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Ask HN: How can I prepare for hard economic times?

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Re: Ask HN: How can I prepare for hard economic times?

#141
It's too late to prepare. The hard economic times are already here. You can still do things, of course, but you should have started doing them weeks ago.

So here goes.

It's reasonable to pull your fiat and putting it into something hard, like physical silver. Not bars, but the smallest units of coins you can get.

Insurances and other stuff that relies on the stock market are going to go bust, so you might want to consider cancelling.

I advise against gold, because governments everywhere could decide post-crash that your Gold belongs to them. It's not unprecedented. There's no guarantee they will pay you for it with whatever money we'll get to use post-crash. When trading Gold is outlawed, your Gold becomes basically worthless.

There's far lower risk for that to happen with Silver. Gold seems to be a great short term investment right now, with the chance of Gold shooting up relatively soon relatively quickly being ... uh ... relatively high. So for short term greed definitely an option, but in current times I wouldn't bet anything on it for the long term.

This is for preserving your wealth and moving it post-crash.

Then, of course, comes food and water. Everything that keeps long-time is good. Given that your fiat is going to go poof, spending a lot of money on food that lasts isn't a bad idea. Worst case you'll have long lasting food you don't need, best case you have food.

Then there's cooking. Ignoring that power is getting more and more expensive, there's no guarantee you won't be suffering from BlackOuts, where ever you live. Personally I've bought a few tanks of propane gas, which doesn't go bad and lasts for a long time. It's like camping. Gas + Cooker.

If you can find anything useful regarding solar, then go for it as well. Always have more than one options available. It's important to never bank on a single thing working out as hoped.

I advise for keeping a few months worth of money on your bank account. You know, regular payments, etc, but the majority should be converted into something you actually can own. That includes cryptos. There's little reasoning to believe that people won't jump into cryptos just as much as hard assets.

In case prices drop: don't sell. In case prices shoot up after the drop (or without the drop), consider not selling silver/cryptos for a currency that's going to go poof anyway unless you have really good use for that fiat.

It's not about getting rich, it's about having something you can sell for the new money, post-crash.

I strongly advise AGAINST hoarding things with the idea of selling them to others who need them. When shit really hits the fan, these people will be overrun and killed by the angry, hungry, desperate mob.

Yes, the world and the people really are in that bad of a shape right now.

Think about everything and do not do panic actions.

Talk to others about what they think.

Do not let yourself be hindered in thinking about this.

Don't believe anyone who tells you it'll be fine anyway, because the risk isn't worth the short bliss of ignorance until reality smacks you in the skull with a metal baseball bat.

Re: Ask HN: How can I prepare for hard economic times?

#142
So much complicated advice in this thread, wow.

Keep it simple: do things that let you accumulate cash, so if you lose your job you won't also immediately get kicked out of your house and you'll have reserves to draw on. Consider that you might need to re-train etc.

Just build your savings. Don't do risky things that add to the complexity and your stress levels. Avoid crypto in particular.

I also have a family and I've been building cash.

Also: ignore people who tell you cash is bad because of inflation. Inflation is an effect that's known. Risks of various investments are combinations of "can be known" and "unknowable". Cash is king!

Re: Ask HN: How can I prepare for hard economic times?

#143

Earlier quoted context omitted.

Raw, yes. But I use alot more seasoning with vegetables. I spend more time chopping and simmering. And the end result just isn't as enjoyable as a steak.

With respect, this implies that you are not very good at cooking. You can make delicious, quick and easy food both with meat and with vegetables. If you try and cook a steak like vegetables, you will have poor results. If you try and cook vegetables like a steak, you will have poor results. If you treat each ingredient - meat, vegetable, or otherwise - in its own right and cook/season appropriately, then you can and…

Nope I've had vegetables at top class restaurants so my cooking abilities are irrelevant to my claim that (on average) meat takes less effort to cook and still tastes better. I enjoy all the food I cook, I just enjoy meat more and doubt I'm the minority, but thanks for condescending.

Re: Ask HN: How can I prepare for hard economic times?

#144

I've always found that "living at my means" has paid dividends. To many folks, 'round these parts, they'd consider it "living below my means," but that's mostly because they "live beyond their means." I avoid personal debt like the plague. If that means living in a small house, and driving an old car, then so be it. I've also found that learning to deliver software, as opposed to just "writing" software, has made me…

> I avoid personal debt like the plague. If that means living in a small house, and driving an old car, then so be it. Going into debt that you can pay off and will make you a profit is good - because making a profit is literally the thing that gets you through bad times. (That's why having savings be 100% cash is riskier than investing - you are 100% guaranteed to not have it go up.) And recent years' zero-to-negati…

If you went into fixed interest rate debt before a period of inflation, you're likely to be fine.

Re: Ask HN: How can I prepare for hard economic times?

#145

Earlier quoted context omitted.

DJIA is calculated using some unusual math on only 30 stocks and you should probably ignore it. It doesn't work the same way any other index does.

If you weren't just interested in derailing the conversation, you would have looked up how this stacks up with a better index. I did, so you might be cheered to know that the S&P 500, a cutting edge market-weight based broad index, dropped 20.2% from 1990-07-03 to 1990-10-11 compared to the DJIA's 18%.

Yes, but there's never any good reason to bring up DJIA unless you're a TV reporter who needs a big number, so I think it's always a good deed to complain about it.

Re: Ask HN: How can I prepare for hard economic times?

#146
The ideas of John Bogle are good financial advice. I suggest starting with "Develop a workable plan" on the Bogleheads wiki [0]. When you have sound financial planning, your income should be higher than your expenses and you'll start saving.

Saving and having an emergency fund are crucial, in any time period, but especially during uncertain periods such as we're starting to see now. Make an honest list of your actual expenses of the last few months and question wether each one is worth it. House, car, Starbucks, gym, takeout, ... where can you save meaningfully?

If you've already saved some money, consider spreading it. Different accounts at different banks. ETF's with broad exposure and large capitalisation. Perhaps a little bit in alternative sources of value like gold or crypto, in case financial markets become unstable.

If it really goes to shit: oats are a cheap food with good caloric value. Easy to store for a long period of time. Actually look at the prices of the things you buy and compare it to the value of oats. That ~5$ latte at Starbucks could keep my family fed for a week on cheap oats from Costco [1]

[0] https://www.bogleheads.org/wiki/Bogleheads®_investment_philo...

[1] https://everydaythrifty.com/grocery-store-price-comparison/ 5$ * 0.06$/oz = 83 oz = 5.1 lb.

Re: Ask HN: How can I prepare for hard economic times?

#147
You wouldn't ask Reddit about how to be a well adjusted adult.

You wouldn't ask 4Chan about white collar workplace social norms.

When it comes to making ends meet most of HN lives on easy mode. If your situation is anything other than easy mode then the usefulness of anything anyone here has to say will approach zero. You don't know what you don't know. This means that even when someone is an outlier and has great advice on a topic in which you wouldn't expect is you won't be able to identify it.

So hedge your bets by asking your questions in communities that have relevant experience in the topic.

Re: Ask HN: How can I prepare for hard economic times?

#148
post #20

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?

I think the idea here is that if the debt is less than 10% APY you’re better off building a emergency fund and can pay off the debts in later steps. With the emergency fund you’re less likely to find yourself in a situation where you take on more debt.

Re: Ask HN: How can I prepare for hard economic times?

#149
post #9

Related: Ask HN: What tips do you have for weathering a recession? - https://news.ycombinator.com/item?id=15798401 - Nov 2017 (104 comments) Ask HN: How are you preparing yourself for a recession? - https://news.ycombinator.com/item?id=22527383 - Mar 2020 (148 comments)

And in both cases the impending recession was not as imminent as the posters likely expected.

COVID-19 induced a recession all around the globe

Re: Ask HN: How can I prepare for hard economic times?

#150

The following has served me well, regardless of economic conditions. 0. Empower and partner with your spouse to make all the financial decisions. They should know absolutely everything. You can’t do it alone. 1. Zero debt. For a while I had house mortgage that I repaid at the first possible availability of bulk cash. 2. Max out tax saving investments. Try not to pay one penny more tax than absolute minimum. 3. Max ou…

>3. Max out life insurance you can afford. Don’t combine life insurance with investment.

Why not combine them?

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