The preface
Why is the wealthiest country full of people who can’t afford rent and food? The places like Skid Row and Tenderloin are welcoming new citizens every night. People are changing a solid roof and a front door for a foil and a zipper these days. The change is happening gradually than instantly. You’re waking up to 4 police officers and an eviction notice.
The truth and facts are not fearmongering. Almost 21 million unemployed Americans are losing their benefits this week. The FED is busy with finance acrobatics that can backfire at any second.
China and Donald Trump are pointing fingers in a miserable display of trying to frame one another for the pandemic. The trade is reduced to essential goods, and global tourism is not coming back next week.
People are on the streets fighting systemic injustice. Retail is in shambles. Shops are burning, and the police force is facing radical institutional reforms. America is in flames, and rightfully so. Real change is long overdue.
Whatever happens in the next few months, you can count on more tents in American downtowns. Young and unlucky are a step away from losing the roof over their heads.
The downtown is not reserved for only drug users anymore, and truth is told, it has never been a predominantly druggie neighborhood. Blaming the homeless for sleeping on the street is something privileged people tell themselves to sleep at night. God forbid if it’s not the fault of the homeless for dying in the gutters.
Your choice counts
What can you do about it? You can protect yourself. Whatever you buy today is going to matter in the months and years to come. Personal finance is as outstanding as physical hygiene right now.
- Save 3 months in expenses
- Avoid expensive and depreciating stuff like new cars
- Start a passion project with the extra time
Being deficient in America is manageable, and once the economy recovers, you’re going to improve too. But being homeless is a near-death sentence. Once you lose the address, you’re toasted. The system, the Freedom, the Bald Eagle, and the Uncle Sam don’t know your name anymore. You’re a ghost — Nobody cares whether you live or die.
Sadly — but truthfully — half a million (reportedly) homeless can tell you the same. Nobody gives a flying damn about you once you don’t have a legal address. The bank account is gone. The chance of employment is almost non-existent. Hygiene? Forget about it. Your dreams and aspiration are now a hunt for food and shelter.
Remember, whatever you buy counts towards the future. Think of your next buy as an investment. Research the food you’re about to buy. Try to spend less than usual. Don’t invest in risky online stuff. And don’t buy depreciating assets.
Have 3 months of expenses on hand
Take a step back If you’re thinking about investing and fighting the inflation. Save 3 months of cash expenses before you even consider stocks, ETFs, index funds, or cryptocurrency.
Take a moment to round up your monthly budget. Underline the essentials and think of a real sum that can cover your rent, food, and car payments. Determine two points: the bare minimum, and a sum to live comfortably.
If your expenses and quirks cost around $2000 a month, try to put $6000 aside. If you can’t get that money, try to save the bare minimum. Whatever you do, don’t splatter cash until you have three months of expenses in cash.
Depreciating assets are the enemy right now.
Depreciating stuff has a limited lifespan and rapidly plummets in value. The following years are not going to be milk and honey, and buying a computer, electric tools, furniture, or a car is financially irresponsible.
You don’t want to add more liability during uncertain times. Individuals are gambling their last assets and winning big. Gamblers are buying Bitcoin and hitting Las Vegas on their last dime. Some miraculously win, but the vast majority of high-risk takers are losing. You don’t want to take the risk that can decapitate your financial goose.
The house always wins. If you put yourself in a position where you’re forced to gamble your last dime, winning is not saving you. You’re still that loser betting his whole life on a poker table.
Millions are not helping poor spenders. Look at Mike Tyson, Evan Holyfield, and a gazillion other financially illiterate and once wealthy men. Money is not making you rich forever, it’s your mentality and spending habits that can keep you comfortable.
Once you can afford luxury and depreciating goods, go crazy and throw money at anything your heart pleases. Get that 4-meter personal portrait where you look like a Napoleon’s general and frame it over the bathroom wall, so everyone knows who’s the boss.
Until you’re not a boss, don’t act like one. Life is not a forgiving event.
Invest your time and skills into the future
The best investment right now is your time and skill. The pandemic, health hazards are making social stuff the least fun at the moment.
Take the opportunity and develop a new skill or start an online business. Find something you love — a burning passion — and create a business around it.
If you’re the master of pulling fat trouts during summer, start a bustling around it. Maybe you can write or record fishing tutorials. You already know the issues, and you know the challenges other fishers face. Help them help yourself.
Don’t make investments with the money you don’t have. Don’t even think about borrowing money and debt — not even credit cards. Try to build a side gig solely using your time, knowledge, and passion.
If you’re not an entrepreneur, pick up an essential side gig. Running errands or Uber Eats is not a shameful job. You’re the smart one for taking care of your financial future.
The big issue of slow spending
The economy is in shenanigans during a recession because people don’t generally spend money. We have almost the same resources, but the matrix is broken at the moment. America has survived 47 recession to date. A recession happens every 7ish years, on average.
People turn to savings, and the savings balances skyrocket during uncertain times. Nobody is spending money.
The best time for investment is right now, but only the right investments. The economy is flushing the toilet, and everything unimportant is flowing down the drain. Focus on essential stuff.
The economy has to move to stay sustainable. You’re hurting the marketplace when you’re radically taking care of yourself. But you have to survive somehow. And once the world gives you enough reason to trust it with your capital again, go back to business as usual and spend away.
But don’t make reckless investments until you’re rock solid about your financial state.
The epilogue
America has no safety net for the bottom part of the society. Once you lose the address and your social security number, you’re toasted. Even if you somehow crawl back to the community, you’re always going to wear the cross of living in the gutters.
The best strategy is to survive first and then think about luxury. The world is trying to tell you that everything is fine, but that’s a lie we expose ourselves to soothe our worry. The coming years are financial shitstorms, raise you’re umbrella and wear rubber boots. It’s time to survive.