During tough economic times, many people look for ways to prepare themselves for a major economic downturn or even an utter collapse. Planning for this eventuality might seem frightening, but with the right investment tools and some knowledge of the world economy you can keep yourself prepared. Here are a few essential tips.
1. Invest conservatively
You might assume that this means to buy gold and other precious metals, but this isn’t always the case. Before making any new investments, you should decide whether your goal is to maintain the value of your money or to increase its value.
Most investors don’t realize that there is a difference between an economic collapse and a complete economic meltdown; gold and other precious metals certainly provide sufficient protection from the latter, but they do not provide enough of a return to be considered strong investments during relatively minor recessions. Investing in precious metals is a safe way to keep your money from depreciating significantly, but consider Certificates of Deposit and other conservative investments first unless you’re simply trying to maintain value.
If you do decide to invest in precious metals, do your research. Make sure that you are working with a reputable investment firm and that most of your money is going directly towards the investment, not towards the costs of the firm itself.
Other smart conservative investments include land, which rarely depreciates in value. Underdeveloped land is often a strong buy, but as with anything else, you should make sure that you’ve researched the property adequately before buying.
2. Vary your income
You may lose your regular job during a serious economic event, and even if you have tens of thousands of dollars saved, you’ll end up eating through your savings pretty quickly. Try to vary your income. Look for ways to use the Internet to bring in money. Invest in friends’ businesses or start a new business altogether. Don’t let your expenses get away from you, but don’t be afraid to try new things to build multiple income streams.
If you can develop more than two income streams, you’ll be fairly well safeguarded from a major economic downturn. Use your creativity and see what you can come up with.
3. Watch the indicators
You cannot protect yourself from a collapsing economy if you’re not aware of the collapse itself. Watch the federal reports of monthly job numbers and compare them to population growth. Educate yourself on manufacturing numbers, GDP and other indicators that could help you make smarter investments.
If you’re willing to keep an eye on the overall health of the U.S. economy and international economies, you’ll be much better prepared when a major recession or depression does occur. Learn as much as you can about the economy and make sound investments wherever possible.