Perhaps a defining characteristic of the present Depression is that it is providing most of the World's people a one-way ticket of 'downward mobility'. Whether or not you join the mass migration will depend on luck, social resilience, and your own choices.
Since the first two conditions are out of your control, we will focus the choosing part. If the collapse is to happen quickly (which appears ever more certain with each, further government-dictated misallocation of resources), then the gap between your lifestyle as it was and as it is to be will be quite shocking.
The most important choice you can make is to commit to adjusting to whatever changes come your way, no matter how disruptive or distressing. Let us illustrate from our own experience: we happen to live in an area with an abundance of wild rabbits. They would make for very easy hunting or trapping. But we find the idea of butchering them most distasteful. We would, however, manage to overcome our squeamishness, if our need for food became urgent enough.
We present an extreme example precisely because you may be faced with an extreme situation: complete loss of income - whether a job, a pension, or otherwise. How will you manage to put food on the table and fuel on the fire if left entirely to your own devices? Can you scrape up some kind of livelihood on your own?
We are not trying to go all 'doomer' on you - we just want you to exercise some creative thinking in contingency planning. The more you expect the system to work for you, the greater the risk you are subject to if things break down.
Showing posts with label creativity. Show all posts
Showing posts with label creativity. Show all posts
Tuesday, July 14, 2009
Saturday, December 27, 2008
Income Replacement
Because the 2007 Depression will entail income loss for just about everyone, we would like to discuss some ways of replacing your lost income.
Passive Investors are currently faced with income losses from (among other things): lower interest rates; cut dividends; and loss of capital. The solution to this lies in either taking greater risks, or rebuilding capital by reinvesting more income.
Self-Employed Persons are seeing business drying up right and left. The solution here, as ever, is to dynamically be on the look-out for income opportunities. At present, opportunities are fewer than before, but they are still there.
Many Employees are presently experiencing cuts in pay and hours, as well as the ever increasing layoffs. We believe that many, if not most, of the currently employed will become formerly employed. The approach of collecting unemployment until the economic situation improves may not work out as it has in the past. Furthermore, reemployment will likely come at vastly lower wages. One solution here will be to become entrepreneurial, which only promises hard work and uncertain income.
The Industrial system has historically been neo-feudal: in exchange for 'knowing one's place', employees would be both offered the security of steady income and relief from the burden of figuring out where the business was coming from. As globalism progresses, workers in OECD nations will find increasing downward pressure on their remuneration. We suspect that most workers will opt for the security of the paycheque, even at lower wages.
The relentless downward pressure on wages and its effects on the economy as living standards decline have been recently discussed elsewhere in Worse than the Great Depression. It is not a happy prognosis for the world's top quintile of income receivers. For most, income will decline and not be replaced.
You, Reader, can make an exception of this for yourself through creativity and Peasant Virtues.
Good luck!
Passive Investors are currently faced with income losses from (among other things): lower interest rates; cut dividends; and loss of capital. The solution to this lies in either taking greater risks, or rebuilding capital by reinvesting more income.
Self-Employed Persons are seeing business drying up right and left. The solution here, as ever, is to dynamically be on the look-out for income opportunities. At present, opportunities are fewer than before, but they are still there.
Many Employees are presently experiencing cuts in pay and hours, as well as the ever increasing layoffs. We believe that many, if not most, of the currently employed will become formerly employed. The approach of collecting unemployment until the economic situation improves may not work out as it has in the past. Furthermore, reemployment will likely come at vastly lower wages. One solution here will be to become entrepreneurial, which only promises hard work and uncertain income.
The Industrial system has historically been neo-feudal: in exchange for 'knowing one's place', employees would be both offered the security of steady income and relief from the burden of figuring out where the business was coming from. As globalism progresses, workers in OECD nations will find increasing downward pressure on their remuneration. We suspect that most workers will opt for the security of the paycheque, even at lower wages.
The relentless downward pressure on wages and its effects on the economy as living standards decline have been recently discussed elsewhere in Worse than the Great Depression. It is not a happy prognosis for the world's top quintile of income receivers. For most, income will decline and not be replaced.
You, Reader, can make an exception of this for yourself through creativity and Peasant Virtues.
Good luck!
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