This economic downturn hasn't been kind to a lot of people. Jobs that haven't been taken away from people have had their hours cut, their workload increased, or their cost of living allowances taken away. Jobs that people used to be able to count on are on very fragile ground.
If this US Debt Clock is accurate, we're getting a new person on the unemployment roster every 17 seconds now.
What can you count on in this economy? I think the only thing that you can absolutely count on in this economy is that you can't count on anything in this economy. Retirements have been upended by plummeting 401(k)s and IRAs. Nest eggs have been cracked by crashing home values. Many people, all of a sudden, won't be able to retire.
It's foolish to take anything for granted. There's far less within our control than we probably realize, and proposed solutions that aim to make things better will almost certainly just make them worse.
When you think about “preparing for the future,” think instead of “hedging against the future.” How?
- Cushions, cushions. Bolster that emergency fund to buy time in the face of job loss. Bolster your food supply in case price controls cause shortages. (Price controls are another solution that will backfire. Think gas station lines in the 1970s.)
- Diversify your investments. If you're heavy in anything (or only have a couple of asset classes) look around some more. And don't forget to invest in yourself.
- Diversify your income streams. Only have one income stream? Start working on another! And then another. Your one income stream can go bye-bye at any time.
- Retire into something rather than just retire. It would be great if one of your new income streams involves something you really enjoy, and can do well into the traditional retirement age.
- Take care of your health. I've recommitted to this. The less you need health care, the better, because it will be more expensive, and you'll wait longer to get it.
- Pray.
Thanks to The Censible Life for including this post in the Carnival of Personal Finance.
Great Post!
I agree with your list. My wife has laid a lot of food by, but that is more because she buys in bulk rather than worried about lines.
I do think the folks who have not panicked and continued to make regular deposits in their investment or retirement accounts have been rewarded.
Their accounts are not far from being back to even.
Those that quit depositing or went to cash are still 30+% down from their peak. So I keep with the plan.
By all means pray!
I actually think we can 100% count on the consumer to BING SPLURGE again now that everything has recovered.
You can never count out the US consumer, and that is why corporate profits are going to rebound like crazy next year. 25% earnings growth will be EASY for 2010!
Best
FS
People have to learn to be creative and think outside the box. My husband is often unemployed. He supplements his unreliable income by selling rare books online, which he picks up at yard sales and thrift shops. I do the same with vintage costume jewelry and clothing. It’s a fun hobby which brings in money.