The truth is that despite all of Wall Street’s empty assurances that the financial markets are strong enough to weather downturns, market volatility is as ferocious and unpredictable as ever – and still manages to scare the living daylights out of us every time it lurches downward. These ruinous spirals, of course, happen more often than Wall Street would like us to think. However, instead of becoming frustrated and scared, the best antidote is to learn to insulate yourself financially, so you don’t have to suffer alongside millions of other ordinary investors. Here are the key things you should be doing to be prepared for the inevitable next Great Depression:
4 Ways to Prepare Yourself for the Next Great Depression
- You need to “just say no” to market volatility: Most Americans turn blindly to Wall Street looking for financial security. You don’t need to be one of them. When you recognize that the financial markets will never give you the safety and stability you desire, you can “just say no” to traditional investing and start exploring much more viable, secure alternatives.
- You need to keep your assets liquid for an emergency: If you live in a fully paid-off house that’s too big for you and just makes you feel poor, what good is it? The same is true of investing on Wall Street. The financial markets depend on you locking up your money in risky investments that are difficult to get out of – and that will almost certainly ding you with hefty fees and taxes when you’re ready to pull out. The solution is to make more of your investments available to you as a liquid asset, because you never know when you might need to tap into that liquidity.
- You need to protect your assets from Uncle Sam: The more you make, the more the government is going to demand of you in taxes. It’s a vicious cycle that most Americans view as an inevitability, but you don’t have to. You can pursue tax shelters just like the ultra-wealthy do. Real estate is a great tax shelter, allowing you to earn rental income while writing off a big chunk of the purchase price of that investment. Likewise, you should consider a whole life insurance policy, a type of investment that allows you to enter into a private contract with a mutually owned insurance company – an arrangement that the federal government has very limited ability to tax. In fact, the government cannot tax your dividend payments at all as long as the dividends are reinvested as paid-up additions.
- You need a comprehensive wealth-building strategy: The financial products touted by Wall Street have never given you the ability to build meaningful, secure wealth, and they never will. The foundation of a comprehensive wealth-building strategy is to gain financial literacy, so you can understand just how much Wall Street has taken advantage of you financially, as well as begin to explore alternative investments like real estate and whole life insurance.
The thought of weathering a Great Depression or even a recession is more than most of us can bear. Fortunately, there are things you can and should be doing to prepare yourself for this inevitability – notably, freeing yourself of market volatility, keeping your assets liquid for when you need the money most, reducing your tax liability, and laying the groundwork for a comprehensive wealth-building strategy.
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