Saturday, January 27, 2018

Financial Tips for Preppers

Full disclosure: Although I do have a Bachelor's Degree in Accounting, I am not currently employed as a financial professional, nor am I involved in selling financial instruments of any sort. The following tips are not meant as professional advice, but are intended as "food for thought" from a long-time prepper and survivalist. I don't expect everyone to agree with every tip, and in fact expect several of these tips to be "controversial." Please carefully consider each tip and its applicability to your own particular circumstances and concerns.

Here is my list of financial tips for success for preppers and survivalists. Have any tips of your own? Please leave them in the comments section below (no advertising links, however). 
  • Avoid personal debt at all costs. Except for perhaps a home mortgage, debt is never a good idea. Especially consumer debt like credit cards, car loans, student loans, and payday loans. The saying that debt makes the debtor slave to the lender is very true. Don't do it, even if it means doing without.
  • Do not go into debt to buy prepper supplies and gear.  Some folks seem to have the idea that they can go into debt now, and not have to pay off that debt after a collapse. What if the collapse doesn't happen as soon as you expect? A complete political and economic collapse that would wipe out all debt  might be many years away, if it happens at all.
  • Spend less than you make, and make savings a regular part of your life. This will mean making some personal sacrifices.
  • Have a well-funded emergency account in a safe, well-established credit union or small bank.*  How much? You'll have to decide that for yourself based on your own circumstances and concerns. However, Dave Ramsey suggests that even folks who are trying hard to pay off their debt put aside at least $1,000 in a beginner emergency fund as their very first step. You can then work up from there. 
  • Learn to be entertained without having to spend a lot of money.
  • Avoid participating in fads and joining in fashionable trends.
  • Avoid impulse purchases.
  • Be cautious about investing in the stock market. If you do so, be a value investor, and only invest in well-established companies for the long-term. Short-term investing is called speculation, and is akin to gambling. Both speculators and gamblers are convinced that they can beat the system that is rigged against them. They can't, not over the long-run. 
  • Do invest in precious metals. Within reason, of course. Never put all your eggs in one basket, even if those eggs are golden. Also, I am talking about physical gold and silver, not paper certificates saying you own x-amount of gold or silver. Those certificates will likely be unenforceable and worthless in and after a collapse.
  • Avoid financial gimmicks and get-rich-quick schemes.
  • Avoid Bitcoin and other cryptocurrencies.  I know Bitcoin is popular with many because they see it as a non-government controlled currency. But governments can and are starting to regulate cryptocurrencies. These regulations will only increase dramatically in the future. Governments also have the power to ban financial transactions that use Bitcoin or any other currency they don't like (can't control). Never underestimate the government's desire to control everything. Second, Bitcoin has proved vulnerable to hacking and other forms of fraud & manipulation, resulting in wild swings in valuation. Third, Bitcoin is not backed by physical assets. It can fall permanently to zero in value. Finally, in a long-term grid-down scenario (such as an EMP event), the use of Bitcoin will be problematic at best - the Average Joe or Jane will not be able to trade or use Bitcoin, even if it is still trading in a remote area of the world unaffected by the EMP event.
  • Learn accounting to really understand the language of business.
  • Learn some basic economics. I highly recommend Richard J. Maybury's book Whatever Happened to Penny Candy?
  • A homestead and productive land is a great investment. 
  • Insurance is a good thing. Have enough, and make sure your insurance company is sound.*
*There are a variety of rating services that you can check with to discover the financial soundness of banks, credit unions, insurance companies, and other financial institutions. Also, pay attention to the news and to the financial reports of your institutions. Again, learning accounting will help.
 --------------'s Financial Guide - Strategies to Invest, Stockpile and Build Security for Today and the Post-Collapse Marketplace, by Jim Cobb. You’re prepared for hurricanes, earthquakes and other natural disasters, but are you ready for the inevitable man-made disasters to come? This book teaches you the other half of disaster planning―how to survive the economic turmoil that hits regions and nations after the storm has passed. Happened to Penny Candy? by Richard J. Maybury. Short (about 190 pages), easy-to-read (aimed at high school level), and NOT boring (written as a series of letters from an uncle to his nephew), this is the perfect book for someone wanting to learn about real economics, but finds most economic books intimidating or boring. A great place to start your economics education.

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