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Ask HN: How are you preparing for the recession?

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Re: Ask HN: How are you preparing for the recession?

#71

Post by mr_gibbins »

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside:

- Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP.

- Emergency fund. Cash is good, but inflation depreciates it and it's too easy to spend. Buy precious metals (gold can be bought by the gram, you don't need to be rich already) or some other reasonably stable store of value that tracks inflation long-term.

- Trim the sails on your unnecessary spending - not all, but some. Try and have something left at the end of every month.

- It's musical chairs time for jobs. Find a comfortable job at the highest pay you can muster that has long-term stability, best measured by longevity and number of employees. Now is not the time to join a funky equity-paid two-man startup.

- Fill the cupboards with tinned and dry foods. Perhaps not in the US (you guys are fairly self-sufficient) but in Europe we're already seeing gaps on the shelves, not least because of the blockades in Ukraine, rising cost of transportation, Brexit and so on.

- Fill some fuel cans if possible (store them OUTSIDE), fuel prices are unpredictable at best, at worst there will be shortages.

- Try not to read too much news. Walk the dog. Focus on your family.

Re: Ask HN: How are you preparing for the recession?

#72

Post by bsaul »

mr_gibbins wrote: post #71

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside: - Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP. - Emergency fund. Cash is good, but inflation depreciates it and it's…

Why getting rid of debt ? I think that if your job is secure then on the contrary it seems like the perfect time to borrow as much as you can at fixed rates to benefit from inflation..

Re: Ask HN: How are you preparing for the recession?

#73

Post by dgb23 »

mr_gibbins wrote: post #71

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside: - Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP. - Emergency fund. Cash is good, but inflation depreciates it and it's…

Seems counterintuitive but those are all things people should do when things are going smoothly. Now would be the time to take calculated risks, bet on a few horses and lean on savings etc. if necessary. Now would be the time for courage and a sharp view. There will be stronger things that emerge, that’s where you want to be.

Re: Ask HN: How are you preparing for the recession?

#74

Post by culopatin »

mr_gibbins wrote: post #71

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside: - Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP. - Emergency fund. Cash is good, but inflation depreciates it and it's…

I’m afraid that storing fuel doesn’t work like that, especially if you leave it outside. You’ll get back to a can of varnish by the time it makes any difference

Re: Ask HN: How are you preparing for the recession?

#75

Post by parkingrift »

There’s no reason we should enter a recession in the next 3-6 months…

…except that people believe it will happen and by changing their behavior it will become self fulfilling.

I recommend you change nothing. Dollar cost average your purchases and continue with life as usual.

Re: Ask HN: How are you preparing for the recession?

#76

Post by mr_gibbins »

culopatin wrote: post #74
mr_gibbins wrote: post #71

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside: - Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP. - Emergency fund. Cash is good, but inflation depreciates it and it's…

I’m afraid that storing fuel doesn’t work like that, especially if you leave it outside. You’ll get back to a can of varnish by the time it makes any difference

That's good to know (no sarcasm intended) - I was intending on holding onto my modest stash of diesel for a few months at most, but probably worth finding out a bit about how quickly it goes off!

Re: Ask HN: How are you preparing for the recession?

#77

Post by mr_gibbins »

bsaul wrote: post #72
mr_gibbins wrote: post #71

All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside: - Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP. - Emergency fund. Cash is good, but inflation depreciates it and it's…

Why getting rid of debt ? I think that if your job is secure then on the contrary it seems like the perfect time to borrow as much as you can at fixed rates to benefit from inflation..

I was writing from the perspective of the debt-holder, that if you have expensive unsecured debt (and many poorer householders do), then as bills rise there is less disposable income to work with, debt payments eat a larger portion of outgoings and consequently is detrimental to quality of life.

If debt is not at a fixed interest rate then there's also the risk of interest rates going up, which we're seeing now. Theoretically a recession might help cap that, but it's a big gamble - an interest rate rise of, say, 5% would see an incredible amount of foreclosures. In the UK in the 80s, the interest rate topped 18% during a major recession and period of intense civil unrest.

Re: Ask HN: How are you preparing for the recession?

#78

Post by sjducb »

mr_gibbins wrote: post #76
culopatin wrote: post #74

Earlier quoted context omitted.

I’m afraid that storing fuel doesn’t work like that, especially if you leave it outside. You’ll get back to a can of varnish by the time it makes any difference

That's good to know (no sarcasm intended) - I was intending on holding onto my modest stash of diesel for a few months at most, but probably worth finding out a bit about how quickly it goes off!

Diesel goes off fairly slowly. One year old diesel can be put into any modern car. Two year old diesel can be mixed 50/50 with fresh diesel and put into a modern car 10+ year old diesel can go into a tractor or an old (pre 2005) diesel car.

Re: Ask HN: How are you preparing for the recession?

#79

Post by taubek »

mr_gibbins wrote: post #76
culopatin wrote: post #74

Earlier quoted context omitted.

I’m afraid that storing fuel doesn’t work like that, especially if you leave it outside. You’ll get back to a can of varnish by the time it makes any difference

That's good to know (no sarcasm intended) - I was intending on holding onto my modest stash of diesel for a few months at most, but probably worth finding out a bit about how quickly it goes off!

Yeah, fuel degrades over time. There are different numbers out there. Exxon [1] says up to six months. "In general, gasoline should be used within a month of purchase. When the engine will not be used for an extended period of time, it’s best to drain the fuel tank and then run the engine until it stalls. If you choose to store gasoline and follow proper storage guidelines, the gasoline can be expected to remain of good quality for at least six months."

https://www.exxon.com/en/gasoline-safety-storage

Re: Ask HN: How are you preparing for the recession?

#80

Post by yurishimo »

fbrncci wrote: post #60

I went the route of geoarbitrage. A few months ago I moved across the world, where cost of living are -70% from where I earn my salary. Financially, I couldn't be in a more stable spot, recently also changed jobs with a 80% salary raise. Every month that I work, effectively is a budget on which I could survive 6+ months on right now, if I really had to cut down my spending, I could survive a whole year on two months…

How do you deal with taxes in your birth country and abroad?
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