Tuesday, March 03, 2009

Ten Ways to Help Prepare for a Depression

Ideally, we would all have prepared for a possible depression years ago.  That said, if you're just getting started it's not too late to take steps now which will make your life easier as the economy continues to circle the drain.

Here's a non-comprehensive list of things you can do to help prepare, in no particular order.
  1. Analyze your spending habits and reduce unnecessary expenditures.
  2. Pay down debt.  Debt is a tool and can be useful, but be careful that you're not incurring debt for the wrong reasons.  For example, taking out a loan to buy a boat right now is probably not a good reason for going into debt.
  3. Diversify your skills.  Employment during  a depression may not be easy to come by.  Make sure they're economically useful skills.  I suspect knowing how to weld, do carpentry, or fix computers will be more valuable than how to write mortgages or sell homes.
  4. Build up your personal and professional networks.  The more people you know the easier it'll be to find someone with a needed skill, and the easier it'll be to find a new job if you lose your current employment.  Social networking sites are potentially a great aid to this.  Look into LinkedIn, Plaxo, FaceBook, and Twitter.
  5. Look to the safety of you and your family.  When the economy goes down, crime goes up.  Take a class in self defense.  Learn your jurisdiction's laws on the use of deadly force.  Learn how to shoot if you don't know how.  See if there are things you can do to improve your home's security: motion sensor lights, a video intercom for the front door, solid doors, etc.
  6. Stock up on non-perishable consumable items.  Canned food, toilet paper, ammunition.  Having stuff like this stored is a hedge against future scarcity and against inflation.   This is something you should do discreetly, lest you get labeled a "hoarder," with all the negative implications that carries.
  7. Start a garden.  Plant a fruit tree.  Raise chickens if you have the space and time.
  8. Consider that if the economy tanks enough, there may be a run on banks.  If there's hyper inflation, paper currency will lose value quickly.  Acquire currency made from precious metals -- silver or gold -- in denominations small enough to be useful for typical transaction.  E.g., gold Soveriegns may be good investments but using them at the supermarket is likely to be an exercise in frustration.
  9. Look into barter arrangements as a way to stretch your money.  You can barter goods and services.
  10. If you have any outstanding health problems, now is the time to get them fixed.
If you have additional ideas please post them in the comments.  (Spam will get deleted with extreme prejudice.)


Paul from Texas said...

Excellent piece. Here are a couple of my recommendations in addition to yours:

11. Store up on over-the-counter medical supplies (aspirin, band-aids, cough medicine, diapers, triple antibiotic cream, etc.) and equipment (eyeglasses, contacts, etc.) which might be unavailable for a time (similar to food).

12. Get your cars fixed - major things like brakes, tires, batteries ("major" being defined as "the vehicle won't go anywhere if X doesn't work"). Have spare oil and oil filters. Have a repair manual for your vehicle.

13. Get books, or burn to your hard drive or print out, on survival-related subjects - basic medical care, gardening, car repair (in a general sense), gun repair, carpentry, etc., etc. No one can know everything, but you sure can look it up.

14. Spare power, even if for only a few hours. Could be batteries, a generator or a bicycle-powered charger.

Dave Markowitz said...

Excellent! Thank you.