This being a holiday weekend, and because a lot of people will have a bit of extra “personal time” tomorrow, it’s a dandy time to take a steely-eyed look into the future.
The bull market the stock market has been in will end one of these days.
The specific cause doesn’t matter. What does matter is what you do to get ready for that occasion.
About Bull Markets
In our work on cyclical economics, there are lots of repeating events to look at. About every 10-12 years, California goes through a “real estate cycle.” The very Sun, goes through an 11-year cycle. (Cycle 24 is ending right now and we are awaiting the uptick in sunspots that will signal Cycle 25 showing up.) Economists look at this potpourri and call it the Juglar cycle.
The present bull run in the market can be traced back to the end of the market decline from the collapse of the Housing Bubble in 2008-2009. In reality, though, there was still plenty of economic displacement being felt even into the 2011-2012 period. The pain of a housing crash is long and deep.
The Federal Reserve’s Economic Data dispenser (FRED) does an amazing job of keeping track of things like the nation’s unemployment rate that – not surprisingly – peaks when the bull markets in stock and bonds hit headwinds:
Sure, not all cases of high unemployment can be blamed on cyclical economics. But, where there are exceptions – like the 1973-1975 period circled in red – you’ll usually find a ready explanation for the aberration. If you’re too young to remember, that was the Middle East Oil Embargo and the related price shocks and…oh yeah…economic displacement.
“What’s to Prep for?”
As individual citizens, we’re like “victims on the bus.” We can’t get off the bus and most of us don’t have the ready cash to sneak off to some third world hideaway and life happily ever-after.
We’ll have to “cope in place.”
When a bull market ends, things happen in slow-motion. You’ll have time for some modest prepping efforts. But, you’ll need a plan and some longer-term strategies to move your life along.
A quick review of past “bull market endings” shows they usually have a basis in some dominant investment or economic activity.
The bull market we’re in now was recovery from a “Housing Bubble” collapse. The one before that (2000) was the “Internet Bubble” collapse. The 1990 recession was really an “Inflation Collapse” – driven mainly by Federal Reserve (and Bush (the elder) economic policies, though it wasn’t covered in the papers that way. “Jobless Recovery” is how it was billed…and it swept Bill Clinton into the White House in 1992.
We could go on, of course. In 1970, I was a young news director in Seattle when the billboard went up “Will the last person leaving Seattle turn off the lights?”
What each has in common is a rising tide of public awareness that something’s changing. And, not for the better.
This is the WHAT to prep for. And the WHEN is as you notice articles like “Longest-running bull market in XX-years. These are sure-fire signs that you need to begin the prepping now.
“How Can Your Prep, Though?”
Another fine question:
Let’s go through my structured list and figure out what will serve you best. Every case is different, of course, but these ideas should be useful:
Finances: The main thing to be “structuring” right now is a reliable income-stream for you and the spouse. Is there a way you can see to increase your value to your present employer? Should you take some additional training? Prepare or offer to do a bit more overtime? Bring in doughnuts for the office, now and then, and frankly (crude as it is!) practice your corporate suck-up skills to the nth-degree.
Step One assumes you have a job. If you don’t, get one pronto and make it one that is at least somewhat recession-resistant, if possible. Jobs in government, education, and healthcare will be more reliable than jobs in construction, for example.
Step Two is to find a “side-hustle.” Surely, there has to be something you can do that could raise a little cash? As a kid, I always knew that with little persistence, I could come up with a little extra money doing odd-jobs around the neighborhood..
No, we’re not kids, anymore (well, mostly…) but you can still find the odd “gigs” job on Craigslist. One of the worst jobs in sales in telemarketing. But, if someone will pay you $15 an hour for a side-hustle, then maybe 10-hours a week – when you might otherwise be moping around the house or being a beer-sponge, could be better spent making another $150 a week. Sounds like chump-change, until you look at the annual take: $7,800 a year.
Which is how many car payments?
Step Three: Plan a side-hustle that will be hard to automate with a robot. Apartment management sounds like a great deal – and for lots of people, it is. But the money is just laying around real estate offices that are managing a few rentals. Find a few such offices, set up a small (back of the truck) repair business, and you’ll be in great shape.
Step Four: Utilize the magic of other people’s work. Find (or buy) a small business that has good expansion possibilities and get others working for you. An acquaintance of mine was a good carpenter-type who did a restaurant remodel or two. Next thing you know, he was doing remodels in a three-state area with multiple crews doing updates to fast food joints.
See where a side-hustle can go? Go big – never nose sight of the fact that you are the boss – or can be – if you put your mind to it.
My son left a good job to take the summer off to fnish some of his lifetime goals. Frankly, I don’t think getting over the 700-mark in skydiving jumps is a worthy goal, but it’s his life so he gets to spend it his way.
Thing is – and it’s a big learning lesson – he walked away from a State job and now he has to find a new job. And the hiring hasn’t gotten easier.
Hard Rule: NEVER lease one job until you have an employment agreement inked and a start date and such before turning in your notice at an existing employer!
If you “fail to execute on this” you can get stuck like someone I know – out of a job AND out of unemployment because a “quit” is different than a “fired.”
The question to ask yourself is this: “If I got fired tomorrow, where would the money come from???”
This gets us to the heart of real prepping. Do you have a…
Job-Los Contingency Plan?
All of your Seven Major Systems of Life (from my book“The Millennial’s Missing Manual: What School Didn’t Teach and What Old People Didn’t Explain” – Amazon, $3-bucks, don’t be so cheap!) need to be figured in advance.
Food: As part of being even a “cowardly prepper” you should be at least a month-out in most of your foods and disposables (toilet paper? yeah!) If you’re not, you’re not going to get prepped by doing nothing. Like wearing that “V” (for “victim”) on your forehead?
Buy two for now, save one for later. Figure the ratio that makes sense. Think of it as setting up your own personal food bank. Best part is, you’re in charge of how much and when you can take things out of it…
Shelter: How many months of rent do you have set aside? If you don’t have 3-4, you need to get cracking on that one. There’s nothing worse than having to beg for a place to live. Or, living on the street.
Have you cleverly timed your lease term so that if there’s a major decline in the market (and business confidence) you can move into a cheaper place (or better for the same dough) when times get bad?
Work out things from your landlord’s perspective. “You know, if I move out, you might have an empty place here for a couple of months. Give me 5% off my rent for the next year and….”
Communications: What is your cheapest possible data plan? Did you think to get a phone with wi-fi so you don’t always burn airtime? Not an online gamer on a phone, are you? You’ll never be rich and successful pissing you life out a modem, right? Unless you own EA or Steam, of course…
Transportation: Again, how many car payments do you have left to make? Got any outs?
When was the last time you “shopped” car insurance?
Environment: Quit the gym. Start a painting company. Paint houses and apartments. It’s a two-fer: You can get exercise PLUS money.
Rethink your healthcare – what about the religious healthcare cooperatives? Check ’em out.
Energy: What part in my book “How to Live on $10,000 a Year – or Less” where I talked about bikes, public transit, the joy of beaters, and ultra-high mileage cars did you miss?
And in Finance: If you own anyone a dime, pay it off now. Compounding interest is the weapon that kills people’s futures in economic downturns.
Fine out what the waiting period is – and how much dough you will clear – from unemployment. Do you qualify? Change the board pieces before the game begins!
What investments can you make in yourself – right now – that will paty dividends when times are bad?
How are your teeth?
OK,. OK, enough already! You get the idea and I’m not trying to piss all over your supposed to be fun :”Labor Day” weekend.
But here’s the real schiznit: The American Labor Movement is dead. It sold out (or was hijacked) by a bun ch of mostly left-wing activists who talk the talk but don’t walk it.
In the 1950’s, one person working at a job could raise a family of five. I know because I was number 4 in that kind of a family.
Today, one of the major drivers of the LBGTQ movement is two people – even without offspring – have a hard time making it. And for young couples, increasing numbers of would-be grandparents (like me) see our branches of the gene-tree hitting the wall.
The hell of it is, we’ve screwed ourselves.
So please take a moment today to remember – and thank – people in the moderate American Labor Movement for their service to keeping this country great. People like Harry Bridges and Dave Beck changed the country for the better, Throw in Jimmy Hoffa, too – if you can find him.
It’s not too much to claim that if you have employer-paid anything – there was someone in the Labor Movement who were willing to strike and starve to press the demand for a living wage.
Please, taking a few minutes to contemplate three things today:
1. Am I ready for when the Bull Market turns down?
2. Have I taken at least some of the reasonable preparation steps to ensure my “continuity of life” in Hard Times?
3. How do we keep crooks and politicians (but I repeat myself) out of the Labor movement so we can make some progress back toward a living wage for working families?
Write when you get rich,