How to Survive an Economic Depression
Ideally you should have started started preparing years ago, but it is never to late.
Debt elimination equals financial security.
Pay off Credit card debt: It is expensive and leaves you vulnerable to the ever-changing whims of credit card companies (I had one card at 27.99%). This is the time to be serious about it.
Pay off any other loans that you have: If you wish to keep your house for the long term, pay off the mortgage. (The mortgage interest tax credit does not compensate for the interest you pay every year.)How to pay off your mortgage .
The average household can be completely debt-free, including paying off their mortgage, in about 5 to 7 years. From that point they have $1,000, $2,000 or more to invest each month – building real retirement wealth in an amazingly short time. – John Cummuta, Transforming Debt into Wealth System
Operate on a Cash basis.
Protect your income: Do your best to be a valuable employee. No matter how safe you think your job is keep your resume up to date. Be on the look out for strong companies in your area of expertise. Find work in a recession-proof sector.
Save for at least a years worth of income. If your mortgage is paid of this really isn’t a whole lot of money. Make sure your savings are in an FDIC insured bank.
Make sure your bank is safe. See this article
Learn about the safest places for your money if you are concerned that FDIC insurance will not hold up to multiple bank failures.
Keep some cash on hand. Cash as well as silver coins is key to making it through bank runs, prolonged banking holidays or cash shortages. Cash and coins are “real money”. There may be times that merchants will not accept a check or credit card. Real money on hand will enable you to survive a depression more easily.
Re-evaluate your stocks and mutual funds. In order to financially survive a recession or depression, your investments must be secure.
Check with your bank and your securities broker/manager and find out for sure whether your Money Market accounts are, in fact, insured by the FDIC. If you were invested in the stock/bond market and have moved your money into a money market at your brokerage firm, that money market is NOT usually insured by the FDIC unless it is in a money market fund invested in U.S. Government Treasury Bills. Otherwise it is usually only insured against fraud.
Learn the difference between an economic downturn and bubble popping. The economy is transforming into something else. [Aftershock]
How to Thrive in a depression or recession:
The Great Depression of the 1930s caused widespread hunger and financial loss. However there were also great fortunes were made during that financial crisis! Many prominent families who’s names might be familiar to you – the Kennedy, Rothschild and Rockefeller families and Howard Hughes all made huge fortunes during the Great Depression. There were also many regular people also were able to increase their financial assets in the midst of the Great Depression. The key to surviving and thriving in a depression or recession is liquidity.
Recommended Reading
The Ultimate Depression Survival Survival Guide by Martin Weiss.
Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown By David Wiedemer, Robert Wiedemer and Cindy Spitzer Read excerpts here
Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression by Robert R. Prechter Read excerpts here.