Owen Raskovich

So less wealthy or otherwise known as poorer people, and this is a generalization, are vulnerable to recessions for a few reasons.

The first is an obvious one, and it goes back to their job security.

You know, they might not have a job that is as secure as a professional's.

or they might not have a lucrative salary where they can survive off one income for the household and meet all the costs and still keep their cash and do all those types of things.

So job security is low for these types of people.

And then if you go into a recession, it's already low, it's now got a lot lower.

In fact, it could mean that you have to take time away from work or you have to get a second job.

Another issue with this group or this camp is that these people are often unable or haven't been able to save $2,000 in an emergency cash buffer.

So you might be thinking, well, Owen, come on, seriously, who's in that camp?

Now, people that are also listening to this thing, that's me, I'm in that camp.

So consider these numbers from a 2014 government survey that I dug up.

So of those people who cannot afford to find $2,000 of cash within a week, so you cannot piece that together within a week to cover a medical bill or to cover whatever it might be, 6% of that group have a postgraduate degree.

but 30% haven't completed high school.

So yes, this is me generalizing here, but what we see is that it's typically the people that don't have the education and who don't have the financial means to get themselves comfortable in this position.

And the final one, the final reason that people end up in this camp is that, or that are already in this camp from birth because they've inherited these situations from their parents or from their family or from the people around them, is the people that get hurt in a recession have failed to diversify.

So this is another generalization.

But because people have limited education, so they probably don't know what diversification truly is, they have a limited means financially, and they've inherited poorly developed financial habits.

So many Australians have not properly diversified.

So as you know from our earlier episodes, I think we did an entire episode just on the concept of diversification and how it's not necessarily, you know, as cliche as don't put all your eggs in one basket.

This is a lot more serious than just eggs and baskets.