Diversify you risks. As much as you can: ETFs, property, rents, commodities, crypto, private funds, currencies.
Ask HN: How can I prepare for hard economic times?
11–20 of 341 posts
Re: Ask HN: How can I prepare for hard economic times?
#12If you have a stable job and a fixed mortgage you’ll be okay regardless of inflation. Inflation really only affects those who hold debt or hold cash. As public inflation numbers increase, make sure you are getting a commensurate increase in salary.
Re: Ask HN: How can I prepare for hard economic times?
#13If you think its coming, move your money to hedges. But people have been predicting the next big crash for the last 5 years to no avail, so don’t be surprised if you miss out on major gains.
Really? Everything points to 'economy is fucked for the foreseeable future', people are worrying about possible food and energy shortages, and your take is 'don't forget your FOMO though, stonks still go up'?
Generally, the best time to invest is precisely when everyone else is pessimistic about the market. When I say invest, I mean true investing. Long time horizon.
Like others have said, that’s aside from the point. You are more likely to lose than gain by timing the market. That’s what the GP is getting at.
Re: Ask HN: How can I prepare for hard economic times?
#14Having a rough idea of how portfolio management works would be a good start.
Logically, having all of your money in one bank(or asset, or whatever you are used to) is not a good idea since you're exposing yourself to a single point of failure(if that one asset/bank fails, you're screwed). You could have for example, 50% of your capital in one bank, 25% in another, 25% in cryptocurrency stables(currencies that keep an almost fixed value) and in this way you're reducing your risk on one side and raising it in other assets.
There are entire books about how to manage money and risk that explain in detail some common patterns and things to avoid when managing money.
Of course this is not financial advice, we all know that finance is a dangerous world and copying what someone else is doing may not bring you the same results.
Re: Ask HN: How can I prepare for hard economic times?
#15I have no investment advice for you, but it's always a good idea to streamline your economy, so that you can manage with less if something happens. Make sure to have a small cash reserve so that you can manage for a while even if something devastating happens. Make sure to have a small stockpile of food at home so that you can make those money last longer. As a bonus, this will also count as basic prepping, and you'l…
Thanks, we don't have any non mortgage debt. Our mortgage is relatively low compared to most.
I'm not looking to invest, I just want to make sure I provide food and shelter for my wife and child.
Good idea to have a plan to rapidly reduce spending. I think I'll see what I can cut now. There are things I host that can be cancelled. No more VPS to host a personal email server I hardly use.
Re: Ask HN: How can I prepare for hard economic times?
#16If you have a stable job and a fixed mortgage you’ll be okay regardless of inflation. Inflation really only affects those who hold debt or hold cash. As public inflation numbers increase, make sure you are getting a commensurate increase in salary.
It's the stability of my job that worries me. I see our expenses at work climbing and our sales dropping.
Re: Ask HN: How can I prepare for hard economic times?
#17If you think its coming, move your money to hedges. But people have been predicting the next big crash for the last 5 years to no avail, so don’t be surprised if you miss out on major gains.
Nasdaq is down 19% for the year.
Looking at one of the best biotech hedge funds, YoY% is -5% (March 2021-March 2022).
These don't qualify as a major gain in my book.
Re: Ask HN: How can I prepare for hard economic times?
#18I have no investment advice for you, but it's always a good idea to streamline your economy, so that you can manage with less if something happens. Make sure to have a small cash reserve so that you can manage for a while even if something devastating happens. Make sure to have a small stockpile of food at home so that you can make those money last longer. As a bonus, this will also count as basic prepping, and you'l…
Thanks, we don't have any non mortgage debt. Our mortgage is relatively low compared to most. I'm not looking to invest, I just want to make sure I provide food and shelter for my wife and child. Good idea to have a plan to rapidly reduce spending. I think I'll see what I can cut now. There are things I host that can be cancelled. No more VPS to host a personal email server I hardly use.
Not to encourage you to waste money, and there's definitely benefit in reducing clutter, but saving $4/mo on a VPS is unlikely to make a significant difference.
Re: Ask HN: How can I prepare for hard economic times?
#19If you think its coming, move your money to hedges. But people have been predicting the next big crash for the last 5 years to no avail, so don’t be surprised if you miss out on major gains.
Really? Everything points to 'economy is fucked for the foreseeable future', people are worrying about possible food and energy shortages, and your take is 'don't forget your FOMO though, stonks still go up'?
If one has assets, my advice is to diversify them appropriately.
Re: Ask HN: How can I prepare for hard economic times?
#20Depends on where you are in the world. In the UK, there's this handy flowchart
https://ukpersonal.finance/flowchart/
The essence is to have a budget. Understand exactly how much you spend and where you spend it. Once that's done, you can work out where (if anywhere) you can save money. It might be as simple as cutting out Netflix, or as complicated as refinancing all your debt.