{"id":154,"date":"2017-02-27T13:16:26","date_gmt":"2017-02-27T21:16:26","guid":{"rendered":"https:\/\/www.preppersoft.com\/blog\/?p=154"},"modified":"2017-02-28T10:07:24","modified_gmt":"2017-02-28T18:07:24","slug":"rebalance-your-wealth","status":"publish","type":"post","link":"https:\/\/www.preppersoft.com\/blog\/2017\/02\/27\/rebalance-your-wealth\/","title":{"rendered":"Prepper Resolution #9: Rebalance & Protect Your Wealth"},"content":{"rendered":"

It’s that time of year again – Christmas is over, the first hints of warmer & longer days have arrived, and the dreaded April 15th tax deadline starts to loom closer.\u00a0 Before we’re totally focused on going outside and making preparations for the spring garden, now’s a good time to reflect on balanced prepping, specifically in terms of wealth distribution.\u00a0 It’s often the case that due to price fluctuations, life changes, or overallocation due to specific concerns, even a seasoned prepper’s distribution of wealth can become unbalanced & less diversified.<\/p>\n

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Editor’s Note<\/strong>: Nothing in this article should be construed as financial advice. The sole purpose in providing this information is for eduction and illustration. Consult a professional financial adviser for financial advice.<\/em><\/p>\n

It’s interesting that just as this post is being published, SGTReport<\/a> released an interesting video interview with Jerry Robinson from FollowTheMoney<\/a> discussing wealth diversification and building income streams.<\/p>\n

https:\/\/youtu.be\/2x96x24kjoU<\/a><\/p>\n

Even if you don’t believe the hype from the “dollar is going to die tomorrow” crowd, there are definitely some key things to consider in terms of wealth diversification.<\/p>\n

The most likely disasters are personal ones that affect only your family.<\/strong>\u00a0 Of these, the two most common are job loss and serious illness\/accident.\u00a0 For the near term future, your big potential expenses such as mortgage, car repair, health care, etc. are all denominated in dollars.\u00a0 Your bank isn’t ready to take mortgage payments in BitCoin yet, and you’re mechanic probably won’t fix your car in exchange for some of your food storage.\u00a0 For this reason, it’s important to have a cash emergency fund.\u00a0 If that job loss happens, or you’re injured\/sick and unable to work for a while, nothing beats having cold hard cash to pay the necessary bills.\u00a0 Six months of expenses is a good target to shoot for.\u00a0 If you’re not there yet, consider putting off some prep gear purchases and save up instead.\u00a0 If your mandatory expenses have increased, it might be that what would have lasted you six months no longer will.<\/p>\n

Banks & brokerages can and do fail; diversify your savings.<\/strong>\u00a0 While the FDIC and other government insurance schemes are supposed to cover depositors in the event of failure, it’s well known that these entities don’t have the funds to cover everyone should another massive round of bank failures potentially hit.\u00a0 As a depositor, you’re basically an unsecured creditor of the bank, and there are already “bail-in” provisions in place so that if the worst happens it may be possible you end up with a “haircut”.\u00a0 We have seen that in Cyprus and Greece already, and it is not impossible it could happen in America.\u00a0 The best defense is to spread your emergency fund across several well capitalized banks.\u00a0 Banks are required to publish their balance sheets and a quick read can help determined which banks are healthier than others.\u00a0 Reading & understanding a balance sheet is a great prepper skill to develop at the same time.\u00a0 If you have serious amounts of cash, it might be worth considering holding some of that in overseas institutions as well, just as an extra hedge against the domestic financial system becoming unstable.<\/p>\n

It is also a good idea to keep some physical cash on hand.\u00a0 In the event that a bank holiday is ever declared again, as it was in the 30s, some physical cash on hand will help meet short term needs.\u00a0 Again we saw this happen in Greece not long ago, and when banks were allowed to re-open, withdraws were subject to a daily limit.\u00a0 How much cash to keep on hand vs. how many banks to spread the rest across is a highly personal decision subject to individual circumstances.<\/p>\n

Physical precious metals<\/a> might<\/em> be a part of your diversification strategy.<\/strong>\u00a0 Many new preppers come into the community after being frightened about the dollar’s imminent<\/em> crash, and have a tendency to want to take all out of their wealth out of the system and pile it all into gold & silver.\u00a0 After the panic subsides, calmer heads usually prevail.\u00a0 The old adage still applies: “don’t put all your eggs in one basket”.<\/p>\n

The prevailing wisdom within the community on this topic generally seems to be that anywhere \"Buy<\/a>from 2 to 15% of your net wealth above and beyond the emergency fund might be reasonable as a precious metal allocation strategy.\u00a0 Of course this is your net<\/strong> wealth, so if your assets minus your liabilities is negative, or less than your required emergency fund, you likely should not consider even owning metals.\u00a0 It would be much more productive to pay down debt or add to your emergency fund or food storage.<\/p>\n

Stay balanced and don’t give in to fear or hype.<\/strong> The dollar is still king at the moment, but just as you can’t eat gold, you can’t 100% guarantee you can eat dollars either.\u00a0 In a serious SHTF catastrophe, food and water may not be available at any price.<\/p>\n

Remember:<\/p>\n