How to Survive a Recession Depression

This article talks about how to survive in recession.

Difficulty: Moderate

Instructions

1. 
    
   Think Ahead

   Best way to prepare for recession is start thinking about recession when there is no recession. I know that it sounds funny, but it makes sense too. When there is no recession, you have job and so some extra money. Wise person will think about how to save this money, so that it can be useful at the time of recession.

2. 
    
   Saving

   Let's start from the lowest income job. Even in that job, you can save at least 10% of your paycheck. Open a savings account in bank and put this 10% money in savings account. Savings account can earn better interest than savings account. Do not touch you savings account money unless it is unavoidable. After a few years, you will see that you have saved substantial amount of money. Go to www.bankrates.com and find out which bank is providing the best interest rate on savings account. This is less risky approach to save money.

3. 
    
   Stock Market

   Once you save substantial amount of money. Start investing some of them in stocks and bonds of government companies. Stocks and bonds of government companies tend to have slower growth with lower risk.

4. 
    
   No Pain No Gain

   If you are young and you believe in the 'no risk then no gain' methodology then take some more risk and invest in 'A' grade companies which are doing better than others. I would suggest you use only a part of your savings in risky stocks. Even though, you loose some money, you will still have money in your savings account. Before investing money in risky stocks, ask yourself that if you loose all the money in these risky stocks, will you have enough savings to survive for at least next 10-12 months without making any money. If answer is yes then go ahead.

5. 
    
   Plan Ahead

   Do not create a lot of debt for you. Debt gives you stress. Don't rely on banks, relatives, friends or anybody else to help you in bad time. Think for the best, bur prepare for the worst.
   Instead of buying luxury car, buy a normal car that can fulfill your requirements. Use coupons in the store. Lower your electricity bill by using energy saving bulbs. Try to make lunch and dinner at home. Gradually, decrease the frequency of eating outside.
   Instead of spending blindly, plan for your expenses well in advance.

6. 
    
   Gold coins

   If you have good amount of money in savings account. Convert that liquid cash into valuable metals like gold and silver. Buy pure gold and silver and put it in the locker. Gold and silver are one of those valuable metals, which will give you better return in bad time.

[ShannaFuentes]

on 5/6/2009 Great article on surviving the recession! Thanks for writing!