We are unlikely to see a repeat of the Great Depression anytime soon. The reason is that the Great Depression occurred during a time when the dominant economic model was one of Austrian economics, in which most economists thought the best strategy was to leave things alone and not print new money. When the Great Depression happened, there were basically none of the current banking regulations, stock speculation was rampant, and the US government more or less did nothing until Roosevelt.
However, we live in a very heavy Keynsian economic state. This means that when the economy starts to fail, as it did recently during Covid, or as it did during the 2008 financial crisis, the government tends to print a vast amount of money. For example, the US money supply increased by around 10% as a result of Covid. Or the vast amounts of money that were printed in 2008 to bail out the bankers.
While this is great news for the economy as a whole, it means that people who save up a lot of cash get crushed by the policy. Money is no longer linked to gold or any other assets, so it's basically worth whatever people are willing to provide for it. If there is more money in the economy, then it buys less "scarce stuff". For example, you can see the perpetual rise in the price of real estate, and the recent rise in the price of gold. Of course, items which can be mass-produced can scale to higher levels of production, and may be more resilient against the price adjustment. This makes inflation hard to measure accurately, but most economists agree it's at least 1-2%.
So while you may feel safe with an all-cash portfolio, the reality is you're losing purchasing power (you can buy less things) every single year. Even your 0.35% "high interest" savings account is losing money every year. (And just so you know, the bank is taking your money and lending it out to make a lot more money.) Most sources would recommend a 3-6 month period of time for savings, which should be ample time to find another job. Add up what you spend in a month and multiply by 3-6, and keep that in a cash equivalent as a safety net. For the rest of your portfolio, there are lots of things you can use your cash for to avoid inflation:
- Pay off any high interest debt. For example, credit cards. Never keep a balance on your card.
- Invest in yourself, such as going to school or attending courses/obtaining certifications that can improve your income earning potential. Or particular products that can increase your productivity. Make sure you can quantify the tangible benefit, and are picking the best value way to attain that benefit.
- Buy things in bulk that you know you'll need and use over the next year or two, if you can get a good deal. Because you pay taxes on all the money you make, a dollar saved is fairly equivalent to two dollars earned in the future.
- In a similar vein, see if you can do things to eliminate or reduce recurring expenses. A good rule of thumb is to multiply the annual cost by 10. If you can pay less than that upfront, it's probably worthwhile to do so.
- Real estate, if you know what you're doing to cash flow it, or you need a place to live. You can generally use mortgages if the interest rates are low as they are now. If you want to go this route, it's probably a good idea to network with people who are more knowledgeable.
- Stocks. You can own a portion of a company. Be sure to only invest in companies that you know and understand in detail. This can be tricky, so if you don't know, you can use an ETF to invest broadly for you.
- There are services that let you lend funds to small businesses. This gives a more consistent return, and you can lower the risk of default if you diversify among a lot of small businesses. There are also some organizations like Kiva where you can invest in small businesses in developing countries.
- Small business. If you have ideas for small businesses you want to start and run on the side, this can easily generate some additional income. Of course, do your research well and only move forward if there is definite demand for the product/service and you have a full understanding of how to excel in that market.
- Cryptocurrency, but only if you know what you're doing. It's very volatile and needs to be properly secured. But it is completely protected against inflation by the finite supply. Be careful not to buy when everyone is talking about it, or to do dollar cost averaging (buying smaller amount regularly) if you're not sure.
- Gold and silver. If you have access to a physically secure area to store it, it can be worthwhile to purchase some precious metals. Keep in mind these are more of a store of value, and don't actually generate a return. On that vein, you can also look at mining stocks.
- Some people would say you can buy art and collectibles, but this is of course something that would require significant research first.
The best strategy for everyone is going to be different - and the advice of most of the wealthiest people will tell you that you never put all your eggs in one basket, but also that you only need a small handful of right decisions to make it to a healthy financial state. Take the time to research everything, and do so in detail. A large loss can be very hard to recover from, but on the other hand a good strategy will compound in a very powerful manner. Never ever make a rush decision. Never ever do an investment or purchase you don't understand. Part of the return comes from risk. You can almost always find a way to invest less or to learn more.
Hope this helps! Good luck!