Is America Headed For Another Financial Crash?
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As the markets continue to soar, and the government continues to print money, I can’t help but wonder: Is America headed for another financial crash? As you probably remember, we had one a few years ago that many of us were affected by. Watching the news during that time and seeing the protests on Wall Street it seemed that change was in the air. Overall, people started saving more and spending less. It was a positive trend that needed to become permanent. Today, the situation looks a little different. As a nation, we seem to be back to our spend happy, undisciplined ways.
My question is, how does this affect you and me? More importantly, if there is another financial crash, are you and your family prepared to weather a nationwide or worldwide financial crash?
Financial Crash Preparedness
I love reading about the period in American history known as the Great Depression. Studies indicate that during that time, Americans were living with a near 25% unemployment rate, and foreclosure rates, it’s reported, were anywhere from 25% to nearly 50%. Lines at soup kitchens were at an all-time high, and people who were “livin’ large” during the period known as the Roaring Twenties suddenly had to do a 180 and learn how to live on little or nothing.
I think what intrigues me most about that period in history is that virtually no one expected it. Most everyone thought that the lavish lifestyle of the Roaring Twenties would go on forever.
But the good times and prosperous nature of the Roaring Twenties didn’t go on forever, and the financial crash that began the Great Depression in 1929 lasted for over a decade, compounded by natural disasters such as long-term drought, which further depleted citizens not only of cash, but of the ability to grow food in much of the country.
Many families had to pack up and leave their drought-ridden areas with nothing but the clothes on their backs. In search of more fertile land, they left everything they knew hoping to find jobs or at least find an area where the soil was moist enough to grow food to eat. This was the tough reality that many people and families faced in the 1930s and 1940s.
Preparedness is Key
So, if America does experience another financial crash, are you prepared? Are you in a situation where you can live on half (or less) of your income if need be? Is your debt load manageable, and do you have a plan in place if things were to suddenly change for the worse financially?
The best defense against a financial crash is a good offense. Kill debt, have cash on hand, and work on creating multiple streams of income so that all of your income eggs aren’t in one basket. For instance, those owning rental properties, especially debt-free rental properties, during the Great Depression did well financially as those who lost their homes due to foreclosure looked for living quarters to rent. Those with plenty of cash on hand also did well financially during the Depression, as they had the means to buy, at a fraction of their value, assets that those desperate for money were looking to sell.
A financial crash may or may not come to America’s shores, but every time I hear how well the markets are doing, and how people are making money hand over fist in their investments, I get a little bit nervous, and I wonder if we are doing enough to prepare for another “surprise attack” on America’s economy. Do yourself a favor and be prepared in your own world just in case history repeats itself, and a worse financial crash comes our way than we’ve seen in a long time. Markets rise and fall, and crashes come and go in any economy, but those crashes are much easier to weather for those families and individuals who’ve prepared themselves ahead of time to be in as solid a financial situation as possible.
Do you think America is headed for another financial crash? Have you ever had a “surprise attack” on your finances, such as an unexpected job layoff? Do you have a plan in place to weather financial downturns?
Photo courtesy of: Ethan Stock