With the recent turn of events, I have been giving a lot of thought about what to do in event of economic slowdown — i.e., recession, stagflation, depression, financial doom, or whatever you want to call it. As I put this list of 5 strategies together, I realize that they are nothing more than responsible and sensible financial management strategies — something that should be practiced daily, and not only during economic turmoil.
I believe frugal living is the basic foundation to sound financial success. A good place to start is with my 50+ Frugal Tips, Ideas, and Resources article. In general, the whole concept can be distilled down to these 5 tenets:
Over the years, I have come to believe that best long-term investment strategy is to leverage a globally diversified investment portfolio consists of low cost passively managed funds that reflect your risk tolerance level and investment time horizon. This is a strategy that Larry Swedroe advocates, and you can read it in his book: The Only Guide to a Winning Investment Strategy You’ll Ever Need.
There are two main parts in this strategy:
If you lose your ability to generate income, do you have enough cash reserve to stay afloat? More importantly do you have an emergency plan to keep you out of trouble? Here are some good articles to get you started:
For most people, their job is their biggest source of income. During recession, the chance of unemployment increases dramatically, and we have seen many examples this past few months. Fortunately, there are a few things that you could do to project your job.
If you ended up losing your job, here an article to help you: How To Deal With A Job Loss.
Now that you all your bases covered, it’s time to think about different ways to increase your income. If you are reluctant about building alternative income streams, I’d like you to consider this statement carefully:
Your job is not going to be there forever. You can’t work forever. And you can’t retire until you figure out a way to replace income from your job.
Don’t wait. The best time to start building your alternative income streams is now.