Amongst the few friends that I have, there is talk of inflation, currency collapse, housing crash, and overall economic uncertainty. I want to inject a dose of reality as well for those who might have a similar life outlook as myself.
Fearing a Collapse
At the heart of such conversations is the fear of economic collapse. Perhaps something dystopian or at least a scenario in which you might end up quite miserable.
The reality is that most of us living in the US are likely going to fare well. A full collapse of our economy is unlikely and the same can be said about the infrastructure.
This doesn’t mean that you can’t prepare for cold winters or some inflation. But you won’t be wiped out. And you’ll likely always have your medical career to fall back on.
Stocks, Bonds, & Real Estate
There isn’t a lot to talk about when things are generally going well. I know, we’re in the middle of a global pandemic but the world has surprisingly done well. No, not poor people – they are more marginalized than ever. Nor the environment. But these themes have never been anything other than philanthropic topics.
When the global economy is doing well experts will predict a collapse. Right now it’s the supply chain and inventory management which is a hot topic.
But you can find a Yahoo Finance article on any collapse you like. From stocks to real estate.
In fact, a housing bubble or collapse is a hot topic. Something along the lines of housing prices dropping by 50%. We’ll get into that.
As for stocks, the fear is that they are and have been overvalued for far too long. And this economic uncertainty could certainly decrease consumer faith and sell out and drop prices drastically.
Economic Uncertainty
In fact, nothing major has happened in this world we’re living in. We have forced those who could work from home to work from home. And we have increased prices on a lot of services which have been utilized less due to the pandemic.
Meaning, the same amount of money is going into the pockets of the rich – often out of the pockets of the poor.
The economic uncertainty which is causing some stocks to drop and even crypto to trend downward is a hunch or a fear but it isn’t real.
So what is real economic trouble?
Wars & Disasters
If the world suddenly dealt with a real epidemic which forced people to avoid each other then we’d be in trouble. Think something along the lines of Ebola. In such a case it would be nearly impossible for any real economic progress to take place. the world would shut down to about 10% of its current capacity.
If a physical war broke out which involved many nations then it’s possible for major economic collapse to affect multiple countries. This would halt trades and production. But most wars are being fought virtually or waged on poor countries with a lot of resources.
Dealing With Economic Uncertainty:
Let those who fear economic collapse talk about it all they want. My goal is to focus on the ABC’s of my personal economic plan.
1. Career
Am I in the right career? Is this the field I want to be in over the next few decades?
These are good questions to answer for me because it’s hard to make a switch when there is economic uncertainty or any kind of financial fear.
I like healthcare. I see a lot of potential for it and a positive future for those who want to make a difference in the lives of patients.
2. Income Longevity
Within my current career or field, can I sustain making an income doing what I’m doing or do I want to pivot?
So if you’re an ER doctor do you think you can keep up your shifts without burning out? Maybe you’d rather go into administration or open your own urgent care.
If you’re an internist and you’re already burnt out then this is the time to pursue something else in healthcare. You don’t have to figure it out but it’s a good time to experiment with health coaching or consulting.
3. Investing
I am invested in broad index funds. Some are stocks, some are bonds, and I hold a few individual stocks.
I have some money in crypto not as an investment but as a currency hedge. I also have investment accounts and bank accounts in Spain in euros which is another currency hedge.
There there is real estate. I have 2 condos, one in Spain and one in Portland. I am looking for another place in either Mexico or Iran. No rush.
As economic fears increase I hope to take advantage of the price shift and hopefully invest more into my current investments. Chances are economic fears will drive down the price but not the value of stocks, bonds, and most other investments.
4. Health Planning
I’m 44 so I am paying attention to my health. And I’m also having more health monologues with myself. What is my definition of health? What am I willing to do for a said diagnosis? Do I have a longevity fetish or do I want to optimize for quality over quantity?
Most of us need healthcare seldomly and almost never emergently. Yet we pay mostly for just-in-case care. I pay for health insurance in Spain and know where I can go for even cheaper care if needed.
For some of us, we’ll also want to include health planning of parents or for our own future nursing home care.
5. Retirement Planning
What is my definition of a successful retirement? What do I really need to be happy?
I realize that for some of my readers a Tesla and a $3m home is an absolute necessity. But if that’s you I don’t think you’re going to get much from the stuff I write here.
A successful retirement for me is being able to work on things that are meaningful to me without needing income from it. It would be welcome but I wouldn’t need it.
Building a future lifestyle with low overhead is a sure way of achieving this goal. If I can live in a city with a low cost of living and not have to depend on a car and enjoy inexpensive activities then I’ll be the polar opposite of what the majority of the world expects out of their retirement.
6. Diversification
From skills to currency to my place of residency, diversifying various aspects of my life gives me more wiggle room. It’s a good move and doesn’t require too much effort.
I speak a few languages and I have residency status in multiple countries. I own real estate and have currently in different countries. I have clinical skills, consulting skills, and most recently data analytics skills.
During economic uncertainty, my various skills could help me shift within my career without losing much income.
7. Social Networking
Whom can you call? Whom can you depend on? Whom can you turn to for support when you need it?
We depend on insurance products and the government to support us but these systems were designed as a last resort. Ideally, we want to have family and friends or other social networks to rely on.
I’ve built this network slowly and more so over the past few years. It’s a mutual relationship. I hope they can depend on me as much as I can depend on them.
The most important thing is for me to get myself to a place of wealth. From there I hopefully don’t have to rely on my social network but can have them as the next layer of safety in case of economic collapse or uncertainty.