This is a very good question and there is no right or wrong answer here. It will all depend on your needs. There is an old saying that goes, “The rich don’t need to save. The poor don’t have enough to save and the people in-between struggle to save.”
This saying is very true. During an economic collapse, the amount of cash that you have with you is very important. It will determine your course of action and give you the flexibility to do things that others can’t.
•Your plan of action
If you plan to migrate to another country and retire should there be a financial collapse in the place you’re currently in, you’ll need a sizeable nest egg. There are many people who have migrated to places like the Caribbean or Bali or Chiangmai because of the low cost of living.
They love it there and are able to stretch their dollar and live a very comfortable lifestyle. If this is the way you wish to go, you need to do the math and come up with a number that will allow you to achieve this goal.
All you need to do is hit this number and you can drop everything and leave without suffering the effects of financial mismanagement by a group of entitled bankers.
If you don’t wish to migrate, you’ll need enough money to last you for about six months or so. Save up 6 to 9-months’ worth of your monthly wage. It will take you a while to get there… but you will have a buffer if you lose your job and the going gets tough during a financial collapse.
•What are your expenses like?
The higher your expenses, the more money you’ll need. If you live in a mansion with your own personal chef, etc. you’ll probably have enough cash to survive the crisis. For someone who has been putting on a show and trying to live with the Joneses, during an economic crisis, they will be hard hit.
There will be a slump. Profits will dip, and everyone will be cautious with their spending. Incomes will drop and the expenses which remain the same will become a huge burden.
It’s best to cut your coat according to your cloth. This will ensure that your life does not become a living hell should an economic crisis strike.
•Do you have skills?
Having skills will be very useful during an economic crisis. Even if you’re retrenched, if you have a trade skill such as plumbing, carpentry, etc. you’ll be able to find work because others will still need their choked sinks to be cleared.
Wilderness survival skills are fantastic to have. If you love camping, you could live off the land for months. You just need to camp out at a good spot and survive. Your expenses will be very low, and you’ll be able to stretch your dollar.
•Have you invested in gold?
Investing in gold is a very wise move to make. Of course, you’ll need some money to purchase gold chips, coins, etc. It’s best to buy smaller pieces of gold such as jewelry which are easier to sell for cash. It’ll also be safer since a gold bar can be easily stolen but several pieces of gold packed into different bags will be harder to steal.
Gold will always retain its value. The price of gold goes up when the value of the US dollar drops. This inverse relationship makes it a fantastic investment.
At the end of the day, your goal should be to determine just how much money you need to survive a crisis and you should save up for it. Always strive to increase your income while living modestly. This will be the fastest way to save your nest egg and achieve financial independence too.