NerdWallet: Is it time to become a financial doomsday prepper? Here’s how to cope with looming calamities.

by | Apr 17, 2023 | Stock Market

This article is reprinted by permission from NerdWallet. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Catastrophes are often called “black swan events.” We hear a lot of people worrying these days about such possible flying-off-the-financial-cliff moments: the U.S. government defaulting on its debt, the end of Social Security — AI causing the collapse of the economy. This type of tragic setback is as rare as a raven-colored swan.

I’m not so worried about ChatGPT or Bard being the masterminds of overthrowing humanity; the AI brains can’t even tell you what time it is. (Just try it.) But the other things are a concern. Throw in the possibilities of a recession, a widespread banking crisis or a whole web of worry surrounding geopolitical risk, including Russia/China and Ukraine, then it feels like we’re swimming in a deep pond of black swans.Black swan events: not worth the worry It’s easy to get caught up in the angst and worry about the latest looming calamity. Will Social Security lose its funding? It’s an issue that needs to be addressed, but we’ve been on the brink of a depleted Social Security trust fund before — in the 1970s, again in the ’80s and the ’90s. Basically, the long-term projected balance of the trust fund has been uncertain ever since. It’s a similar scenario with the looming national debt default. Most recently, the U.S. was on the brink in 2011, 2013 and again in 2021. That’s not to say that these financial mishaps won’t happen, or that we won’t endure a calamity that’s not even on our radar. Black swan events, by definition, are impossible to predict. Rather than treading water anxiously on the alert for black swans, worrying about things out of your control and problems you can’t solve, here are some strat …

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