Losing your job, house, and car due to economic collapse in the financial markets is the worst and hopefully you never experience it. Most people don’t prepare for a financial disaster. I truly believe the quote, “failing to prepare is preparing to fail” is 100% applicable to a financial disaster. Once the day comes where your job, house, and car are gone you’re essentially homeless and not much can be done at that time. In order to protect yourself from this type of fiasco you must prepare for years and years. There is not a magical pill that will solve your problem at the moment of your collapse. Most people don’t realize that many of the goods and services they constantly buy day in and day out are killing them. It’s important to ask yourself anytime you buy something, “Is what I’m buying really important for me tomorrow?” Messing with credit and loans for houses and cars is a very dangerous feat. It’s important to understand that when you go to a bank to get a loan you must ask yourself, “is the item I’m purchasing going to make me cash on a monthly basis?” If the answer is no than it’s worthless to purchase.
To prosper in a monetary system like capitalism you must own assets. Assets are investments that pay you month after month until the investment is sold. Popular assets most people purchase in the US are real estate like rental properties, small businesses, and stocks. Most financial advisers will tell you owning assets in a well diversified way is extremely smart. Of course no one knows when the economy will crash, but there are other ways to hedge your money. Gold has been known throughout history as one of the most popular precious metals. In 1971 the US took off the gold standard for the money supply. In essence the money supply was completely opened up for the banks to receive loans from central banks. Money will never be the same after that day in 1971.
What do you do when there’s an economic collapse? Hopefully you never have to ask yourself that question or live through because it simply will be too late for anything. If you freak out and panic the day it happens, you’re a fool for not preparing several years in advance. What one must do is educate and consistently invest money in safe investments. The common “safe investment” most people always discuss is a well spread index or fund. The advantage to investing in something like this is that your money is well spread out and not put into one single basket. You have to religiously save your money, become frugal, and invest in well-diversified funds. Along with practicing those simple money principles you might want to look into investing in gold when the dollar value is high.
Gold is a good investment to buy when the value of the dollar is high because gold prices are low. The same is true the other way around. When the value of the dollar collapses or is extremely low the price of gold soars. Of course to have success in this you must buy low and sell high, but that’s easier said than done. Not everyone is a fan of investing in gold. Warren Buffett is known for speaking out about investing in gold. He thinks it’s a terrible investment to make because the owner is never receiving cashflow on a monthly basis. Now that we know the gold standard was abolished in 1971 it’s still a good idea to put some extra cash in a couple ounces of pure 24 carat gold when the value of the dollar is high. Many people will ask, how can you know when the value of the dollar is high? That’s a great question. The stock market and more specifically the dow jones index is a good indicator of where the value of the dollar is.
Hopefully by now you understand a little bit more about money and it can work for you. With anything in life take away what you think is most valuable. Don’t take everything discussed literal as things in the economy may play out differently. The crazy thing is no one knows which way the economy will turn, not even Warren Buffett. Be cautious with your money and change the way you spend by being more frugal. Instant gratification in America is a terrible disease most people suffer from. Instant gratification is when people see something in a store, tv, or online and decide they need it that very moment. You have to be disciplined. I know it may be extremely hard to do in today’s day and age but it has to be done. Wake up to the chaos around you and watch your money closely before it vanishes.