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How To Make Money Out Of The Credit Crunch

By: Owen Smith

The Credit Crunch has hit and house prices are plummeting, while everyone feels the pinch. We could be headed for recession, and that means bad news for anyone who is already struggling to keep up with their mortgage and debt payments. Smart players, however, look set to make small (or occasionally very large) fortunes out of the crunch. Here's how:

Play the housing game

House prices are dropping and interest rates look set to rise. Many people will not be able to keep up with mortgage payments and the market will therefore be flooded with underpriced houses. Rather than being a bad time for housing this could be a very good time, if you can afford to buy. After the crunch is over the house prices are likely to rise again, and interest rates to drop. A good time to own an excess of property, then.

Bet on the loser

Short-selling, or betting that shares will fall, is a way of earning money during times of financial difficulty. Banks have been in plenty of trouble lately, and being able to recognise drops in their share prices in advance using techniques such as spread bets and fixed-odds financial bets have led a number of investors becoming rich. Business schools warn, however, that only one in five spread-bets makes any money, so you will need to do your research first.

Play the stock market

With all this talk of recession it's hard to imagine that investing in shares is a good idea at the moment, but that is not necessarily true. Many companies are still thriving, and investments in large oil companies could well prove lucrative at this stage. The market may be down, but that doesn't make it worthless. A lot of people will be turning their attention to their own finances at this time, which of course we all need to do, but that doesn't mean we can't keep an eye on the finances of prospering companies too.

Of course, all of these strategies come with the element of risk. It is just as easy to lose money as to gain it, particularly if you don't know what you're doing. Find out as much as you can before considering any of the above, as with any other financial gamble.

Get crunch-friendly

If these ideas seem too much risk for you then an alternative is to look for ways to alter or create your own business to make it crunch-friendly. People haven't got as much money to spare, so everyone's on the look-out for a bargain. Selling your product at two-thirds the price of your competitor might make you more sales, which adds up to more in the long run, and selling factory seconds or second-hand goods might appeal to the bargain-hunters out there.

Article Source: http://www.articleresourceindex.com

For more tips please see my site: Make Money in the Credit Crunch ... or type credit-crunch.rightimoff.com into the address bar of your browser.
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