An Economic Preparation Survival Sustainability Plan for a Crisis

This morning I was thinking about a time which was a couple of thousand years ago. An extensive drought was forecasted that would last 7 years.  The economic lead time was 7 years.  Everyone knew the economic prospects were “not good” for the coming drought. Solutions were researched. A government team reviewed the possibilities.  Time was of the essence. The winning solution was a preparation survival sustainability plan by a man named Joseph.  Sound familiar?

That plan got me thinking on how to apply it as a preparation plan, survival plan, or a sustainability plan for an economic crisis, unemployment, industry shifts, a major illness or retirement in the years of agedness. You can find the forecast of the drought, research, winning plan’s approach, applications and the results in the ancient book of Western Wisdom -  Genesis 47^th chapter. 

The plan was for everyone to save a fifth part or 20% of the yearly income for the future drought. The government enacted the program for the people. It seems that approach has been used for thousands of years. 

Now let’s look at what happened as the crisis unfolded from an economic perspective.

1.   As the crisis hit the first thing Joseph did was move his family, who were not prepared, to a safe place.  Then in the first year the people used up their cash and short-term cash equivalents such as CDs and T-Bills to pay for the scarce food and expensive necessities. Quickly cash and its equivalents became almost impossible to find in the country.

2.    Amazingly by the end of the first year the people used up their portable wealth, which today would be either selling or borrowing against our mid-term investments such as cars, trucks, business equipment, inventory, antique furniture, art work, collectibles, stocks, bonds, etc. In one year life had significantly changed!

3.    At the end of the first year they realized things were so bad they sold or borrowed against their property and against their future profits/wages to keep going. The result was they worked in government owned businesses and lived in government housing in the cities. 

They survived the famine but at the expense of losing everything.  Hoping not to wind up selling everything when an “economic drought/crisis” comes, I reflected on the story. I wonder if it would have been wise for the people to have also implemented the winning program for their own lives.  If the people had enacted the program for themselves beyond what the government had planned to do, there might have been a chance to have been saved from poverty.  It is not easy to pay taxes, live and save for emergencies and the future.  The problem is the same today as then.

The plan seems simple.  Set aside 20% which seems easy - Or is it? Wages are easily spent for taxes and living expenses.  Sometimes it seems nothing is left for the future.  Yet by following the money in the story it becomes clear how we can avert the process of going broke and being destitute. Using each category of items that the people spent in the long economic drought/crisis helps to know how to save for an economic down cycle.

Drawing from this the 20% three categories are:

1.    Cash or cash equivalents

a.       Cash

b.       Short term savings

c.       Food for the family for 90 days to 1 year

d.       Garden seeds (In the story this was like money to them)

e.       Medications for 90 days to 1 year

f.        Day to day items

g.       Clothing

h.       Fuel

i.         Water

 

2.       Portable Wealth

a.       Gold/Silver/Gems/Jewelry held for a hedge against inflation and crisis

b.       Mid-Term Investments such as stocks and bonds

c.       Furniture – Antiques or brand name

d.       Antiques

e.       Collections

f.        Vehicles

g.       Travel Trailer/Motor Home

h.      Business Equipment

i.       Tools/guns

j.         Wheat/Grains (In the story this was like money to them)

 

3.       Property and Income/Wages.

a.       Your livelihood (Skills to make money)

b.       Your education/training to increase and maintain your livelihood

c.       Your business

d.       Your farm

e.       Your employment

f.        Your home (In the ancient past people lived where their business was.)

 Questions that could be drawn from this story are many without debating the government involvement.

 Do I have enough cash and cash equivalents for short term emergencies, 3-4 months or if necessary a longer time such as a year on hand and available?  It would be good to have a sizeable amount of it available because remember in the story cash dried up and was almost impossible to find.  Cash is truly “King/Queen” in these situations.

·         If I had to burn through the cash in 6 months, do I have enough “portable wealth” that could be tapped to carry me though?  These items could be found cheaply at auctions, yard sales and on sale to help increase the value without spending a lot of the cash to get them.

·         Do I have additional skills that I could use to carry me through a long drawn out “economic downturn or retirement”?  Industries have come and gone therefore keeping current in several skills sets can be helpful.

·         Do I have insurance for disasters?

·         Do I have property, houses or my own home to carry me through a long-term “economic drought”?  If not what would I do?

Exercises like this can be helpful in strategies for the future. Some suggestions: 

1. Maintain a list of your items and how much they are worth.
2. Divide them into the three (3) categories.
3. Keep a balance between the categories.
1. 1/3 in cash and cash equivalents
2. 1/3 portable wealth and mid- term investments
3. 1/3 in home, land, equipment and livelihood/education.  

By equaling out the value in the 3 categories your life will be balanced and ready for the economic downturns of life.  At the very least you will have tried to stay off destitution.

Have fun trying this exercise on your life. Judy

https://www.thrivelife.com/yourpantry  FB Group Justice Life Pantry