April 27, 2016
Translated by Kristina Kharlova
How to overcome the crisis. 12 immutable commandments from Mikhail Delyagin
Mikhail Gennadyevich Delyagin is a Russian author, politician and economist, former presidential adviser. Director of the Institute of Globalization Issues (IPROG) and former chairman of the ideological council of the Rodina political party.
We are educated by past crises. The default of 1998, the plunge of 2008, and little noticed by most banking crises of 1995 and 2004 unfolded according to the same pattern: a sharp, almost instantaneous deterioration, from two to six months, and long gradual recovery.
And now we are expecting the same.
We have been waiting for improvement, and it hasn’t come.
It is time to understand: it will not come.
We entered another crisis. The standard of living of the majority, as evidenced by consumer behavior, began to decline in the summer of 2013. Capital flight and devaluation started in January 2014, with high oil prices and Yanukovych in Kiev. It’s not a blow – it is a slow strangulation by corruption and monopolism.
And it’s here to stay for a long time.
In order not to go crazy and not lose too much, we should firmly know some very simple rules, which when faced with daily adversities we tend to forget.
So let me remind you.
1. The crisis is a loss of money. Back in 2008, not loved by me Gref [Minister of Economics and Trade of Russia from May 2000 to September 2007, currently the CEO and Chairman of the Executive Board of the largest Russian bank Sberbank – FR], annoyed by stories that “crisis is an opportunity”, explained: Yes, opportunity. But for the majority it is the same as in a collision with a concrete wall: two weeks in a cast. Therefore, you will lose, and that’s normal, and your goal is to minimize losses.
2. The twentieth century was brutal and smart. Research has shown that in camps, prisons and crisis optimists died first — those who expect that the troubles will soon be over. Survived — and eventually overcame the crisis – the pessimists, accepting the hard times as the new normal established for a long time, to which we must adapt and in which we must survive, if we cannot change it.
And the current crisis is here to stay.
3. Hurry slowly. No fuss, think over your business and your steps, think about plans “B” and “C”: act quickly to achieve your plans, with all means and without hesitation, and carefully analyze the situation and consider other options. Draw a plan for a week or a month: it helps. Remember the commandment of pilots and air traffic controllers: “Acting fast means to make slow movements without breaks between them”.
4. Psychological hygiene is as important as personal. Panic is worse then losses: no wonder for panic at war they shot without trial. Jealousy, hatred, anger are unacceptable, as it destroys your body, and despair kills more surely than a gun. They should be avoided like drugs.
Don’t be afraid of change: try to understand that constant change is the current form of stability. And if you are not able to understand it — just take it for a fact.
5. Strengthen social ties.
“Don’t have a hundred rubles, but have a hundred friends: the money can be taken away, but friends remain.” – that’s what it really means.
Your pension is your children. They must be properly educated to achieve success and become your lifeline and not a stone around your neck, and you should have at least two, so when you become their burden in old age, you don’t brake their back.
Be the backbone of your family: then you will be able to rely on it. Tell your wife and loved ones, when the children get older, how was your day, what you accomplished, and what didn’t go well and why, listen to their stories, and give kind feedback. There is nothing easier in a crisis than to lose the emotional connection with your loved ones — and fall into loneliness. Discussing your problems, you discipline yourself, and eventually will start finding unexpected solutions; discussing the problems of family members, at least, will broaden the horizon, and most importantly — will save the respect of the family even in the event of life’s failures.
Do not count the sheep before sleep — draw conclusions, identify the causes of failures and success, and build plans. You’ll sleep less, but deeper.
6. Save money. Record expenses and analyze them at the end of the week and month. Compare prices, utilize sales and Internet shopping, analyze price vs. quality. Think why you need each product, do not buy for no reason. Before going to the store make a shopping list. In supermarkets beware of products at face level and those next to sales, they are usually overpriced and cheap goods are located at ‘uncomfortable’ height. Try to pay cash: paying with a card, you do not feel the parting with money and spend more.
Don’t forget to relax and have fun (even if just playing with kids), make time for happy family celebrations (even if free or cheap): without it you will go crazy.
Lead a healthy lifestyle, eat balanced meals, walk in the fresh air, engage in physical activity, do not skimp on food and health – or it will cost you more in the end!
7. Type of savings, if any, depends on the time frame. Until November, you can keep money in rubles. Past this time – in foreign currency, better in dollars on deposit in a state bank (or, at least, in a major bank with top ten assets). If you hold it in other banks — split the deposits so that even after the devaluation of the ruble by 50% each does not exceed the amount insured by the state. Foreign currencies, except the dollar and the euro, are less liquid: they should be considered if you won’t need your savings suddenly. Gold is for 5 years and more.
Real estate in a crisis is a liability, and not an asset; the purchase of unnecessary appliances is a loss of money, securities — “Russian roulette”.
If you want to speculate with money — establish the minimum, including the necessities, that your family spends in six months in foreign currency, increase this amount by 30%, add the necessary expenses for the next year (for medical treatment, education, repairs, etc.).
This is your required reserve: you can speculate with the rest.
8. For now the crisis is not too severe to stock up. But the range of products has been already reduced and if you need rare drugs – stock up subject to expiration date. This also applies to imports: a new round of devaluation will raise the price of imports, and it makes sense to stock up until the end of October.
You need to stock up if you live in a small village with one or two stores. But, then I guess you have it already.
9. Hold on to your job: in a crisis, permanent income is more important than its amount. Even large savings are eaten away surprisingly quickly, but work keeps you in shape and afloat, even if revenues fall. Often lay-offs are carried out callously, forcing people to leave themselves: hold on until you find the ‘alternate airfield’. Know your rights, but try to defend them properly, without becoming an enemy even of insensitive management.
10. If you’re going to “flee Rashka” [Russia – FR], remember: you are paying for the safety and comfort of your children not only with your fate (you will at least endure a long culture shock from immersion in a different language environment), but also the fact that they will lose the right to change the rules of their society. Not because they are immigrants, but because even the citizens of developed countries forgot about this right themselves.
Try not to buy a ticket for “Titanic” (as Muscovites, who left for Kiev in 2000’s, as immigrants from the Soviet Union, who found themselves in Germany near refugee camps). Remember about the vulnerability of downshifting at the expense of tourists or renting a Russian apartment.
Explore the real and not the advertised rules of life in the country where you are going not to end up in a bad neighborhood, not to lose a child for slapping him on the street, not to report to police for taking a shower after 10 pm and know that calling the police if you don’t know who robbed you, may cost you.
11. Going to trust the government? Go to the cemetery: stay in the company of others like you. If you do not want to hurry — think for yourself. Until a government starts to invest in the country, teach and treat children, jail thieves, trust in it is fraught with losses.
12. Finally, most importantly: do what you can change right now, without delay: ‘later’ will not come. Don’t worry about what you cannot change: you don’t punch the wall because of cold weather but look for warm clothes. And constantly, like children, test the world: as crisis unfolds the scope of your possibilities will expand, and what’s impossible yesterday can easily become available tomorrow.
And don’t you dare feel sorry for yourself: it’s the most despicable way to commit suicide.
Our not so distant ancestors survived several waves of famine at the end of the reign of Nicholas II, First World War and Civil war. Our forefathers endured ruin, industrialization, collectivization, “the great purge”, the Great Patriotic war, post-war famine and repressions. Our parents resisted the fear of the KGB and the “timelessness” that “infused us with vodka.” And we ourselves survived the 90’s — except those who sincerely love this happy and carefree time, because that’s when they learned to walk and talk. Among us live the heroes of Afghan, the two Chechen and the darkness of undeclared wars.
Against this background — against the backdrop of our own family histories — our troubles seem somehow insignificant, don’t you think?
Yes, of course, “a nail in my boot is more horrible than Goethe’s fantasy”: this is my boot, not of the old German.
Yes, of course, the return of poverty is terrible. And systemic crisis into which we are pushed by the liberal servants of global monopolies and just thieves, scares us absolutely righteously: it will be dark and scary.
But that doesn’t mean that we won’t win.
We just have to prepare for victory today.
Overcoming the crisis with the tools at hand.
And enjoying life, because without it we cannot win.