How To Take Advantage Of Stock Market Crash?
Last week, the stock market fell 12%. This week, we are seeing a bounce. But I believe the worst is yet to come.
So how can you take advantage of a stock market crash?
That’s what we are going to talk about now.
The first question that comes to mind is …
Should you buy stocks during a crash?
In general, it sounds like a good idea.
But here’s the problem:
You never know when we hit a bottom. Let’s take a look at the current market: Have we reached a bottom, or is this a “dead cat bouncing?”
Buying stocks during a market crash is like catching a falling knife: It’s dangerous, and you can get hurt.
How Do You Make Money When The Stock Market Goes Down?
There are 2 ways: A short term game and a long term game.
The Short Term Game: Learn How to Short Stocks
As a trader, you can sell stocks that you don’t own.
This way, you can make money in a falling market.
I believe, that THIS will be one of the most valuable skills this year: Learn how to make money in ANY market condition, whether it’s going up or down.
As you know, I like to use 3 indicators and the PowerX Optimizer to find the best stocks to trade.
I don’t want to go into too much detail in this article, since I want to show you the “long term game” – because it’s fascinating!
If you want to learn more about the 3 indicators and also the software that I personally use in my trading, just visit this website: MyTradingRoutine.com
On that website, you will find a video in which I show you exactly what indicators and settings I use, how to find the best stocks, when to enter and when to exit. You can watch this later. 🙂
But right now, let’s talk about…
The Long Term Game: How The Rich Get Richer
THIS is really fascinating!
I never knew how the rich get richer – even during a recession! …until I figured it out.
I have been playing this game for years, and it has made me around $3MM! And now I am going to show it to you.
So here’s the deal:
As the stock market crashes, the Fed lowered interest rates. On March 3rd, they did an “Emergency Cut” of 0.5%.
What does this mean?
It means 2 things:
1.) Borrowing money gets cheaper
As the Fed Fund rate gets lower, mortgages and longer-term loans are getting cheaper.
That’s obvious. But there’s something even more important:
2.) It will get easier to get loans
Think about it: How do banks make money? – Through interest rates!
So if interest rates are dropping, they will make less money. And right now, it’s VERY likely that the Fed will lower interest rates even more.
Therefore, banks will make even less money. Obviously, that’s not what they want!
So how can a bank make more money? – By giving out more loans!
It’s simple math: The more loans they hand out, the more money they make.
But think about it:
Do you think they hand out a $5,000 loan to “poor” people who want to buy a new TV?
Or do you think they would rather hand out $1,000,000 loan to an investor who buys real estate with it?
Obviously, the latter! Because it makes more money!
So let me show you EXACTLY how to take advantage of it and get hundreds of thousands of dollars as a loan with super-low interest rates.
And then I’ll show you how to use that money to MAKE hundreds of thousands of dollars!
It’s a simple 5 step process.
I have done it several times, and it works like a charm.
Step 1: Know Your Credit Score
Go to https://www.creditkarma.com/ and sign up for free. (It’s REALLY free)
Then check your credit score.
You’ll see something like this:
Step 2. Improve Your Credit Score
Credit Karma makes it easy for you to improve your score.
For most people, the easiest way to improve your credit score is to lower your “Credit Card Use”: If you can stay below 30%, it can make your score jump by 30-50 points!
And here are 3 ways to do it:
a) Pay off credit cards if you can.
b) Call your credit card company and ask them to raise your limit. As I said earlier: Right now is a good time to ask for more credit. It doesn’t cost anything and half of the time they will say YES. I have a cheat sheet for you on how to do it in the right way.
c) Get another credit card with a higher limit and transfer your balances.
Again: CreditKarma makes that easy by showing you your chances of approval:
Step 3: Ask Your Bank For A “Line of Credit”
Once your credit score is above 700, you can go to your bank and ask for an “unsecured line of credit.”
Ask for $100,000!
Tell them you have an investment opportunity and you would like to establish a line of credit in case it comes through.
In times like this bankers are incentivized to hand out lines of credits.
The maximum you can get is $100,000. You might not get it, but often they will give you $75,000 – $100,000.
Step 4: Go To Other Banks And Do The Same
The chances of approval are highest from your bank since they know your history.
And when you get a paycheck, they see that money is coming in every month.
Once you got approved from your bank, go to 3 other banks as quickly as possible!
Do this within 2-3 days, before the new line of credit shows up on your credit report.
Simply tell them that you can an offer for a line of credit over $75,000 from your bank, and tell them the conditions.
Then simply ask: “Can you match that?”
In times like this banks WANT to give you a loan. So most probably they will match it.
Then you say: “Sounds good. Let’s do it.”
Now you got another $75,000, or maybe even more.
Do this with 3-5 banks and try to get $500,000.
IMPORTANT: These are “lines of credit”, i.e. they don’t cost you anything until you actually use them. At this point, you just want to line up as much available credit as possible. It won’t cost you anything!
Step 5: Take advantage of opportunities
After a crash, there are plenty of opportunities on how to take advantage of a stock market crash:
- You can buy stocks at a discount
- You can buy real estate cheap
- You can even buy distressed businesses if that’s what you want.
The key is: When there’s blood in the streets, you want to have CASH to take advantage of opportunities.
And a line of credit gives you that: CASH.
And if you’re smart in your investments, you can make A LOT of money.
I used this method to buy an apartment complex for $2.3MM
I had to bring $500,000 to the table.
$450,000 came from lines of credit.
I brought only $50,000 in cash.
That was 3 years ago.
Yesterday, I received an offer over $4.8MM for this apartment complex.
That’s $2.5MM in profit – in 3 years.
The only reason why I could take advantage of that opportunity is that I had my lines of credit lined up.
How To Take Advantage Of A Stock Market Crash – Next Steps
Right now is a fantastic time to take advantage of this opportunity.
So do it now!
Follow these 5 steps, and start with step 1 today.
Sign up with CreditKarma and find out what your credit score is.
And then work on improving your credit score over the next few weeks.
Right now, there’s a 66% chance that the Fed will lower rates again at their meeting on April 29, 2020.
And when they do, banks will get desperate to hand out loans. Be ready!
THIS is how the rich get richer, and how YOU can do the same.
Take action now!