Have you been following the stock market woes? No? Perhaps you have noticed rising food prices and the cost of goods?
You are most likely aware of the incredible fluctuation in gas prices – so much for high prices being linked to the cost of gas!
While we have sometimes spoken about it in a far-off future disaster scenario, the facts point to one thing – the stock market, and our global economy, is in trouble. Let us discuss ways for you to get through it and perhaps even thrive.
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This is not something most of us want to think about, but I am going to ask you to take just a little bit of your time and pay attention. No matter where you are, there are going to be some ways that you can prepare and be ready.
Recently I spoke with our bank manager and mentioned a woman I had just met who had been laid off without warning (and quite illegally). The manager nodded and said, “You’re going to be hearing a lot of that in the next little while. Businesses are struggling.”
Hopefully all of you have been working hard at reducing debt and increasing savings. If you are looking for the magic bullet, here it is – spend less than you make. I can’t make it any simpler than that. If that means dropping the phone, eating cheaper foods, walking to work, figure out ways to spend less than you make. (It’s kind of like losing weight.)
Are you ready to find out what you must do in order to get through economic upheaval?
Lose The Debt
I know – you probably knew that.
But despite that knowledge, the vast majority of North Americans are drowning in personal debt. And I’m not even talking about debt for a house or car that you can sell and at least pay off the amount owing.
I mean unsecured personal debt.
Debt is a terrifying thing when there is no job security.
Please put debt repayment at the top of your priority list. Not too long ago, people were telling me that it was wiser to have money in investments and slowly pay off debt, since the investments were paying far better than the interest charged on the debt.
Good luck with that these days.
Have an Emergency Fund
With a month’s notice, could you come up with $2000 for an emergency? The majority of people in North America can not, which means that the majority is financially insecure.
An emergency fund – either cash or assets that can be easily and quickly converted to cash – protects from debt and hardships. The oft-repeated sentence that we are all just a paycheque away from homelessness is unfortunately true for most people. It does not have to be, though.
Please do not make the mistake of thinking that an emergency fund is only for people who have large incomes. It may come as a shock, but the lower your income is, the more vital it is for you to have an emergency fund. Higher income people are more likely to have hard assets and the ability to quickly lay their hands upon necessary funds.
If you live in a place where employment insurance is available and you’ve been paying into it, take into account the wait time for your first cheque. Here in Nova Scotia, as 2016 begins, the wait can be as long as eight weeks. That is a long time to go without paying your bills.
Okay, so what do you do if your debts are paid and there is money in the bank? Surely the bank is not the ideal place to keep your money?
Invest In Hard Assets
Generally, people keep excess money in investments – stocks, bonds, and other interest-earning assets.
And while, in normal circumstances, that is a safe and wise idea, it becomes less safe and definitely less wise in times of economic uncertainty.
Instead, if you have actual cash in hand, you are going to want to tie up your money in hard assets.
- Land (preferably rural)
- Livestock (this is wide open, from quail to horses)
- Woodlots (or, to a lesser degree, cut timber)
- Metal and precious metals (gold, silver, platinum)
- Barterable skills training (medical training, firearm ability, carpentry, food preservation)
- Dry goods (grains, seeds, salt, sugar, tobacco)
- Non-electric tools (kitchen, sewing, carpentry, woodcutting, gardening)
Do you get the picture of what hard assets – tangible assets – are?
These are all things which retain an intrinsic value no matter what foolishness is happening with the economy. And yes, you will notice that I list skills and people as hard assets.
Every dollar you spend in building up a community full of skilled people who can rely on each means a dollar that is not subject to inflation.
Some of you are living in apartments or in very urban areas and you wonder if apartment homesteading is a thing.
The good news for people trying to homestead in an apartment is that it’s certainly possible to build up your food stores, your skills, your tool supply and your community. Take the time now to study second hand markets for tools, non-electric appliances and other resources – they are sometimes available very inexpensively.
It can even be possible to raise livestock if you live in an urban area!
Not cows, of course, but rabbits and pigeons are perfect for the city. And if you look around and think that your home is not somewhere you could weather truly tough times, have you made arrangements to relocate elsewhere?
What about day to day survival? There are some things that you should be doing constantly, every day, right now. Ready to find out?
Keep Cash On Hand
If the market crashes completely, banks may put stringent restrictions on cash withdrawals.
As much as possible, bill payments should be set up automatically or electronically to reduce the cash withdrawals, but more importantly, keep cash on hand.
A restriction on cash withdrawals could mean days or weeks without the ability to remove money from your bank.
Cash. On hand. While it will not replace barter, should things become very bad, it will remain very useful until that day comes.
One thing we learned from the gas shortages here in Nova Scotia – keep the tanks of your vehicles, and your jerry cans, full at all times.
I almost never pass a gas station without topping up, and I never let the tank get below half. With the price of gas these days, that’s very easy to do.
Never let yourself get in a position when an empty gas tank prevents you from getting home.
Of course, it is wonderful to live in an area where you can walk or bicycle everywhere, but that’s not usually possible for those of us building homesteads in rural areas.
Let’s take a closer look at some of those very important hard assets. There are some that I put higher than the others. Keep reading!
Hard Assets: Food
My friends, I have been preaching this for six years. Build up your stockpile.
Build up your food stockpile. Start now.
Get on my mailing list if you want help with planning your food storage. I do not, have never, and will not ever promote or sell freeze-dried food packages. As I have been saying for years, food storage should be made of primarily of foods that can be grown and preserved locally and they should be stored in reasonable amounts.
A few years ago, I met a woman who, when she found out what I wrote about, told me that she had carted twelve hundred pounds of whole wheat from South America to Canada. Why would anyone do that, I wondered. We have wheat here. And to make it worse, after storing it (improperly) for over a decade, she was trying to figure out how to dispose of it because she knew she’d never use it.
What an awful waste!
Store what you eat and eat what you store. Aim for food storage amounts sufficient to feed your family for two years – and then rotate it, replacing as it is used.
Again, let me make this clear, I am recommending that you have a TWO YEAR FOOD SUPPLY.
I know. That’s a lot of food. If you’re just starting, start in three-month increments. That means build up a three month supply for one person, and then repeat until you have food storage on hand for a two year supply for everyone in your home.
Hard Assets: Supplies
Take a moment and think about all of the other things that you use on a regular basis.
From dish soap to socks to Tylenol, you need at least a six month supply of the items you use regularly.
This gives you some protection against inflation and lets you watch for sales.
Ideally, we should have a two year supply of necessary supplies, and if you have the space available, I strongly encourage this.
When you are buying an item that is on sale – dish soap, for example, buy multiples.
Take your storage space and finances in account, of course. I buy 4 litre jugs of dish soap and buy six at a time. They won’t go bad and I know I’ll use them.
With four children, I do a lot of dishes.
A friend of ours is planning to return to school, but was debating between computer programming and paramedics.
Of one mind, EJ and I urged him to choose paramedics, especially since his wife has been making plans for doula training. Perhaps it is selfishness on our part but I am pleased that more members of our group of close friends will have emergency medical training. (Update: He finished his course and is now a paramedic!)
What practical, useful skills that you have which can be bartered?
- Cooking and food preservation
- Sewing, weaving, needlework
- Metal working
- Animal husbandry
- Child care (don’t discount it – not everyone is good with children!)
- Medical training
- Entertainment (it may not sound practical, but storytellers and musicians are important)
With just a little thought, I am sure you can add to that list!
Most of us are good at something, or have a natural interest in something that we would like to learn more about. If you are contemplating doing something to improve your life in the near future, I would strongly urge courses or training to expand on that.
Remember, no one needs to be good at everything.
All of these skills will make you valuable to a supportive community and will give you the ability to trade or sells goods and services.
Oh, yes, a community. You will never hear me advocating that people hunker down in the woods by themselves to wait out whatever disaster sent them there.
Forget anything you have heard about the lone prepper hunkering down in his armed fortress and outlasting the hordes.
First, he’ll be eating spam, white rice and Tang (or expensive freeze-dried foods) and second, he’ll go completely crazy within five years.
Not everyone has had the dubious pleasure of meeting someone who “has lived alone on that mountain for too long” but most of us can understand what happens to a person who has no one but his hunting dog to talk to for long periods of time.
In case you’re wondering, I’m not joking.
Solitude can make people crazy.
Humans are social creatures and we need other people.
Although many of us use the term self-sufficiency, it is impossible for any person to be completely self-sufficient.
Instead, we need to be forming up in groups of people that span a variety of ages and skills. This means having people who specialize in food production, carpentry, metal working, some who are talented at making and repairing clothing, some who have medical training, or understand defense and protection, etc. Of course, do not overlook the value of the elderly.
Stop for a moment and think about the assets, skills and knowledge available among the people you know.
Those with land that could be farmed may not have the strength or time available to farm it. Those with the energy and youth to do work may not have the assets to get things started.
We need community.
We need to begin working together.
If you belong to a faith group, have a meeting in which you discuss working together to meet the needs of the people in your congregation.
The Great Depression changed the mindset and habits of an entire generation and those of us who had grandparents or parents who lived through it can attest to this.
A elderly neighbour of mine, about twenty years ago, once yelled out the window to me to please go catch her cabbage.
Catch … her cabbage.
It had fallen out the open kitchen window and rolled down the driveway. A half cabbage, worth all of fifty cents at the grocery store, but there was no way she would allow it to go to waste.
The Depression changed them, strengthened them and often hardened them.
But one thing to remember is that, when it began, people were still primarily rural, accustomed to working hard and living relatively simply. Gardens and backyard chickens were normal and most people had skills that allowed them to build and repair. These are skills that most of us no longer have.
We can get back to that. And yes, we can get through an economic crash.