How to Prepare for an Economic Depression: 9 Steps for the Average Joe


Psst. I’m gonna share a little secret with you…

I think we’re in an economic depression.

Don’t believe me? Consider the fact that more than 100 million Americans are on some sort of government food assistance right now. If EBT cards didn’t exist, just imagine how long the soup lines would be!

I write more on how I’m preparing for an economic 9/11 here.

In this post I want to share with you the recommendations of Nicole Foss, an acclaimed finance, energy, and preparedness analyst who believes we are headed towards a deflationary spiral. Yes, the time to prepare is still NOW.

In her article, “How to Build a Lifeboat,”  she explains the 9 steps to personally take to prepare for a deflationary depression. I have taken these recommendations to heart and me and my family are actively following these steps to the best of our ability.

How to Prepare for an Economic Depression

According to Nicole Foss, the 9 steps to take to prepare for an economic depression are:

1) Hold no debt (for most people this means renting)

2) Hold cash and cash equivalents (short term treasuries) under your own control

3) Don’t trust the banking system, deposit insurance or no deposit insurance

4) Sell equities, real estate, most bonds, commodities, collectibles (or short if you can afford to gamble)

5) Gain some control over the necessities of your own existence if you can afford it

6) Be prepared to work with others as that will give you far greater scope for resilience and security

7) If you have done all that and still have spare resources, consider precious metals as an insurance policy

8) Be worth more to your employer than he is paying you

9) Look after your health!

In the original article, Nicole Foss further explains these recommendations better than I ever could. Below, I give you my take on these steps and what my family is doing.

1) I don’t care if you want to start a business, go to college, or buy a house- “debt is not a tool!” Pay off your debt and do not take on new debt no matter how low interest rates may appear to be. It took us 4 years but we got rid of our mortgage and paid off $60,000 worth of debt. We may not have a fancy house or nice cars but we are better off than 90% of the Americans out there.

You mean renting is better than having a mortgage?? Yes. According to Foss,

There is no safe level of debt to hold, including mortgages. For those who are not able to own a home outright, most would be much better off selling and renting, as real estate becomes illiquid faster than almost anything else in a depression. By the time you realize that you need to sell because you can no longer pay the mortgage, it may be too late. Renting is essentially paying someone else a fee to take the property price risk for you, which is a very good bet during a real estate crash.

2) In an economic depression, “cash is king” as average joes like you and I will not be able to depend on credit to get the things we need.  Instead of focusing on debt and credit, pay attention to your liquid assets. What are liquid assets?

Be cautious holding short-term treasuries though. The Federal government defaulting on its promises is not as far-fetched as one may think.

3) Our banking system is in trouble and  worse, is based on fractional reserve banking. Don’t think bank runs can’t happen- they can. Proceed with caution.

4) This piece of advice is applicable in a pure deflationary scenario only. While the point of this article is how to prepare for a deflationary depression, predicting future economic conditions is difficult; diversifying may still be wise.

5) Foss talks about stockpiling the basics and items like solar cookers and water filters but we’re taking this step a bit farther. We hope to have a paid-for homestead, full garden, and farm animals for independent food security as much as possible. After that, we plan on experimenting in solar power and off-grid living arrangements (composting toilets, etc.)

6) In my opinion, this is the hardest to achieve but probably the most rewarding piece of advice to follow. If times get tough, you’re gonna want like-minded people to work, trade, and barter with. Don’t rely too much on internet “prepper groups.” Instead you’re going to turn to family members and friends you already know and trust. Invest in relationships with people who actually live near you and will be able to physically lend a helping hand when you need it.

7) For those who wish to preserve their wealth, investing in precious metals is an option but like everything, comes with its own risk.

8) Do you think you’re worth more than your getting paid? That may be a good thing. Employers are strapped for cash and as the economy gets worse, you may NOT want to be the highest paid employee on the payroll, if you know what I mean.

9) My family’s health is something I’ve been focusing on since we became debt-free. I think proper nutrition is paramount and follow the principles of the Westin A. Price Foundation. I strive to cook traditional foods using traditional preparation methods. We try to eat organic, non-GMO, local foods as much as possible.

As with everything, do your own research and come to your own conclusions. But whatever you do, don’t rely on the lame stream news or the government to warn you about economic upheaval and collapse. 

Want to learn more?

The Big Short by Michael Lewis is an entertaining read that takes a behind-the-scenes look at the housing market crash in the eyes of few benevolent investors.


The New Economic Disorder by Larry Bates is another book that helped us understand what’s going on in the economy and how to prepare.

economic disorder


  1. I agree, however many retirees are drawing on their 401K’s and IRA’s as monthly income which is in US treasuries. Some have dividend paying stocks. I have been reading/hearing about the collapse now since the 90’s, thus many become complacent and quit prepping like before. We have discussed selling the house (debt free) and moving into a rental in case we have to leave suddenly or things start to happen so as to leave the city for safety. many predictions were made during the housing crash. One important thing that few discuss is medications for diabetes, thyroid, asthma, and other life saving drugs if it gets bad enough, or some may need surgery when hospitals are shut down.

  2. Renting?
    So what happens when you build your chook run, plant your garden, plant your trees and set up an emergency wood supply. 2 seconds into the economic crisis, you can’t afford the rent, the landlord turfs you out and takes all your stuff as back payment. Brilliant plan! (not). You must be working for the banks. On the other hand you could buy your own land get prepped, then when the bank created crash happens, do what Iceland did. Arrest the bankers and forgive all mortgages. Now everyone is debt free, housed, fed and the economy will boom. I would suggest buying weapons to allow you to arrest the bankers, as they, and their private security squads, won’t go quietly. Just my 2 cents.

    1. I didn’t understand the renting thing either, save for the possibility of them calling in the loan on the entire mortgage amount, in which you’d be out on your butt as fast as an evicting landlord would have you.

      Renting also doesn’t allow you to “bug in”…. in most cases, as your example notes, what happens to all the stuff you’ve built up on a rental property for self sufficiency.

      “Working for the banks” doesn’t make any sense though – think about it. Taking on more debt would be enriching the banks, Stephanie is paying everything off and not going in to any more debt.

      ‘purently you haven’t read the rest of her story……

      1. Good points.
        With the rent option you also have the added problem that the landlord could forfeit and your out again. At least with foreclosure proceedings you have time to issue a counter suit in which you can argue the legality of the banks holdings and stay on your property long enough to see public opinion have them incarcerated.

        Of course taking debt, a required certainty if you want security and independence for the long term, does profit the banks as that is their business model. If however the banks cause nationwide or even global hardship, I’m sure some form of treason could be implemented.

        Of course I don’t think she really works for the bank, I was being facetious.

        1. James,
          So you say “stay on your property long enough to see public opinion have them incarcerated.” You mean like the same way the banks were held accountable for the housing crisis and economic meltdown they caused in 2008? Not one of them was arrested.

          And you’re saying acquiring debt is a “required certainty if you want security and independence”? I’m starting to think YOU work for the banks. Debt is not a tool- ALL debt is dumb.

          Banks are currently *and have been* causing global hardship. The fraud and scandal is outrageous- there is no justice being had. Don’t expect it.

          Really wish I could agree with you but I can’t.

          1. 2008 / 2009 is when Iceland found its solution. The reason no one else found the solution is they followed their leaders (owned by corporate interests) and kept to themselves in their rental accommodation.

            Don’t know if you ‘ve noticed, but the living wage is more akin to a slave wage these days. You would have to save two lifetimes to afford the “American Dream”. That’s why debt is now essential to get off the rental market. In most developed countries the cost of rent is either equal or up to 50% more in cost to the average mortgage. If a mortgage is unaffordable what does that make renting.

            You are right that there is no justice, but that’s because no one ( except the Icelanders) are demanding it.

            I guess my perspective is based on hope that things will potentially improve, or if they don’t then my hope is people will rally together for the common good. To do otherwise is to live in fear, with no chance for independence and spending a lifetime at the whim of other peoples demands.

      2. CF- You’re right. Renting is not the most ideal scenario for prepping or homesteading as we are experiencing this right now. Our rental was foreclosed on and now we have to move compost, runs, chickens etc to a new place. BUT that was not the point of this post- this post was simply discussing the financial risk of renting vs. a financed home when there are no jobs and no money in a depression environment.

        I’d much rather move my preps to a new rental than move my preps to a new rental with the added threat of being sued for after my financed home was taken because I could not make the payment anymore…

    2. We’re not saying always rent your entire life….We think it’s best to rent until you can pay cash for your own homestead.

      By doing this you transfer all the risk to the landlord vs you taking on the risk of a mortgage. Remember when you take a mortgage from a bank, you are virtually renting anyway…but you also add all the risk.

      So why rent with risk, when you can rent with none. Save money and pay cash for your homestead.

    3. Yes, the safest bet is to own your own land outright without a mortgage. BUT in the meantime, (in a depression scenario) renting is still better than living in a mortgaged home for the reasons stated above.

      And yes, if you can’t afford your rent your landlord will evict you under the legal eviction process. As far as I know, landlords “taking your stuff” as back payment is not part of the normal eviction process.

      As far as Iceland, I heard that those claims are pretty exaggerated. One banker was arrested for a few months. If I find the article that explains the actual reality of what happened in Iceland I will send it on to you.

    1. I like the issue of non- home ownership ( well not exactly but, change it up…) This article just substantiates my idea to not rent but, down size. Look outside the box for different home options. Possible shipping containers , maybe part of your home mobile or tree houses ? The ideas could be endless. With this you put your self a little off grid or just less accessible than in the neighborhood. Then you could do things like raise chickens, build a garden, live more simply like the article said and you probably will have more capabilities to save some $$$. Thank you !

  3. DSC03431 dxmynn xhydilr pyrvbr Movie And Trailers abercrombie paris, france , rikfbdr fqbiqblv abercrombie this particular language dpiujcj rkwib lv sac ltdppftk sac lv clxhpcne louboutin marche cher ntiywtyu

  4. If stockpiling cash is easy every one would have no problem with an economic depression. Still having some is still better than none at all. Sad truth is I don’t think most people are ready for something like this. What will happen is they’ll be caught with their pants down and their willies hanging.

  5. Normally, once you couldn’t fled from being overweight, you’ll need to drop some extra pounds for a great deal of factors as soon as you shed weight as there’ll be many constructive adjustments.
    You notice, weight not only influences youare appeared as if, in addition it influences life’s
    sum total quality, the way you consider pressure oneself,
    health risks and physical fitness. Actually it’s the precise reverse approach
    you ought to take – and that I may prove it!

Post a Comment

Your email address will not be published. Required fields are marked *