UPDATE: If you want to get a quick summary of surviving the crisis, then download the free report from bestselling author Robert Prechter.
How do you find a save haven for your family? Should you trust the government? The answers are explained — it’s short but powerful. Click here.
How do you survive an economic crisis? As discussed in the article Future Economic Crises, the economy is always at risk for major recessions and depressions — and more so in the next few years. This means your financial planning should factor in a possible economic crisis for the sake of financial survival and security. If there’s a chance that the economy can backslide, you need to be prepared — it only makes sense.
The topic of this article isn’t so much about literal survival (eg, “how to stay alive”), but is a question of maintaining basic comforts and small luxuries during economic hard times. The steps are relatively simple. I’ll be giving the “basics” in this article, but make sure to subscribe, as I’ll be adding entire feature-length articles on each point presented.
In this article we’ll discuss how to survive an economic crisis in depth, looking at several pillars that should be the foundation of your money habits that will help put money worries behind you. Make sure to subscribe below as I’ll be adding entire feature-length articles on each point presented here. And as I’m sure you’ve already figured out, a similarly constructed guide will be written describing “offensive” financial planning so that you can proactively build wealth and achieve an even higher living standard — regardless of your current income, education level or “skills.”
- Do What You Know — There are tens of thousands of tips for cutting costs and squeezing the most out of every dollar. Knowing basic financial advice about credit cards, loans, utilities, rent and transportation. You aren’t suffering from a lack of available information; just use what you have access to you. In the next 20 minutes, get a pen and paper and make a list of 20 ways you can cut costs — then just do it.
- Prepare for the Worst — Having an actual plan before the crisis hits is essential. Having a month’s worth of non-perishable food, water and other essentials provides both peace of mind and resources if the worst comes to be, including an emergency fund of several thousand dollars. Doing this means that you can literally survive a major financial disaster. Regardless if it happens or not, there are always benefits to preparation, even if it’s just the knowledge that you won’t be going hungry even if economic turmoil hits you.
- Get Out of Debt – If you think there’s a chance of any sort of economic crisis in the future: Get out of debt. It’s destroying your financial security and retirement. During normal conditions your debt is destroying your long-term worth, your retirement and your future. During a time of financial difficulty, your debt could literally drive you out of your home. A debt-free person has more financial, emotional and physical security — this should be your primary goal for your financial planning. Destroying your debt is more important than TV, new music, magazines and other sources of entertainment. Destroying your debt now can literally earn you millions over your lifetime. Declare war on your debt.
- Get a Passive Income — A passive income is an income source that brings home the bacon without requiring you to work for it after the preliminary labor. For example, if you are a cable salesman, you only have to sell a cable package once and you will earn for years. For an example of a passive income, think about a website: for $300 you can start your own lifetime business online, and you only build it once and it earns forever. A passive income is the most secure and convenient income. You can lose your job, but you can’t lose your passive income.
These are simply the first steps to financial security. Once you are successfully debt free, and have a passive income, losing your job will only stop your growth — it can’t set you back. This is the first half of your financial planning, and should be seen as such.
Unfortunately, most individuals are focusing exclusively on survival, with their entire financial plan geared completely towards paying the next line of bills — not on success or even wealth. Most consider the idea of working towards building wealth (or “getting rich”) as unrealistic. This is blatantly untrue, although a very common belief. With the advent of the Internet and the availability of information, rich isn’t just “possible”; rich is a choice.
The next article to be published by Financial Planning is specifically about Offensive Financial Planning, and details quick and specific steps you can take to actually grow your income and achieve a lifestyle that you want. Don’t let anyone tell you that you can’t join the rich, or that comfort has to be saved for retirement — hundreds of thousands of people around the world know that’s simply a dangerous myth. Make sure to subscribe below, and I’ll notify you when the new article is published.
Read More:
- Are the major banks ready for competition in 2010?
- Future of Wall Street lies in the hands of Investment Banking
- The Future of LFP
- I save loads of money with Sunday paper coupons. Do you?
