out.
Develop and maintain a long-term bias.
The world belongs to those who play long-term games with long term people (and know how to take a punch).
When in doubt, zoom out.
Develop and maintain a long-term bias.
Principle 3: Favor Optimists
During tough times, it’s easy to be pessimistic.
But being around pessimists never helped anybody go anywhere worth going.
When choosing who to spend time with, prioritize spending more time with optimists.
During tough times, it’s easy to be pessimistic.
But being around pessimists never helped anybody go anywhere worth going.
When choosing who to spend time with, prioritize spending more time with optimists.
Principle 4: Maintain a Bias for Action
It’s easy to shut down during tough times.
But if you can be a “buyer” when everyone is a forced seller, you are positioning yourself well for long-term growth and success.
Boldly act on new and exciting opportunities.
Builders build.
It’s easy to shut down during tough times.
But if you can be a “buyer” when everyone is a forced seller, you are positioning yourself well for long-term growth and success.
Boldly act on new and exciting opportunities.
Builders build.
Those are my 4 core principles for surviving a recession (and hopefully thriving on the other side).
Follow me @SahilBloom for more writing on growth and decision-making.
And join 100K+ getting my newsletter where I write deep dives on this stuff! https://sahilbloom.substack.com
Follow me @SahilBloom for more writing on growth and decision-making.
And join 100K+ getting my newsletter where I write deep dives on this stuff! https://sahilbloom.substack.com
Here’s the @paulg essay I referenced. It’s worth a read! http://www.paulgraham.com/aord.html
