In fact, the psychological pressure is much greater than the real economic pressure in the crisis.

Although crises exist objectively, we always think there are many crises and "this time is different" to scare ourselves. The biggest crisis we are facing is not the collapse of the market, but the withdrawal from the market in fear.

According to a survey, during the period of the subprime mortgage crisis in 2008, the market fell to its lowest level. About 5% retirement accounts were liquidated all their investments at the bottom of the market.

The market rebounded to new climax in the following years, but these departing investors lost more than half of their accumulated wealth and faced a retirement crisis.

It's an effective way to eliminate psychological pressure. Look at how difficult the economic crisis was in the past and our lives now. In fact, we have survived every time. Once the psychological pressure is eliminated, many problems will be not difficult.

Let's introduce a very useful idea - five layers of margin of safety.

The word "margin of safety" seems to be advanced, but in fact we all use it in our daily life. The accidents encountered while traveling are no less than investments. However, we don't need to predict every accident perfectly to make a complete journey. The method is simple - put more money in your pocket and leave more time on the way.

The first layer: passive income

In general market conditions, this part of income is fully enough to cover living expenses.

The second layer: petty cash

In case of unexpected expenditure or economic downturn, the first layer income will decline, and the second layer will make up for it.

For example, in this epidemic many people have started the petty cash, which is used for living expenses on the one hand, and for marketing investment on the other hand. Risks are also opportunities.

The third layer: social insurance and commercial insurance

It is used to protect against major unexpected expenses as illness.

Don't underestimate the value of social security and insurance. Although it seems that we only pay money but money never return, it is protection for us to face major risks. There are three types of commercial insurance that are just needed: medical treatment, serious illness and life insurance.

The fourth layer: maintain flexible expenditure structure

Let's compare two situations:

A: About 70% of the expenses are housing loans, credit card installments and consumer loans, and the rest is general consumption.

B: The expenditure is the same as that of A, but only 20% of it belongs to rigid expenditure such as housing loan and debt repayment, and the rest is enjoyment expenditure and consumption.

It seems that B's life is wasteful. 80% of his money is spent on food, drink and enjoyment. However, B's anti risk ability is significantly higher than A. Because of unexpected circumstances, B can easily reduce expenses.

The fifth layer: sideline

If you have a sideline, it’s an additional advantage in the crisis.Improve our actual income and anti accident ability by sideline.

The best way to deal with the crisis is not to try to predict, but to set up a sufficient margin of safety and build a system that can bring benefits. The biggest crisis is not from outside, but from ourselves.

（Writer：Hoock）