Just about every adult I know is concerned about the economy.

MB, who owns a furniture wholesaling business, is wondering when consumers will start shopping again. “I’m just treading water now,” he says. “But I’m not making any profit. My employees are getting paid, but I’m not.”

PE, a real estate developer, fled the U.S. after his hundred-million-dollar developments went bust. Now he’s building homes in Panama. “I wonder if I’ll ever get back home,” he says.

My sister, a high school teacher, has seen many of her friends lose careers due to budget cutbacks. She wants to know if we are in a “recovery” that will protect her job or if things will get worse next year.

Nobody knows for sure what will happen. And when I’m not sure about the future, my rule is to hope for the best but plan for the worst.

The best we can hope for? A gradually improving economy with full health restored in 5 to 7 years.

The worst? A massive, worldwide Great Recession as long and as deep as the Great Depression.

In this essay, I hope to do two things.

1. Show you why I believe the worst-case scenario is about 100 times more likely than the best-case one.

2. Give you a three-part plan to survive and prosper.

Why Things Are Likely to Get Worse

Since the real estate bubble inflated and collapsed, trillions of dollars have disappeared from American pocketbooks.

And millions of Americans — actually, tens of millions — are now, for all intents and purposes, bankrupt.

My view of what happened differs a bit from the story that’s been told by our government and most economists.

Wealth didn’t magically appear and disappear. What happened was that the government, banks, brokers, and real estate professionals colluded in the biggest wealth transfer in the history of the world.

Wealth (stored assets) shifted from the bank accounts of teachers and plumbers and merchants into the bank accounts of bankers, brokers, lawyers, and others who participated in the scam.

The wealth I’m talking about is not the tens of trillions in trumped up property values that disappeared. That wealth never really existed.

The money that was cleverly shifted from one large group of people to a much smaller one consisted of hard-earned savings.

A significant portion of that transfer came from fees — the billions and billions of dollars in fees charged by the bankers, brokers, and lawyers for all the new and second mortgages, the appraisals, the insurance, the legal vetting, etc.

But even more of it came from mortgage payments. While property values were falling, millions of Americans did their best to keep up with mortgage payments, often emptying their bank accounts in a futile attempt to maintain “good credit.”

That transfer was probably in excess of a trillion dollars, and it hasn’t stopped. There are still tens of millions of Americans “under water” who will keep paying till they can’t or enter into settlements that will, essentially, leave them bankrupt.

So most Americans are poorer now, or will be very soon, while the banking and brokerage community — protected as it has been by the government — is richer and will become richer still.

But that is not the entire problem.

Our government itself is bankrupt. Its debt far exceeds its assets, and that debt has been spiraling skyward since the Clinton administration.

Whether it was to fight the “war” on terror or to finance fraudulent brokerages and irresponsible banks, the federal government has been taking on debt faster than at any time in its history. We are talking about tens of trillions of dollars.

And finally, there are all the future financial obligations that our legislators have voted in. Financing the baby boomers’ retirement in the next 20 years will cost additional tens of trillions of dollars.

The total, by any count, is more than a hundred trillion. And one way or another, every single dollar of it must be paid back.

Who will pay back these trillions?

Not the financial masters of the universe that planned it all… not the banks, brokers, and lawyers that promoted it… and certainly not the government.

No. These trillions will be paid back by the people who have been foolish enough to (a) work hard, (b) start businesses, (c) employ other people, (d) create new products and services, (e) make profits, (f) save those profits, and (g) not fall for stupid scams and schemes like the real estate bubble.

And there aren’t many of them. They comprise less than 20% of the population. But they will pay back 80% of the remaining debt. That is a 100% certainty.

And why will the sins of the 80% be paid for by the 20%?

Because no one else can pay it back.

Our government can’t pay it back. It is bankrupt. And he majority of the population won’t be able to pay it back because they don’t have anything.

So it must be paid back by the honest, frugal taxpayers who still have wealth — the middle-class and upper-class Americans who still have assets.

If you have assets, that means you. It doesn’t matter whether you are a billionaire or have a net worth of $10,000.

They — the 80% of America that is (or will soon be) bankrupt — are coming after you. And they will have the government and the financial community at their sides.

There are three ways that they will get your money:

1. If you have a good income, the government will make you pay more taxes. If you have assets, they will make you pay higher “wealth/property” taxes on those assets.

2. Consumption taxes will be introduced — “private” taxes on every product or service you purchase. These taxes will take the form of increased banking, insurance, transportation, purchasing, and other fees — all tied to new regulations meant to “protect: us.

3. The economy will be sluggish. Income, on a relative scale, will decrease. And with your income shrinking while your expenses rise, you will ultimately become poorer… unless you do something radical.

If you think this is crazy speculation, do this. Post this now on your calendar for 2015. Read it again then and see how crazy it seems.

If you don’t think I’m crazy and want to do something to protect yourself, pay close attention to the rest of this message.

Recognize that you will not be able to avoid the three-stage assault I outlined above.

  • You will not be able to avoid the extra income taxes you will have to pay. If you do try to get fancy with your taxes you will end up in jail. This is not an avenue worth pursuing.
  • You will not be able to avoid paying the extra “private” taxes on everything you buy from now on. These will be buried in the fine print. You won’t find them. And even if you do, you’ll be required to pay them because the regulations that are being written right now to “protect” us contain clauses that allow banks and brokerages and so on to pass along their extra costs to their customers.
  • And, finally, you are not going to be able to avoid the effects of stagflation. Prices will increase. But your salary will not. And the value of your cash-based assets (it doesn’t matter they are in dollars or euros or whatever) will diminish.

But there is something positive you can do. Actually, there are three things:

1. Keep your job. There is a good chance that the business you work for will continue to make payroll cuts in the months and years ahead. The best way to protect your job is to become an invaluable employee. When your boss has to make the tough decisions about who gets cut, who gets cut back, and who stays, you want him to want to keep you.

2. Put your savings in tangible assets: gold, real estate, and, if possible, your own private business.

3. Create additional streams of income. This is the only way you can hope to build your wealth during the coming Great Recession.

I am a big believer in multiple streams of income. I started working on mine about 20 years ago. At first, the streams were mere trickles. Now, each one of them is more than I need to live on. And I have about a dozen of them.

That’s why I’m not personally worried. But if you don’t have a dozen streams of income, you should be.

How to Create Extra Income

If you have at least a hundred grand in cash, you can create income in two ways:

1. You can invest in rental real estate. I’m doing that now and I’m getting cash flow of between 5% and 10% on my money.

2. You can invest in quality, dividend-paying stocks. If you are interested in doing this, I suggest you follow Andy Gordon’s recommendations in the Sound Profits newsletter.

If you don’t have a hundred grand to invest, then you really have no choice. To create a viable second stream of income you must start a side business — something you can do evenings and weekends.

You could mow lawns or clean windows. But that’s hard work for modest pay. The kind of business I recommend is one that (a) doesn’t require very much start-up capital, (b) provides you with job satisfaction, and (c) could eventually allow you to quit your day job.

As an Early to Riser, you are in luck. Because at ETR’s annual Info-Marketing Bootcamp, we specialize in helping people start this kind of business, specifically online. (And the Internet gives you a big advantage over brick-and-mortar businesses because entry costs are low and the market is huge.)

Our experts help you find the right niche — one with the most profit potential that matches one of your passions or areas of expertise. The technical side is no problem because they show you how to use tools as easy to use as e-mail. And the marketing strategies they teach are based on what they themselves use every day.

This kind of business really can give you a sizeable second (or third) stream of income… while doing something that is both enjoyable and can be leveraged.

Let me give you a couple of examples:

PJ McClure was a veteran of the corporate world (earning a six-figure salary!) when he came to his first Early to Rise event. There, he gained the confidence to start a side business — “The Mindset Maven” — focused on his life’s passion: self-improvement. Since then, he’s been able to quit his corporate job and work solely on growing his online business. PJ will be at Bootcamp again this year. He secured five joint venture partnerships at the last one, and he’s coming back for more. Plus, he will be acting as a goodwill ambassador to the “newbies.”

Then there’s longtime Early to Riser Mike Garvey. He credits what we teach at Bootcamp with a big part of his success. His business, which helps employers keep track of employee driving records, brings in $2.3 million a year. “To say that ETR changed my life is an understatement,” says Mike. “I owe you a debt of gratitude that can probably never be repaid.”

These are just two of the hundreds of success stories that come out of Bootcamp.

If you want to create an extra stream (or streams) of income for yourself, the business model taught at Bootcamp is the best way I know of to do it.

It works. It has worked for ETR, of course. It has worked for my clients. And it has worked for many other people who have used it to generate their own income streams, including hundreds of our customers.

Bootcamp is in just a few months. And in order to get the $500 discount ETR is offering to “early birds,” you have to sign up now.

This is a great chance — maybe the best chance you will ever have — to get to the next level of financial success. If you’re serious about taking charge of your future, be there!

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]

Mark Morgan Ford

Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Wealth Builders Club. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.