These are difficult times!!!
Inflation is high, stock market has collapsed, economy might be showing signs of slowing down, and to add salt to your wounds, your job may not be safe enough!
Are you prepared for the worst?
I was thinking seriously about it. How prepared am I? What should I do to be better prepared?
The following post is my idea of how to weather this storm. Please check if you can strike a chord with it.
1. Get your base strengthened
- Maintain an emergency fund with at least 6 months (or 1 year if you prefer) expenses.
- Get yourself medical insurance and don’t rely solely on your employer’s health insurance.
- Take stock of your assets and liabilities. Pay off your high cost loans as much as possible asap.
- If you don’t have term insurance yet, get it.
- Consider selling a few things like your car if you still have liabilities.
2. Strengthen your career
- Spend time on sharpening your skills.
- Spend time on networking. Know people above you better. Manage people below you better.
- Spend time on adding value to your job.
- Let your good work be known. Gently push the fact that you have been doing good things.
- Keep your resume updated and revisit it frequently.
- Identify gaps in your skills and see if you need to work on it. If yes, spend time doing so.
- Reconsider your decision to hop jobs. A newer place would mean starting all over again.
- Give priority to job security than to growth.
- Keep yourself updated with industry news. (make use of options like RSS feeds, they help you immensely to read content you want, the way you want)
- Do not be scared. There is life beyond the worst. But be mentally prepared.
- Diversify your assets. Equity, EPF, PPF, FMPs or FDs, floating rate funds, a bit of gold, etc.
- Learn a second skill to diversify your job risk (you take the call, do you want to focus on your job and upskill or do you want to diversify and add more skills? Either way, make sure you become more important to your employer).
- Diversify your income stream if possible. (Eg..If you are planning for marriage, look for a spouse who is in a different industry. )
4. Take advantage of the crisis
- Raise cash and go cherry picking… but be patient. Stock are getting cheaper. Maybe, its the opportunity of your lifetime to buy great stocks at a bargain… but… be fully prepared to lose more than 50% of what you invest in equities. So, back yourself up to the hilt first.
- Start pushing concepts like frugality @ home. Your family will understand you better now.
- Rupee cost average. Continue your investments in SIPs. (but pray to god that over a 5 year period, the market will do well)
- If you plan to buy a house, be prepared. Rates are falling and you may land a good deal. Keep a watch.