Yesterday's market "correction" had a lot of investors experiencing acute arm pain as they clutched their chests, watching the Dow Jones average plummet over 200 points in the course of about 2 seconds. The swiftness of the drop was attributed to a computer glitch, which isn't exactly reassuring, either from a technological standpoint (how did that happen???!?!) or a practical one (it still dropped over 500 points, right?). The Shanghai index correction was the obvious impetus for the drop, and that makes me feel even worse.
I don't have much dough invested in the stock markets, save for a paltry sum that fluctuates in my IRA, so I wasn't as concerned about the drop as say, my dad, whose entire 401k is directly affected by market swings.
Despite this, I was definitely clutching my chest when I heard that former Federal Reserve Chairman Alan Greenspan predicted a recession for the US economy. Some economists have been predicting a recession for a while, based on the housing slowdown/slump or other indicators that most of us don't think about much. Other economists with actual jobs have predicted that a full-blown recession is not, in fact, likely, but it certainly got me thinking: how does one prepare for the possibility of a recession?
There's lots of info out there on how to survive a recession as an investor, but what about us regular Joes who are simply worried that we won't have a job should the economy turn southward?
Well, there are some articles and books on the subject. Some bloggers are giving it some serious thought and have their own ideas on the subject. Forums are filled with helpful (and not-so-helpful) tidbits. Paul Kirvan penned some advice back in 1991 regarding this exact topic, when it may have been even more relevant than today.
Here are some ideas that I am exploring:
- Start your own business. Be prepared to start working on a consultant or freelance basis if you lose your permanent job, and get some great tax write-offs in the meantime.
- Look around your workplace and find ways to make yourself more useful. Job security is when no one else can do everything that you are doing.
- Know ahead of time if you qualify for unemployment. If you don't, look into that emergency savings account that you've been meaning to get started for the past 6 years.
- Take the classes that you need to take now. Make sure to include the costs of continuing education when you file taxes. You can probably make a shift in your career with relative ease if you pick up a few new skills or take a risk and try out a new field altogether.
- Develop a love of peanut butter and jelly sandwiches.
- Get a roommate (shudder).
- Join the Compact. Not sure if I WANT to do this, but I might have to at this rate.
- Budget. Budget. Budget.
- Chose a hobby that will actually promote your career. Volunteer for a professional society or nonprofit organization that corresponds to your work. Life shouldn't be all about work, but these are great networking opportunities, should you ever need them.
How about you guys? Are eBay careers the way to go? Do you have any ideas for recession prep besides what we normally tout to our readers (Save, Budget, Buy Used, Library Card, etc.)?