So the United States is in a recession.
Or is it?
Despite the widely accepted common criteria being met, President Biden denied that particular label for his country.
Closer to home, some experts similarly believe that the UK is already in a recession. And will continue to be in one until early 2023.
But, again, there are those who dispute this and point to widely accepted rules of thumb not yet being met.
What is not open to debate, however, is the fact that Britain is in the midst of a cost-of-living crisis.
What should we do with our limited savings?
With inflation and interest rates soaring, households’ real incomes are falling dramatically across the country.
Which some might say makes saving — and investing — near impossible.
So with this in mind, I wanted to ask Fools on Twitter whether they believed the Financial Independence, Retire Early (F.I.R.E) movement was still possible in a recession.
As you can see below, it was a tight call. But optimism won out!
It’s well broadcast that advocates of F.I.R.E are scrupulous savers, and fully committed to the movement in order to see the benefits.
Columns upon columns upon columns have been written in print and online about ways to help cut costs during the coming months.
Certainly, I myself have sought to reduce outgoings.
And to help further, I’m planning on invest those savings into high-yield shares. Much like F.I.R.E. proponents do.
Dividend stocks are a great example of passive income, of course. And while my aim would be to reinvest those dividends into further shares, in order to benefit from the power of compounding, I acknowledge that I might need to use that additional income to help pay increasing bills, for instance.
And, you know what, that’s okay. I’d happily be in that fortunate position of knowing I can dip into those funds if I need to.
So don’t be disheartened if — or, indeed, as it’s looking increasingly likely, when — we enter into a recession. Not least because the markets and companies alike are already acting as though we’re already in one.
Instead maintain a positive, Foolish (capital F!) outlook. I for one will continue to buy shares. Yes, the aforementioned high yielders — but also growth stocks where I see decent opportunities. Because a diversified portfolio is one of the best ways to ride out a recession!
