After the stock market opened up this week on “Black Monday” and quickly dropped 1000 points, many people were surprised. The internet was abuzz with stories discussing the various reasons for the market turmoil and more than one educated source said these wild fluctuations are “perfectly normal”. Economists sounded a more positive note and talked about how it was a “buying opportunity”. I read another headline that was telling everyone to “take a deep breath and do nothing”. The advice implicit in all of these examples is that we sheep need not worry because everything is going to be fine. The financial experts on TV know what they are talking about and we would be foolish to do anything contrary to their advice.
I would agree with some of their advice. If you have the knowledge and resources, yesterday may have been a buying opportunity. If you have trillions of dollars of money that was created out of thin air, entrusted to you to invest, maybe there isn’t anything to worry about, at least in terms of the stock market volatility. I don’t recommend anyone panic and jump out of any buildings now. Markets do go up and down, but the long-term average is always up, right? Maybe there isn’t anything to worry about and yesterday certainly turned out to not be the global collapse feared by many.
On the other hand, I don’t think you should sit back and do nothing. Personally, I think we are in for a scary ride and yesterday was just the most ominous first signal. It was the beginning of a roller coaster ride that will eventually end up crashing into the parking lot coming out of the 4thloop. Yesterday was like the initial jolt you feel as the coaster shudders before the run up the hill. We still have some ride left, but I don’t think it will end well.
How can you prepare for economic collapse?
What can preppers do in the face of an economy that according to many experts (I certainly am not one) is dangerously close to collapse? There isn’t anything we can do to affect the markets. You won’t be able to shore up the economies of any other country around the world much less our own. However, the global economy will impact everything so even if you are like me and do not have any money in the markets you will be affected if they tank.
Your 401K might be perfectly fine in a year or it could lose all of its value completely. Yes, there are traders who are able to short the right commodities and make a fortune even in this financial climate. This article isn’t for them.
There are steps you can take to reduce your risk of exposure though if the financial markets take do end up taking a dive. You can begin to protect yourself so wild market fluctuations, maybe even crashes will impact you less in the short run. You wouldn’t only have one survival knife or way of making fire in your bug out bag, would you? You have backups and we call this redundancy. Shouldn’t the same principles apply to your financial health? Are you practicing financial redundancy? Instead of relying completely on your bank which could fail or simply refuse to give you the money you gave them for safekeeping, do you have an alternate way to get money? Instead of expecting your credit cards to work when you need to buy gas, do you have backup cash?
Time is running out I fear, but you can still take meaningful actions now to prepare your family. I will say again that I am not a financial expert and do not claim to know anything more than a 5thgrader when it comes to economics but the steps below are what I have chosen to do. You must make your own choices with the information and resources you have.
Step 1 – Get out of the market now
When we had our last little hiccup with world finances I along with many others watched the value of my 401K go down daily. It was a pitiful sight and I didn’t even have as much money as most people have in there. I certainly wasn’t anywhere close to retirement, but the money invested was my nest egg for what it was worth. It lost half of its value in just a few months. When it regained most of the initial value I had in there after a couple of years I decided to cash out. I took the interest penalty and turned most of my investments into precious metals that I physically have access to. This approach isn’t for everyone but now I am sure that my investment will not be worthless in October. There are many economists predicting losses of as much as 40% or more.
When banks don’t feel like they need to give you back your money, this is what it looks like.
Step 2 – Get as much cash out of the bank as you need to live for one month
or longer. Greece is still limiting withdrawals from banks. The money that people placed into the bank is not able to be taken out of the bank. They can use banks to pay bills but they can’t get money out when they want it. Don’t let this happen to you. I have set aside cash in the event that banks declare a bank holiday or severely limit withdrawals. This also works for power outages too when the ATM machines simply aren’t working.
Step 3 – Eliminate debt if you can
Some time back I asked the question of whether we should pay off our credit cards or buy prepping supplies. I do still believe that debt should be paid off. I don’t believe you should be incurring other debts either but must admit I fall short in this area. I haven’t lived an austere lifestyle of rice and beans to save pennies to pay off my mortgage. What happens when everyone is out of a job?
Step 4 – Have an alternate source of income
They can’t fire you if you’re the boss. There are millions of ways you can go into business for yourself and begin making extra money that you can use to pay down debt, purchase vital prepping supplies or simply augment your income. If you are like me and already have a day job, be thankful. A second or third part-time job isn’t without cost and effort, but it can pay off in big ways and give you some breathing room if you lose one job due to a downturn in the economy.
Always make sure you aren’t completely dependent on ATM machines, credit cards or bank tellers.
Here are just a few examples of side jobs you can take:
- Website design
- Graphic Artist
- Personal Assistant
- Freelance Writer
- Elder Care/Baby Sitter/Pet Sitter
- Seamstress or Tailor
- Odd Jobs/Handyman
The possibilities are limited only by what you feel like doing and your own commitment. Will you look back after a job loss and miss all those reality TV shows you could have watched?
Step 5 – Start prepping now
If you haven’t started prepping already, it’s not too late! If you have started, make sure youreevaluate your prepping plans to make sure there aren’t any gaps you meant to take care of and forgot. You still have time to stock up on supplies you need. The basics haven’t changed. You need food, water, shelter and security. Do you have those bases covered?
Other useful resources:Pioneer Survival - Lessons We Should All Learn
Alive After The Fall (Advice onto handling crisis situations )
US Water Revolution (Have Plenty of Water when others don't have any!)
Blackout USA (EMP survival and preparedness guide)
Conquering the coming collapse (Financial advice and preparedness )
Backyard Innovator (All Year Round Source Of Fresh Meat,Vegetables And Clean Drinking Water)
Liberty Generator (Easy to build your own off-grid free energy device)
Backyard Liberty (Easy and cheap DIY Aquaponic system to grow your organic and living food bank)
Bullet Proof Home (A Prepper’s Guide in Safeguarding a Home )
Survive The End Days (Biggest Cover Up Of Our President)