If you watch the establishment media, you might think everything is wonderful with the economy. We just need to get rid of those MAGA Republicans and then we will be nearing paradise.
If you watch alternative media, then you might think that the sky is falling and that we only have a chance of survival if we happen to elect the right politician.
While I generally have an idea of what is being said by the establishment media, I certainly prefer to pay more attention to alternative media. There is a lot of variation when it comes to alternative media, but there is certainly a sector of it where they have to announce that the sky is always falling.
This doesn’t mean that the sky won’t fall. It doesn’t mean that we might not get some of these bad economic and political scenarios. I just think that sometimes it is overhyped, and I also believe that it is better to tell people what’s possible instead of telling them that something will happen.
The future is unpredictable for everyone. We have no idea how the billions of people on the planet will act each and every day, and we certainly can’t anticipate reactions to that.
Bad Advice for What Might Happen
I appreciate warnings of what could happen. I do not like it when I hear advice given based on a prediction. I especially don’t like it when that advice is dangerous if a particular scenario doesn’t play out.
For example, maybe someone is predicting hyperinflation. They tell you to pull all of your money out of the bank and to buy gold and other hard assets. Maybe they tell you to load up on guns and ammo and food.
The problem with this advice is that it will be harmful to anyone who listens if the scenario doesn’t play out and there isn’t hyperinflation.
This is more than paying an insurance premium. It is paying with your entire lifestyle.
You can hear similar advice for someone predicting a banking crisis. They tell you to take all of your money out of the bank and to hold it in cash or to buy gold.
It is possibly only good advice if the scenario actually happens. If the world goes on and functions basically the same as it has been, then it is terrible advice that could financially ruin people.
The More Things Change
I have been one who has been warning of a deep recession ahead. I have also warned of the possibility of higher consumer price inflation.
But I don’t completely change my advice in terms of investing and money management based on what might happen. There may be tweaks to make to better protect yourself, but you still have to stay the course.
Even during times of change and turmoil, most things tend to go on. There most likely won’t be a breakdown of the division of labor.
Even if there is a banking crisis, it probably won’t be that much greater than in 2008. That was a bad financial crisis, but life mostly went on. It may have been a tough period of time for some people, but most people still went to a job, paid their bills, and ate dinner and slept in a bed each night.
Even with radical political change, things will largely stay the same. It is hard to imagine things getting crazier than they were in 2020 and 2021 when people were essentially locked in their homes. Then, many people were forced to take a medical injection in order to keep their job.
People who have lived in a war, where their actual home was in a war zone, have had it the worst. Whenever anyone says that this is the worst period in American history, think about the so-called Civil War where many hundreds of thousands of people died at a time when the population was a fraction of what it is today.
Staying the Course
It is important to have your principles in life. You should also have your financial/ money principles, and you should let them guide you. Don’t let the media (establishment or alternative) guide you.
If you need to make a change based on the latest news, make sure to think it through.
I still recommend that at least part of your financial assets be in a permanent portfolio. It is designed for virtually any economic environment. It may not protect you from a civil war, but not much will.
I recommend having an FDIC-insured bank account. You need it to pay your bills anyway. Your money is most likely safe in there. The biggest threat is currency depreciation, but that’s why you also invest in gold and stocks.
I recommend staying out of most debt. Pay your credit cards off each month. Don’t have any debt other than a mortgage and possibly a car loan. Even these should be manageable.
You should have long-term goals of saving for retirement and paying off your mortgage if you have one. Don’t think you are being wise by taking out extra debt using your house (or anything else) and investing the money. It will likely backfire.
If you want to speculate, then save extra money to do so. You can have a speculation fund aside from your more conservative savings.
Conclusion
It is easy to get wrapped up in the latest headlines and think the world is crashing around you.
The best thing to ask yourself is if you are protected if a particular scenario does occur. If you are vulnerable, and there is a reasonable chance of this happening, then perhaps you should make a change.
But this doesn’t mean going all-in on one scenario. Chances are that it won’t happen.
In all likelihood, things will be largely the same in ten years as they are now. You will still have a bank account with U.S. dollars. They will be worth a bit less than they are now. Contract law will still mostly function. If you have a long-term mortgage, you will still be making the same payments on that mortgage as you are today unless you move or finish paying off the mortgage.
Compounding interest will still work for you over time. Maybe the interest will be less in real terms with higher price inflation, but it will still be there, and you can still benefit from it.
In sum, don’t make any radical changes unless they are thought through well.