The Inevitable Collapse of the Dollar and How to Prepare

Watching the news has not exactly been my favorite pastime as of late.  Honestly, it feels like everything that we see is all doom and gloom.  Alas that this is for good reason – bad things are happening all over the world and to some extent it appears as though the powers that be are not doing very much to stop it.  What are we supposed to do about it, though?

Not to be an alarmist, but it does appear as though the collapse of the United States dollar is imminent.  Sure, it may not be this year, but I think that we will see it occur in the coming decade.  All of the signs are here.

Looking back to the 2008 crisis, we saw a lot of the same patterns.  First, the housing market totally boomed.  People were buying properties left and right.  Does that sound familiar?  Unfortunately, it does feel like what we saw last year, especially in summer.  

Of course, this is hardly a guarantee that the same sort of crash is going to occur again.  However, for a lot of the financial experts who have been watching, it does seem to be a rather bad omen.  Just something to consider.

This leaves many of us scrambling about what to do next.  While there are plenty of options, narrowing down what will work can be a real challenge.  Keep reading to learn about a few of them.

One: Create an Emergency Fund

Almost every financial expert out there will tell you to do this.  It is a universally accepted and recommended step towards securing your financial future.  Without one, well…you could be moments away from disaster at any moment in time.

Alas, this is the situation that many young adults find themselves in right now here in the United States.  One emergency could send a large majority of our population into total financial crisis.  Isn’t that a frightening thought?  

The fact of the matter is, though, that this is the case for a lot of us.  So – if you have not had the opportunity to start a crisis or emergency fund, now might be the time to do so.  I understand that it can be quite difficult, though, especially if you are one of the many workers who are living from paycheck to paycheck.  Just remember that even a dollar a week can add up over time.

Two: Consider Rethinking High-Risk Investments

I am sure that we have all heard the saying, “with high risk comes high reward.”  However, with a potential economic crash looming around the corner, now may not be the best time to take that sort of advice to heart.  Why is that?

Well, there is a lot lower of a chance that your risk will pay off if the value of the dollar plummets (or other extenuating circumstances occur).  Think about it – is that up-and-coming industry really going to thrive in such a situation?  The answer to that question is “probably not.”

Now, I am not saying that you should avoid them altogether.  Putting a small amount of money into something like cryptocurrency is not necessarily a bad idea.  Just do not pour your entire life’s savings into it, because there is absolutely zero guarantee or even proof that it will give you money in return.

In fact, that is good advice for pretty much any type of asset that you can think of.  Never put all of your eggs into one basket, right?  Some friendly advice that I hope will serve you well as you continue along.

Three: Limit Your Purchase of Stocks

I know that this one probably sounds rather strange.  Why would we do that right now if we are trying to prepare for the future in a pinch?   The fact of the matter is that stocks are more at risk now than ever for losing significant amounts of value in the coming months and years.  

In addition to that, though, there is always the question of examining your portfolio to ensure that it is not dominated by one type of asset more than the others.  While that can work when we are not perched on the edge of a market crash, right now it is probably not advisable to have more than five percent of your entire portfolio hedged on one specific company.

You might be wondering what some alternatives to that are, then.  Do not worry, I will be going over them more in depth in the coming sections.  For a preview of what you are in for, though, you could check out https://www.bondsonline.com/what-should-i-buy-before-the-dollar-collapses/ to see what resources they have to offer.

Four: Utilize Dollar-Cost Averaging

Now we move onto something a bit more technical and complex, but still worth learning about.  You see, some people believe that they may be able to “time” the market out by waiting a long time to resume investing.  They may also attempt to sell all of their current assets right away before the crash happens.

Neither of these strategies are particularly effective, though, unless you have a gift for predilection.  Without the presence of future sight, though, you are not likely to make it out unscathed if you pursue this.  That is why I recommend dollar-cost averaging instead.

It is rather simple, thankfully.  Essentially, it means to spread out your stock market purchases rather than buying in bulk all at once.  You can read about it a bit further here on this page if you are curious about some of the specifics.

Pretty simple, right?  You could go about it in a variety of ways, depending on your personal preferences and style.  The key factor is just that you space out everything – so, you could spend one thousand dollars one month and five thousand the next (hypothetically speaking, of course).  

This method can help you to reduce risks and to potentially luck out on the whole “buy low and sell high” aim that most investors have.  There is no guarantee of that, of course, but it is certainly worth considering.

Five: Try Alternative Styles of Assets

To conclude today’s article, I want to discuss some of the potential alternatives that you can consider as opposed to investing everything in stocks.  Thankfully, we do have plenty of choices available.  It will be up to you to determine which of the following sound most appealing to you.

Real Estate

The real estate market has been booming for good reason right now.  Bearing in mind that it may be slightly riskier than the other selections that I will be mentioning, it remains a solid choice if you are someone interested in renting out or flipping properties.  It can be hard to get into the market, though.

Commodities

For those who are already familiar with investing to some extent, you may have already heard of commodities.  In essence, they are a type of asset that is classified as a raw material to be used and refined later in the manufacturing process.  There are several categories to consider.

Agriculture is a huge one, although few investors decide to tap into this market.  That is likely because of how ephemeral it can seem – the seasons heavily influence what crops will be more profitable than others.  Similar to that is the livestock industry, which has issues in the same vein.

Energy is another potential that many folks do not opt to invest in because of how complex it is right now.  Given all the concerns about climate change and shifting our sources of energy to more environmentally friendly options, it makes this sector intimidating and risky to put money into.

The final one that I want to discuss are precious metals.  You have probably heard of at least three of the primary ones: gold, silver, and platinum.  The other one is palladium, although it is in the platinum family of metals and thus is not always mentioned specifically.  

I suppose, then, the question is which is best to invest in.  There is no clear-cut answer there, but it is certainly worth noting that most prefer to purchase gold bullion over the others.  This is partially due to the fact that it is more readily available, and partially due to the fact that it is high in value while coming at a reasonable cost.

So – there you have it!  You can pick from any of those alternatives or find some of your own.  The most important takeaway from this blog post today is that you should start preparing now if you have not already.  While none of us can reliably look into the future to predict when exactly a crash is going to occur, it is hard to deny that one appears to be on the horizon.

That is why most financial experts recommend starting to save now rather than later.  Hopefully you can utilize the advice that I have offered today to begin this journey for yourself now as well.