Planning for the next BIG EMERGENCY!
THE BIG EMERGENCY!
I'm not talking about the AC breaking, needing a replacement car or even losing your job temporarily. I'm talking about an economic depression, being permanently disabled, or the coup de gras, premature death.
Hardly anybody ever talks about the big emergencies, and why would they, it rarely happens in any given lifetime or century (depending on where you live), but they do happen.
So how do you plan for, lets say, an economic depression?
- First, have a lot of capital (money) on hand.
- Second, have an alternative sustainable income before employment dries up.
- And 3rd, have NO DEBT!
Obviously, all of these steps have to be planned and executed before a depression hits.
Have a lot of capital (money) on hand.
Two ways you can accumulate capital.
- Earn more than you spend.
- And make money with your money by investing.
Capital can also include real estate, making sure your home is paid for, or land, which can be used for useful purposes, like crops, etc... Every single person reading this is in a different financial position, but these rules still apply everywhere. And this kind of capital accumulation takes time, in most cases, years.
Have an alternative sustainable income.
An alternative sustainable income is income that you don't really have to work hard at and it weathers most adverse economic situations. For example: stock dividends, crypto staking, real estate rent, Hive/Steemit rewards, growing food and selling it (need land), etc… Essentially, have your money work for you so you don't have to work as hard (farming is tough though).
Obviously, during a depression, asset prices are cut in half at the very least, so your money won't make as much. But remember, money moves from good to better, no matter what the economic conditions are. It moves to safe places in crisis. It moves to growth places in stagnation. It moves to “stores of value” in devaluation environments. It moves from people's wants (expensive vacations), to people's needs (food and shelter) more often than not.
Move your money to places where people will eventually move their money in the future, therefore you capitalize on the wealth accumulation of the asset.
Have NO DEBT!
Pretty please, with sugar on top and cherries, don't take out debt! Pay for things with cash! I know there are exceptions to the rules, if you're hungry, and you have no money, and that is the only way to eat, put it on credit. But other than that, don’t do it.
DEBT saps future income. People are slaves to debt. Debt is unforgiving. It never goes away unless you pay it off or die. And you still have to pay it off when you lose your job, hence when you are most vulnerable, like during a depression, if you become disabled, or you die and someone else is depending on you, like kids or a spouse. You don't want your kids having to choose between payments on a boat and food on the table.
And there you have it; have a lot of capital on hand; have an alternative sustainable income; and have NO DEBT! And do it before the emergency hits, because by the time the emergency gets here, it's too late. You have to have all of these things in place before things go bad.
When did Noah build the Ark? Before it rained. So build your Ark now, because when it rains, you and your family do not want to be stuck without a boat.
Stay frosty people.
50% allocated to ph-fund.