by Adam Lee Buller

Created on: September 04, 2008   Last Updated: February 15, 2010

Many of my colleagues and I working in financial services agree that the economic outlook for western economies is the worst it has been since the great depression. Falling house prices, mounting debt and now the inability to refinance that debt has meant less spending power and a massive decline in consumer confidence. Unfortunately the combination of all these economic factors make it very difficult for many to survive, let alone thrive! For people in the know however, exciting opportunities do still exist.

It is wise to be cautious in such an economically challenging environment, so you should make sure you protect your savings and investments. As interest rates fall and inflation picks up it is easy for the value of your savings to be eroded. In light of this, be shrewd and look to invest in sectors and services that people can't live without such as energy and commodities. The demand for these services and products will always exist and in fact is being boosted by thriving eastern economies that still have a pent up demand for the good life. There are various exchange traded funds that will allow you to invest in these sectors in the same way you would stocks and shares while at the same time spreading the risk involved.

Also although it is wise to be cautious during these hard times do not let your fear of the times cloud your judgment. Often the best time to get a good deal on products and services is when times are bad. The average Joe's unwillingness to commit financially during hard times leads to less sales of big ticket items like new cars for example. This in turn means that car dealerships will likely begin to offer bigger discounts and added features to sweeten a deal like free insurance or 0% financing. For those looking to buy their first home and lucky enough to have a deposit and a good credit history use the current climate to your advantage.

With a surplus of unsold homes at the moment and the lack of mortgage finance available, your opportunity for negotiation cannot and should not be missed. If you can achieve the investor's dream and find the bottom in the housing market there could once again be great gains to be made in property. Also if you already own a home now may be a good time to make those improvements. With the downturn in the construction industry getting worse the price you will be able to negotiate with tradesmen will be significantly less now, than when they were all snowed under with work and could charge what they wanted, not what was reasonable!

Finally, do not think that because times are hard and consumers are beginning to tighten their purse strings that no opportunities exist to make money in business. As discussed there are certain things that people cannot live without. If you can find a way to offer these products or services to the consumer at a lower price, there will be a strong demand. Also remember the lipstick theory! In times of hardship sales of major luxury purchases fall (cars, kitchens, bathrooms etc) but people will still want to treat themselves and will therefore look to buy small, inexpensive, feel good items like lipsticks, sweets and clothing accessories. So again if you provide these products at a good price there will likely be a healthy demand!

So remember, even though the economic outlook is very bad use it to your advantage. There is still plenty of money to be made and saved, just use your head!

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