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Monday, February 8, 2010

Urban Survival Planning – Financial Survival

Today we are going to talk about another form Survival Planning; Financial Survival. Worthy of much more than a single posting, Financial Survival is important enough to have a dedicated blog. However, in the interests of time and space we are going to just touch on a few basics.

There are several schools of thought regarding finances and financial planning for SHTF scenarios or an economic collapse, the one we subscribe to and promote is based on Austrian economic principles.

We do not buy into the “buy everything on credit because everything is going to collapse anyway” or “buy everything on credit and use your cash to buy survival related supplies” theories. The fallacy with these ways of thinking is very obvious if you just take a step back and look from afar.

Financial Survival Planning is basically insurance. Insurance is to replace something, or to make whole again, in the event of some sort of loss. This is saying IF something bad happens, I’m covered.

Well the word IF implies there is a possibility of something happening. If there was a certainty of something happening, and you knew about it, you would not need insurance; you could move before a fire or flood, get out of town with all your belongings before an earthquake or tornado. You could also do the same financially, you could move all of your financial assets out of a particular instrument before it bottomed out.

If there is a possibility of a financial collapse, there is also the possibility of there not being a financial collapse. Therefore we believe in the theory you should live a principled financial existence; no one can tell the future. If you live a principled life, you’ll be covered on all fronts, whether there is a collapse or not.

So what do we subscribe to you might ask? Live debt free and pay cash for as much as possible; budget your monies every month right down to the dollar; and diversify your holdings between cash in hand and precious metals (PM’s), gold silver and lead!

Now the first step is to get out of debt as fast as you can. Pick up Dave Ramsey’s book Total Money Makeover. IT WORKS! Now if you are already out of debt and want to take some steps to protect the wealth you already have in the event of a financial collapse of some sort, consider some of the following:

Hold PM’s, mainly gold and silver. Why, you might ask, should you hold gold and silver? Gold and silver have historically always been measures of value. From Roman days through today, gold is gold and silver is silver; societies have always placed a high value on both. In the even of an economic collapse or hyperinflation scenario, these precious metals will probably hold their value much more readily than any fiat, paper currency. Additionally, both are recognized world wide as a compact and portable form of wealth. For instance, during World War II, Jews were able to both buy their way out of Nazi occupied areas, as well as take their wealth with them; carrying nothing more than the clothes on their backs and some gold coins in their pockets. Through the coins they snuck out with them, they were able to start a comfortable new life where ever they ended up. We also believe that without a means to protect your assets, you may find yourself without them.

Now other than sneaking out of an area with a lot of your wealth in the form of PM’s on your body, what other scenarios might involve the use of PM’s? Well if there is a collapse of our dollar or our economic system overall, eventually you will have to start bartering with other survivors for goods and services. Dollars might be useful only in the near term, and in the long term probably only as a portable form of fire-starting material, or some other non-bartering task such as toilet paper. How will you trade with others? What will you have to trade with?

Perhaps, canned food for rent or passage; ammunition for a mule or donkey; or something similar along those lines in which someone really wants what you have to trade. Well the problem with the above is, 1) why trade food, ammunition for anything unless you have which will help keep you alive unless you have an over abundant supply of it? 2) Will you be able to carry enough supplies with you in order to both survive as well as enough to trade with? While we believe in having barter items, we are going to discuss them in a later post.

By owning an amount of gold and silver, you give yourself countless opportunities and possibilities that others who do not own any will never have. You have a form of insurance in case things go really bad in your own lifetime. However, since none of us can tell the future, say you buy PM’s and no collapse or hyper inflation event does happens, what do you do with your PM’s? Well you could either sell them, and probably be able to buy the same items with the money you receive as you could have bought with the amount of the money you paid for the PM’s, or you could always pass them on to your children or grandchildren without anyone knowing about the transaction. You have a means to transfer wealth anonymously to anyone you may wish.

Now lets say you are still with us, and you want to start looking for places to purchase some gold & silver coins to hold IN YOUR HOME (Not in a safety deposit box in a bank as the boxes & their contents are not in your physical control and may be seized by the banks). Where can you actually buy some from and how much should you hold? The how much part is totally dependant on your finances. Again, get out of debt first, build your survival preps to an acceptable level, then start accumulating your PM’s. As a guide $1,000.00 face value of pre-1965 dimes, quarters, and half-dollars per person of your group is a place to start. We also think you would be wise to have cash on hand, maybe another $1,000 as this currency is light enough to carry and would probably be of use, especially in the early days, maybe weeks, of an emergency, albeit at inflated rates.

As for the where to buy gold and silver part of the question, the following are a list of companies we have purchased from; we do not have any financial interest in the companies nor the sales of their products to you. We have just used these companies ourselves with nothing but outstanding service and quality products.

We hope you will consider this type of survival insurance for you own family. A lot of people tend to go overboard on a particular aspect of survival preparations and completely neglect other equally important aspects. We feel PM’s play a part in any survival plan. Do your own homework and decide if they play a part in your preparations.