So these are the top three things that I think you need to do to prepare for the coming recession, and we're talking about global recession here. I've predicted it to be in sort of the middle of May, June of 2021. The reason I've done that is because I think Trump is going to do everything in his power to make sure that he fends off and gets another term. Once he gets another term, I think then it'll be just too hard for him to continue and then that correction will inevitably happen, but I reckon he'll get six months grace before the markets just go, "Enough is enough, you're an idiot."
So, yeah, so top three things. So, first of all, I think you have to do a portfolio review. So, number one is do a portfolio review. What do I mean by that? I mean you have to look at all your assets. You have to look at all your expenses. You have to look at all your incoming, outgoings and do a real picture for that, but part of that review is you then need to, once you get that data in a spreadsheet, preferably, then you need to run some numbers against that. So you need to go, what happens if interest rates go, say, increase 3%? I don't think they're going to increase more than 3%, so whatever you're paying now, add 3% to it. Even if you're on a fixed rate, just add 3% to it.
I think the other scenario you've got to do is what happens if I lose my job, yeah, for three months, and then I'll get a new job at 70% of my old job. So, run that scenario. These are scenarios that we run regularly with our things during these reviews. If you're not sure about this, give the team a call and they can run you through the numbers and get that all set up. We've got the spreadsheets already formatted that can allow you to do this. So, first thing is you need to do a portfolio review.
Now, what you need to do also is be getting rid of as much consumer debt as possible. The focus on that, okay, and look, if you haven't got the debt, then you can skip this one. Fantastic, you're in a much better position. Then maybe you look at your mortgage situation and just work out whether there's any remortgaging to be done that can get you down to a lower rate and potentially take out some extra income, depending on how you're doing it. Sorry, extra capital, which can create a buffer. So you've got a cash buffer.
Now, bottom line is, so if you've got debt, you need to focus on paying back the highest interest debt first, is effectively the best way to do. Now, the way to do that is quite simple. Look at all your minimum payments across all the debts, including mortgage debt, all the repayments that you've got to do, and then work out the minimum monthly payments on those. Anything discretionary that you've got leftover, apply that, not across the board, but to one. So, focused payments, we call this. So get into a focus payment discipline around your debts, because when you do that, you'll find that, actually, you can pay off individual debts really quickly.
Now, inherent upon this, if you're going to pay off debt, you've got to make sure you're not creating new debt. Now, sometimes that means you've got to take a lifestyle check, because a lot of people are surviving on credit and as long as the credit keeps increasing, then they're okay, they can maintain the lifestyle, but my suggestion would be, is that, if you go doing that, and if you're living like that, you change your ways, you change your lifestyle now, because when the global recession comes, credit is going to get tighter and you're not going to be able to expand that credit. Really, you don't want to. At some point, if you're going to be serious about creating wealth, if you're going to be serious about getting control of your finances, you have to take a lifestyle check, back to where you're actually not just spending everything you earn, but where you're saving and then spending, okay? So you've got to be pay yourself first. I'm sure you've heard that principle before. You have to get to the point where you're paying yourself first. So, that's number two. So number one, pretty simply, do a portfolio review. So look at what you've got.
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Number two is get rid of ... Pay your debts. Pay down some of your debt so you're in a much better cashflow position, if you were to lose your job, if interest rates go up and these sort of things. Look, the reality is, in a recession that's coming, it's more likely that you're going to have interest rates going down than necessarily going up, but they can go either way. So, we can have an inflation or a deflationary recession. To be fair, it's 50/50 which way we go in how they deal with this. The challenge that I do have is the instrument which they normally use, which is dropping interest rates to stimulate the economy in a recession, is not really available to us, because interest rates are so low. So what does that mean? That pretty much means that we're screwed from that perspective. In addition to that, they've been dumping money, billions, into the economy already, which is another instrument that they use, print more money. So we're running out of options. That's a real worry. So, number one, portfolio review. Number two, pay down some of your debt.
Number three is, okay, and this may be sort of more confrontational, but it's a bit sort of ... I don't know. Look, bottom line, what it is, is look at your income, how you're earning your income, how you're living your life, how you actually ... your life comes together and disrupt it. What do I mean by disrupting your life? What I mean is looking at stuff and thinking, "Really, do we need to spend this?" We did a review, I did a review personally, and I found that the amount of money that we're spending in our household was almost ridiculous on amazing things, such as, we've got two club memberships. One of the club memberships we hardly ever use, and yet we're getting charged every month and it was about $300 a month, Singapore, and we'd hardly use it. So, basically we got rid of it. We just weren't using it.
So, have a look at how you can trim back your expenses, have a look how you make things easy, because I'll tell you this, the one thing ... As you know, I read a lot of books. I think anyone who reads a lot of books right now, you'll see a real movement towards simplifying life, because, actually, we're busier than we've ever been, we've got more stuff that's being thrown at us, more information, more ads, more everything. All this sort of stuff, it's just bombarding us.
So, strip that back, and that's what I mean with disrupting your life. Forget about everyone else in the industry, disrupt your life and find out what's really important. So, for me, and I've been through this exercise, I found out that what happened, I was taking life too seriously. I had fun and drinking with mates and partying and all that sort of stuff. I had all that social life, but what I realise, what really made me happy was effectively three things, okay? Three things. So, what I've done is I've then stripped back my life to those three things. One of those things was fitness, some form of physical activity every day that gets my mind off work and everything else. So, that was the first one. So, that's one of my elements that I do. The second one was that I love work and what I do. I love work and what I do, so I've got no problem doing that. So, that was one of my focuses. Then, obviously family and friends was the third one.
Really, there're three elements that I go, "Actually, they're not in there." When I say ... I'll drive down a bit more detail into the work and that sort of stuff, because I'm a bit different than most people, where I don't believe in this nine to five, I don't believe in this five days, two days off thing. It doesn't work for me. It really doesn't work for me. If I've got something on my mind, a project or whatever, I will throw myself into that project, but once it's done, then I'll take a week off. Since I've really started to embrace that and do it, actually I find the level of stress, and most people say I live a stressful life, but it's not stressful. I've just got an active life for me, but once I got into this habit, it's amazing how, when you disrupt your lifestyle, actually you realise that, for instance, and this is what would this will produce, this is where it comes back to the financial side, rolling this into disruption. Those three things don't cost a lot of money because actually ... Okay, so karate is one of them that we do. I do that as it's a family activity, so I've combined the two. All right. So that's great.
I ride my bike and I run. At the end of day, they don't cost a lot of money. My bike's probably 15 years old, but it's still bloody good. So, at the end of the day, I don't need a new bike. Yeah, I need tires every now and again, but what I found was I was spending money on new clothes and all this sort of stuff, whereas I I've got cupboards of clothes. Well, I haven't bought clothes now for probably three years. Why? Because I just don't need to. For me, it's excess. When you realise, this stuff you think you need, you don't. You actually want it, not need it. When you strip that back, that can have a really cool effect on your financial situation. So, what I would recommend is that you actually focus on disrupting your life.
So, first one is get a portfolio review. Second one is sort out your debts, pay down your debts, focused payments on your debt. The third one is disrupt your life and ask some real hard questions about what is the life that you want for you and your family. When you do that, I think you're going to see some amazing changes. All right, guys, that's it. Three top things getting ready for the recession. I think if you do those things, you'll find amazingly ...
Actually, one more story I thought was just quite interesting. My brother used to ... I did this with my brother, this process, and what I found was my brother was spending ... I don't remember the exact number, but basically he was spending ... it was about $12 or $16 a day on iced coffee, milk, iced milk, ice coffee. Basically, if you add that up, he was sort of ... When you're complaining about not having money at this stage, this is 10 years ago, 15 years ago, and not having money. When we did this, this opened up whatever it was, 3, 4, 500 bucks a month, every month, that he was spending. He couldn't work out where ... He thought he wasn't spending any money, but he was just spending on that because every time he called into the petrol station, he'd grab an iced coffee. Every time ... He' buy two because he'd have one for now, one for later. It was amazing how that adds up. It's all those little things that make a big difference, and really they don't add a lot to your life.
So, focus on what adds a lot to your life, but yeah, so disrupt your life, pay down your debt, and obviously do a portfolio review. If you want to do a portfolio review with your property and all that sort of stuff, then speak to the team and they can run through our simple review with you to get to real certainty about where you are and where you want to get to. All right, guys. Have a great day. Do it with passion. See you.