As an advisor, I’m constantly asked what I think about our current economic situation, and how to handle all the possible threats we face. I will be the first to admit that there is no crystal ball, so I think its important to prepare in a number of different ways. With talk of hyperinflation, devaluation of the dollar, and increased taxes, here is what I do to prepare the best I can for my financial future.
1. Food Storage
This is my first priority. If everything went sour, and our economy collapsed, there would be certain things that would outrank any other asset, and food is one of them. It would be my priority to protect my home, shelter my family, and provide food. This outranks gold, in my opinion, because if we picked back up somewhere along the way, and move passed survival mode, I could easily trade my food for whatever new currency arises- such as gold. If, however, its survival of the fittest out there, I believe food would rank as a higher priority, and no one would be offering food for anything… gold included.
2. Real Estate
Real Estate and other hard assets can also be a great way to retain your dollar in the event of monetary crisis. I personally have purchased a couple rental properties because I like the income now, the prices were dirt cheap, and it tends to be a good hedge against inflation. I don’t believe there is a magic pill here, but real estate I think is one of the best ways to prepare for economic uncertainty.
3. Whole Life Insurance
I use life insurance as my hub for all my financial decisions. It has always been consistent and safe, and I have access to my money. Even though this post has been geared toward preparation for a financial crisis, this asset provides the flexibility I need to have my money liquid for difficult times. We may not experience an Armageddon-type disaster, but I might personally face my own personal “Armageddon.” By keep my money liquid inside my policy, I always have access to it if my income stops, I become disabled, or whatever occurrences there may be. If I find myself in a lawsuit, these assets are also protected. Additionally, as I use it as a tool to purchase my food storage, and my real estate, I walk away with both the assets, and the cash, giving me the ability to adapt to what I feel are a large variety of circumstances.
Like I said, there is no crystal ball, but preparation now goes along way.