Preparing for the crash without being a lunatic about it.

Forget stacking food, guns and ammo. Aim for simplicity instead.

Image: PixTeller

Minimalism by force

In 2004, a number of things converged in my life. I was laid-off from a lucrative job in a field Time magazine called one of the “Top 25 dying industries in America.”

I also got divorced. As the sole “bread-winner” in a community-property state, she got the money and I got the debt.

And, what a mountain of debt I had.

My debt-to-income ratio was probably close to 4:1. Four dollars of debt to one dollar of income, not including the mortgage on my house.

Meaning, almost all of it was unsecured. At the height of my credit card mania, I had a “goal” of obtaining an American Express Black Card.

The AMEX Gold and Platinum cards I had weren’t enough. Never mind the fact I carried near $100k balances on each. Somehow, in my mind, they didn’t have the “prestige” I attached to a Black card.

Basically, I was a lunatic. Drunk on cheap credit and bingeing on consumer lifestyle garbage, with zero-clue how I got there, or how I’d ever get out.

Post-divorce and first lay-off, I managed to find jobs in the same (dying) field. But, they didn’t pay as well. And, as jobs in dying fields often do, they soon got made redundant as well, with me right alongside.

A particularly nasty employment dry-spell in 2006 followed my 3rd or 4th lay-off and I was done. I had sold my house after the divorce, but my ex-wife got most of the equity.

I was hundreds of thousands of dollars in debt with no income, save for an unemployment check that was a fraction of my previous earning power. I was bankrupt.

Thus began my journey into the world of forced minimalism.

Best thing that ever happened to me.

The 2008 financial collapse

Minimalism came slowly at first. When I sold my house post-divorce, I moved into a two-bedroom apartment and packed it with all the stuff from my house.

The lay-off prompted the sale of my valuable stuff. Things that held resale value, like tools and firearms, went first. Then I was forced to sell my less valuable stuff.

This was stuff like entertainment equipment and consumer junk, which sold for pennies on the dollar. The two-bedroom apartment got downgraded to a one-bedroom apartment.

Another lay-off or two and the one-bedroom got downgraded to a studio. The next lay-off ended in bankruptcy and a struggle to even find an apartment that would take me with no job and a recent bankruptcy.

I finally managed to get into a 150 square foot bachelor apartment (no kitchen) in a run-down building right next to a major freeway. All I had left at that point were clothes, a few kitchen items, a computer and my books.

I have always been fond of books. I loved having a library of my own. Shelves of books arranged neatly in beautiful book cases.

Now, the books were all in boxes. Once I moved them into the tiny little apartment, I realised the books had to go. I had so many boxes of books, I would have to move them around, “Tetris” style, just to get to my bed.

With tears in my eyes, I put my entire library in the dumpster.

I was emotionally devastated.

In the space of two years, I had gone from being the kind of guy with a house, a brand-new BMW every year, and every possible convenience you could imagine to a guy living in a tiny, run-down apartment with no job, no credit, no debt, and no stuff.

For the first time in my life, I was free.

Not to mention, by the time the 2008 financial collapse came along, I was already rekt. Compared to many of my friends, my road through the financial crisis was easy.

Crash prep 101

I often joked after 2008 that I had my financial crash two years before everyone else did. It actually served me really well.

Of course, in the moment, my world was melting down. I was depressed, anxious, and scared all the time. The worry and uncertainty about the precariousness of my financial state probably took years off my life.

But, I had many advantages in 2006, that most didn’t in 2008. My stuff still retained some measure of value in resale. I unloaded my entire garage full of tools and machine equipment for about 60% of what I paid.

In 2008, you’d be lucky to get $0.10 on the dollar.

Likewise, I was able to sell old monitors, television sets, stereo equipment, and furniture. Most of that went for anywhere from 20–30% of what I paid, but it was something.

In 2008, that stuff was garbage. You would literally have to pay people to take it away, or you’d just dumpster it.

The biggest benefit I reaped was the ability to adapt and adjust to my new financial reality when resources were still abundant. Once 30–40% of the population writ large was in the same boat, things got a lot harder.

The takeaway is: start now simplifying now, when things are still abundant.

Maslow rears his ugly little head

I was a deeply committed consumer. I fell for consumerism in a bigly way. Consumerism is an insidious killer. Through carefully designed manipulation (advertising), peddlers of junk slowly mutate our perception of need.

“I need new shoes.”

“I need a new car.”

“I need a new phone.”

That’s a negative, Ghost Rider. You want those things. And, for many of us, we don’t even know why we want those things. Truth is, we want those things so desperately, it feels like a need.

That’s the manipulation at play.

In moments of deep consumer mania, I think it’s important to recall Maslow’s hierarchy of needs:

Now, reflect on this: if you lost your job tomorrow and could not find another income stream for 18 months, how long would it take for your ability to meet physiological and safety needs to degrade?

One month?

Two months?

How long would it take you to reorient your life so you could more easily satisfy those needs, absent an income? How many of you would, like I did, cling to emotionally attached stuff?

And, for how long?

I watched people during the 2008 financial collapse drag around households full of junk. I watched them sacrifice scarce resources to preserve their junk.

Just like I did, they’d pay higher rent to get bigger living spaces than they needed, just to accommodate their junk. They’d rent storage spaces, sacrificing hundreds of dollars a month to store junk.

For instance, when I downgraded from the two-bedroom apartment to a one-bedroom apartment, I threw out four lawn-size garbage bags full of clothes. Those clothes weighed over one hundred pounds!

And, I hadn’t worn most of them in years.

But, I still carried it all around like a baboon. Think about how stressful it is to move. It’s stressful for a number of reasons, but easily one of the biggest is logistics.

How much does your dresser weigh? And, your kitchen table. And, your bedroom set. And, your weights. And, your living room set. And, your bathroom stuff. And, your kitchen stuff. And, your…well, you get the picture.

How much of it do you need? The cold, hard answer is: none of it.

Often, when I say this to someone, they sill say, “Wait, are you suggesting I get rid of all my stuff? I can’t get rid of all my stuff!” I usually reply, “You might not have a choice.”

I say, your stuff has three major costs:

1. Acquisition cost (resources expended to purchase);
2. Maintenance cost (resources expended to store and move); and
3. Opportunity cost (inability to efficiently allocate resources).

The average cost per square foot of a home in the United States is $244, with the median cost being $202. A four foot by eight foot dining room table takes up 32 square feet.

Meaning, bare minimum, a large dining room table costs $6464.00 to store in an average home. Put another way, it’s an additional $6464.00 you have to spend to be able to store the large dining room table you use twice a year at Thanksgiving and Christmas.

Now, multiply that by all the other stuff you have and you will start to appreciate the true “cost” of keeping all your stuff. If you really want to drill down, take it a step further.

For one week, write down everything in your house you actually use during the week.

Then compare that list to a complete inventory of everything you have in your house. With a little thought, I’m sure you can imagine that what you actually use regularly is a tiny fraction of what you have.

The larger part of that fraction is, almost universally, a serious, and unrecognised cost burden. If you are shouldering that burden because you are emotionally attached from decades of manipulation, you will mismanage those costs and your resources in a financial crisis.

The first step to financial liberation is: break your emotional ties to junk.

Then, get rid of it.

Or, flip that around. Either way works.

Less stuff = Less anxiety

Even if we never have another financial crash (highly unlikely), reducing stuff increases positive health metrics, namely by reducing stress. Emotionally speaking, you carry everything you own, everywhere you go.

And, if you are like I was, and carrying literal tonnes of stuff, you are weighted down heavily. I didn’t even notice how much of a burden all my stuff was until it was gone.

Once I got over my sadness at the last of my stuff (my books) being thrown in the dumpster, I experienced an overwhelming feeling of lightness. Despite my depression, despite my anxiety, despite being jobless and in a shit apartment, I suddenly felt good.

I felt so good, in fact, I vowed to never return to the burden of consumerism again. Since that time, I have lived, studied, and worked on three different continents.

Each move was stressful. But, only mildly so. Put another way, it was far less stressful to move from the United States to London, England as a minimalist, than it was to move from Studio City to Burbank, CA as a consumerist.

Moving was solely an emotional issue, not a logistical one.

If a calamity struck tomorrow and I had to move across the country to mitigate it, it would take me one trip to the dump, maybe two hours to load the car and I’d be on my way. The only cost I would incur is food and fuel. I might even get a hotel or two on the way, if I was feeling fancy.

Meaning, it would be more of an adventure than a shock.

If calamity struck you tomorrow, and you had to move across the country to mitigate it, what would that look like? I’m willing to bet just the thought of it gives you a tingle in the chest.

Why?

Because of all your stuff. You know, all that stuff you pay a fortune to store and scarcely use. The stuff you will sacrifice thousands of dollars to move around and store, rather than use to help mitigate the calamity.

The stuff that will drag you down when you are at your weakest and barely staying afloat.

You can’t live your life preparing for the worst

This is a common criticism I hear. And, it’s a fair criticism. Of course, no one wants to walk around, Chicken Little-ing all day, wondering if the sky is about to fall.

And, that’s not the point. That argument says having, keeping, and maintaining all of your stuff is somehow a good thing. It’s not. Thanks to decades of manipulation, that stuff has become a proxy for success.

That short-lived feeling you get when you buy a new car. It’s exciting, you want to show everyone, that moment when you feel pride of ownership. A month later, it’s just a car.

And, thanks again to the decades of manipulation, the pride of ownership becomes a proxy for who you are. Where you quietly, unknowingly go from being a person, to the kind of person who owns: a truck, a house, a tool-shed, a handbag, a big-screen, a gaming system, etc.

It’s a Venus fly-trap.

If, dear reader, you actually decide to inventory the things you use and compare it to the things you own, you will take a first, monumental step in breaking out of the fly-trap.

The next, extraordinarily difficult step, is to actually pare down what you own to what you actually, legitimately, REGULARLY use. In times of PLENTY, doing so will:

1. Save money;
2. Reduce stress;
3. Simplify your life.

In times of extreme DISTRESS, doing so will:

1. Conserve precious resources;
2. Reduce stress;
3. Simplify your life.

Meaning, what I suggest is not to “prepare for the worst.” It’s rather to say that, living a simple, minimalist life will make your life better AND will prepare you for the worst.

Depending on your age, between 50–73% of Americans are living pay check to pay check. No savings. No “safety net.” And, no hope if something goes wrong.

They lose a job and don’t find one again soon, they’re rekt. If their extended family ends up in the same predicament, the whole family is rekt. Maslow’s hierarchy of needs can fall apart for these folks in a few days or weeks.

“I can’t get rid of all my stuff!”

“You might not have a choice.”

The Earth provides everything you need

Human beings have been around for roughly 200,000 years. For 98% of that time, humans relied on the Earth for survival.

No grocery stores.

No supply chain.

No prebuilt, 2500 square foot house with all modern conveniences.

Just the Earth and a little ingenuity. Henry David Thoreau lived on Walden Pond in a 150 square foot, hand built “house” for two years.

And, he did fine. Thrived, really.

The point is, if you simplify your life in the modern context, with modern conveniences, and pare down your existence to be much closer to your actual needs, then you are closer to your natural state.

The further you exist from your natural state, the farther you will fall to regain your footing. Not to mention, with the advantage of modern materials, the availability of modern resources, and the advancements of technology and understanding, creating a comfortable, sustainable, healthy life is so much easier than it was in Thoreau’s time.

Your stuff is costing you the resources you could use to:

1. Buy a small plot of cheap land;
2. Erect a small cabin; and
3. Save some gold and silver.

If, heaven forbid, a great financial calamity does befall you (us), those three things are a foundation for survival. The bottom two-tiers of Maslow’s hierarchy fulfilled.

Not to mention, it will be nice spot to get a way to from time to time. For the cost you currently pay to store a dining room table, a few chairs and a chaise lounge, you could have the means to vacation in the good times, and survive in the catastrophic ones.

My broader point being, if you pare down your life now, you gain several major advantages.

You will:

1. Condition yourself to live with less;
2. Reduce the likelihood calamity destroys you;
3. Gain more options in good times and bad; with
4. Only positive health and emotional benefits.

You don’t have to be a lunatic prepper, building bunkers in the backyard. Those folks are prolonging their problem. They are conflating “need” with “want” in a vain attempt to preserve a supply-chain based lifestyle after the supply chain is broken.

I say, live your supply-chain based lifestyle closer to the human natural state. Minimal possessions. Minimal needs. Minimal wants.

Such a prescription is a preservative against supply-chain based stressors and an easy transition to a post-supply-chain based world, should that come to pass.

It’s much like the old joke:

Two campers see a bear in the distance. One starts putting on his running shoes. The other says, “What are you doing that for? You can’t outrun a bear.”

The first replies, “I don’t have to outrun the bear, I just have to outrun you.”

These are just my opinions. I’m not a financial advisor, this isn’t financial advice, and always DYOR. Following any of these ideas might cause you to lose all of your money. I am 100% serious about that. I like tinkering with this stuff, but I’m on record acting like a total baboon. Invest accordingly.

Until next time, be safe, be smart and be sure to tie the camel.