Financial Planning for a Crisis

Dear Fellow Survivalist;

It seems like every week somebody’s coming out with a new list of what you need to stockpile, in order to be ready for an emergency. Worse than that, all too many of the people who are writing those lists seem to be doing nothing more than trying to one-up other guy. Whereas people used to put out lists of “21 Things You Need to Stockpile for an Emergency,” now the lists are of 100 things.

The thing is, until you actually have the emergency, you aren’t really going to know what you need. There are no two emergencies which are exactly alike and no two survivalists that are either. With the plethora of variables that can affect what you will need, I suppose a real list of everything you could possibly need would be almost endless.

Even so, there are some things that pretty much everyone overlooks. We are all so busy trying to make sure that we have everything we need for some exotic disaster, that we forget about some common, simple things that would help us to make it through something more simple than the end of the world, like a natural disaster.

Take money for instance. I’ve lived through a couple of hurricanes, flooding and been in areas where other natural disasters have occurred. Those who are trying to rebuild their lives after those disasters are always cash short. They don’t have cash on hand, because they aren’t used to dealing in cash; but rather, use plastic for everything. But with power lines blown down and telephone communications out of order, their plastic isn’t any good. It doesn’t matter how much money they have in the bank, they can’t get to it.

Few people like keeping large quantities of cash on hand. Yet in the wake of a disaster, cash is what you need. Whether you’re trying to buy building materials to repair your home or gasoline to take grandma to the hospital, you’re going to have to have cash, or nobody will deal with you.

The same can be said for the big TEOTWAWKI events, such as the loss of the electrical grid or a financial collapse. Just like the aftermath of a natural disaster, credit and debit cards won’t do any good. People may not even be willing to take cash, although most still will.

But what if they won’t; what do you do then?

That’s why so many people like to invest in gold and silver. Historically, all money came from a gold and silver base. The oldest examples of money in the world were made of gold and silver, struck by hand form metal that had been smelted by hand as well.

In any financial crisis, these precious metals are the touchstone that people return to. If the coin of the realm is no longer secure, then gold and silver will be even more so. That’s because they are real money, based upon real value, not just some abstract expression of value, like a Federal Reserve Note. Even if the Federal Reserve goes down, the value of gold and silver won’t.

We’ve got to remember that Federal Reserve Notes, the coin of the realm which we use today, are only worth something because everyone collectively agrees that they are. If we were to suddenly decide that they weren’t worth anything, their value would swiftly disappear, like fog on a hot day.

If anything, a disaster, especially a financial disaster, will make the value of gold and silver go up. So, having it isn’t just a stop-gap measure to protect you from a failing economy, it’s also one of the most reliable, sure methods of investing there is.

There’s another sure method of investing that you should look into too; that’s investing in your home. Yeah, I know we all suffered through the housing bubble popping in 2009, but that was an artificially created bubble. Any other time, the value of property climbs and keeps climbing. Why? Because there is only so much land and everyone needs it.

But that’s not my main reason for mentioning your home. The reason I’m mentioning it is that you and I, all of us, are only one missing payday away from living on the streets. If we don’t own our homes outright, a personal financial catastrophe is all it takes for us to lose our home. That’s a big deal. Losing your home means losing your bug in shelter, leaving you scrambling for a place for your family to live.

Let’s say that your area is hit by a major natural disaster. We’ve seen from hurricanes like Sandy and Katrina, that it can take months to get things back to some semblance of normal. But that’s assuming everything goes well. If you can’t get to work or your work is closed down due to the disaster, you’ll end up not being able to pay your mortgage. No mortgage payment, no house.

It’s really just that simple. Our ownership of our homes is a very tenuous thing, as long as we owe the bank on them. Our inability to pay, even for a very reasonable reason, steals our family’s security. But if we own our homes, those who would take them away are suddenly thwarted.

Granted, paying off your home mortgage is difficult, even in the best of circumstances. But doing so provides us with a level of security that nothing else can do. So, while it isn’t something easy to accomplish, it should be one of the long-term goals of each and every one of us who take surviving a disaster seriously.

In the mean time, be sure to keep your powder dry and your survival equipment close at hand.

Dr. Rich

PS: For a unique way to prepare for a financial crisis, check out this weird trick.