What banking job is recession proof?

Updated on : December 6, 2021 by Aidan Patel



What banking job is recession proof?

What Jobs Thrive in a Recession?

Debt collections, Liquidators and Trustees.

When there is a recession, there is an increase in personal and business failures due to the ailing economy. The business cycle is destroying unviable businesses. This means that more people are needed to come in and clean up the mess.

Thus, an expert in debt collection would have no shortage of work during this time.

Yes, a career in banking is riskier than being an accountant or an actuary, or at least it has been. Who knows what automation is going to take place in accounting, actuarial or banking positions.

It's riskier because investment banks are quick to fire people. Young people tend to be a little better off because analysts have a lower cost and because it is a 2-3 year program anyway, there is annual wear and tear so they may hire less in the next class of analysts. But that systemic risk works its way up the food chain to the c-suite.

I'd say the riskiest thing in finance, and that's why

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Yes, a career in banking is riskier than being an accountant or an actuary, or at least it has been. Who knows what automation is going to take place in accounting, actuarial or banking positions.

It's riskier because investment banks are quick to fire people. Young people tend to be a little better off because analysts have a lower cost and because it is a 2-3 year program anyway, there is annual wear and tear so they may hire less in the next class of analysts. But that systemic risk works its way up the food chain to the c-suite.

I'd say the riskiest thing in finance, and by that I mean the Wall Street or City types of finance, is that career progression looks like a pyramid. There are fewer and fewer senior positions as you move up the pyramid and if you don't move up the pyramid, you will be kicked out. So if you don't make the leap from associate to VP and VP to SVP / CEO / CEO and then CEO (all companies vary slightly in what they call people), you will be kicked out at any stage. No one can remain as a vice president in an office job indefinitely. It's not like corporate America, where you can get to a middle managerial level and stay there for the rest of your career.

It rises to the highest levels producing money. In investment banking, that means generating commissions. The job of a Managing Director is essentially a sales job. They need to produce and if they don't, they will let them go. And they are the best dogs. In the world of hedge funds and trading in general, that means you manage risk and if you don't produce returns, or worse yet, make big losses, you're out. In private equity, that means you find and close acquisitions and they become profitable, or you can raise capital, or get out.

It takes a lot of work to get to the top levels of finance and once you're there, it's not a walk in the park. I don't know about the accounting or actuarial world, but I guess it's not that fierce.

The big payoff is the risk / reward part. You will make a lot more money in those areas of finance than in accounting, in addition to becoming the CFO of a large company or succeeding in a startup.

A few weeks ago, the Fed warned that auto delinquencies, or late payments on auto loans, are rising sharply.

In fact, 7 million Americans are at least 90 days late on their automatic payment:

That is the highest level in history.

While most analysts see this as a threat to the auto industry, I see it as a symptom of a bigger problem that should sound the alarm bells across the country.

Rising auto crime is a canary in the coal mine

Notice what I said earlier: Auto loans are a high priority payment. Everyone knows very well that their well-being depends on these payments.

People did not forget to pay on time. North

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A few weeks ago, the Fed warned that auto delinquencies, or late payments on auto loans, are rising sharply.

In fact, 7 million Americans are at least 90 days late on their automatic payment:

That is the highest level in history.

While most analysts see this as a threat to the auto industry, I see it as a symptom of a bigger problem that should sound the alarm bells across the country.

Rising auto crime is a canary in the coal mine

Notice what I said earlier: Auto loans are a high priority payment. Everyone knows very well that their well-being depends on these payments.

People did not forget to pay on time. They also didn't postpone those payments for any trivial reason. They didn't pay because they don't have enough money.

Let me put it another way ...

The number of Americans who don't have enough money for even high-priority payments is increasing rapidly.

That is not a sign of a healthy economy. Instead, it is a sign that we are not too far from a recession.

All signs point to an impending recession

I am not alone in this thought.

The Fed doubled the odds of a recession in the last year alone. In fact, your recession probability reading hasn't been this high since 2008:

Source: Federal Reserve Bank of New York

When the Fed is concerned, it realizes. The last time you were so pessimistic about our economy, we faced the financial crisis of 2008.

Another key piece of data that signals the end of this economic cycle is consumer spending.

Consumer spending is the main engine of economic growth. And it's starting to falter.

The graph below shows the difference between current and future expectations in consumer spending. The higher the reading, the less spending is expected in the future.

Today, the ratio is hitting highs not seen since the dot-com crash in 2001:

Source: Gluskin Sheff

This means that the consumer is exhausted. Even "bond king" Jeffrey Gundlach said this was "one of the worst readings ever."

Another key indicator of consumer spending is retail sales. There is no positive news here either.

Last month, retail sales fell at the fastest pace since 2009.

The bad news is piling up. It is a clear sign that the economy is at the end of the cycle. Now it is only a matter of time before a recession hits.

Dividend-paying stocks come to the rescue

Most economic downturns cause bear markets in equities. And in a bear market, you want to do one of three things:

  • Go to cash
  • Buy bonds
  • Buy stocks that pay dividends

If you go to cash, you are not making money. In fact, you are losing money due to inflation. With bonds, you are getting a negligible 2-3% return on your investment.

This is why I prefer stocks that pay dividends.

Look, my strong suit is income investment. This means buying stable and reliable companies that will deliver strong results no matter what is happening in the economy. And I've done it for most of my life.

Dividend-paying stocks have a long history of weathering financial storms.

Even a simple strategy like buying the 10 stocks with the highest dividend yields on the Dow Jones Industrial Average (DJIA) outperforms the market in the long run.

For example, between 1996 and 2006, the DJIA yielded 356%.

But if you had the 10 DJIA stocks with the highest dividend yields, you would have made 407%! This period included the dot-com crash.

But these are not selected data. This same strategy worked in 2018.

While the DJIA lost 6% of its value, the 10 stocks with the highest dividend yields lost just 1.5%.

But good long-term performance isn't the only reason to own dividend stocks in a volatile market.

An investment strategy for all weather

Dividend-paying stocks have proven to outperform both bull and bear markets. There is a good reason for this.

First, the profitability of dividend stocks doesn't just depend on the stock price.

You see, dividend stocks, while also benefiting from rising stock prices, offer payouts similar to bonds. These payments are added to your total return.

Because dividends make up for some of the losses, dividend stock prices tend to fall less during bear markets.

Another reason these stocks are more stable is that they are often very strong businesses. They are much more immune to economic weakness than other stocks.

So in the first place, they have money to pay dividends.

Remember back in October 2018 when the stock market was a roller coaster ride?

Well, if you had had dividend stocks in this period, the ride would have been a lot smoother:

As you can see, the S&P Dividend ETF (SDY), which has a basket of dividend-paying stocks, fell much less than the S&P 500. It also rebounded even faster.

Clearly, dividend stocks are what you want to keep in volatile times. But choosing the right dividend-paying stocks is crucial.

If you want to know the types of dividend stocks I buy, download my latest free special report. It includes three of my favorite dividend-paying stocks.

Americans losing their car payments is one of the red flags that are appearing. And my readers know that it won't go away without a major reboot in the markets.

Put your portfolio to the test with dividend stocks before it's too late. For a good starting point, download my free special report here.

Part of the answer appeared in The Weekly Profit, my free weekly investment letter.

Officials. Your wages are protected by law. Anything short of the complete bankruptcy of his government and social collapse would keep him employed and paid. Your only risk is that your government suffers hyperinflation and pays you in paper money with many zeros that will not buy anything.

Criminals They are armed and organized. High tide or low tide, they would carry what they needed.

Police officers. Their wages are protected by law, they are armed and organized. Some other Quorans mentioned prostitutes. But who would make sure the prostitutes were paid? Okay, pimps, criminals. And who w

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Officials. Your wages are protected by law. Anything short of the complete bankruptcy of his government and social collapse would keep him employed and paid. Your only risk is that your government suffers hyperinflation and pays you in paper money with many zeros that will not buy anything.

Criminals They are armed and organized. High tide or low tide, they would carry what they needed.

Police officers. Their wages are protected by law, they are armed and organized. Some other Quorans mentioned prostitutes. But who would make sure the prostitutes were paid? Okay, pimps, criminals. And who would protect criminals from being detained by the police? Policeman. Or, if the going got really tough, they would just eliminate (shoot) the middle man and go procuring, extortion, and the rest themselves.

Good doctors and dentists. No matter how bad things are, someone would have a not as bad time as others, and that someone would rather live in good health and without toothache. Let's say you have a gold coin, a terrible toothache, and you haven't had sex for a couple of weeks. Would you give it to a prostitute for sex or to a dentist?

An organic / biodynamic farmer. As such, you must produce various types of crops and livestock, and even if no one buys your food, you have something to eat yourself. You can practically survive the collapse of the entire system. On the downside, if things go bad but not too bad overall, it's just as bad as a total meltdown for you - the first expense people make is buying organic produce.

According to unemployment statistics released by BLS.GOV, accountants enjoy a constant unemployment rate that is significantly lower than the overall unemployment rate, whether the economy is in recession or not.

Hollywood depictions of accountants as ridiculously socially inept and overly in love with minutiae are outdated. Accounting and bookkeeping are often confused by the public, which are closely related, but are not the same. Automation for the past 60 years has removed much of the tedious part of the profession, making the daily life of accountants much less boring than it used to be. The young wa

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According to unemployment statistics released by BLS.GOV, accountants enjoy a constant unemployment rate that is significantly lower than the overall unemployment rate, whether the economy is in recession or not.

Hollywood depictions of accountants as ridiculously socially inept and overly in love with minutiae are outdated. Accounting and bookkeeping are often confused by the public, which are closely related, but are not the same. Automation for the past 60 years has removed much of the tedious part of the profession, making the daily life of accountants much less boring than it used to be. Young people who want to look cool are still swayed by the outdated reputation accounting has when they decide that accounting is not for them.

The days of working alone without human contact are long gone. Yes, there is still a lot of desk work, but nothing like before. Most of my time is spent communicating with clients and colleagues, either orally or in writing.

A general answer that expands on Mrigesh Kejriwal and covers other answers

It occurs to me that the original 4 Varnas documented in Manu Smriti were supposedly based on hereditary professions. Thinking of each of the varnas (who became castes).

Kshatriya: The rulers. Now they have become politicians, democracies or autocracies. Just read Animal Farm.

Brahmins: After less than a century of communism and atheism, religion is back with a vengeance. The priesthood in all religions and denominations seems infallible and secure

Vaishyas: In this globalized world, the world's GDP has exp

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A general answer that expands on Mrigesh Kejriwal and covers other answers

It occurs to me that the original 4 Varnas documented in Manu Smriti were supposedly based on hereditary professions. Thinking of each of the varnas (who became castes).

Kshatriya: The rulers. Now they have become politicians, democracies or autocracies. Just read Animal Farm.

Brahmins: After less than a century of communism and atheism, religion is back with a vengeance. The priesthood in all religions and denominations seems infallible and secure

Vaishyas: In this globalized world, the world's GDP has expanded even in sub-Saharan Africa.

Shudras: To our absolute shame, even today manual waste collection is very strong. As a profession, there are enough and more odd jobs that work very well. Think of pest control, recycling waste, creating compost.

If we change the inheritance of the profession and separate the caste from Varna, all the professions seem recession-proof.

I rest my case. Thanks for asking.

If you like what you read, follow the murmurs of Murali Vasudevan and Murali

References:

Manu Smriti - Wikipedia

Animal farm - Wikipedia

Bezwada Wilson - Wikipedia

If I had to choose one skill that I hope is always in demand, it is problem solving. All the companies I have worked with have needed them.

Others have listed some good industries to consider. One that seems to me to be in demand is health care, particularly mental health care.

I would look for what you like to do. I know that manufacturing is thought of in the United States as a dying industry. It is not. I relate it to agriculture. In about 1900, 30-40% of the country was on a farm. Today it is less than 5%. However, we produce more agricultural products than ever. The manufacturing is similar. Although not like domin

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If I had to choose one skill that I hope is always in demand, it is problem solving. All the companies I have worked with have needed them.

Others have listed some good industries to consider. One that seems to me to be in demand is health care, particularly mental health care.

I would look for what you like to do. I know that manufacturing is thought of in the United States as a dying industry. It is not. I relate it to agriculture. In about 1900, 30-40% of the country was on a farm. Today it is less than 5%. However, we produce more agricultural products than ever. The manufacturing is similar. While not as dominant as it used to be, there is a lot of manufacturing in the US even as productivity gains reduce the number of workers needed. However, in many geographic areas, the number of skilled workers has decreased faster than the job requirements. Companies don't want to trust a machine worth hundreds of thousands of dollars to someone who can't keep it running. It may not be recession proof in the short term,

There are recession-proof jobs in America, but chances are you're hearing jobs, not positions that require years of training outside of healthcare or seniors.

My first thought was garbage disposal. It's safe to say that people will always pay to have curbside debris removed.

Do not look for guarantees in life, create your own possibilities. Few if any industries are truly recession proof, but it is a life matter that occurs every seven years and we are technically far behind.

I lived and worked through three of the worst recessions outside of the great depression and it went well

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There are recession-proof jobs in America, but chances are you're hearing jobs, not positions that require years of training outside of healthcare or seniors.

My first thought was garbage disposal. It's safe to say that people will always pay to have curbside debris removed.

Do not look for guarantees in life, create your own possibilities. Few if any industries are truly recession proof, but it is a life matter that occurs every seven years and we are technically far behind.

I lived and worked through three of the worst recessions outside of the Great Depression and I did well, you will too.

Good luck.

Government jobs don't pay much. But they make up for it both in benefits (healthcare, retirement) and in the fact that it is very difficult to fire a public employee after a probationary year has passed.

The reason for this is to prevent a large number of politically sponsored positions from being distributed each time there is a change in leadership. In the past, politicians have used government jobs to pay their political benefactors (Me, my sister's son is no good. But hire him anyway). This leads to massive corruption.

With that said, you can fire an employee for

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Government jobs don't pay much. But they make up for it both in benefits (healthcare, retirement) and in the fact that it is very difficult to fire a public employee after a probationary year has passed.

The reason for this is to prevent a large number of politically sponsored positions from being distributed each time there is a change in leadership. In the past, politicians have used government jobs to pay their political benefactors (Me, my sister's son is no good. But hire him anyway). This leads to massive corruption.

That said, you can fire an employee for poor performance - it's just a very time-consuming process. The government is, well, the government and there is a fifth amendment that prohibits federal, state, and local governments from “harming employees' property interest in their income” (that is, firing them) without minimal due process of law.

Often times, governments hire many contractors who do not have the civil service protections mentioned above. These contractors are often the first to go when budgets get tight.

In the US, most banks participate in the Federal Deposit Insurance Corporation (FDIC) program that insures depositors against losses in the event of bank failure. There are limits on the amount insured. Individual accounts are insured up to $ 250,000 and joint accounts up to $ 500,000. It is important to note that the insured limit is per bank, not per account. So if, as an individual, you have $ 1,000,000 to deposit, you can't just open four accounts at your bank to achieve full coverage. You must distribute the cash among four insured banks. Check the fine print on any account you open to make sur

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In the US, most banks participate in the Federal Deposit Insurance Corporation (FDIC) program that insures depositors against losses in the event of bank failure. There are limits on the amount insured. Individual accounts are insured up to $ 250,000 and joint accounts up to $ 500,000. It is important to note that the insured limit is per bank, not per account. So if, as an individual, you have $ 1,000,000 to deposit, you can't just open four accounts at your bank to achieve full coverage. You must distribute the cash among four insured banks. Check the fine print on any account you open to make sure it is FDIC insured, as there are some special types of accounts that are not covered.

Technically, the recession is when we are faced with two consecutive quarters of negative growth. We continue to grow although slowly at 5%.

Regarding employment, we are facing a job with lower growth due to the development of technology and business models. Robots, internet marketplaces, digitization, hired transportation, dedicated freight corridors, and shrinking demand are leading to tight structures. The damage to MSMEs (micro, small and medium-sized enterprises) from the demonstration and GST has become irreversible.

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