Real Estate Investor Magazine South Africa February 2016 | Page 19

7

Proven Ways to avoid
permanent Meltdown in a

Global Crash

I

n the event of a global stock market crash, all the
basic rules of personal finance still apply. Continue
eliminating debt, budgeting, saving and investing
as normal. Make sure you have an emergency saving
funds and the ability to cover basic expenses for six
months or more

1

Review your portfolio.

If you haven’t done so in a while, take a look at the
stocks in your portfolio. Make sure the companies
are still operating at a high level. If you own Perpetual
Dividend Raisers – stocks that raise their dividend
every year – examine when the company last raised
its dividend. If the company is continuing its streak of
annual dividend raises, generally speaking, you should
be fine for the long term. Invest when you have money,
not according to how the market is doing

2

Diversify your income

Your income is the most essential part of your
finances. Without it, everything else runs dry.
That’s why experiencing a job loss, or even reduction in
income, can be so damaging to a household’s finances.
When recessions strike, many people see their income
shut off, in many cases because they are laid off or fired.
One way to keep the finance flowing is to diversify your
income. That may mean having a second job, or even
starting a side business. The goal here is to find ways to
have money coming into your accounts from multiple
directions, so that when one stream runs dry, you’re not
left in a bad position.
Allocate your investments wisely. One great way to
lock in investment values, which you can’t afford to
lose, is to put them in stable bond markets. A good rule
of thumb is to make your bond allocation percentage
the same as your age (e.g., if you are 32 years old,
allocate for 68 percent stocks and 32 percent bonds).
Assuming a normal lifespan, you’ll have time to recover
your losses in the stock market, with the assurance that
your bond investments are high and dry.

www.reimag.co.za

3

Make yourself indispensible

Your ultimate goal as a worker, business owner,
or anything else, is to make yourself absolutely
vital to any given operation. If you and your skill set are
absolutely essential, and irreplaceable, then you have a
built-in defense mechanism against what’s happening
in the economy overall.
This may mean going back to school, learning new
skills or simply become an expert at what you do. Either
way, you’re increasing your market value as a worker,
and making yourself even more difficult