Everybody loses when the economy collapses, right? Wrong.
There are definite winners in an economic collapse, and if you position yourself correctly, you can take advantage of the downturn. But first, before we get too excited about how we can benefit from general misery and suffering, make sure you are not one of the losers.
The following people, and occupations, are losers in a recession or depression. I’m skipping the obvious ones, like real estate agents and Humvee salesmen, and focusing on the not so obvious.
Update September 2010: Two years later, I am returning to this article, to see how my predictions panned out.
Okay, maybe obvious to most people, with all the trouble banks are in today. However, being an ex-banker and having been personally through the bank contractions following the S&L Bailout of the early 1990′s, I don’t think bankers realize how ugly it is going to get.
Banks are going to start downsizing branch locations across the country. There will be a flurry of mergers, as banks try to profit from economies of scale, and layoff duplicate workers. It would not be surprising to see a Citibank Bank of America merger. Resulting in tens of thousands of layoffs. Repeat that scenario across the entire industry and imagine how may hundreds of thousands of unemployed bankers will be looking for work.
Prediction Result: Although Banks did get hammered in the economic collapse, they didn’t get hurt as much as I thought they would, mainly because investment banks bought retail banks. Also, as we all know by now, banks own Washington and so get whatever financial backing they need.
Food Service Industry
People will be eating out less often to save money. Starbucks could go out of business, chain restaurants will suffer dramatically, high-end restaurants will go out of business.
Prediction Result: Mixed. Starbucks is still around. Chain restaurants are hurting, and high end restaurants are going out of business.
The Travel Industry
Empty cruise ships, deserted resorts, and hungry taxi-drivers. Disneyland will seem less goofy, Vegas will be rolling out Free Mega-Buffets, and you can have Miami to yourself next spring.
Prediction Result: The travel industry is suffering, especially Las Vegas, but the industry overall did not collapse.
Massive layoffs in the Government sector, both local and state, are already occurring and will worsen exponentially. Cops, fireman, librarians, teachers, everyone. There will be strikes, lot’s of them, as workers fight for their jobs.
Prediction Result: Massive Layoffs did occur, and are continuing to occur, in state and local governments nationwide.
Consumption is going to plummet, shopping malls are going to turn into ghost towns, everything will be on sale all the time.
Prediction Result: Accurate.
The first place business looks to save money is in their advertising budgets.
Prediction Result: Advertising got hammered.
Charitable donations will decline, as mothers repeat the long forgotten line, “Charity begins at home”. People will be less concerned with saving the world and more concerned with saving themselves.
Prediction Result: Charitable donations are down and non-profits are struggling to survive.
Okay, that’s enough depressing news for now, let’s see who the winners of the economic collapse will be, and how you can position yourself to take advantage.
If you own a religion, you are in a recession proof industry, and will have your business filled with desperate parishioners seeking answers from the highest authority. The get rich quick churches, are going to do great, as people give god their last hundred hoping to get a thousand back.
Prediction Result: Religion did not boom. Apparently, Americans realize that the economic collapse, was not a message from god.
Liquor and Bars
Those that don’t go to church, will try and drink their misery away, as a hopeless situation leads to the solace of the bottle. Defeated husbands will hide from angry wives, in countless dive bars across America, and the globe.
Prediction Result: Americans actually consumed less alcohol.
Bankruptcy and Divorce Lawyers
Nothing destroys a marriage like an economic depression. The good old days, have been replaced by the bad new days, and everyone will forget about silly credit scores and flood the bankruptcy courts. Marriage counselors should see more business.
Prediction Result: Mixed. Bankruptcy lawyers are seeing booming business. However, Americans are discovering that they can’t afford to divorce, so divorce lawyers are not really seeing an explosion in business.
The Prison Industry
More desperate people, equals more crime, equals more prisons.
Prediction Result: Wrong. Crime is down. Prisoners are being released because states can’t afford to keep them locked up.
Higher crime, leads to higher gun and ammo sales, and an already well armed populace will be adding even more firepower.
Prediction Result: Accurate. Americans responded to the economic collapse by buying guns and ammo. – link to story.
This will be a high growth business, as people can’t eat their Harley Davidsons, and pawn shops will pop-up in every strip mall across America.
Prediction Result: Correct-link to story.
Americans will be digging through their garages looking for anything they can put on Ebay to pay for their kids braces.
Prediction Result: I didn’t see an explosion in business at ebay.
Tarot Card Readers
Spirituality will make a big comeback as people wish to know the future. Astrology, Tarot Card Readers, Psychics, Spiritual Gurus, cults, all that stuff will be big business.
Prediction Result: Correct – link to story.
Used RV Sales
Demand will be strong for used RV’s as people lose their homes and turn to living in RV’s. Cities across the nation will designate special parking areas for RV’s.
Prediction Result: Although Santa Barbara did create a special parking area for people who live in their cars, and tent cities did spring up across America, it did not happen to the extent I predicted.
Yes, as a global economic collapse unfolds, the world will be able to breathe a little easier. Pollution and global warming will decline, as less consumption, leads to less production.
Prediction Result: Although global consumption is down, it did not decline by enough to make a significant impact on the environment. Two years of slowed consumption does not make up for 200 years of environmental destruction.
Overall Prediction Results: Mixed. I got some right, others wrong, mainly because we did not actually have an economic collapse (thank god). We had an economic shock, followed by massive global stimulus spending, which helped prevent the collapse. Instead of collapse we got a severe recession. What we are facing now, is a prolonged period of decline, which will happen slowly.
This is a short list of winners and losers in an economic collapse. If you would like to add to the list, please leave a comment below, and visit the Early Retirement Website to find out how you can save your retirement, learn how to retire early, and try our free retirement calculators.