Prepare For Financial Emergencies
Prepper websites are typically chock-full of information about surviving nuclear wars. While it’s possible we may experience a nuclear exchange in my lifetime (I sure HOPE not) I don’t spend a ton of time thinking about it. I’ll lay it out there for your you: I am woefully UNprepared for a nuclear war. I don’t have a Geiger counter, a fallout shelter, or the stockpile of food and water that would be required to survive a strike on San Antonio. I mean MAYBE if it’s a single, small warhead targeting one of the air force bases and the wind stays out of the North…
Nope. Chances are, if it ever comes to nukes I will probably not make the cut. I’ve made a decision about priorities in my life, and those priorities are incompatible with nuclear holocaust preparation. I’ve chosen to be modestly prepared for just about everything else, and as a result I am prepared for a financial setback. While an individual’s likelihood of experiencing nuclear war (2 times in history) is low, the price for preparing his high.
Conversely, we are very likely to experience a financial hardship during our lifetime:
- At the peak of COVID, almost half of Americans indicated they were suffering a financial hardship
- Many Americans would be in trouble if they had a $400 emergency
- COVID or no COVID, every month some number of people in the US is newly unemployed.
- Ultimately, 3/4 of Americans have experienced a financial setback at some point in their lives.
Don’t Go Broke.
Like many of the other topics in this article, “Don’t Go Broke” is simple advice to give, but can be very complicated in practice. The advice that any financial professional will give you is:
- Pay off debt, starting with your highest-interest credit cards first.
- Develop an emergency fund, with a goal of achieving 6-12 months’ living expenses.
- Build your net worth through investment and savings: Buy a house. Maximize your 401(k) and other tax-advantaged accounts. Make savings a habit.
In addition to these well-worn paths to financial freedom, I like to add a couple of others:
- Keep your network working. Help people out. Introduce people. Stay in touch. Ask for recommendations, and give recommendations when asked.
- Get a side hustle. In my mind, having a side hustle is one of the best ways to insulate yourself from financial hardship. Extra points if it’s in a different industry than your primary gig. BONUS extra points if it’s something that’s helpful in a prolonged emergency: Handyman, small engine repair, canning, beekeeper, gunsmith, small-scale commercial agriculture (fruit, livestock, dairy, chickens, …) Ask yourself: “What am I good at that would be helpful if we had a prolonged emergency in my area?”
Everything in this article is very simple. Hundreds of millions of people just like you have done one or more of these things. But it’s change, so it’s hard. All I can say is this: It’s not going to get easier, and it’s not going to get less important. Of all the bad things that might happen to you, a financial setback is the most likely. So you better get off your ass and get started.