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A reader agrees with her husband: A recession is coming. They don't agree on what to do about it.

Question: My husband and I have read many articles by you and other experts that predict a recession is coming soon. We’re very scared about this, as we barely survived the last recession. We still haven’t paid off all the debts we incurred during that time period.

My husband read this article on the Fox Business website and wants to invest in silver stocks. He wants to divert the $50 a month we put into an IRA we have for retirement. This doesn’t feel right, but I can’t explain why it feels wrong. What do you think?

— Regina in Texas

Howard Dvorkin CPA answers…

When I originally wrote we’ll suffer another recession during President Trump’s first four years, I was worried. I wanted Americans like you, Regina, to know what might be coming — and get ready for it. However, I didn’t want to cause panic or even angst.

I have a formula: Preparation plus time equals inner peace.

So you can indeed prep for the next recession, but you don’t need to take hasty risks like investing in precious metals. Only a few months ago, I told another husband not to buy gold on his credit card. Now I’m telling your husband not to stop saving for retirement to buy silver.

What I wrote about gold also applies to silver or any metal: Prices fluctuate wildly, they’re impossible to predict, and you can lose your entire investment if you’re not careful.

Even worse, you seem to imply, Regina, that you still have credit card debt that you’ve been carrying since the last recession. Your first priority should be paying that off. If your husband is unconvinced, tell him to think about it this way…

  • Silver has a 16 percent annual rate of return, although that can fly in either direction at any given time. You might make 200 percent, or you might lose 100 percent.
  • The average interest rate on a credit card for someone with good credit is around 15 percent. It balloons to 21 percent for those with fair credit. It sounds like you might be somewhere in the middle, Regina.

…so paying off your credit cards will put just as much money in your pocket as investing in silver, and without the risk.

Investing in the stock market is something you should only do when you have money you don’t desperately need. Even then, it’s folly to buy individual stocks or even stock funds that are invested so narrowly in industries you and your husband know nothing about.

If you really want to prepare for the next recession, Debt.com has a special report that shows how Americans recession-proof their finances. Unlike that Fox Business story your husband showed you, Regina — which ended with a pitch to separate you from your money — the Debt.com report is free.

Have a debt question? Can’t find what you need to know? We can! Submit any debt or finance question you have, and we’ll tap a pro who will respond as quickly as possible.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC