I do not want this to be a political debate nor an opportunity to post recent headlines. However, in my opinion, this administration seems to be taking actions which history suggests may lead towards a near or total economic collapse. Whether you agree with this or not is irrelevant.
This post’s question is: If one were to have a concern that they’d no longer be able to afford common household goods or that mainstream (S&P, Nasdaq) financial investments were no longer sound, what can one do to prepare for “the worst”? What actions could someone take today to minimize economic hardship in the future?
I would also like thoughtful insight from older adults to offer younger adults about how they should be better preparing themselves for an uncertain future, outside of current events or place of residence.
You can’t. Ride the wave. If the market tumbles, everyone will suffer. Which is most likely what they want anyway, because a hungry population is much more easier to control.
Finance-wise, have an emergency fund and well-diversified portfolio. This is not financial advice, and I’m not a professional, but this is what I’d do with retirement funds and personal stock accounts:
Emergency fund: if you already have this handled, then look at your investments. If you dont have an emergency fund, do everything you can to save up at least 3-6months of living expenses - ideally in a high-yield savings account to protect your money from inflation.
US stocks: Don’t be over-exposed to US stocks, especially riskier ones. Historically, bonds and foreign stocks have been recommended to balance your portfolio, but many people have ignored that in recent years due to the dominance of US large-cap stocks, especially the tech sector. Ensure you’re diversified in accordance with your risk tolerance/retirement time-horizon.
Non-US Stocks: It would be good to have a non-US ETF or index fund with developing and emerging markets. It may not perform as well, but can potentially hedge against US market volatility. The counterpoint here is that US stocks are globally interconnected enough that getting non-US stocks would overexpose you to that part of the market. Caveat emptor, do research.
Bonds: bond ETFs/funds, I-bonds (inflation protected securities, you can buy $10k per year), and automated bond ladders can give you steady returns. Remember buying bonds directly is fairly illiquid - your money will be stuck in the bond for the duration of the bond’s term.
Cash: Inflation isn’t crazy right now. Probably wouldn’t be bad to have more cash than normal sitting in high-yield accounts (earning around 4% APY right now) since the market is likely to dip. Maybe consider liquidating some investments that are riskier than you’d like. I wouldn’t really advocate trying to time the market, but also it doesn’t seem like a bad time to be a little heavier on cash imo.
Check out Boglehead 3 fund portfolios and their variations. Imo it is time to be safe and boring. If you have a long time until retirement, don’t panic - ride it out and consider rebalancing your portfolio to the standard, oft-recommended asset mixes. If your retirement timeline is short, make sure that you aren’t over-exposed to risky investments like stocks.
If we’re really going full warlord-rule society (“the worst”), names on a domestic account at some institution are worthless. Wax for the scraping. Bonds, bank accounts, stocks, all of it. Cash gets devalued by inflation. That leaves you with foreign accounts, goods, metals, crypto. #1 and #4, assuming you have electricity to access/move them.
I disagree. A sated population is far easier to control. Hungry populations become desperate and have little to lose. Americans are sated and comfortable which is why we have allowed this to happen.
A hungry population is easier to direct in violence. Tell them who the enemy is, who the reason for their problems is, and they will focus on that hatred and prejudice. Blame others for the problems.
That’s what the republicans have been doing, and they will continue to do it.
That’s the kind of control I think the commenter meant.
Right now we’re easy to control because we’re afraid to lose what we’ve got.
The french revolution has entered the chat
That’s what you would think. Like hungry people would protest or take action. But that’s not how it plays out. When everyone is so busy with getting by and staying alive, nobody cares about any atrocities committed by the higher ups. I’ve seen many countries where the people simply ignore the craziest things their governments say or do.
You’re not wrong. We are seeing that exact scenario play out right now. We can agree on one thing. We are all fucked.