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    • Robsta1973
    • By Robsta1973 14th Mar 18, 11:15 PM
    • 8Posts
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    Robsta1973
    Preparing for an economic collapse
    • #1
    • 14th Mar 18, 11:15 PM
    Preparing for an economic collapse 14th Mar 18 at 11:15 PM
    Hi
    I realise this will probably seem a stupid question to some of you. Howevwr I am just after a bit of advice please. I havw seen on a lot of website that people are expecting an economic crash within the next few years. I have About £23000 in savings which is the deposit for a mortgage. I was wondering whether I would be better keeping the money in cash, keeping it in my bank account and ISA, trying to buy a house beforehand. Or do something else such as buy gold or silver etc. Thanks in advance for any replies.
    Rob
Page 1
    • AnotherJoe
    • By AnotherJoe 14th Mar 18, 11:18 PM
    • 9,426 Posts
    • 10,425 Thanks
    AnotherJoe
    • #2
    • 14th Mar 18, 11:18 PM
    • #2
    • 14th Mar 18, 11:18 PM
    Buy baked beans, bottled water and a shotgun.

    can you eat gold?
    • tacpot12
    • By tacpot12 15th Mar 18, 1:04 AM
    • 913 Posts
    • 777 Thanks
    tacpot12
    • #3
    • 15th Mar 18, 1:04 AM
    • #3
    • 15th Mar 18, 1:04 AM
    Keep it in cash at a bank. If a crash is coming, buying a property asap would be the worst thing to do.
    • dunstonh
    • By dunstonh 15th Mar 18, 1:30 AM
    • 92,643 Posts
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    dunstonh
    • #4
    • 15th Mar 18, 1:30 AM
    • #4
    • 15th Mar 18, 1:30 AM
    . I havw seen on a lot of website that people are expecting an economic crash within the next few years.
    You mean like all the other crashes that have occurred before and will keep occurring?

    Its a bit like a website saying that 3pm will happen again soon. Or its going to rain this year.

    Do you mind me asking how old you are? I suspect your age is behind your worrying.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • badmemory
    • By badmemory 15th Mar 18, 2:09 AM
    • 1,623 Posts
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    badmemory
    • #5
    • 15th Mar 18, 2:09 AM
    • #5
    • 15th Mar 18, 2:09 AM
    There are people STILL in negative equity from the crash 10 years ago & ones still paying for the property crash almost 30 years ago. Buy a property if you want somewhere to live/own the roof over your head & not have to pay dead money in rent but not to preserve your savings. After all your savings may be protected from a crash, the value of your house would not (but then you would still have a roof over your head).
    • WobblyDog
    • By WobblyDog 15th Mar 18, 6:13 AM
    • 464 Posts
    • 292 Thanks
    WobblyDog
    • #6
    • 15th Mar 18, 6:13 AM
    • #6
    • 15th Mar 18, 6:13 AM
    Crashes of all kinds are inevitable but unpredictable. Although I do spend some time on the HousePriceCrash website, I still think that buying a house to live in is likely to be a good long term investment. Governments know that falling house prices and negative equity make a lot of voters unhappy, and take measures to help and protect those affected. I'm pretty sure the government will not take action to help people who have lost money due to falling shares prices or gold prices.
    • Alexland
    • By Alexland 15th Mar 18, 6:49 AM
    • 2,389 Posts
    • 1,790 Thanks
    Alexland
    • #7
    • 15th Mar 18, 6:49 AM
    • #7
    • 15th Mar 18, 6:49 AM
    Maybe keep plenty of fresh petrol for the flamethrower? The cash might be useful to burn to keep warm. There are always websites predicting most scenarios - if you believed all negative possibilities then you wouldn't get up in the morning and your life would have been wasted.
    • AlanP
    • By AlanP 15th Mar 18, 8:49 AM
    • 1,182 Posts
    • 851 Thanks
    AlanP
    • #8
    • 15th Mar 18, 8:49 AM
    • #8
    • 15th Mar 18, 8:49 AM
    Crashes come and crashes go.

    Ignoring economic predictions what is the timescale and plan for those savings?

    If it is to buy a property within the next 5 years for example then keeping it in CASH makes good sense as you don't need to take the risk that there is a stock market crash within 5 years.

    If it is for retirement in 30 years time (which I know isn't the situation here) then keeping it INVESTED makes good sense as the risk that inflation will erode its real value is higher than the risk posed by a stock market crash as there would be time for markets to regain the ground lost and move upwards.
    • Malthusian
    • By Malthusian 15th Mar 18, 9:23 AM
    • 4,113 Posts
    • 6,449 Thanks
    Malthusian
    • #9
    • 15th Mar 18, 9:23 AM
    • #9
    • 15th Mar 18, 9:23 AM
    I havw seen on a lot of website that people are expecting an economic crash within the next few years.
    Originally posted by Robsta1973
    And they will almost certainly have been predicting an economic crash since 2010. They'll get it right eventually.

    I have About £23000 in savings which is the deposit for a mortgage.
    When do you plan on buying a house? This question determines the answer to "what you should do with the money", not when Mystic Meg thinks the next inevitable crash will come.
    • Robsta1973
    • By Robsta1973 15th Mar 18, 3:06 PM
    • 8 Posts
    • 0 Thanks
    Robsta1973
    Thanks to those that have tried to offer help. While some people may think I am stupid and suggested baked beans and petrol etc. I have saved the money over the past 4 years and as a lot of people will appreciate it isn!!!8217;t easy at the moment. So naturally I just want to secure the savings I have until I can find a house. Hopefully within the next year. I just didn!!!8217;t know whether to keep the money with Lloyds Bank or take the money out and keep it in a safe place. I suppose from seeing all the people stood waiting at Northern Rock the last time. I wasn!!!8217;t sure if buying a house would just set me up to fail should a financial crisis start sooner than later. Rob
    • dunstonh
    • By dunstonh 15th Mar 18, 3:26 PM
    • 92,643 Posts
    • 59,963 Thanks
    dunstonh
    I have saved the money over the past 4 years and as a lot of people will appreciate it isn!!!8217;t easy at the moment.
    It not being easy is just an excuse to make millennials feel sorry for themselves and make them feel special. It has never been easy. Doesn't matter what generation you are talking about.


    I just didn!!!8217;t know whether to keep the money with Lloyds Bank or take the money out and keep it in a safe place
    And what would that safe place be? Burglar proof? Fire proof?

    I suppose from seeing all the people stood waiting at Northern Rock the last time. I wasn!!!8217;t sure if buying a house would just set me up to fail should a financial crisis start sooner than later.
    And how many people with Northern rock lost money? none.

    NR caused its own failure but the media created the hysteria and the lemmings queued up. Even after the Govt said deposits would be protected. And now, retail banks are ring-fenced.

    I wasn!!!8217;t sure if buying a house would just set me up to fail should a financial crisis start sooner than later.
    On a typical 25 year mortgage you will likely see around 4-5 crashes, 2-3 recessions, and 4 financial crisis. You know they are coming. And will come again and again.

    This is the point we are making about you worrying unnecessarily. It's normal. Yes, the media over the last 10-15 years has become increasingly sensationalist and has dumbed down significantly. However, you have to be able to look past that.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Malthusian
    • By Malthusian 15th Mar 18, 3:47 PM
    • 4,113 Posts
    • 6,449 Thanks
    Malthusian
    I suppose from seeing all the people stood waiting at Northern Rock the last time.
    Originally posted by Robsta1973
    As Dunstonh suggests, what happened to Northern Rock should give you extreme peace of mind, given that not a single depositor in Northern Rock lost any money.

    I wasn't sure if buying a house would just set me up to fail should a financial crisis start sooner than later.
    I can't see how. Presumably you are planning on living in it?

    The reason people are being glib and talking about baked beans and shotguns is because your post conflates two completely different scenarios: an economic collapse (which is what happened in Venezuela and Zimbabwe and is exceptionally rare) or an economic crash (which is a normal part of the economic cycle, and happens at irregular intervals - the last being in 2008 - without necessarily causing any lasting ill effects to individuals).

    You seem to want to know about a crash but you can't blame people for talking about what to do to protect yourself against a collapse when the thread title is "Preparing for an economic collapse".
    • Robsta1973
    • By Robsta1973 15th Mar 18, 3:51 PM
    • 8 Posts
    • 0 Thanks
    Robsta1973
    I wasnít trying to feel sorry for myself or trying to make other people look worse I am not that type of person. I donít understand enough about investments etc so thought I would ask the opinion or advice of people on here because I thought it was a Forum to ask questions.
    Rob
    • TBC15
    • By TBC15 15th Mar 18, 4:08 PM
    • 466 Posts
    • 240 Thanks
    TBC15
    I wasnít trying to feel sorry for myself or trying to make other people look worse I am not that type of person. I donít understand enough about investments etc so thought I would ask the opinion or advice of people on here because I thought it was a Forum to ask questions.
    Rob
    Originally posted by Robsta1973
    A few personal/financial details may help with guidance. Goals, risk tolerance etc. Roof over your head is probably first place to start.
    • dividendhero
    • By dividendhero 15th Mar 18, 5:20 PM
    • 201 Posts
    • 180 Thanks
    dividendhero
    Buy baked beans, bottled water and a shotgun.

    can you eat gold?
    Originally posted by AnotherJoe
    What, no ammo?
    • TBC15
    • By TBC15 15th Mar 18, 5:31 PM
    • 466 Posts
    • 240 Thanks
    TBC15
    What, no ammo?
    Originally posted by dividendhero
    Typical split is food, fuel and ammo in equal proportions. However this is based on US philosophy.

    Considering the chap in charge, probably sound advice.
    • kidmugsy
    • By kidmugsy 15th Mar 18, 5:38 PM
    • 10,562 Posts
    • 7,233 Thanks
    kidmugsy
    I'd have thought that you can do a few things that would defend you from two sorts of calamities, namely (i) disruption of supply chains, (ii) inflation of, say, 1970s level.

    A stock of tinned food, bog rolls, and kitchen foil might be wise. Buy a camping stove and plenty of bottled gas for it. And keep your mouth shut on the topic lest someone else fancies relieving you of your possessions.

    For soaring inflation there may be a case for keeping some gold sovereigns and some low-carat, second-hand, gold jewellery.
    Free the dunston one next time too.
    • Alexland
    • By Alexland 15th Mar 18, 5:43 PM
    • 2,389 Posts
    • 1,790 Thanks
    Alexland
    NR caused its own failure but the media created the hysteria and the lemmings queued up. Even after the Govt said deposits would be protected.
    Originally posted by dunstonh
    I didn't have a Northern Rock account but somehow it felt like I was missing out by not queuing. I enjoy good run on a bank. Seen too many repeats of Mary Poppins in my childhood
    • capital0ne
    • By capital0ne 15th Mar 18, 6:41 PM
    • 477 Posts
    • 236 Thanks
    capital0ne
    I have About £23000 in savings which is the deposit for a mortgage. I was wondering whether I would be better keeping the money in cash,
    Rob
    Originally posted by Robsta1973
    Actually, although £23k may seem a lt and probably took a long time to accumulate, it's not that much really.
    If there is no crash and things remain the same in five years your £23k will only have buying power of £19.75k.

    Each year you lose £700+ so work on that.
    • LHW99
    • By LHW99 15th Mar 18, 10:45 PM
    • 1,285 Posts
    • 1,180 Thanks
    LHW99
    £23k is well within the 'safe' amount to have with a single institution (currently £85k I think), so as said above you wouldn't lose out because provided you bank is registered under that EU-wide scheme you would get the money back (possibly after a bit of a wait) in full.
    You time-scale of around 1 year means investments are not a good idea, as there could have been a bit of a dip just when you want to use the money (markets are always having 'a bit of a dip', and sometimes 'a bit of a rise', and occasionally a big jump either way).
    Gold (coins / bars) is a very poor investment on the whole because you pay more than the actual value of the metal to get it, and in a short time probably wouldn't get it back.
    Keep to things like UK banks, building societies or NS&I and although you may not get much interest (but try looking at interest paying current accounts or regular savers) for one year you should be able to sleep OK because 3% inflation wouldn't really have much time to affect the buying power of what you have.
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