How to Survive the New Depression
Posted by jonathan on 9/18/08 ē Categorized as austerity, banking, making money, money, personal finance, saving
Photo Courtesy of Improv Everywhere
It appears weíre on the verge of a new Great Depression. Unemployment is up, wages are stagnant, inflation is up, major corporations and banks are collapsing left and right. There hasnít been this much instability in the international economy since the Great Depression.
The old Boy Scout motto is ĎBe PreparedĒ and thatís a great creed to live by. Nothing in life is guaranteed.
So, how can you prepare for this?
The people responsible for this mess arenít losing any sleep, neither should you. Things may be getting bad, but theyíll only get better. The nature of the capitalist systems is a series of up and downs. Bad fiscal management by the Federal Government and the Federal Reserve has smoothed out the grooves for the past 30 years or so, the problem is that you CANíT get rid of the ups and downs. Thatís just not the way it works. Thatís why itís important to prepare for the valleys just as much as the peaks.
Your money is generally safe in a bank. You should be monitoring the financial health for your bank. Since most banks are publicly traded, this information is freely available. Donít trust that the bank will always be there. Many banks have failed already. Luckily the FDIC has your deposits insured up to $100,000.
So, what if you have more than $100,000 cash in the bank? First, you shouldnít have that much money in a savings or checking account to begin with. If youíre truly investing your money, passbook accounts are terrible places to keep your money. Your money should be invested in mutual funds, retirement funds, bonds, etc. So, what if you do have more than that in the bank anyway? Split it up, there is nothing to prevent you from spreading your cash around to several different banks. That way youíre completely protected.
If youíre completely disgusted by the banking system, like my wife and I, you donít have to continue participating in it. Join a local credit union. Youíll have more of a say in how your money is handled. Credit Unions are not for profit, so they wonít be consolidating and joining bigger banks and then making stupid multi-billion dollar investments that will bring down the economy. Credit, above all things, are local, which is great. Credit Unions can also get you a car loan, mortgage and other products. Your money is also insured by the Federal Government under a separate insurance program as the FDIC.