Jeff Bezos is an American billionaire. His name is generally associated with Amazon, a renowned online marketplace. In a recent interview, Bezos commented on the possibility of a recession. He urged consumers to exercise restraint on big-ticket purchases. Big-ticket items are categorized as significant financial purchases requiring a lot of capital. These include houses, cars, and expensive electronics.
His reasoning is reasonable, considering economic experts have not ruled out the possibility of an economic downturn. In light of this, people should ideally save dry powder, which refers to securities that can easily be liquidated or cash. The dry powder assets can be held in reserve and used in the event of an emergency.
Are We Moving Towards Recession?
While we are not currently in recession, all the factors indicate that we might just be soon. That’s precisely why this isn’t the time to splurge. While most people have held back spending, reserving it for must-haves, others continue spending money even when it’s not necessary. This could hint towards alack of foresight.
The possibility of an economic recession can be seen in layoffs in several sectors, shrewdly pointed out by Jeff Bezos himself. He encourages small business owners to reduce their risk by spending carefully and ensuring they have some dry powder in hand.
Bezos made this comment soon after the New York Times disclosed that Amazon might dismiss approximately 10,000 staff members in its corporate and technology sectors. This shows that Bezos might be onto something.
Be careful and save instead of spending money on big-ticket items, thinking you have a high-income, stable job. In periods of economic instability, it’s best to be cautious and protect oneself. You should have some cash or assets you can deploy when times get tough.
However, Amazon wasn’t the only company to do that. Other instances of downsizing in the technology sector include Twitter and Meta, which terminated 3,700 and 11,000 individuals, respectively.
What to Do in the Event of an Economic Downturn?
As Jeff Bezos hinted towards the possibility of an economic downturn, it’s viable to consider what you would do in such an event. As recession is usually predictable, your preparation begins before the period of the recession starts, which is now!
Limiting and prioritizing spending has to be done now so you have enough savings or other assets to be used during a financial crunch. As sales drop during the recession period, small businesses should halt the idea of any big acquisition before and during recession. Businesses are usually forced to cut costs during this time, so keeping enough to bounce back on will help you survive.
Final Word
Jeff Bezos has garnered significant praise for his entrepreneurial skills. The unstable economic environment hints towards the possibility of a recession, which mandates careful spending. He urges Americans to halt big purchases and be prepared for an emergency. Given the mass layoffs by hi-tech giants, the economic downturn may just be in the offing.
