recession

Why The Rich Love RECESSIONS

The Rich Don’t Love Recessions Because They’re Optimistic.
They Love Them Because They Understand the Math.

Recessions don’t happen because people suddenly lose confidence.

They happen when leverage outruns cash flow — and reality finally forces a repricing.

That repricing doesn’t hit everyone equally.

It never has.

Here’s the sequence, and it’s structural — not political:

- During expansions, leverage is rewarded.
- Cheap money flows everywhere.
- Risk is ignored.
- Optimism is financed with debt.

During contractions, leverage is sorted.

Households with variable income and fixed costs break first.
Think mortgages, car loans, credit cards.

Then businesses dependent on cheap capital follow.
Then banks tighten.
Then governments respond — last — with money printing.

This order is not an accident.

It’s how the system is built.

When recessions hit, three things happen every single time:

• Asset prices fall faster than liabilities
• Forced sellers appear
• Liquidity concentrates upward

This is why downturns widen inequality — even when governments claim to be “protecting the middle class.”

In 2008, housing didn’t really fail.

It changed hands.

U.S. home prices fell roughly 30% nationally from peak to trough.
More than 6 million homes went through foreclosure between 2007 and 2014.

Most people saw devastation.

I saw math.

Banks were drowning in bad loans.
They needed buyers.
They needed liquidity.

So I did what my rich dad taught me decades earlier.

I didn’t save cash.
I didn’t wait for certainty.
I used debt to buy assets with cash flow.

While people were dumping houses, I was buying them — often with other people’s money — at fractions of replacement cost.

Not because I was brave.

Because the numbers finally made sense.

- Rents didn’t fall like prices did.
- Debt was cheap.
- Assets were discounted.

That’s what recessions do.

They don’t destroy wealth.
They reprice it.

The same thing happened in 2020.

Small businesses didn’t all “die.”
They consolidated.

Large firms with access to capital survived.
Those without it disappeared or got absorbed.

That’s why recessions feel unfair.

Because they are.

They don’t reward optimism.
They reward balance sheets.

They punish people who confuse leverage with wealth.
They punish growth financed by hope instead of cash flow.

The wealthy don’t love recessions emotionally.

They love them mechanically.

Because volatility compresses timelines.

What might take 10 years in a normal market happens in 18 months during a downturn.

And compressed timelines favor prepared capital.

This is the real divide in every crisis:

Not optimism vs pessimism.
Not left vs right.

Liquidity vs dependency.

People dependent on wages, cheap credit, and stable prices panic.

People with liquidity, cash flow, and access to capital go shopping.

That’s why my advice has never changed:

Don’t wait for recessions to “end.”
Prepare for them before they arrive.

Because when the next one hits — and it always does —
it won’t be a surprise to the rich.

It will be an opportunity.

The question isn’t whether a recession comes.

The question is simple:

When assets go on sale… will you be forced to sell — or positioned to buy?
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