A good friend reached out to me yesterday, and ended up venting for about an hour about how tough things have been for him financially over the last few years.

Unfortunately , this isn’t an uncommon situation in America today.

Between inflation, stagnate wages, climbing interest rates, and declining consumer confidence, millions of people have been struggling financially for a while now, and that number continues to grow every day. But the scariest part, because this is a sign of how bad the economy really is, is that even the wealthy are struggling financially now.

When the people who don’t generally have to worry about money start having to worry about it, you should treat that detail like a canary in the coal mine.

In other words, things are about to get really bad.

Dr. David Phelps, a noted financial expert, wants to help Americans thrive despite today’s economic challenges by outlining the strategies that are most effective in a weak and declining economy. His latest book, Building Your Financial Ark: How to Survive and Thrive During the Next Economic Storm, is based on the strategies used by companies to thrive in previous economic downturns, along with advice on how to adapt those strategies to optimize for today’s economic environment and technology.

“We have a serious financial literacy problem in America today because it really hasn’t been taught for a long time. I remember learning the basics in school when I was a kid, and then I learned a lot more from my father as a teenager and young adult. Still, today, only about half of our states have any kind of financial literacy curriculum in schools. Most of the economic challenges we’re facing now are the direct result of decades of not teaching this, and that’s evident in the fiscal policies we see people supporting, as well as record low savings and record high debt,” he explains.

Because our economy has been humming along strongly for so long, most Americans haven’t seen what happens in a recession. The last major downturn was in 2008 when our housing market collapsed. Before that was the crash in 2000 that followed the dot com bubble, and that was preceded by the oil crisis and stagflation that put a stranglehold on our economy through the 1970s and early 1980s. Phelps says with 57.76% of the U.S. population under 45 years old, a majority of Americans have never experienced a significant economic correction first hand so they don’t know how to operate in a recession. This is a recipe for disaster.

“Things are relatively easy when the economy is good, but when layoffs start stacking up, credit underwriting gets more stringent, and consumer spending plummets, it becomes a completely different world. And not only do things get more difficult, but many things that used to work in a good economy no longer work in a declining economy. A systemic change in our underlying economic foundation also necessitates a significant change in our strategies,” he explains.

Phelps’s book starts off by painting a picture of what’s going on in our economy and why being proactive is critical to your financial future, before segueing into strategic planning.

From there, he unpacks how to reduce risk in your portfolio by choosing the right asset types for this economic environment. This is important because an asset that performs well when the economy is good tends to perform poorly when the economy slows down.

On the other side of the coin, assets that don’t perform as well when the economy is booming tend to perform better than others when things slow down. But he warns that doesn’t mean you should expect to see the same kind of returns as when the economy is good—these assets may appreciate, and in some cases, generate cashflow, but the primary goal is to act as a store of value. These assets are a hedge against inflation, and unlike more speculative assets, are less volatile.

“When the economy is firing on all cylinders, all asset classes generally do well, even to the point of creating bubbles,” Phelps explains, “But when we face an economic correction, the financial markets tend to become volatile and often correct sharply, due to investor sentiment. Tangible assets that have intrinsic value, however, perform less erratically. While they may not be as exciting, their relative market stability offers significant downside protection from loss.”

However, risk doesn’t just come from choosing the wrong asset types; any opportunity can still go downhill for other reasons. So, he also addresses another area of investing that can make or break your portfolio—due diligence. This is an area where experience matters.

Phelps has been investing for over four decades, so it shouldn’t surprise you to know that he has had a few investments go bad over his career. This is something that every investor experiences, and the knowledge gained from that helps them avoid bad investments in the future.

He advises, “As investors, we can never get too comfortable with the status quo. When we fail to keep up with evolving markets, it’s easy to get blindsided, no matter how experienced we may be. I’ve faced that myself, so I make it a point to review our due diligence process regularly and look for opportunities to improve it.

This is critical because a single bad investment can wipe out years of financial progress. You’ve probably heard the phrase, “pigs get fed, hogs get slaughtered,” and that applies to investing, too. My philosophy is that it’s far more effective in the long term to seek reasonable returns and minimal risk rather than swinging for the fences and risk striking out.”

What I found most valuable in this book, however, was Phelps’s comparison of previous economic cycles and a breakdown of what’s different today. This provides clear insight on how to operate in the economy we will all face for the foreseeable future.

As a fellow investor who has thrived through several boom-and-bust cycles, I agree with Dr. Phelps’s assessment and advice. What has worked over the last few years won’t work today, so if you want to thrive in the coming years, you’ll need to adapt accordingly to build your own financial ark.

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Lori Greymont is a seasoned real estate investor, creator of the hit TV show, Funding Faceoff, and founder of a private mastermind community with the mission to help 5,000 real estate entrepreneurs get their real estate deals done and create true financial freedom.