By Mark Friedman
Former Mayor of the City of El Cerrito, California
The increasing economic shakiness necessitates preparing for possible worse case scenarios, notably that the global economy could enter a prolonged period of recession or depression. An economic depression brings a significant increase in lay-offs and unemployment, dwindling retail sales, falling stock values, depressed real estate prices, and a shrinking tax base.
These impacts are bound to affect you and your family in a variety of ways. You or a loved one may lose a job; if you own a home or land, its value will likely decrease; if you have a stock portfolio its value could shrink.
The lifestyle and economic changes that will help you prepare for an economic downturn will generally benefit you, your family and your community regardless of economic ups and downs. Those changes include the following:
Simplify your life
- Purchase only what you and your family need.
Excess material goods will burden you and take away money you may need.
- Get rid of unused, unwanted, and unnecessary goods.
Selling items you don’t need can help you accumulate money you can use if your job or income is lost.
- Emphasize non-material happiness and family togetherness.
No lasting happiness comes from external objects. Emphasizing the non-material joys of life now, will well prepare you for a time of scarcity.
Look into recession/depression resistant professions
In any economic downturn there are certain areas that have more job and economic security. Job categories that may provide more stability include:
Government employment – Although tax revenues will decline leading to possible layoffs, there will be a great need for government workers in the area of health and human services to deal with the increased numbers of unemployed and impoverished people.
Repair Shops – Less people will be able to afford new cars, computers, stereo equipment, furniture, clothes, and appliances. Shops that repair things will flourish as a result. To prepare for that time think about investing in learning how to repair the above consumer goods and going into the repair business.
Second Hand and Consignment Shops – Stores that sell used goods will do well, as fewer people can afford to buy new. Consumers will still need the goods and you could supply them. Consignment shops that have people leave their goods for the store to sell require less money to start, as you don’t have to pay for inventory. You only pay the original owner once the goods are sold.
Education - Many people who get laid off will look into going back to school to gain more marketable skills. There will be a need for teachers and trainers who can help the returning students gain the skills they seek.
Security Related Businesses – One of the potential negative consequences of economic hard times is an increase in crime as those who lose their jobs or sources of income, may turn to crime in an effort to support themselves or their family. This increase in crime will lead to an upsurge of demand for home and personal security including locksmiths, electronic security systems, fences, and security guards.
Cooperatives and Community Services – Both producer and consumer food cooperatives will flourish, as farmers seek reasonable prices for their produce and people in the cities seek ways to decrease the high cost of food. As large companies fail, there will be a need for cooperative consultants to show employees how to save them through worker management. Community organizers, drug rehabilitation programs, crisis centers and other programs that can mend the social fabric of neighborhoods and create support networks will all be needed.
Diversify your potential sources of income
If your primary source of income suffers during an economic downturn, you will be much better able to weather that loss if you have developed other sources of income.
Among the potential additional sources of income you can begin to explore are the following:
- Go back to school to develop marketable skills such as the ability to repair electronics or automobiles.
- Look into acquiring rental property or goods you can rent or lease for extra income – But be careful that you choose a property that will be able to generate a positive cash flow even in an economic downturn.
- Look into acquiring a part-time job – If you lose your primary job in an economic downturn, your part-time job could become your primary source of income. Particularly if you choose a profession that is more recession/depression proof, it could be an important security blanket for maintaining yourself and your family.
- Be creative – Think of hobbies or interests of yours that you may be able to convert into an income producing activity.
- Above all put your priorities in order
Economic challenges can present a tremendous opportunity for you and your family to come closer together to meet those challenges. Conversely, the failure to come together to meet those challenges could allow the economic stress to create disharmony and conflict in your family.
The only way to avoid these worse outcomes is to begin to emphasize the positive spiritual qualities that bring out the best in us all. Both in your family and in your community, a depression will test all your inner strength and require you to tap all of your inner resources. The best preparation for that is to tap those resources now and build upon your strength. Learn a form of meditation and practice it daily. Inner resources of love, compassion, emotional health, generosity, and friendship are resources that grow when they are used.
Some people react to economic hard times by becoming more fearful and greedier. Reacting that way will be a disservice to yourself, your family, and your community. Begin now to look at your life as a service to others and the sacrifices you will make in the future can ennoble your life. You can grow and others around you will benefit from your growth.
PROUT is the real remedy to depressions
Copyright The author 2011