How to Avoid Economic Hardship
Readiness for hard times is something we can appreciate much more now than 15 years ago. And in the meantime we’ve learned a few things that are worth passing along to the next generation. There are relatively simple measures that we could have taken to prevent foreclosures and unemployment, and if you’re more interested in having a secure low-risk living than a high level income then these tips can help you protect your life from economic hardships.
Job
To assess how secure your current job is you need to ask yourself a few questions to determine just how important you are to your company as well as the economy at in general.
- Am I middle management? – The purpose of middle management is to make life more convenient for your boss, you typically have only limited power and do very little besides babysit your underlings and report on their progress to your boss. This makes you expendable.
- What does my company make? – If your company provides non-essential goods like decorative iPhone covers or services like foot massages then your business will shrink when times are tough. If you’re a plumber or an electrician nothing will change because people will always need those, and if you’re a brewer or a lawyer your business will probably boom because people need you to protect their interests and to drown their sorrows when they fail.
- Do I produce anything? – What you make is vitally important. If you produce hard goods like food, lumber, or computers you will have a better chance at holding down your job than someone who sells intellectual goods and services like project managers, marketers, or salespeople. Manufacturing companies might contract and lose workers for a while, but without goods to sell all the people who sell them are also out of work, meaning they depend on you.
Being someone that other people depend on puts you in a position of power, even if your profession doesn’t make a lot of money, and someone else is your boss. If you produce things then your boss needs you in order to justify the existence of his own job which gives you security.
Home
Holding on to your home doesn’t require you to have paid off your mortgage before tough times hit, it just means you have to be ready to absorb the impact. You’ll need to formulate a plan to pay off any outstanding credit card debts, save up enough of an emergency fund to continue paying your mortgage for several months (or years if you can) even if you lost your job tomorrow.
Talk to a mortgage lawyer before you get buy your house and keep contact with them once or twice a year even if you don’t need anything from them. Take them out to lunch and make friends and make sure they know you so that you are treated as a real person. Having a legal professional going out of their way to help you along with enough funds to ride out a rough spot or two can make a harrowing ordeal a relatively painless experience.
Skills
I once had someone tell me that “skills are better than education”, and while that’s not always true, the truism is that in tough times sometimes a “skill” will help you more than a college degree. With more and more people going to college there is a huge labor surplus for office jobs that require college degrees (except math and science fields, which are always in high demand). Walking onto the job market with practical skills like commercial cooking, baking, construction, welding, or carpentry can get you a job very quickly in an economy that is shrinking rapidly in the white collar world. Additionally apprenticing yourself to gain many of these skills is a paid job, which definitely beats racking up tens of thousands of dollars in student loans.
Category: Financial Planning
