Recession - Proof Income

"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment." That was the statement made to the U.S. House Government Oversight and Reform Committee today by former Federal Reserve Chairman Alan Greenspan.

Many pundits on TV have been using the word “recession” to describe our current economic circumstances. What is a recession? The U.S. based National Bureau of Economic Research (NBER) defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

That means your job may be in jeopardy. If get to keep your job, your hours may be cut, you may not get a year-end bonus, or you may see your co-workers downsized. If you own your own business, you will see a slow-down in sales, directly affecting your income.

What would happen if you lost your job tomorrow? Would you be able to make your house payment? How long can you go without a paycheck? Statistics say most Americans are 2 – 3 paychecks away from being homeless.

What if you could create an income that is recession-proof? An income that you could work on part-time alongside your current job or full-time, if that’s what you desire. Read more…

There are a few businesses that are recession-proof. One, in particular, is the consumer staples industry. Consumer staples are the things we can’t live without: food, toiletries, cleaning products, gas, etc. They are the things you and I will spend the last dollar in our pocket on because we have to have them.

Most consumers can live without the latest iPod from Apple or a brand new 46-inch high-definition television. Such products are known as discretionary purchases -- consumers will decide to buy or not buy these products based on a variety of factors including income, expectations for future income growth, and willingness to take on debt.

But while you might think twice before shelling out $2,500 on a new television, it's unlikely you gave much thought to your last purchase of a $1.00 pack of chewing gum, $0.50 soda, or $7.00 tub of laundry detergent. In fact, if you're like most consumers, then you'll continue chewing gum and doing your laundry regardless of the general condition of the U.S. economy.

Companies that make or sell these everyday necessities are called "consumer staples" firms. Typically, the consumer staples industry includes traditional food and beverage companies as well as grocery retailers, fast-food chains, and drugstores. Companies in these industries are exposed to different competitive forces; they're by no means fundamentally identical. However, all of these industries share one common trait -- stable demand for their products.

Major Players in the Industry
Anheuser-Busch
Procter & Gamble
Colgate / Palmolive

That stability of demand is behind the consumer staples industry's reputation as a safe group. And there's a great deal of truth to the sector's reputation for stability; during bear markets and periods of poor economic growth, consumer staples tend to handily outperform most other industry groups.

If you were going to start any business or new career in these troubled economic times, wouldn’t the consumer staples industry make sense?

I think so. That’s why I’m helping people to learn about a small consumer staples company that is providing everyday people with an opportunity to start their own business. Go to www.beyourownceoonline.com to learn more.