How Diversified Income Sources Helps Economic Collapse Preparation

In this series, you will look at what life is like for a family man living in a social and economic collapse. The writer of these posts is a middle-class Venezuelan, in a country which has the world’s highest inflation rate at more than 4000%. Venezuela is an economic collapse nightmare with extreme shortages of food, riots severe hunger, a crippled economy, crumbling infrastructure, collapsed healthcare system, and a failing government.

The Venezuelan economic collapse has escalated to a breakdown in social order, putting Venezuela at the top of Latin America’s most homicidal nations. The rate of Venezuelans murdered is now 20 times that of the US.

In this post, the Venezuelan Prepper speaks of his economic collapse preparation.

When I was an oil state company worker in South America, and I found out I was going to be a father for the second time in my life, I started to be concerned about the possible things that could go wrong for my family in the area I live in. It the risk of unexpected events, and potential financial and political concerns that drove me to start researching what is now my source of information, the prepper community.

It was in this research that he found there was a global movement of people from different parts of the world that were in the same line of thinking about being prepared.

The most important economic collapse preparation I did was…

One of the most important activities that I immediately started to look for, was an extra income source. When you’re looking down the barrel of a financial collapse, nothing is more important that diversifying your income.

With my salary before our country collapsed our living standards were reasonably good. However, once I checked how badly prepared our household was for a turmoil situation (back then, the official propaganda was a US invasion, because of our oil, gold, titanium, iron, gas deposits, water, etc.). This drove me to look for some other income sources, to get some equipment and stock our pantry.

Food was plenty, and we could afford to have a 5-6 month supply with some time after designing a proper budget. I found a wonderful online job that allowed us to buy some of the equipment via online shopping, like high power LED bulbs, flashlights, and some radios and tools for my CNC equipment. All of this would build the foundation for my economic collapse preparation.

With the money I put aside, I could save enough for my CNC equipment, and even though it was expensive, this machine served a number of useful purposes:

  • To earn some income on the side with some ornamental furniture
  • The possibility to machine some replacement parts for devices as laundry machines perhaps
  • To create car parts, like gears, and all kind of parts with a diversity of materials: plastic, aluminum, copper, wood

Another home based business I started after visualizing a potential business was selling cheese from my native state, which was 600 kilometers away from my location, and where I would go once a month to check up my parents.

Getting creative with possible revenue raisers

We have a long tradition since colony times regarding cheese from the pasture lands. It is a variety of cheese, not pasteurized, and has to be consumed fresh. It is very appreciated as a basic staple, because you can add it to your “arepas” (cornbread made in a pan) with butter, and it is now considered a deluxe staple, because of the decreasing of the milk production in Venezuela.

I had a friend with a farm who produced lots of this cheese, so I invested in 45 kgs, that my brother who worked in a restaurant those days and was licensed to manipulate foods, kindly divided in one kg. pieces, and wrapped them in plastic with a foam dish underneath, just like the cheese you buy in the supermarket. I provided the added value to bring the staples to our workplace, and within one day I had sold everything to neighbors and coworkers. It was good quality too because the cheese made locally dripped a lot of the excess of salt water it was mixed with, just to add weight, and delivered right at your doorstep, and under the price of the cheese commercially sold.

With that extra money from cheese I could buy two extra set of tires for my spare vehicle parts stash, oil changes, and an additional freezer (very much needed), a second refrigerator, the generator, electrical tools, plumbing parts and other essentials.

The time I invested into doing this extra job was not a lot, just driving to my parent’s place and back two days later, and with my wife taking turns to the wheel it was an easy, enjoyable trip, that would put money in my pocket the next day.

So I would save my online job income (in foreign currency), I would use the cheese sales income for my preparations, and my salary for daily expenses. As a result of my financial collapse preparations, I was able to give my family a safety net, which has been enough for getting us throughout the recent harsh times for almost three years.

As you can see, with the rate of Venezuela’s inflation in 2015, diversification of revenue was increasingly important.

After the company I was working for was affected by the Venezuelan recession and had to set free some of the writers, the economy started to sink and the CNC business that required a lot of time and knowledge, could not even start because people would not buy the products. Instead, people were focussed on buying medicine and food as their primary, and only, objective.

That, and the power started to fail on a regular basis, mostly in weekends, which were the days I could machine some parts. At that point, seeing that my salary was not enough for a week worth of food, we decided to use the remaining of the savings for me to get out of Venezuela and work a foreign job.

I bought all of this thanks to my side jobs, when my main job collapsed

But nothing of this would have been possible without those extra income sources I built during my economic collapse preparation. I would have to start selling, in a tanked, collapsed economy, with people stabbing each other’s back, all the gear that took me years to put together for my home business.

With those extra income streams of money, from the side jobs I had founded myself, I was able to:

  • Pick up a couple of handheld used HAM radios
  • Get a nice TV
  • Acquire a large monitor used for the design of the parts to be machined
  • Get an extra spare laptop,
  • Keep the air conditioning in top form with two good cleanings yearly
  • Keep my bike serviced with good quality oil and a lithium-phosphor ion battery (it was our secondary vehicle)
  • Keep our SUV in top condition as well
  • Get a good 1500 liter tank
  • Provide protection for our windows, doors, lots of other small stuff would have not been possible just with my salary.

Cutting down on expenses and becoming more self-reliant

Venezuelans make bags out of their currency as its value becomes almost worthless.

The approach I took to build my economic collapse preparation allowed my older son to be a car mechanic, and he was able to pay himself most of his instrumentation career in a private institute. We did not save money in our main recreational activity, but re-sized and gave a new dimension to it with activities such as the beach and going to the movies.

But instead of going to an all-inclusive resort as we did sometimes, we would rent a small apartment, cook by ourselves (Italians love to cook and drink meanwhile) as a team, and the big boy would even go fishing for our lunch from the nearby deck. Instead of buying candies and stuff before going to the theater, we just got a real massive lunch, and perhaps with a small cup of popcorn for each and some water and we were done.

The owner of the apartment would give us the WiFi key, not included in the price, but for two or three weeks he would be happy to do it, and that was great. I would usually keep writing while everyone else was sleeping which I did not consider a job and instead was another recreational activity that I was getting paid for.

But above all of that, and something very important: that money was safe. In Venezuela, one of the causes of such a nasty economic collapse has been the government seizing our right to wealth with the currency exchange control. All the money I could get was sound and safe in foreign accounts. It was not too much, but it was there as a way to be able to navigate the worst of the collapse. This foreign money was linked to my payment service accounts, I could use it wisely to buy dried goods online and ship to Venezuela by the bucket, one at a time, in the worst of the scarcity and sell small amounts online to some well-known merchants, desperate to get foreign currency to keep their business barely floating.

I could even get some foreign currency in cash I brought in with me from a couple of trips, something that is not possible these days. The National Guard steals the money from the people trying to get out in customs, or getting in. They will not be sanctioned, because the government does not care about that, and people insist on not taking some basic precautions, like taking a picture of their IDs with the serial number of the money clearly exposed, upload it to a secure cloud, and getting this information to the police of the country they go to, so INTERPOL can track the stolen money.

Two Steps To Ensure Your Economic Collapse Preparedness:

1. Savings in a safe place is paramount

If I can give any advice to financial collapse preppers out there, it would be to get your savings in a safe place. In Venezuela, we have the possibility to open accounts in USDs, sure. But we could not go to the bank and get them out of there. They would give us national currency, at a price much lower rate than the black market: 10 units (our Bolivar) per dolar. The rate on the black market (controlled as well by dirty operators linked to the government) is 195.000 units per dolar.

If you needed to escape out of the country in a hurry, a conflict of some kind, it was possible the government would lock out all the accounts in foreign currency, just because. And we would be stranded in a foreign country, with a small child, jobless, and no money.

2. Diversify and distribute your income

Diversifying the income, and distributing the money in the accounts you believe you may need, and even your means to receive money is crucial. In an economy like this, I believe that keeping the 20% of the monthly income in silver would have worked, but Venezuela is not a place where preppers and people concerned about taking the direction of their own future are plentiful, so a trading network would have been pretty difficult to set up.

However we have been able to do it somehow, but depending on the traffickers, though. No big deal, as our main income now is in currency and the assistance you kindly have been sending out.

Having health insurance is important, especially if you have small kids. It is a good idea to keep your paperwork updated, such as car papers, bike, house, land, taxes, basically everything.

Final thoughts on preparing for an economic collapse

Diversification of income and revenue is key.

I was fortunate enough to get extra income in a funny, entertaining way as a financial writer for a Forex blog. It allowed me to earn money in very creative ways, and it was extremely important to get the basic gear to sort out some little annoying economic collapse inconveniences such as no power, no water, job loss, and similar stuff without affecting at all our household expenses and our once decent lifestyle.

Getting the money in a safe place, and several ways to use it was another excellent idea for peace of mind. You may try whatever you feel you may need for extra income, and direct that for your prepping. But if you hesitate, please stop doing it, and do what you need to do to get it and increase your prepping level.

It is these things that have saved my family. The impact for us has not been as hard as it has been for the rest of the people in post-economic collapse Venezuela. I know most of my coworkers are taking a beating. This is because they did not prep when they should have, or when they still could.

Thank you again for your donations, the building up of the funds have been a little slow because I have to send some money home (and help my elderly parents too as you may understand) and this week I am looking for buying a couple of mattresses and a fan.

Yes, we are starting again. Not so young this time (much wiser, thanks God), in a foreign country, 5000 kms away from my loved country, with a small child to take care of this time.

Putting aside all sad stuff, what an exciting adventure life is, don´t you think?.

Stay safe, and God bless you all!.

1 Comment

  1. Donovan

    March 22, 2018 at 3:16 am

    There is a place in the World where this is playing out right before our eyes. Venezuela. There is lots of demand in Venezuela. Demand for basic food items and necessities like a$$ wipe papers. Yet despite all that demand, the Venezuelan economy has been contracting. The Maduro government can hand out fists full of dollars to people to “boost demand, yet it would make precisely zero difference. It”s not money the Venezuelans need, it”s production. In fact, Chavez and Maduro did indeed effectively hand out fists full of dollars early in the piece. They robbed the private sector and handed out free $hit to people. That “stimulus didn”t boost the economy, it destroyed it. There was lots of demand in the former USSR. People needed and wanted cars, white goods, housing etc. But none of that demand helped the Soviet economy because the Soviet production was fvcked. History is littered with evidence that boosting demand doesn”t help the economy, yet the economists of today like that wanker Krugman keep preaching it. It”s like the modern day socialists and Marxists. Despite endless evidence that the ideology is evil, countless millions of people especially mouldy smelling professors still crave it.

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