41–50 of 341 posts
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Most people have a job in bad times. The real problem is your wages won't keep pace with inflation so you have to be careful.
Pay off debts now. Get an emergency cash fund going. Max out your retirement savings (so you can afford to save nothing if needed).
Last, but most important: you don't know what is coming. Enjoy life as best you can now.
Depends 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.
Hi, that's a nice flow chart. Just one thing that I don't understand: Step 1. Make minimum payments on all debts. What does it mean? Isn't it better to pay all debts as fast as possible?
Leave the city.
- housing: pick in a flat to keep your energy costs low (neighbors heat one another), and make sure you can walk to a park or a river. Fight to make your city more walkable and bikeable, and support your local businesses. Make sure to live close to people you like or to build new relationship (can't beat cities for that!). I love my neighbors and we regularly organize meetings to ensure every one is happy (that was so awesome during lockdowns, I never felt better surrounded). Being in a city means you stay close to people you like (so important during harsh times) and have more transportation options. I can walk anywhere: doctors, police, markets, train station, etc. Note that my French grand-parents always said that WWII was much easier for townspeople (the bigger the city, the better) and given their experience, I fully trust them when planning for harsh times.
- transportation: I spend ~€10 per month for my transportation needs (I own a cheap, light bike to go to work and move around). I take the subway/train sometime (when I'm too tired to bike) but it's much cheaper than all other options.
- food: I'm a member of a coop i.e we partnered with a local, organic farmer to commit to deliver all his production directly to us, for the whole year and at a fixed cost (around ~€15/week for a big basket of vegetables). I opted to get other produces from the coop, from other farmers/artisans: bread (1.5 kg/week), flours, oils, fruits (apples, pears, oranges, pomelos, kakis, berries…), café, etc. No distribution and overhead cost (we run everything ourselves, and do the distributions once a week). The inflation is very limited inflation (almost zero logistics costs, little impact of market prices) and at least one year of visibility and cash. This helped me become vegetarian: the food is so good, cheap and more sustainable. Coops let you have the benefits of the the city and the countryside, and you can't better help farmers (we work together to ensure they invest in the long term, protect their health, use as little fertilizers and pesticides as possible…).
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Keep in mind the question is not about "likelyhood" of an economic recession. It's not a risk assessment. The question is about what would you do to deal with a recession better. An "it's unlikely" answer feels off topic to me.
Diversify you risks. As much as you can: ETFs, property, rents, commodities, crypto, private funds, currencies.
Genuine question. How does retail investor invest in commodities which are all future contracts?
Also in Europe there are Forex brokers that offer contracts (CFDs) on commodities, but there are a lot of scammy firms in this area, and the spreads charged are usually hefty.
(according to wikipedia in US CFDs are banned)
That way, you will be more easily able to provide your family with food. Especially if both you and wife can do the farm work.
And perhaps, with the farm at some point you might be able to live without needing to work much.
Some inspiration can be found here: https://www.youtube.com/watch?v=T15gXm6ha_I
In mine (UK) one the biggest outgoing costs is energy, mainly heating. There are various government schemes to help people with recent bills and ways of reducing energy consumption.
If 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.
> As public inflation numbers increase, make sure you are getting a commensurate increase in salary. Because that's easy to do for everyone?
Is it? I don’t think it is. Why do you think it is?