How to Prepare for the Coming Economic Eruption

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Posted by The Savvy Retiree on September 1, 2020 in Live Better

What’s the best investment you can make these days? And stick with me—this is not a financial story…which, actually, hints at the answer. Because at this particular moment in history, I’ll argue that the best investment you can make is in yourself.

Yes, yes, yes—one could make the identical assertion, regardless of the historical moment. But now seems a particularly opportune moment to get one’s ducks in a row, to call upon a trite cliché.

See, we live in an exceedingly fractured world nowadays, and preparing for what’s possible means using this moment to plant a few “seeds of change” so you can harvest the fruit in the months and years to come.

Here’s why I say that: First, we have the coronavirus and, well, enough said about that.

Beyond COVID-19, however, we find ourselves in a Gilded Age economy teetering between continuation and collapse. And we have an increasingly dysfunctional society irreparably riven by extreme and seemingly unbridgeable social and political dogma.

Historically, these are moments from which fundamental changes erupt. Changes that redefine some aspect of life going forward. I think of the French Revolution (which gave rise to the ideas of liberty and equality). I think of the American Civil War (which punctuated our poorly followed founding principal that all men are created equal). I think of the Great Depression (which birthed the New Deal and the idea that a wealthy nation must provide safety nets to protect and raise up its citizenry).

To be clear, I’m not saying an eruption equivalent to those is imminent. I’m saying it is, however, possible—maybe even probable or likely. Who knows? 

What might such an eruption change? Again, who knows?

But what I do know is this: We humans are masters of something called the Status Quo Bias, the belief that every tomorrow will resemble every today, because our brain is incapable of processing the scope of radical or dramatic change. It’s easier to just assume everything pretty much stays the same.

If nothing else, though, history is proof that unexpected upheaval that structurally alters the present is the real status quo. Of course, this rarely happens overnight. The French Revolution was 10 years in the making. The Great Depression had its roots in World War I 15 years earlier. 

Eruptions brew and fester and bubble and—BOOM!

Those who fare best in the fallout are those who sense the pending change and prepare accordingly.

I started lining up my ducks nearly a decade ago, in 2012. I gathered with colleagues at one of the oldest restaurants in the world, Madrid’s Botin, to lay out what I was calling “The Big Rip”—the cleaving of American society because of political, social, fiscal, and monetary maladies I saw metastasizing throughout the U.S. Lots of people I talked to at the time thought that was a whacky thesis.

And, yet, here we are today: the mainstream media openly wonders if a second American civil war is in the offing; the U.S. government is buried under worrisome debt that’s undermining the dollar and sending gold above $2,000 for the first time ever; social unrest and violent hatred has exploded across the country; and there’s legitimate concern about a Greater Depression amid economic and personal financial duress that threatens tens of millions of American families, even as millionaires and billionaires feel no pain.

I certainly didn’t foresee a pandemic as the linchpin, but the pandemic has simply served to expose all the systemic problems I laid out all those years ago. None of those problems just magically fade away at this point.

If the top blows off…well, you want to position yourself smartly, now, while you can.

In many ways, this reflects the August cover story of The Savvy Retiree on building your own Plan B. But more than that, this is about positioning yourself now to take advantage of the fallout if an eruption does occur.

There are as many ways to do this as there are people on the planet, by which I mean this is entirely individualistic. But here’s an example of what I mean…

We know COVID will go away because of all the vaccines in development. Because of that, we know the economy will return to normal-ish at some point in the future. But it won’t be the same economy. 

For instance: Numerous newspapers have axed their travel sections because no one’s traveling. Certainly, travel will return. Maybe travel sections return too—or maybe not, for all sorts of newspaper industry reasons. Yet demand for travel stories and travel tips will explode on the internet, and in newsletters, blogs, magazines, and social media.

That’s an opportunity for anyone who has ever wanted to earn a living traveling the world to write. I’d be out there, right now, taking travel writing classes, learning what sells, learning how to build a social media following, learning how to approach outlets with travel story pitches so that when the tides change, you have the skills to surf the incoming waves. 

For me, putting ducks in a row has included everything from stacking gold and silver (a monetary crisis is probable) to building a history of successful freelancing online in particular segments. In the new world I see taking shape, informal ties to the workforce is the future of jobs, and I want a strong profile on freelance sites—the 21st century version of a resume—as my calling card.

Those are, in a very real sense, investments I’ve made in me. There are many other ways I could spend my money and my time. But because of what I see, these are the ducks I want lined up. 

So that’s my question for you: What ducks do you want lined up so that in the eruptions ahead you’re well-positioned to exploit the fallout?

By Jeff D. Opdyke