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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?

#221

Post by ganzuul »

oneoff786 wrote: post #183
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.

No, there are no spare machinists right now. They would come pick up our machines and install them in bunkers to make weapons of war.

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

#222

Post by tharne »

ChrisMarshallNY wrote: post #87

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…

This is excellent advice. The number one thing you can to do to improve your financial resiliency is to avoid debt.

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

#223

Post by alfor »

Put your finance in something like mint.com so that you know where every penny goes. Add to the system how much you pay in income tax so you get the full picture.

Trim excess expense that doesn’t bring you something

Invest the excess into something durable (house, stock, gold, etc)

Don’t hold dollard in your account, it’s value is going down

Look into increasing your value/salary

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

#224

Post by dionidium »

philipov wrote: post #199
davedx wrote: post #139

Earlier quoted context omitted.

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.

"Going into debt you then invest" is probably the exact wording used by pathological gamblers to justify betting their house at cards. In older times, that's how people gambled their way into slavery. "I'll borrow some money to buy the seeds I need to plant my crops" and then the harvest goes bad and you have neither food nor money to repay the debt. Suddenly the wealthy neighbor you borrowed from is taking your land…

Buying a house gives you extreme leverage, though, and with extremely favorable tax treatment. You can put as little as $25k down on a $500k house and when the land underneath it increases in value you get to keep all the upside and pay no capital gains on up to $250k in profit ($500k if you're married). And you'll pay, what, a fixed rate of 3.5% for 30 years?

If you find a bookie giving you terms like that, then you should take them.

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

#225

Post by senectus1 »

spyremeown wrote: post #200
senectus1 wrote: post #26

Earlier quoted context omitted.

I was thinking more of using the debt to fortify. Maybe metals... or property.

>I was thinking more of using the debt to fortify. Maybe metals... or property. "just trust me bro"

haha yeah no. I'm not advising anyone. i was more asking questions/speculating.

pretty good chance i wont do any of this.

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

#226

Post by sillysaurusx »

ChrisMarshallNY wrote: post #87

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 don’t understand how delivering software is related to “how can I prepare for hard economic times?”

Let me tell you, as one of the highest performing team members in every organization I’ve been at: if a manager doesn’t care about you, no amount of performance will help you. It didn’t help me.

And whether a manager cares about you is mostly luck of the draw. Sure, there’s politics at play. But the most common situation is that you’re not really helpful to their career mobility.

In that situation, “learn to ship software” is the opposite of helpful. If your manager doesn’t have your back, and you can sense this, you need to look for a new job. Because I guarantee you’ll be the first to go. It all comes down to whether some dude in a proverbial suit likes you.

(Isn’t it interesting how it’s always some dude? I feel like women would be better suited to actually caring about team members.)

You should at least mention to those young devs that performance is one of the least important aspects of being a part of a team, for 97% of companies. It’s table stakes. Raising the stakes won’t help you if you can’t play the game.

As for preparing for hard economic times, my advice is pretty simple. Exploit the good times, and never assume it will last. If you can’t survive losing your income for three months, make changes. That’s pretty much it.

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

#227

Post by tharne »

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…

Lol, you clearly don't live in the U.S.

With the exception of Manhattan, and some parts of D.C. and SF, no car = no job.

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

#228

Post by adhoc_slime »

davedx wrote: post #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'…

I'm not trying to be to mean when I say this but this is advice to be scared. Risk is something we all manage in our daily lives, We know the risk of inflation, yeah so we also know that just building a savings barely keeps you afloat from you throwing away %1-4 of your savings every year due to inflation. where I live (Canada) my basic savings accounts only have %1.85 interest.

Yeah there's risk in investing too, we all know that as well, but what level of risk is it that you should really afraid of? should I be afraid of investing in 3M, coca cola or how about a brand-new psychedelics/cannabis stock? Yeah probably for the latter, but you can even manage risk associated to that.

One risk we all don't like to think about is that our employers will let us go and we'll be out on the streets.

My point is, you can know your risks, understand and manage them. Watch your assets column so that something you think is an asset doesn't turn into a liability(something that doesn't generate profit), you want to be able to rely on a lot of factors for wealth generation because a wide array or complex risk can actually be better than single points of failure like trusting you will have / be able to find a job, that that crypto you put your life savings in won't be rug pulled, that the stock market won't crash.

Last piece of advice is to know what you can live on, if I lost my job today, what would be left in my assets column and how long a run way would I have if I could rely on my saving and the rest of my assets.

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

#229

Post by tonyedgecombe »

nivenkos wrote: post #184
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.

For people who struggle with their finances it's not just the gym membership. It's the gym membership, media subscriptions, daily latte, oversized car(s), holidays abroad, eating out daily, mortgage payments on a McMansion, new phone every year, overflowing wardrobe and on and on. Most people live pay check to pay check.

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

#230

Post by ianai »

astrange wrote: post #145
MagnumOpus wrote: post #140

Earlier quoted context omitted.

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.

Importantly, no one serious should use the djia as a proxy for a larger sample like the economy. The stock market already isn’t the entire economy and the djia is selected to not be representative of the stock market.
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