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Aug 23, 2013

How to prepare for an economic collapse and disaster

First things first, I don't want to sound antagonist in a booming economy like ours BUT it is worthy to prepare for something worse. Isn't?

We keep on discussing on how to prepare for our future and plan our retirement and we seldom talk about the "WHAT IFs". Have you ever wonder what you will do if the worse comes? 

"Anything that can go wrong will go wrong" - Murphy's Law. 

“If you fail to plan, you are planning to fail!” ― Benjamin Franklin

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Recent world events have given me this fear that despite having good fundamentals in our own economy, we cannot escape from the bad effects of our neighboring countries and global economies. U.S. Quantitative Easing, China's slow economic growth, Thailand in recession, Indonesia entered bearish market, PSEi falls 6% in one day, Philippines, Taiwan, China hit by tropical Storms causing huge losses, Syria's chemical attack, Egypt's Civil war, territorial disputes in south china sea, Cyprus bailout, Malaysia's gun violence etc.

Prevention is better than cure though we cannot prevent an economic collapse and disaster BUT we can be prepared for it.

1. Cash is King. Have you imagine if bank is on holiday and ATM is running out of cash? I know keeping a lot of cash is not wise but having enough can save the day. The keyword is "ENOUGH". Having enough is wise and better than having nothing and find for a nearest bank, ATM or beg for money.

2. Emergency Fund. It should be an amount equal to three to six times your monthly expenses. This will be your buffer fund for emergency cases. Economic collapse and Disaster I think can fall under this category.

3. Diversification. Don't put all of your eggs into one basket. Having one savings account is good but two is better. Investment in stocks is good but having stocks in different industry is better. Investing in stocks is good but having scattered money in different investments is better. It can be Property, Special Deposit Accounts, Bonds, Mutual Funds, Gold, Money Market and CASH.

4. Start a small business or have an extra work. We often see ants working harder on sunny day but resting at home during rainy days. We can be like them, save while we can and stop spending money and time on something that we can't benefit.

5. Live below your means. "We have a booming economy dude, we should PARTY!" It may sound cool to enjoy but I still believe that frugal living will give you better financial condition and a little adjustment if worse comes.

6. Cut Cost. If you're spending on something you really don't NEED, get rid of it unless it is something that can help you SURVIVE.

7. Store Water and Food. These are the basic survival necessities we must have during a disaster. You can have lost all your money, wealth, jewelries and properties but LIFE is the most important. Doing everything that you can to survive and for the survival of your love ones is the only thing you need to think of.

8. Medicine and Medical Supplies, Vitamins too! Have a first aid kit, enough supplies of vitamins for the kids, medicine for common diseases like fever, cough, flu, wounds and inquiries.

9.  Grow your own food. Instead of going and buying food in the supermarket which might not be that easy because everybody is running to the grocery to have few supplies they need (an act showing they failed to prepare).
Growing Fresh Vegetables in the wall.

People queueing for grocery during/after a disaster or calamity.

10. Plan and have Faith. Stop thinking that the END is near (slap). I'm talking short - medium term downturns and it is not yet the END OF THE WORLD! Have FAITH and BELIEVE that GOD is simply teaching us a new lesson in life and it will make us stronger and better as a person and as a society. 

Psalm 23:4 King James Version (KJV) 4 Yea, though I walk through the valley of the shadow of death, I will fear no evil: for thou art with me; thy rod and thy staff they comfort me.

I write this not to SCARE you and cause PANIC but to help you BE PREPARED. Assess your situation now and ask yourself, are you prepared?

Mag-Invest Ka Pinoy is an IT Professional working in Singapore. He is an advocate of Financial Literacy in the Philippines. He founded Mag-Invest Ka Pinoy in year 2012 and started the website www.maginvestkapinoy.com. The mission of the website is to encourage every Filipino to learn how to SaveInvest their money and plan their Retirement.

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