Making Money During a Depression

Making money during a depression is a challenge, without a doubt, but before we get into ways to make money, perhaps it would be a good idea to consider what things would be in a declining demand, and what things would be on an increasing demand. We should consider what things people need and can't do without, and what things people want and will not do without.nnMaybe making money in a depression would be only a second thought for those who already have money; but, how about protecting your money and preserving the value and the buying power of that money.nnWe will not get into too much of a market/economics model, or talk in terms of high finance; we want to understand just some simple concepts first, that’s all.nnIn 1935, gold was $35USD per ounce, and would buy a good, three-piece men’s suit. Consider this: you’ve got the gold from 1935, and held onto it until today (Jan2009 Gold Price); you also took the $35USD and held it until today. With the $35.00, if you were lucky, today, maybe, you could buy a pocket on that suit. On the other hand, you could sell the gold for about $850 to $900, and you could still buy a good three-piece suit today. Now, Gold? That Is Wealth Preservation! And the USD? That is called loss of buying power, or better known as inflation.nnIf you put your money in the bank today at, say, 1% interest and inflation is running at 10%, or more per year, then you are losing 9% of its buying power; you are paying a high price for protection, or safe keeping of your money. And if you haven't heard of the bank closures and corruption in that industry, then you have been under a log for a few years.nnAsk yourself if the prices of things you buy regularly, are going up, staying the same, or going down? If it has been going down, it was made in China at discounted labor cost, and that is the only reason prices are not out of control.nnOkay, with that little bit of new information, consider now how one can be making money in a depression...nnWhen thinking of making money, perhaps something you might consider, are what kinds of things people need and want, and how you can buy them at wholesale and sell them at a profit?nnEven if you are only thinking of getting a job and don’t want to be in business for yourself, consider this anyway, because, ultimately, if you get a job, you’ll be working for a company, or business, that does this very thing.nnSo, if you have money over and above what you need to live on (even if it is only $50 or $100), the questions you should ask yourself, are “How can I preserve it, and, if I am going to put that money at risk, what is going to be my return on investment or ROI.”n nI feel the best investment of your money, even small amounts, is to put it into your own business, and for a couple main reasons. One, you still have control over it, and you can always do something to ever improve the odds of a fair and healthy return on your investment. Two, you don’t run the risk of losing it by investing it with someone you don’t know.nnAn example of this, is what we see today in hedge funds, where investors are not allowed redemptions, so they can’t even get their money back.nnMaking money in a depression will be possible, and can be very profitable is you keep it simple and logical, and seek advice from others who have more experience in your chosen field of endeavors.nnIn the book How To Survive A Depression MANUAL there is one full chapter dedicated to this question, and another on wealth protection and wealth preservation methods.