How to protect yourself from the financial crisis

Have the desire to be strong and able to maintain balance in difficult times - it's natural. Experts believe that it is enough to identify in advance the likely causes of the crisis, as well as the reasonable approach to spending.

1. Find out the cause of the collapse of the private economy

You agree that any problem can be solved at the expense of understanding the true reasons for its occurrence. American billionaire Ray Dalio has led a very good explanation of the financial crisis: credit for doing useless things cyclical economic development, as a result of decline in living standards is inevitable.

How does it look in practice? Consider the example of a fictional character named Fyodor, which employs low-level manager in a large corporation.

Fyodor has a certain productivity and spends all his money on the acquisition of material goods. Nevertheless Fyodor wants to increase their consumption, improve standard of living. Natural way - is to increase personal productivity (promotion, work overtime), But instead Fyodor takes a loan and buying a new car.

Fedi consumption increased, but productivity and incomes have remained the same. As a result, the personal character of the economic system is collapsing, though he does not notice. What is the reason? The disparity of consumption and production sizes.

If Fedi economy could be reflected graphically in the time of purchase was a sharp jump up, and then schedule fell further down. Fyodor lowered the standard of living of the loan payment period.

Now imagine millions of these characters who carelessly wasting money. As a result, we see entire nations who live on credit, leading to a situation of default.

2. Adopt measures for the recovery

in security, you only, if you can lose the state, does not suffer additional humiliation on that now you have to lead a modest life.

Nassim Nicholas Taleb, an American economist and stock trader

Once the likely causes of the crisis in your budget are identified, it is time to move on to take decisive action. At a minimum, try to strengthen its economy, once again postponing the available funds rather than spend it on something that is not too necessary.

Be prepared for the fact that in a country every 5-10 years will be a crisis. Such a cycle is marked by economists. Therefore, strictly observe budgetary discipline and pay one's wayNot allowing yourself to get into more debt.

Finally

Finally - the three most important anti-crisis rules of Ray Dalio:

• do not let the debt grow faster than revenues;
• do not allow earnings to grow faster than productivity;
• do everything possible to raise productivity, as in the long term, the most important thing.