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Suppose for the moment you’re going to jail in three months. It doesn’t matter why you’re losing your freedom, and it doesn’t matter how long your exile from civilian life will last. All that matters is that you’re going to jail and as soon as you arrive there, you’ll be potential prey.
Now I have a question for you. What will you do in the three months prior to the start of your sentence to reduce your vulnerabilities?
If you answered “workout, improve my fighting skills, and watch ex-con YouTube channels so I understand ‘the code’ of prison life,” congratulations. You’re admirably doing your due diligence and making yourself less of a target.
Quick aside. About a year ago, I came across a YouTube channel called Fresh Out. Fascinating stuff for the armchair sociologist. Check it out when you get a chance.
Is the Economy About to Kick Your Butt?
The national debt is over $23 trillion. Our economy is supposedly humming along with record-low unemployment, but the federal deficit this year has eclipsed one trillion dollars. How is that possible? The last time the economy was kicking butt—during the Clinton presidency—we ran budget surpluses.
I’m not an economist, and I don’t play one on television. I’m just a little ol’ country blogger from North Carolina. But something’s wrong. I look at my fellow Americans and I see too much indebtedness, too much dependency on coerced charity (i.e., government welfare and subsidies), and too much moral decay (i.e., crime, drug use, out-of-wedlock births, idleness, cronyism, etc.). And for the life of me, I don’t see how our second- or third-rate culture can long support a first-rate economy. At some point, deficit spending and ridiculously low interest rates will no longer be able to prop up the underlying rot and our economy will implode.
Quick aside. For a jarring look at the state of our culture, check out the following:
What to Do
I don’t know when another 2008-like recession is going to punch us in the face. It could be next year. It could be five years from now. But it is coming. And much like the darkest elements of prison life can be mitigated with proper due diligence, so too can the darkest elements of a brutal economic downturn. But you got to do the due diligence now, while things are good and the prep time is ample.
So what is proper due diligence for the pending mother-of-all recessions? Good question. I spent a good 15 minutes pondering that question, and here’s what my fertile mind came up with.
Get out of debt. The less debt you have, the less likely you’ll get crushed by an economic tempest. Focus on student loan debt first. That debt isn’t dischargeable in bankruptcy. Then go after consumer debt. And then, if at all possible, pay off your house. The cost of living is incredibly reasonable once you’re completely debt-free. In most parts of the country, you can get by on a ten dollar an hour job.
Build a twelve-month emergency fund. The larger your emergency fund, the better you’ll be able to handle either a prolonged bout of unemployment or a nasty pay cut.
Learn at least one new job skill. Learning one new job skill, especially if it’s related to your current job or field, just might make you layoff proof. And if it doesn’t, it will surely help you in your quest for another job should that unfortunate need arise.
Develop a humble mindset. Right now, you might be a well-paid professional. Once the mother-of-all recessions comes, however, you might find yourself working the grill at a Waffle House. And that’s okay. All work is honorable (providing it’s lawful and ethical, of course). And as soon as you realize that you’re not above menial work and menial comforts, the better you’ll be able to handle whatever indignity the next economic downturn throws your way.
Create a jettison list. Everyone adorns his or her life with luxuries—that is, everyone wastes money because wasting money is one of the things that makes life enjoyable. But come the mother-of-all recessions, wasting money will no longer be tolerable. So now’s the time to make a list of the luxuries that you’ll need to jettison once the recession arrives. Here, for example, are five things Mrs. Groovy and I would jettison if the economic situation got really dire:
- Travel
- Gift-giving
- Landscaping
- Dining out
- Streaming television
Final Thoughts
Okay, groovy freedomist, that’s all I got. What say you? Am I being overly pessimistic? Or am I offering very sage advice? Let me know what you think when you get a chance. Peace.
Here’s an idea. Let’s suppose the Black Swan flies into Wall Street and suddenly our net worth on paper has declined 40%. Sure, we might continue drawing down principal. Or maybe…
Through-hiking the AT has been nagging me for a while now. That’d have me out in the sticks instead of spending money in town. And there’s the North Country Trail that runs about 15 miles past my house.
So, I hope to radically dial back lifestyle to make my cash reserves last w/o touching my Vanguard account.
Amen, brother. There are always options. And in the face of a severe economic downturn, a little lifestyle deflation never hurt anyone.
I’m large into bonds and cash with only half of my portfolio in stocks and much of that in international. I can do that because I don’t need growth to be fine. Once you are retired I think it is prudent not to take any risks you don’t need. I think your attitude should stay one of expecting a butt kicking around every corner because one day you’ll turn the corner and wham!
“Once you are retired I think it is prudent not to take any risks you don’t need.”
Nailed it, my friend. If you’re ahead after the top of the ninth, you don’t demand to take swings in the bottom of the ninth. You already won the game.
If I have to go to jail in 3 months, I’d probably skip town and go live in Thailand. I can’t handle prison. It sounds terrible.
Actually, I could do the same if the financial apocalypse hits the US. Sell everything and go live abroad for a few years. The cost of living is so much cheaper in Asia.
Joe recently posted…Swarming Pigeons, Dog Poop, Happiness, and $60,000
I hear ya, my friend. I’m not prison material either. Hey, I got a quick question for you. I recently came across a YouTuber who said one could live comfortably in Thailand for a $1,000 a month. Is that true?
One of the biggest perk for Financial Independence is traveling when the mother of all recessions hit.
It is so much cheaper and less crowded.
Amen, TE. Mrs. G is already doing her homework on Costa Rica, Thailand, and Portugal.
Participating in an economic recession and in cultural degeneracy is a choice. It isn’t easy, but it’s simple. Save more than you spend. Look for ways to create wealth & help people.
Rejecting a degenerate culture is a simple matter of smashing its idols. A culture is generated by its idols. Personal peace & affluence, sex & death are worshipped by western culture. Smash all the idols and seek that which is truly worth subordinating everything else.
“Rejecting a degenerate culture is a simple matter of smashing its idols. A culture is generated by its idols. Personal peace & affluence, sex & death are worshipped by western culture. Smash all the idols and seek that which is truly worth subordinating everything else.”
Wow! This is pure gold. Thank you, sir, for sharing the ruminations of your first-rate mind.
You may not be an economist, but you clearly slept at a Holiday Inn last night.
Scary what’s becoming of the world, the falling down drunk videos were concerning to say the least. Best to prepare for the worst, and hope for the best. Kinda sad, but so is reality. Ah well, at least we can bunker down in the mountains. It sure beats life in prison…
“Ah well, at least we can bunker down in the mountains. It sure beats life in prison…”
No words are necessary other than “thank you for that class-A example of vintage Manifesto wisdom.”
we have an “in case of emergency” list of contingencies and strategies. we’ve done a lot of right things like being debt-free for years but still own/operate two cars and live in more house than we need because we enjoy it. we buy good wine too.
in case of emergency including job loss we would: go to the karma bank and hit up friends for employment, even lower level jobs. we would rent a couple of spare rooms in our big house. we would cease to travel by plane/stay in hotels. we could go down to one car or no cars, but bike travel is tough in a buffalo winter. the last and most desperate step would be to give up good wine. everybody needs their own priority list.
freddy smidlap recently posted…We’re Killing the S+P 500 Index AND VTSAX in 2019
Love your “in case of emergency” list. But I did weep at the thought of you giving up wine. I’m a reprobate of the first order, but I would never wish a no-wine existence on anyone. You’re the best, my friend. And good luck with this year’s winter. I was in Buffalo from 1979 to 1983 and I learned first-hand how brutal the “lake effect” can be.
I agree with your list of ideas for weathering a storm, but I would like to add one more item. Vote for the party candidates in 2020 that are in favor of reducing student debt, making sure that everyone has affordable, comprehensive medical coverage, that wants to do something about saving our planet, and will restore steep progressive taxes in order to reduce our Government borrowing, and help make our economy a bit more fair.
Hey, LC. I think your proscriptions are wrong, but I completely understand and respect your reasons for suggesting them. In fact, I think a fair response to your awesome comment requires a post of its own. Check out my post on this upcoming Monday (12/23/2019). I’d really love to get your feedback.
The “jettison list” is great!
People should understand their fixed/required expenses vs their variable/non-essential expenses.
In fact, the amount of emergency fund is usually based on the fixed budget amount. (At least it is when I work with clients on cashflow.)
Speaking of the EF, those in FIRE/retirement mode might want to consider even more of a buffer.
Personally I hold between 12-24 months living expenses in cash, then three years’ living expenses in bonds – the rest in equities. I don’t recommend this mix for everyone because certain life factors would impact the decision. Still, a variant of this might be helpful during the next correction/recession.
Brad Kingsley, CFP® | Fee-Only Financial Planning recently posted…5 Tips For Selecting Your Ideal Financial Advisor
“Personally I hold between 12-24 months living expenses in cash, then three years’ living expenses in bonds – the rest in equities.”
Hmmmm. You’re making me think, my friend. We currently have a year’s worth of expenses sitting in cash. I like your reasoning and we may want to heed it over the next year. Hope all is well on your end, Brad. Thanks for stopping by.
First of all, if you’re facing prolonged incarceration, you’ll be going to prison, not jail – there is a difference.
Second, I would contact Jason Paperny, an ex-convict, who has made a successful career educating people about prison life.
http://www.jasonpapery.com
Fighting in prison is generally a losing game, and if you do win, you are likely to face retaliation by a group. It’s much better to be low-key, and avoid engaging with violent inmates.
Thanks for the clarification regarding the difference between jail and prison. And thanks for the Jason Paperny link. I’ll be sure to check it out. And, finally, I couldn’t agree more with your assessment of fighting in prison. I was just recommending that you improve your fighting skills in case a fight becomes unavoidable. Anyway, great comment, my friend. Cheers.
P.S. GREAT survival advice. I’m in!
Thank you!
D.I.T.T.O.. YES, Mr. G!!! I’ve had this gut feeling for some time now that we cannot survive at these types of national debt levels. The powers that be keep telling us it’s A-okay, but if you were to take away the zeros and break it down into a family-sized budget, you’d see the atrocity of it all.
https://image-store.slidesharecdn.com/0dd06b41-9e37-4fdf-b317-1b6ca640180a-original.jpeg
You can say what you want about govt debt being different from private debt, but the numbers don’t add up. Period.
I hear ya, Laurie. I’ve completely lost faith in our government overlords. They have the answer to everything, especially around election time. But nothing seems to get better. So the more they tell us that the national debt isn’t a problem, the more I dedicate myself to debt-free living and self-sufficiency. Hope all is well on your end. Peace.