Updated on 09.12.14

Investing in Yourself: Fear of an Apocalyptic Economy

Trent Hamm

edvard munch - the scream 1893 by oddsock on Flickr!Four or five times a day, I get an email from a reader who is worried about some absolutely apocalyptic prediction about what will happen to the global economy over the next several years. As I’ve stated before, I don’t buy into fear, but when someone writes to me with obvious deep concern for their future, I am compelled to help.

My conclusion is that if you’re worried about the economic future, the best place to invest is in yourself. Developing yourself into a more intelligent person with more skills and more connections will pay huge dividends if such an apocalyptic scenario were to occur.

What does that mean, exactly?

Build strong relationships with a wide variety of people. Don’t just reach out to coworkers. Focus on building strong connections to your neighbors and others in the neighborhood as well. Don’t just stick with people who are in your socioeconomic status, either – look for people who are from different cultures, have different incomes, and have different values.

The more people you’re connected to, the more people you can contact for help and build connections between later on.

You can start this process by simply talking to your neighbors. Invite them over for dinner and build a strong relationship with them. Trade skills with them by freely volunteering yourself to help them out with their situations, and ask for their help when you need it.

The next step is to get involved with your community. Seek out community events and organizations that seem compelling to you and get to know the people involved. Serve those organizations as well, and build relationships with the people involved in those groups. In troubled times, such groups often develop into groups of mutual support, as with the Grange organizations during the economic crises of the late 1800s.

Learn a wide variety of skills – particularly ones that would be useful in the event of economic meltdown. During periods of deep economic uncertainty, many local areas resort to bartering, and skills are assets you can always barter.

Teach yourself basic carpentry, basic plumbing, basic electrical skills, and basic car repair. You should be able to handle almost every simple home repair yourself, be able to change a tire or change the oil in your car, know how to handle basic electrical problems in your home, and know how to deal with a leaky faucet or a plugged toilet yourself. And that’s just for starters – the deeper you dig, the more useful the knowledge becomes.

I suggest picking up a few handbooks for learning these things, such as the Reader’s Digest Fix It Yourself and Do It Yourself manuals and the Popular Mechanics Complete Car Care Manual are good places to start. The key, though, is to get these books and work through them. Try out these things and know how they’re done. When you’ve got these skills cold, expand into more advanced books, electrical books, carpentry books, and so on.

While I don’t envision any sort of situation where such a thing might happen, it is always useful to learn such basic skills. They can save you money in a boom economy or a bust economy because they enable you to do things for yourself and to build relationships with others by sharing these skills.

Invest at least some of your money in cost-saving and self-sufficient infrastructure improvements. People constantly want to hear about “recession proof” investments. The best “recession proof” investments you can make are improvements to your infrastructure.

For starters, fix the obvious problems with your home and property. If there are issues that could result in property devaluing or in potential danger, get it fixed.

Once that’s done, look for other investments you can make that will improve your infrastructure and reduce long-term costs. Ideas for this include solar panels, wind turbines, extremely durable roof tiles, energy efficient lighting throughout your home, a wood stove, a backup generator, a sturdy bicycle, and so on. These are all significant cost investments, but over the long haul they all pay for themselves and make you less reliant on the services of others.

Again, as with learning the basic skills, these options are all reasonable investments regardless of the state of the economy. They will save you money over the long run whether the economy is booming or it’s tanking, and they will always improve the value of your property.

Diversify your other investments. If you’re concerned about an economic disaster, your best bet to protect your investments is to diversify, diversify, diversify. Own index funds of domestic stocks, international stocks, large stocks, and small stocks. Own real estate index funds, bond index funds, and foreign currency index funds. Keep some money in cash, too – CDs and savings accounts. You can even look at rare metal index funds as a part of this.

Why? The only thing that is certain is uncertainty. Frankly, no one can predict the future and anyone that says that they can is selling you a story.

If you’re concerned about the future, prepare yourself by not relying too much on one particular asset to ride through the storm.

What do all of these suggestions have in common? All of these are things that a person who is conservative with their money might do in any economy, not just in the face of one that’s got them worried.

In the end, fortune always favors the prepared, no matter what the environment looks like.

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  1. mhoward says:

    Very good advise for ANY economic times! As the caption from “Changing Times” magazine used to Quote “These times, like ALL times are good, if we but know what to do with them.”

  2. Johanna says:

    Another thing to do is invest in your health. Eat healthy foods, and exercise your mind and body to keep them both in good shape. If you can reduce the chances that you’ll be forced to stop working due to poor health, you make yourself less dependent on your retirement savings, so it’s not quite as big a deal if they lose a lot of their value.

  3. Susan says:

    Nice post. The fear issue is what will ultimately be our demise, not the economy. The economy goes up and down and there’s nothing we can do about that. But diversifying and coming up with valuable skills and multiple revenue streams is key.

    I’m a freelance writer and I find my career is better in bad economies. People don’t want to hire full-time employees, so they need someone to pick up the slack. And I never have to worry about being laid off.

  4. Studenomist says:

    One thing I always tell people is that you are not above any job. Every job makes money. It doesn’t matter if you have a degree in Business Or Engineering, you should diversify your income sources. You can have an Honors Degree in Science but if there is no work in the field you won’t make a penny. I am always trying to new sources of income, whether it be installing windows or any other trade.

  5. Lisa says:

    I remember learning in high school that the economy has a very distinct history of ups and downs and so I guess I don’t tend to worry a whole lot about the future.

    I was always taught many skills growing up and I think it fits in nicely now. I don’t have to pay others to do things for me…and although it’s not benefiting local businesses, it is good for my own personal economy.

  6. sammy says:

    This is wonderful advice that people are in need of hearing.

    It’s becoming more obvious by the day that we sacrificed a lot in the heady years of easy credit. One of the sacrifices is the human connection.

    The excesses in the market fed excesses in every other aspect of our social and individual lives. Maybe it will be possible to become more human and humane now.

    I keep thinking and hoping that the upside to this economic disaster will be reinvestment in those things we let fall by the wayside.

    Thanks so much for your advice today. It’s really useful!

  7. Also… Get healthy enough to depend as little as possible on medications. Along the same lines get sufficiently fit/capable to rely less on energy intensive technology (cars, electric appliances, …)

  8. Kelly says:

    Although we’re not the reason you wrote this post, I’ll have to make sure my spouse reads this. He often talks about being worried about the possibility of an apocalyptic future (fueled by the great fiction he loves to read, and our real world uncertainties). I balance him out by thinking and doing positive things and attributing his “paranoia” to wanting to make sure his family is always safe, which I have to appreciate. But worrying and thinking gloomy thoughts doesn’t make anything better- it’s what you do about it that matters. Be prepared and connect with people. I totally agree with Trent’s ideas- and the other comments so far, too. I suppose I also ought to learn how to do all those home/car repairs etc, but at least I’ve got people close to me I can rely on or call for advice if i ever need it. In the mean time I’m going to keep surprising my neighbors and friends with dinner after their surgery, or home baked snacks as a thank you, reach out to the new folks to make them feel welcome, and help out where I can. The world is what you make it, and even when you feel like it’s not, you can still make a difference. I believe in the power of positive thinking… isn’t there something about your thoughts become your words, become your actions, become your habits, become your legacy… or something like that. Maybe it’s the artist in me, but I know I’m just too sensitive to let myself think drastically gloomy thoughts, or watch horror movies, or even watch TV, or play most video games. I just feel like it’s brain rot. Don’t get me wrong, we have our fair share of things to stress and worry about- like trying to get rid of our house in this rotten market. But we just try to remember the lessons we are learning and know that in a few years we’ll be able to look back and say “Do you remember when…” One of the biggest reasons I love my spouse is that he always finds some way to laugh about our hardships -despite the occasional paranoia :)

  9. Good health and practical skills are good to have in any economy.

  10. Joan Meadows says:

    I stopped watching the news on TV because it fueled the panicky feeling within. My husband and I both grew up very poor. His mother taught me the fine art of “making do”. Her husband died when she was 8 mos pregnant and already had 6 kids and no insurance. She lost the farm, gave birth in a snow storm (no doctor) and got up and found food for her kids. Someone finally let her live in an old abandoned store. Now that lady really knew what hard times were. I’ve tried to learn and imitate her. This article reminded me of her. The boys learned to hunt, fix things, farm, garden, etc. She could walk in the woods and find things to eat. She always had a huge garden from which she canned, froze, and traded for she might not have. She was amazing! She passed away 15 yrs ago at the age of 76.

  11. One other investment that person could make in their property would be edible landscaping. A fruit tree, berry canes, an asparagus bed or some other perennial vegetable would be a nice investment that would cost little compared to the other high ticket renewable energy items. A mature fruit tree on your property is a nice asset whether you want to eat the fruit or sell your home.

  12. I agree with the point that investing in skills is a smart thing to do. I presented some ideas to survive financial meltdown in an article a few days ago. Here is the link for The Simple Dollar readers – Ten Tips to Survive the 2008 Global Financial Meltdown -http://adawnjournal.com/2008/10/30/ten-tips-to-survive-the-2008-global-financial-meltdown/ I hope readers will find this helpful.
    A Dawn Journal

  13. Sharon says:

    People are under the illusion that exercise and eating organic foods will somehow, magically keep them “safe” from becoming ill. It doesn’t. I know many people who live a healthy lifestyle get blindsided by cancer, mental illnes, MS, or a host of really nasty things.

    I’m not saying that it is a bad idea to live a healthy lifestyle, but what is underlying a lot of these comments is the idea that people who do become ill somehow “deserve” it for not “living healthy.” Shit happens, people. Live healthy, but don’t indulge in magical thinking. You still need checkups and to keep on top of things that are early symptoms of potentially disastrous illnesses.

    And look as closely at safety issues as well. You are far more likely to end up with a serious and expensive injury than a serious illness. Wear helmets yourself (invest in the good ones!) and have the kids wear them on bikes, skates, skateboards, skiing, etc. (No health insurance? Stay off the above!) Wear seatbelts every ride, every distance. Invest in steel-toed safety shoes, impact goggles and wear long pants when you mow the lawn. There is a lot more to safety, so learn about it and DO IT!

  14. Such valid comments! Investing in oneself is certainly an investment that doesn’t lose money and gains value!
    I like learning new things but often find, if the thing is not something I can make money from, I don’t do it! That’s flawed reasoning I realize. I need to learn to do things that are fun as well as useful as well as creating a “side hustle” as our friend Frugal Dad puts it.
    Another great post Trent. Keep em coming!

  15. Deborah Johnson says:

    I read a great article in the Wall Street Journal about survivors of the Great Depression. Their stories echoed what my grandmother used to tell me about growing up during that time.

    What really impressed me was how people shared and helped each other survive. Even those who didn’t have much shared what little they could to help out others.

    Grandma and her family often went hungry during the Depression. As an adult, she made sure that never happened. There was always food on the table at her house, and plenty was available for family, friends and strangers. No one went hungry at Grandma’s.

    That sense of community is inspiring.

  16. Jules says:

    Learning new skills is fun, too! It always amazes me to watch MTV (always accidentally, when I’m channel-surfing for favorite shows) and see spoiled-rotten teens who can’t tie their shoes because they’ve never had to.

    Carpentry reminds me that tomorrow I need to build a shoe rack…girls and power tools–what could be sexier? ;-P

  17. Lenore says:

    Kudos to Sharon for challenging the New Age and Oprah-fueled idea that we can control our physical destinies. Healthy choices and positive thoughts won’t hurt anything and may even help, but we can’t stave off all forms of tragedy. And its rude to blame others for their afflictions, bodily or financial. I always snicker when someone says, “I make my own luck,” because we are all fortune’s fools. It’s important to educate ourselves and choose our actions wisely, but every now and then, we all feel like that guy in the SCREAM painting. That was the perfect picture for this article and these times, Trent!

  18. Michael says:

    Having a lot of children is a good way to build your support network and diversify your assets.

  19. moolah says:

    there’s a saying”formal education can make you a living but self education can make you a fortune”you are so right about this you need to discipline yourself take stock of yourself,build alliance this is a times of trial for everyone of us we can’t predict our economy but with our skills we can get through it,we should also get a “”personal finance advice”

  20. As of late, I do not make a habit of watching the news. When I do, I get all nervous inside and anxious on the outside. I scan the newspaper, read what I think is important but mostly just avoi d the hyped up news. I build my savings, and enjoy my family. That alone keeps me pretty busy.

  21. Johanna says:

    Sharon, what comments are you reading? Nobody mentioned organic foods except you. Nobody suggested blaming people for their health problems except you. Nobody suggested *not* getting regular checkups except you.

  22. Mule Skinner says:

    Repairing your own car is not as easy as it used to be. Some makes and models are particularly difficult, so if you intend to do this, do some research first and buy one that’s easy to work on. The big dilemma here is that the older models are easier to work on, but are also less safe and more polluting.

    I do agree with bicycles. People seem to throw these away like paper cups, so you can probably get two or three for cheap and build one good one out of them. They are generally easy to repair, and in some situations can replace a car.

  23. I hope nobody thinks eating right and exercising are a replacement for having health insurance. Things happen that are outside of your control that can destroy your life. Conversely, I hope no one thinks having health insurance is a replacement for eating right and exercising. Those are things you can control, and they can better your quality of life.

  24. Charley says:

    To Trent’s excellent advice I would add, visit Jim Rawles’ SurvivalBlog site (www.survivalblog.com) regularly.

  25. Sharon says:

    It is the subtext that I see in many, many places. Trent talks about eating organic, often. Look around! These are not just posts in response necessarily to a specific essay, but they are ongoing conversations.

  26. Trent,

    I’ve always been an advocate of investing in your home, but doing it wisely (basic upkeep and key renovations that are not over the top).

    I also agree with the conservative investment strategy, unless, of course, you’ve done the index funds, have the 6 month cash reserve in a CD or savings account, etc. Thereafter, it may make sense to take a little risk with risk investments (especially in a down market).

    My two cents.

  27. Rhonda says:

    This is a topic that’s close to my heart… Cheers!

    Exactly where are your contact details though?

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