Who Actually Benefits The Most Financially During A Recession?

Recessions are game changers for consumers. When a recession hits the economy, everyone sees routine costs go up and buying power shrink. Shifts in consumer spending habits, an increase in the unemployment rate, or a rise in interest rates all act as red flags signaling a potential recession.

The frustrating thing here is that recession troubles can affect people who don't participate in some, or all, of these individual factors that influence the market as a whole. A consumer who doesn't use any debt products and has held the same job for years, for example, is affected in much the same way as a chronic job-shifter and mortgage-paying homeowner. You don't have any individual control over these changes, and in many instances, can't do a whole lot to improve your odds when a recession does take root. But that doesn't mean a recession is a wholly terrible thing, financially.

For some, a recession acts as a fabulous time to create more wealth. (On that note, here's how to survive a recession.) On this list, there are some usual suspects, but the truth is nearly any consumer can bend recession conditions to their benefit in at least a few small ways. In this article, we take a look at the people who actually find they make out better in spite of a newly forming recession.

Those with extreme wealth are obvious candidates to reap financial benefits during recessionary times. When the marketplace is hit with rising costs, someone earns better profits off that increased tag; the benefactor is the seller. People with plenty of financial weight find themselves in the best position to capitalize on a depressed marketplace. With enormous cash and other financial assets on hand, buying in a down market can yield immense profits. Whether it's in the real estate marketplace or stock acquisitions, those with the highest levels of wealth are in a unique position to purchase a higher base volume of depreciated goods. This means that when market rates inevitably rebound, the vault in value becomes exponentially greater with the increased volume of underlying purchases.

Investing aggressively during times of financial turmoil is a time-honored strategy that the wealthy have long used to their financial advantage. When assets hit relative low points, they're often primed for a rebound, especially when these reductions come during larger market sell-offs. Consolidating a position and adding quite a bit more volume is an exercise in long-term planning. The wealthiest of people are endowed with enough capital to tie up plenty of money in long-term investments without squeezing their day-to-day finances. This allows the ultra-wealthy to enjoy the best upside possible when recession conditions take hold and begin to stifle economic prosperity for the rest.

Fortunately, you don't have to count yourself among the cadre of Americans who can claim to be some of the world's wealthiest people (who have these everyday habits in common, by the way) to benefit during a recession. Unfortunately, though, in order to enjoy good fortunes when the economy is tanking, you do have to have a bit of luck if you aren't already lucky enough to count yourself among the rich. A select number of professions also benefit from relative stability during recessions. Therefore, young people contemplating what they might want to do, or those in search of a career change, might consider one of these workplace options to add a bit of recession-proofing to their financial situation.

People working in health care, accounting, and auto/home maintenance are particularly stabilized during economic struggles. After all, consumers always need things like groceries, car repairs, and medical attention, no matter what the economy is signaling beyond their front door. Employees in these sectors (and entrepreneurs, too) are often some of the most secure during periods of recession. Beyond these select industries, employees across the board who aren't downsized as a result of cost- cutting efforts are typically positioned well. This said, these sorts of employees need a little luck on their side, as there's often no telling how any given business will respond to difficult times or how the client community will adapt. Even so, a bit of foresight for your career can be a big help here.

The final group of people who come out the other end of a recession better off are those who can characterize themselves as intelligent and prepared investors. Recessions might not be kind to their wallets and day-to-day living circumstances, but the reality is that anyone can be a savvy investor. The money in your retirement account and other stock investment portfolios is separate from the cash you utilize for everyday spending, and with the ability to keep them separated, investors retain their ability to create opportunities in their savings profiles, even if their personal checking account is under enormous threat.

Keeping cash in your investment portfolio is a smart way to remain prepared for a sudden market downturn. When bear market conditions take root, the best thing to do is to hold onto your positions, and buy more whenever possible. Every time the market has dipped in the past, it's also recovered. Investing in index funds and exchange-traded funds provides broad market exposure while limiting the threat of insolvency. It also allows you to buy into the market as a whole at a steep discount when things go sideways. With plenty of free capital on hand, when a recession takes hold you'll be able to buy at major price reductions that only serve to exponentially boost your portfolio value when the market makes its rebound.