Much of the advice I have seen is very relevant and useful, especially the idea of saving up and living well below your means. However, to more specifically add

Much of the advice I have seen is very relevant and useful, especially the idea of saving up and living well below your means. However, to more specifically address what you are looking for, I think the most important thing to think about is what are your risk factors, and how can you mitigate them? Here are a few risk factors (more to give you an example): (1) Loss of income from employment / Inability to get a similar income in your next job - Do you have the savings to weather 6 months of unemployment (or more)? There is a saying, though I don't know how true it is, that for every 10k of salary, you need to plan to allow up to a month to find a comparable job. - Is your job set something that will always be needed, or is it something that is somewhat fickle based on the markets? As a concrete example, ActionScript may have been a popular language at some point, but you would be out of a job now if that was all you knew. - Are you yourself either specialized in something that will never go away, or flexible enough to handle whatever comes your way? You need to be one of those. (2) How is your health? - I think this is something most people missed below in terms of preparedness. It is easy to think you can weather any recession if you have your health... but what if you lose it? The #1 cause of bankruptcy is due to Medical Issues. Do you have a means to weather medical issues? - Are you actively keeping care of yourself (an ounce of prevention is worth a lb of cure as the saying goes). - Do you have a healthplan (or means of switching to a health plan) that will cover you in the worse case scenario? (note: you can usually use COBRA if you get suddenly unemployed, but what is the monthly cost?) - Note the specific "backup" health plan should be tailored to your risk factors: does your family have a history of cancer, etc. (3) Risk of your assets getting severely depleted - People make a lot of assumptions about how "safe" their investments are. It is always worth taking a hard cold look as to what your risks really are, and making sure they are diversified. For example, is real estate in the bay area really independent of tech? I would harbor to think NOT. - A general safe bet (if you follow Warren Buffet/Ben Graham) is to look what everyone else is doing, and do the opposite. "Sell when everyone else is greedy, buy when everyone else is scared". (4) Your "other expenses"/Cost of living - Do you have any expenses that may come up? Do you have a kid that might be needing money for school? - What is your monthly costs, and how easy would it be to slash them? - While I don't know this from personal experience, what I have heard is that the single biggest mistake that a person/company can make is not cutting hard enough early enough when faced with depleting resources. The early you make those hard decisions, the better you are able to weather hard situations. Those are meant as examples, you know your personal risk factors than anyone else. The best thing of course is to be prepared with options. Hope this helps...