On June 3, I referred to the book How to Prosper During the Coming Bad Years by Howard J. Ruff and said the title sounded like it was written today instead of in the 1970s. I have since read this New York Times bestseller, more than 30 years since I last read it. It surprised me at how relevant a book labeled “a crash course in personal and financial survival” remains today. So let’s see what we can learn from a book written in the middle of a period of inflation and stagflation by a man who many considered “a prophet of doom.”
Ruff came from a poor Mormon family, became a self-made millionaire twice, and was a financial analyst who predicted inflation in the 1970s. He published the “Ruff Times” newsletter, which grew to have 150,000 subscribers. (He also had a syndicated TV show. Today, he’d have a blog or YouTube channel.)
Five Ruff Recommendations
The book is more than 370 pages, but it has five specific recommendations, each backed up with a chapter or two. I will focus on these.
Number 1: Store enough food to last for a year. Survival starts here!
Food storage, Ruff says, is necessary to “panic proof your life.” He talks about the long path for food to reach the grocery market shelf and how it depends on a complex system that requires farmers, truckers, labor peace, a reliable credit market, and a functioning financial system. It amazes me that more than 40 years after he pointed out the complexities and potential flaws of our food delivery system, nothing has changed. In fact, it’s gotten worse because more aspects are international, including packaging and raw materials imported from overseas.
In another reflection of current events, he talks about the drought in California from 1975 to 1977, saying water reservoirs were “down to rock bottom.” Sound familiar? It appears there really is nothing new under the sun. We simply have a new generation of people who refused to learn from history and are doomed to repeat its mistakes.
Number 2: Have one-half bag of junk silver coins per person, and, if possible, an equivalent amount in gold coins for your “survival” position.
That’s $500 in face value of U.S. dimes, quarters, half dollars and/or dollars minted before 1965. When he wrote this, a $1,000 bag of junk silver cost $4200. Today, that same bag sells for between $21,000 and $23,000, if you are lucky enough to find someone willing to sell.
Ruff talks about many of the reasons to own precious metals that remain valid today, including “periods of runaway inflation and paper money collapse.”
Number 3: Avoid unsound debt while using sound leverage for safety and profit.
As mortgage rates, car loan interest, and other loan rates grow, this is not only important, this is increasingly pertinent. While I agree with “Neither a lender nor a borrower be,” Ruff is OK with some borrowing. Two of his “basic rules for managing debt in an inflationary spiral” are:
1. Eliminate all “consumer borrowing.” Have no outstanding obligations that you could not meet if your income were cut off due to inflationary or recessionary distortions in the economy. Cut your standard of living or get a second job, if you have to. Your personal security requires it.
2. Use borrowed money only to purchase income-producing investments or this which rare good bets to do well when people are scared and which are basic to human needs…
He also recommends keeping a liquid cash reserve to pay off your debt if your income should be cut off, paying off your home mortgage and never lending money, “except very short term, in the most secure way possible.”
Number 4: Sell (or trade) all big city or suburban real estate and invest in small town income property. Move if possible.
Like many preppers today, he likes small towns because: “Big cities will go broke and taxes, crime, racial and social friction (both real and imagined), etc. will accelerate.” Again, not much seems to have changed. We’re stuck in a “rinse, wash, repeat” cycle.
Number 5: Prepare for price controls and a black market inflationary economy.
Ruff recommends storing the following items for barter: food, seeds, tools for self-sufficiency, tools and spare parts for making repairs, ammunition, and durable clothing, especially warm clothing, shoes and boots. He also suggests common items that will “disappear” from the market, such as soap, motor oil, car parts, and building materials.
Ruff outlines three things governments try to intervene to fight inflation: Outlaw hoarding, implement price controls, and rationing necessities and discusses how to prepare for each. He also predicts currency reform will eventually follow these stages, possibly several waves of currency reform.
This book may have had more influence on me than I realized, because I find it difficult to argue with his advice, and I have echoed parts of it on prior posts on this blog. If you are in pretty good shape for a SHTF emergency, it might well be time to consider some of his suggestions on how to survive economically.
My biggest take away is this: Ruff wrote this book more than a generation ago during the Carter presidency, prior to the fall of the Soviet Union, before the invention of the CD or the IBM PC, when most people still had access to only three to five TV channels. All the technology, automation, rapid communications, and access to news and information via the Internet we have today didn’t exist then. Yet when you look at the fundamental financial problems that challenge us now and then, nothing much has changed. I find that quite damning.
Our elected officials have passed on opportunities to audit or end the Fed, and we still use the same fiat currency that got us in trouble fifty years ago. We didn’t learn our lesson about deficits. We didn’t protect ourselves by becoming energy independent. If anything, the country is worse off today, thanks in a great part to free trade. We make fewer goods in the U.S., and we are more dependent on off-shore suppliers, some of whom are not our friends. Our supply chain is more complex and more likely to fail. Our corporate leaders share some of that blame.
If you find a copy of this book in a used bookstore, buy it. He published an updated version in 2008, but it was not as well received.
Ruff died in 2016 at age 85. He had an interesting and unusual life and seems to have maintained his sense of humor throughout it. His obituary in the New York Times is worth reading and a reminder that when you fail, you can get back up and succeed again in the future.