Online Experts Matt and Liz Raad share their thoughts on what’s happening with the global economy and how to find opportunities during challenging times.
Matt: G’day everyone it’s Matt and Liz Raad here and we wanted to give you a special update because obviously the world has just changed and it certainly looks like we’re moving into some very challenging times.
Matt: There’s a lot of fear and panic out there… understandably though… so what we wanted to do is give you what we’re seeing because obviously we’re online and that’s a great place to be in this sort of environment cause everyone is working at home now…
Matt: And we wanted to give you guys some insights into what we see as some positive trends that could come out of this, because as we all know, things do pass and as humans, I’m sure we will get through this, but maybe for the next couple of months or maybe next year or so, there is some challenges to overcome.
Liz: So yes we’re watching the stock market very closely because that is a really interesting indicator of what’s happening economically at the moment, and of course anyone who has seen the stock market has seen the cliff that it has fallen off in America and in Australia… but interestingly not so much in China or Hong Kong, or some other markets… so far… and we’ll see how that pans out…
Liz: But one of the things that really interests us is the difference between the general stock market and what’s happening in the tech space… so yes we’re seeing some drop-offs, but there are certain companies that are reasonably stable, that are actually starting to thrive… companies like Amazon which has now just put on 100,000 extra employees… companies like Zoom which does these Live streams and online meetups…
Matt: … which I’m very pleased I bought a couple of months ago because it’s doubled, in fact it’s one of the few stocks that has doubled recently… but with Amazon this is where there’s a big opportunity here… not to be selling stock through Amazon, but what we do is get an affiliate commission for selling products through Amazon… because everyone is just moving online now.
Matt: So for the moment, lets put aside the fear and panic that’s going on out there and lets look at what we can learn from the stock market and what we think are two big trends.
Matt: First point from the stock market that we can learn, and if we look back at the GFC in 2009, that’s when Liz and I were transitioning from buying and selling bricks and mortar businesses, to buying and selling websites and online businesses… and one of the reasons why we were so attracted to the online space is because of what was happened due to the GFC… so with stock-based businesses (bricks and mortar businesses), it got very challenging during the GFC and more so in America… whereas what we were seeing with website businesses is that it actually got easier…
Matt: One of the companies that we modelled ourselves on, literally just bought and sold websites, exactly the same as what we were buying, was worth $640 million through the GFC and their profits went up 15%… why? – because all they did was sell advertising… so even during a recession, and up until then this was one of the worst recessions America had ever seen, small businesses still needed to advertise and get leads… so that’s what we started doing and it worked really well and I believe it will work well into the future, through this recession as well.
Matt: Again, same as Google… during the GFC, their profits went up 18%… pretty impressive… so we’re saying similar things happening now with online businesses like Amazon, we mentioned their share price is not going doing… they’re doing the opposite, their putting on 100,000 new people… you’ll see I believe that what happened during the GFC, that businesses that are still around will be wanting information… just the sheer volume of people now who have moved online, over just the last 2 weeks… apparently internet traffic is up 30% in the States… that’s a massive increase and so there is opportunities there, there has to be…
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Liz: So we can see that longer-term picture… I think the most important thing at this point is to, even although there is a lot going on, and it’s very easy to get sucked into that negative media spiral, we do need to look at that longer-term picture and be thinking about what we can be doing now to protect ourselves, our wealth, our families, and our future… and what’s we’re going to do now in order to grow something…
Liz: Cause as Matt said, this will pass, there will be better times, whether that’s a year, two years, three years, five years, we don’t know the timeframe, but it doesn’t matter as long as we’re setting ourselves up now in order to ride that beautiful wave up as well.
Matt: So the easiest, low-risk thing that you could potentially do, and I’m not giving financial advice, is that none of us want to be going out there now and taking on debt and spending mega bucks on things… so one of the simplest things you can do, and this is the beauty of being online… you can build very simple websites, and down the track I think there’s going to be great opportunities, like Liz and I saw after the GFC, to buy really good websites at really good prices, because during a recession of course assets get sold off cheaply…
Matt: But what we’re more interested in this time around is actually building up a portfolio of valuable online real estate… cause online websites are now treated as real estate and they will certainly be way more valuable once this recession ends… so whilst we’re at home and possibly in lockdown, we can be building these websites that doesn’t cost you anything, just your time and effort, and your learning… and ok they might not make you mega bucks now, but down the track, this is a long-term play that you’re building assets for yourself… we saw this play out in the last GFC, and you can ride them… and there’s no risk, you can’t lose from this strategy…
Liz: So our best advice, if you are stuck at home, now is the time to learn… so if you’re on our WebDev or Digital Profits program, get in there and do some of those Webinars, because that is going to pay off for you in the long-term… so that’s our best advice. Stay safe, keep learning, and we’ll see you in our next update.