Two important questions often asked lately are: “How do I save money in today’s economy”, and “How do I make money in today’s economy?. History is our greatest teacher. During the “Great Depression some people lost everything they had, and others made their fortune. So obviously this time in our history is what we make of it.
Several years ago a dear friend shared with me how her deceased (middle income) husband had made his fortune during the “Great Depression. In this article, I am going to share with you the strategy he used to accomplish prosperity during a difficult time.
- My friend said her husband was always very frugal… rich or poor. He was far more frugal than she (my friend) wished to be. Note: saving was a key element to his success because it gave him investment money.
- During the time I knew her, she was quite wealthy, and could afford to do many things others could not. She advised me to only spend money on what was truly important to me, and not on things to impress others. For example she liked nice clothes and cruises, so she spent money on those things (he husband would not have though.) However, she drove a very modest car (Volkswagen), and lived in a modest (mortgage free) home.
- He always made sure he had $1000.00 cash money on hand. He did not keep this money in the bank. So when the depression hit, he had cash when most did not.
- Note: Because of the devaluation of the current U.S. dollar (“quantitative easing” by the Federal Reserve) top economists are suggesting this stash should be in gold or silver rather than in dollars. However prices are fluctuating dramatically in these two metals, so it is important to keep informed.
- After the hard times hit, he purchased investments for pennies on the dollar. For example: my friend said he began buying up handfuls of worthless stock for a few pennies. When the market returned some of that stock was still worthless, and others made him rich.
Most people needed money for food more than they needed gas, and their cars set idle. So he bought their cars, and other items they wanted to sell for needed cash. When the market for these items returned, he sold them at a profit.
It was not a complicated thing he did, but it was a very effective strategy that most people overlook because of its simplicity.