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Comment by truebosko | Hacker News Reader

This is kind of on topic but I was listening to a podcast earlier this week and one piece of advice given was:

If you are part of a small company, or if you have a growing small startup/business, this is the time to grow. The big guys are going to be hurting by the downturn in the economy. Get your product out there, stabilize it, and use these years to get a level of safety for it.

As for your assets. Like others said, reduce your debts, keep saving as you are now and you will be fine. If most of your assets are in ACTUAL CASH (i.e: money stored in a savings account) then you will be fine.

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Having hordes of actual cash won't protect you from inflation if it starts to become a problem. There's a reason gold is trading incredibly high right now.

Oh I understand this, but for most people doing any kind of trading is just out of their league. I'm sure most people will be happy to know the $50k they have in their ING Account will be safe from most things while the economy levels back up again over the years.

I truly hope so. I have $15k to wade through this thing, so I doubt I can last very many years. Luckily I don't have to travel much, so the rising cost of fuel doesn't affect my burn rate terribly. Health insurance is a different story though.

It's not exactly "trading" to keep something like 15% of your savings in physical gold, GLD ETF, or everbank CDs (gold backed interest earning certificates).

How to protect against inflation:

1. Don't stick (too much) cash under a mattress. Avoid long-term bonds (which get killed by inflation).

2. Gold is a great inflation hedge, but is a terrible long-term investment. Other commodities are similar.

3. TIPS (e.g. VISPX) make excellent inflation hedges AND long-term investments.

4. Short-term investments, like money market funds, short-term bonds, and short-term CDs, also generally do well. If people expect 4% inflation, these investments need to pay more than 4% in order to get people's money.

5. Stocks and real estate protect against inflation over long time periods (5-10 years), but not over short periods.

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