Two important questions that are often asked recently are: “How can I save money in today’s economy” and “How can 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 do to it.
A few years ago a dear friend shared with me how her late (middle-income) husband had made his fortune during the “Great Depression. In this article, I will share with you the strategy he used for achieve prosperity during a difficult time.
- My friend said her husband was always very frugal … rich or poor. He was much more frugal than she (my friend) wanted to be. Note: saving was a key element to his success because it gave him investment money.
- By the time I got to know her, she was quite rich and had the opportunity to do many things that others could not. She advised me to spend money only on what was really important to me, and not on things to impress others. For example, she liked nice clothes and travel, so she spent money on those things (that man would not have any more.) However, she drove a very modest car (Volkswagen) and lived in a modest house (no mortgage) ).
- He always made sure he had $ 1000.00 in cash. He did not keep this money in the bank. So when depression hit, he had money when most did not.
- Note: Due to the devaluation of the current US dollar (“quantitative easing” by the Federal Reserve) senior economists are suggesting that this amount should be in gold or silver rather than in dollars. However prices fluctuate dramatically in these two metals, so it is important to stay informed.
- After hard times hit, he bought investments for pennies in dollars. For example: my friend said he started buying some piles of worthless stock for a few pennies. When the market returned, some of the stock was still worthless, and others made it rich.
Most people needed money for food more than they needed gasoline, and their cars became out of work. So he bought their cars and other items they wanted to sell for the money they needed. When the market returned for these items, he sold them at a profit.
It was not a complicated thing he did, but it was a very effective strategy that most people neglected because of its simplicity.