How to Prepare For The Next Great Depression

Some economists are referring to our current economic malaise as the "Lesser Depression" — but it could be getting worse soon. Europe is unraveling, China's October output fell off a cliff and the U.S. Supercommittee is about to push a round of austerity.

It's not too late to start unleashing your inner survivalist, in case things get really bad. Forget maintaining your current shiny standard of living — how will you feed and clothe yourself, in the worst case scenario? In an article that originally ran at io9 in 2008, here's a list of things you can do now to brace yourself.

Top image designed by Stephanie Fox.

Avoid debt at all costs. If anything, you'll want to save up as much money as you can, in case you have to live off your savings. Thanks to recent changes in bankruptcy law, it's much harder than before for an individual to declare bankruptcy. So if you're stuck in debt with little or no income, you'll still be working for the banks. And as this guy points out, the banks will be hurting, so the moment you miss a payment, they'll be quick to try and liquidate your collateral for whatever they can get.

Get out of your mortgage before the housing market collapses any further. As this site says, if you paid $300,000 for your house and it sells for $200,000, you could end up not owning your house and owing the bank $100,000.

Buy some cheap land in a rural area. Build a house, or just get a used RV. Either way, make sure you own your home free and clear, so you can live rent-free and mortgage-free for as long as you need to.



Go off the grid.
Get your own power generator — or, better yet, some of those solar helium balloons. Or some wind turbines. Don't be dependent on the power company to keep all your necessities running.

Cultivate some skills that will always be in demand. Become a decent electrician, handy-person, carpenter or cook. There may not be much need for someone who understands content management systems during a total economic shutdown, but someone who can build a house will always have a place to crash.

Offshore yourself. As the dollar gets weaker and weaker, U.S. white-collar service workers will be the cheap overseas employees for Europeans and Asians, predicts Robert Scoble in his roundup of how to recession-proof yourself. So as long as someone, somewhere, is still making use of those white-collar service skills (like programming, or customer support) you may be able to offer yourself to overseas companies as a cheaper alternative.

Invest in the ultimate counter-cyclicals. Some industries will always be in growth mode — like any business that caters to the rapidly growing senior population. Also, "sin and comfort" industries, like cigarettes, gambling and booze, do well during downturns and will probably make bank this time around as well. (Too bad booze and cigs are generally part of huge diversified conglomerates these days.) Also, movie companies are quietly bragging that the movie industry had one of its biggest growth spurts ever in the 1930s, as people craved escapism.

How to Prepare For The Next Great Depression

Have some liquid funds on hand. MSN Money suggests reducing your contributions to your retirement plan or 401(k) (if you have one) so you can put more money into your savings instead. And remember, the banks are still FDIC insured, so your savings are probably safe — but other investments have no such guarantee.

Start a vegetable garden or take part in a community garden in your neighborhood. Try to position yourself so you can get as much of your diet as possible from food you've grown yourself, instead of being hooked on sushi.

Learn to hunt. Some people claim that hungry people are already hunting small animals in the parks of San Francisco, and during the 1930s deer and squirrels were hunted almost to extinction. Learn how to trap, kill, prepare and eat a squirrel now, so you'll be ahead of the curve.

Stockpile medications. Your biggest problem, in an economic meltdown, could be getting health care. If you're dependent on prescription meds, try to get some extra pills now so you'll have some on hand later. Just make sure you're always taking the oldest meds you have, to minimize the risk of taking expired pills, these folks advise.