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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?

#181

Post by hoseja »

davedx wrote: post #139
astrange wrote: post #114

Earlier quoted context omitted.

> 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…

Your advice might be okay for good times (investing, buying land, houses). But in hard economic times, the global economy will be doing badly and therefore most investments will too, even housing (see 2008). Going into debt that you then invest is doubly risky: you have debt, plus you have a risky investment. Saving cash is actually indeed the best way to prepare for hard times.

Enter hyperinflation.

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

#182

Post by nivenkos »

davedx wrote: post #139
astrange wrote: post #114

Earlier quoted context omitted.

> 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…

Your advice might be okay for good times (investing, buying land, houses). But in hard economic times, the global economy will be doing badly and therefore most investments will too, even housing (see 2008). Going into debt that you then invest is doubly risky: you have debt, plus you have a risky investment. Saving cash is actually indeed the best way to prepare for hard times.

Inflation will wipe out that cash though.

Honestly, it's hard to give advice since it's so specific to the region and job market, etc.

Like many US engineers can easily afford to buy a house outright with $200k+ salaries, that isn't possible as often in Europe or Asia for example.

But basically do what you can to get fixed costs that you know you can afford and stability - i.e. a fixed rate mortgage, fixed rate utilities, and trade union membership and unemployment insurance, etc.

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

#183

Post by oneoff786 »

ganzuul wrote: post #99

Started preparing 5 years ago by leaving IT for a more stable industry. As a machinist I won't be sent to the front lines because they need me alive to rebuild society. That's a pretty bleak outlook, I know. However right now the depressive realism I had when I chose to switch is looking prescient, up here in the North East of Europe. No worries. :)

Buddy if you’re in a Ukraine situation and you’re a reasonably aged guy, you’re going to the front lines. Everything is front line when the enemy is strolling down your residential street.

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

#184

Post by nivenkos »

dmje wrote: post #74

Diversify in as many areas as you can. In income terms, diversify away from a single source by learning new skills, training up in areas you're a bit rusty in, learning totally new ones. In savings or investments: diversify where you put them, spread them around so you're not dependent on any one scenario. In eating: eat more interesting and cheaper things. Become vegetarian, if you aren't already. In exercise: drop…

> In exercise: drop any gym memberships, use things like body weight to train. Run one day, do yoga the next.

This is a bit like the avocado toast nonsense though - a gym membership costs about $50 a month which is nothing compared to the near $2000 mortgage payments.

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

#185

Post by hoseja »

danuker wrote: post #177
throwaway3b03 wrote: post #168

Earlier quoted context omitted.

You're somehow implying that eating meat is bad for human health, which considering how general a statement it is, is bound to be completely false. Human beings have thrived eating meat for hundreds of thousands of years. And it's a lot harder to completely address all the nutritional requirements on a purely vegetarian diet, but not impossible.

We've only lived long enough to suffer from the effects of meat in the past century or two. Here are videos exploring studies about meat, which convinced me. https://nutritionfacts.org/topics/meat/

We've hunted large portion of large fauna to extinction. Agricultural society is a way to factory-farm peasants to use in warfare.

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

#186

Post by CPLX »

sofixa wrote: post #167
hervature wrote: post #162

Earlier quoted context omitted.

> But going into debt for a depreciating asset like a car is a bad idea, yes. This is just as stupid as: "But going into debt for a depreciating asset like a computer is a bad idea, yes." They are both investments in potential tools. For many, an investment in a car can ultimately be cheaper than most other modes of transportation. Just like how companies finance their data centers with debt. Of course, it does not m…

> For many, an investment in a car can ultimately be cheaper than most other modes of transportation. That's a joke, right? It's entirely dependent on one's location, and i think for more people here on HN the inverse would be true ( I'm assuming the majority of users here live in or around big cities, where tech was traditionally concentrated). In well developed big cities ( so excluding the many failures at urban d…

> i don't think there are any places around the world where owning a car is cheaper than paying for public transit ( with the caveat that depending on how you measure the time spent could alter that)

That's the world's biggest caveat. Investment in a modest car that stops you from spending 3 hours each way commuting over 4 separate bus routes from exurban home to exurban job is about as high a return on money as you're ever going to see. Not to mention grocery shopping kids and whatever else.

There are painfully few places in the U.S. where this isn't true. I prefer your model and I live in one of those places (Brooklyn) but let's be honest here about how the world actually works.

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

#187

Post by Swenrekcah »

hervature wrote: post #162
astrange wrote: post #114

Earlier quoted context omitted.

> 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…

> But going into debt for a depreciating asset like a car is a bad idea, yes. This is just as stupid as: "But going into debt for a depreciating asset like a computer is a bad idea, yes." They are both investments in potential tools. For many, an investment in a car can ultimately be cheaper than most other modes of transportation. Just like how companies finance their data centers with debt. Of course, it does not m…

I think you may be missing the qualifier that actually makes this advice true.

>But going into debt for a depreciating asset like a car is a bad idea, yes.

It's important to not go into debt for frivoulous consumption. If you buy an old car, it actually doesn't depreciate very much as long as it's kept in working order. The same with a computer, if I go into debt to get the new M1 Max because I need a computer to code, that's not very smart.

I can code just fine on a $300 used ThinkPad, and I can travel just fine on a $4000 used car.

If I'm unfortunate enough to really need either of those for income geneartion but can't afford it, then it makes sense to borrow for it, but only to get the minimum you need to get the work done.

Of course it's much more fun to get a newish F150 and the latest Apple gadget on a 96 month loan...

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

#188

Post by itake »

sofixa wrote: post #167
hervature wrote: post #162

Earlier quoted context omitted.

> But going into debt for a depreciating asset like a car is a bad idea, yes. This is just as stupid as: "But going into debt for a depreciating asset like a computer is a bad idea, yes." They are both investments in potential tools. For many, an investment in a car can ultimately be cheaper than most other modes of transportation. Just like how companies finance their data centers with debt. Of course, it does not m…

> For many, an investment in a car can ultimately be cheaper than most other modes of transportation. That's a joke, right? It's entirely dependent on one's location, and i think for more people here on HN the inverse would be true ( I'm assuming the majority of users here live in or around big cities, where tech was traditionally concentrated). In well developed big cities ( so excluding the many failures at urban d…

I live in Seattle. To get to work in Bellevue, I have 1.15hr commute by bus + walking.

When I lived in SF, I had a 1.5-2hr Caltrain/bike commute to Palo Alto. Missing a train would cost me 45 min. A car getting stuck in the tracks or a suicide would cost 1-2 hours.

A car currently saves me 2hrs, enabling me to have more time to cook healthy food myself and visit the gym with cadence. Imho, a car pays me in dividends.

I could live closer to work, but it’s difficult to socialize in those areas.

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

#189

Post by ntSean »

dmje wrote: post #131
danuker wrote: post #89

Earlier quoted context omitted.

> Become vegetarian, if you aren't already. This is very healthy. But make sure to take B12 if you're going vegetarian. > Though deficiency for those starting out with adequate stores may take years to develop, the results of B12 deficiency can be devastating, with cases reported of paralysis, psychosis, blindness, and even death. https://nutritionfacts.org/topics/vitamin-b12/ Edit: To the downvoters, care to explain…

32 year vegetarian. Never had to take a supplement.

7 year vegetarian. Recently found out I’m low on iron. Probably because I don’t eat fortified cereals. As a male, I’ve been told not to worry about my Iron intake- but that’s bad advice.

Best is not to generalise and instead get a blood test to check vitamin levels. Talk to your GP.

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

#190

Post by CPLX »

Swenrekcah wrote: post #187
hervature wrote: post #162

Earlier quoted context omitted.

> But going into debt for a depreciating asset like a car is a bad idea, yes. This is just as stupid as: "But going into debt for a depreciating asset like a computer is a bad idea, yes." They are both investments in potential tools. For many, an investment in a car can ultimately be cheaper than most other modes of transportation. Just like how companies finance their data centers with debt. Of course, it does not m…

I think you may be missing the qualifier that actually makes this advice true. >But going into debt for a depreciating asset like a car is a bad idea, yes. It's important to not go into debt for frivoulous consumption. If you buy an old car, it actually doesn't depreciate very much as long as it's kept in working order. The same with a computer, if I go into debt to get the new M1 Max because I need a computer to cod…

The problem is that qualifier isn't correct. The test needs another qualifier, it should be a depreciating, non productive asset.

Many assets that are incredibly productive depreciate. If you're making a living as a house painter you definitely want to invest in paint brushes rather than smearing the paint all over the walls with your hands. The fact that the brushes wear out pretty quickly is irrelevant. Same goes for an auto mechanic buying sets of wrenches, and possibly the developer getting a much faster computer that increases their productivity.

Fact is that owning a reliable car is a prerequisite to many jobs and living situations.

The advice is usually given around consumption type "assets". Like don't go into debt to buy a jetski or golf clubs or something. It's a mistake to transfer that logic to productive assets.

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