What to do in case of economic downturn

There’s some segment of the population who believe that the US economy is going to collapse completely in the next 2 years, and that all sorts of disasters will then follow (world economy collapse, governmental collapse, etc). And they may even have a point at this moment, although rumors of impending economic collapse have been around for more than a century (don’t believe me? Read Thoreau).

But they always follow this up with “Buy gold!” The theory being that if the US dollar becomes worthless, you’ll still be able to buy things with gold, gold being the one true standard of value.

But as Scrooge McDuck himself has pointed out, gold is – in and of itself – pretty worthless. You can’t eat it, can’t wear it. It has value only to the extent that people are willing to trade it for food and clothing. It relies on a social contract just as much as US dollars do. And if the social contract has broken down to the point that US dollars are no longer accepted as currency, there’s a reasonable chance that gold won’t be accepted as currency either.

Where is the wealth of a country?

What made the US an economic powerhouse, what made us the richest country in the world and our currency the international currency-of-choice, was not gold. Was not our huge tracts of land nor the (admittedly extensive) natural resources that accompany them. What made19th-century Americans richer than anyone in history, gave the country a reputation as a place anyone could make their fortune, and raised standards of living by several thousand percent, were things like:

  • An environment where you get to keep most of the results of your hard work
  • an environment where you can start over after failure
  • recognition of opportunities
  • ability to form teams and work together
  • hard work
  • creativity
  • courage and determination

Those things aren’t based on the value of a dollar. Just the opposite: the dollar is based on those. When the US left the gold standard in the last century, we instead based the economy on the true value of the nation: hundreds of thousands of people, working day after day, to make this world a better, more comfortable, easier, safer place for their children and grandchildren.

Want Safety? Invest in You

Those things aren’t going away. They’re what Steve Pavlina calls “internal resources” – things that really can’t be eliminated by time or circumstances. No economic collapse can make you less brave, less creative, or less capable of teamwork.

If you really believe that change is coming – whether a total economic collapse or simply another Great Recession – then the best thing you can do is invest in yourself. Make you a valuable resource, that can be used to acquire resources like money, food, and shelter. As a basic starting point I’d recommend:

  • Make an assessment of your skills and experience. What can you do? What can you make, manage, create, design, implement, or discover? As you’re compiling your list, look not only at the specific experience you have, but at the general skills behind them. A telemarketer who’s not afraid of confrontation could do well as a negotiator or in law enforcement; a church youth coordinator may make a great teacher, or manager-of-linchpins; and I’m convinced that there is no one better at juggling multiple priorities with limited resources than a stay-at-home parent.
  • Look at your unique set of talents. What can you do well? What comes easily to you? What questions do people ask you, what problems do they bring you? How do those fit in with your skills? What skills might you be able to add to your repertoire without much difficulty?
  • Get comfortable with being in charge of your own income. Learn to analyze your spending. Learn to create a budget for an unsteady income. Figure out how much it really takes to keep your household going month to month. Learn how to run a small business – even if it’s just a vegetable-growing business. Practice meeting new people, keeping track of them over time, and telling them what you do. All of those skills—accounting, networking, sales, and financial planning – will come in handy no matter what the situation is.

What to do in case of economic upturn

Happily, and unlike buying gold, all of those skills will also serve you well if the economy doesn’t collapse. If the stock market continues its rebound, the dollar stays high and business booms, then you’ll be in a great position to take advantage of it by getting a better job (through your enlarged network and improved resume), earning freelance money on the side (through your newly-developed professional skills), or starting your own booming business (now that you know how to run one).

Invest in you. You can’t go wrong.

  • igor

    What do you mean when you said: “Practice meeting new people, keeping track of them over time, and telling them what you do.” ??

    • apingel

      One of the most important things you can do to take control of your own income is to practice networking: meet people by talking to your neighbors in the Starbucks line, going to networking events, and approaching those you don’t know at parties; keep track of people over time by connecting with them online or at subsequent events, keep track of what they’re doing, what activities their kids participate in, and how their careers are progressing; get comfortable telling people who you are and what you do for a living, and find ways to do that without feeling pushy or salesy.

      If you want to own your own job as a self-employed, you’ll need to be able to do this to sell your services. If you want to own your own business, you’ll need to be able to do this to get venture capital and find your initial customer base. If you want to be an investor, you’ll need to be able to do this to find leads.

      And if you want to be an employee, you’ll still need to be able to do this in order to keep up in your industry and find the best jobs.

      So no matter what happens, you’ll want to practice it.

      You can find more at http://howtomonetize.me/book-review-never-eat-alone/