I'm by no means an alarmist. I have a generally optimistic view of the world, but I'm also not going to blindly trust my government to take care of me in a time of crisis. I think the pandemic is a perfect example why. What if COVID was a lot worse? A lot more deadly? What if you genuinely feared for your life? What if it were actually dangerous to go get groceries? What would you do for food if the delivery guys decided it wasn't worth risking their lives?
What would happen if the economy collapsed and we experienced a period of hyperinflation where in one week your savings and income halved, then halved again? What if the forest fires in Canada raged on and dropped the air quality to unbreathable levels? What if a war breaks out and an enemy hacks our power lines and cell towers. These aren't unreasonable possibilities.
We've been fortunate enough to live in the calmest period of peace in history, but before the Cold War, people were on guard. They saved a lot more money. They wouldn't have needed stimulus checks. They would have been ready for harder times; but recently, people have become soft. Myself included. I depend an uncomfortable amount on the government and supply chains. Without them, I couldn't feed myself.
In all seriousness, if money just stopped working for you today, what would you do? Where would you go? How would you get food, water, and electricity? I've read enough history to know that no government lasts forever, no currency lasts forever. Wars break out. Bad pandemics happen. Just because you live in a developed nation with social nets today doesn't mean that they will last forever. And one thing that I've learned from this pandemic is that the government can't protect us from everything. If people actually feared COVID as much as they feared the Black Plague, our world would be chaos. The economy, government, and supply chain would crumble. That's why I don't want to keep all my eggs in one basket. I want to have a back-up plan. And I think you should have one too.
The 3-Day Strategy
A few weeks ago I was at a conference in Mexico called "Nomad Capitalist". Robert Kyosaki was there presenting his new book on how to be prepared for a potential crisis. I thought the guy was a nutcase back in May when he was presenting this stuff, but now I realize that he's actually pretty smart for being prepared.
One thing that really stuck with me was a reflection he said about Nazi Germany. The people who were optimistic, who thought, "This is Germany! I love my country! I trust my country! I'm not leaving!" were the ones who got killed. The people who were pessimistic and got out of there as soon as they could were the ones who lived. Just like an investor, I want to hedge my bets against risk and there are some risks that you can't insure against: currency risk, pandemics, war, and the unforeseeable.
There are some things that you can do to mitigate these risks, but the way I see it, the best way to mitigate against these risks is to have a plan in place to protect yourself and provide for your basic needs. Robert Kyosaki had a few getaway plans. An armored castle in the states and a plot of land in Africa. His idea was, where could you go within three days? How setup can you be if a crisis happened NOW and you needed to get out of the city and secure food, water, and shelter. What is your 3 day plan?
My 3-Day Strategy
My girlfriend is Lebanese and every week when I join her family for Sunday dinner, I hear the new update of what is happening to her relatives who still live there. If you're not familiar with what's going on in Lebanon, they are going through a financial crash. Everyone's bank accounts are frozen, people's savings disappeared overnight, their currency is going through hyperinflation, gas and electricity are luxuries now and hard to find. The streets are getting violent as people fight for food.
If you think this is just a third world problem, that this would never happen in the States or any other developed nation, you're completely naive. This is an absolute possibility for the United States, in fact we weren't far off from this happening twice in the last 15 years.
I've learned a few lessons from these family dinners though. My girlfriend's mom is from the city and her dad is from the country. Her maternal side of the family who had this extremely comfortable life as well paid dentists are now reduced to bartering. They are literally pulling teeth for food. The farmers are doing much better. Their lives have changed, but their basic necessities are met. So I took a minute to ask, "What if all of a sudden, all my money stopped working today?" Seriously. Think about it. What would you do if tomorrow you wake up and your bank account was frozen. You couldn't touch a dollar of your wealth. You can't sell stocks. You can swipe a credit card. What would you do?
Personally, I would want to escape to a cabin with plenty of land. I'd want it to be somewhere warm so I can grow crops year round. I'd want to have my own solar grid, my own water source, trees to use as lumber, machines for construction, and a weaponized bunker for safety. Most of all, I'd want my family in on the plan. I'd want everyone to know that we have a Plan B. I'd want them to know exactly what it is incase something happened and I'd want to have a constitution in place that everyone agrees upon ahead of time.
Does it sound a little extreme? Perhaps. But I don't think so. It's a "just-in-case" plan and in the meantime, it's the vacation home, the lake house, perhaps even a short-term rental property that we put up on AirBnb. I have 20 immediate family members that I can think of that would need to fit into this plan. If everyone pitched in a little, we could share a vacation home that happens to be our 3 Day Strategy. Sounds a little bit more reasonable now, doesn't it?
I'm contradicting myself a bit, because I've been speaking in the hypothetical all this time. The truth is, I don't own any land or cabin. This is a 5-year goal of mine--to get the backup plan set up. It's not an urgent matter, but I have talked to my family and friends about it, and most of them are on board. Others have laughed it off, but of course it's because they put their complete faith in the government. The way I see it, it's undeniable: the US government won't last forever, the US dollar won't last forever, peace, health, and safety won't last forever.
We may be fine in our lifetimes, but if we're not, you're going to wish that you had a plan.
