Just recently, Britain and Europe went through the Brexit crisis.
Britain’s decision to leave the European Union by a referendum sent financial markets into panic mode.
The pound plunged, and has yet to fully recover. As a result, many people, especially the ones with retirement funds, took a hit.
It’s important to be financially prepared for the future so an event like the Great Recession does not take everything away from you. Here are top tips on how you can secure finances and survive another recession:
Stock Up on Gold
Not everything loses value when cash currency loses value. Gold, for example, rises up in value when the currency takes a hit. That’s why savvy investors like to have gold in their portfolio. This precious metal can hedge any potential losses from economic downturns where cash loses value. You should have things like gold ETFs in your portfolio. Buying physical gold for bartering when the time comes is a good idea as well.
Diversify Portfolio with Non-Cash Investments
Having a portfolio with all cash investments is simply calling for disaster when currency is devalued, even a slight bit. You need to have items of tangible value on your investment portfolio, like land, property and precious metals. Precious metals like gold, silver and platinum will prevent you from going bankrupt in case of an even like the Brexit. Land and property are always handy to have investments. Even if these lose value in a financial crisis, the value of land always bounces back. After all, everyone needs things like land no matter what.
Have an Emergency Cash Fund Ready
If the economy takes a hit, you may need to have some cash at hand to cover everyday expenses. Chances are high that you could lose your main income in this situation. So, you must have an emergency fund ready where you can easily withdraw cash from. Even in a financial crisis, people get sick and may need access to cash for smaller things. The last thing you want during a crisis is to be at the mercy of predatory lenders. So, keep an emergency cash fund at hand.
Find an Income Source to Fall Back on
As mentioned before, getting laid off can be inevitable if the economy takes a wrong turn. If you lose your primary source of income, your family will be left destitute. You may need to borrow money from people you don’t like, because the banks are too tied up to offer a loan. You can lessen the impact of losing your job by having a secondary source of income. This could mean a part time job or an online flower shop you are running from home. What’s important is that a temporary, extra cash venture should be exploitable if you lose your main job.
Financial preparedness many not come easily and naturally to many. For example, if you are strapped for cash now, you may not immediately see the benefits of having an emergency fund. But it is very important on the long run.