How to Prepare for a Financial Depression


With the stock market seemingly on a crash course and with the credit markets slumping world-wide, you need to prepare for a possible economic depression. Here you will learn where to put your money, what you should buy and what plans you should make with your money so it doesn't disappear during a market crash.

Diversify immediately. Split the investments that you have in the stock market into five separate stocks. Invest into a public utility company, a distributor, an energy company, a medical science company and a telecom company to make sure you are fully diversified. If you have already done this and you are afraid that the market is just going to drop too low for you to ride it out, then take the money out now.

Put the money that you take out of the stock market and put it into an FDIC insured savings account. Do not put more than $250,000 into each savings account at any one bank, because that is the limit that the FDIC will insure up to.

Invest into money markets if you do not want to pull all the way out of the market. Money markets stay steady for the most part. The Euro and the Yen are usually the safest to invest in. Gold is also a very good investment because the more money that is printed, the more valuable gold becomes. When markets are headed toward a depression, governments tend to start to print more money, which increases the value of gold, but also inflates the price of all goods and services.

Buy canned foods if you are not invested in the stock market now. Food prices are going to soar if a depression hits. Stock up on all kinds of canned foods and also household supplies like toilet paper. It might sound crazy because not many people alive today lived through the last depression, but there were soup lines and toilet paper shortages at that time in history. Fill your entire pantry and closets full of canned food and toilet paper.

Look for alternative steady work just for in case your job gets cut. Many employers will have to start cutting jobs because they will not be able to afford to pay employees due to a decreasing demand for products and services. A lot of companies will have to shut their doors completely. Take pre-emptive actions to set up a new job if you think your company might close or lay you off.

Do your best to prepare for a pending depression, but there is no way to completely avoid the hardships that will come to most of us. It will hit everyone in one way or another. Try to stay calm and save as much money as possible, since there is no way to know when a depression will end. If you have the money, pay as many bills as you can in advance, so you have some time before you need to worry about paying rent, mortgage or any bills in case you lose your job.

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