2022-03-23-2_of_3-Financial_Lessons_from

00:00:00.000 | Today on Radical Personal Finance, we talk about the financial lessons that you and I

00:00:05.180 | must learn from Russia.

00:00:25.360 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,

00:00:28.200 | skills, insight and encouragement you need to live a rich and meaningful life now while

00:00:32.360 | building a plan for financial freedom in 10 years or less.

00:00:35.120 | My name is Joshua Sheets.

00:00:36.120 | I am your host.

00:00:37.120 | And today we continue with part two of our three-part series on Russia.

00:00:42.600 | Part one was talking about the financial lessons from Ukraine.

00:00:46.360 | Part two is the financial lessons from Russia.

00:00:49.160 | Part three, well, wait and see.

00:00:57.200 | I won't make you wait too long.

00:00:58.200 | I just was hearing my cue with the music and I needed to finish.

00:01:01.600 | Part three is going to be the financial lessons from the United States.

00:01:05.080 | We're going to talk about the current situation in the United States.

00:01:08.200 | I am proud to announce that today's podcast is brought to you by InternationalEscapePlan.com.

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00:02:01.920 | situation is what I've been watching for years all around the world.

00:02:05.480 | But in today's episode, we're going to talk about the lessons from Russia, not just about

00:02:09.640 | leaving.

00:02:10.720 | But if you're interested in having a practical and sensible plan in case you ever had to

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00:02:30.000 | We're talking about this series of collapses, these series of crises, because I believe

00:02:35.360 | that they give us good lessons from each one.

00:02:38.400 | Part one was Ukraine.

00:02:39.980 | And Ukraine is a war zone.

00:02:41.840 | Now, I'm trying not to overstate how much of Ukraine is at war.

00:02:46.760 | Of course, there is a lot of it, meaning, of course, the whole nation's at war, but

00:02:50.120 | where the actual action is.

00:02:51.400 | I know people in Ukraine right now and I'm getting kind of on the ground reports.

00:02:56.560 | And you can be even in big cities in Ukraine and things are still working.

00:03:01.360 | But the point that I made in part one is that when you're dealing with the potential loss

00:03:05.020 | of life due to an active war, it's not a risk worth taking.

00:03:09.160 | You must get out.

00:03:10.500 | But what about Russia?

00:03:12.120 | Russia is extremely different than Ukraine because of what's actually happening.

00:03:17.400 | And I am coming to think that for those of us who think about carefully the concept of

00:03:23.800 | disaster preparedness, for those of us who advise people on their money and diversification,

00:03:28.760 | etc., I'm coming to think that the situation in Russia is going to be our most important

00:03:34.880 | lesson because there are a lot of lessons for you and for me.

00:03:39.940 | The challenge that we have, and I say we because most of the Radical Personal Finance listening

00:03:46.440 | audience is from the West.

00:03:47.760 | By far, the vast majority of us in the audience are Americans, followed by Canadians, and

00:03:53.200 | then it's people from the UK and from Germany, a little bit of us and Australia.

00:03:59.000 | Those are the top five countries that are represented.

00:04:01.880 | And so for most of us, the problem with thinking about big scale disaster scenarios is often

00:04:08.920 | we look and say, "It can't happen here.

00:04:10.600 | It's not going to happen here."

00:04:12.400 | After all, places with hyperinflation are always either very old, like Weimar, Germany,

00:04:18.240 | or very foreign to us, like Zimbabwe.

00:04:22.280 | So we say, "Even though it was recent, it's not going to happen here."

00:04:24.640 | And I think there's good reasons to believe that this makes those examples not real great

00:04:29.520 | examples that we should look to.

00:04:31.560 | You don't hear me talk a lot about the hyperinflation in Zimbabwe because I don't in any way compare

00:04:36.280 | Zimbabwe and the Zimbabwean currency to something like the US dollar.

00:04:40.680 | It's just a very poor comparison in my estimation.

00:04:44.920 | But Russia is different.

00:04:47.680 | Russia is very, very different.

00:04:50.200 | And I think you see that in terms of the way that Russia has captured the world's attention

00:04:56.200 | and this current war in Ukraine has captured the world's attention.

00:05:01.020 | It's not that there haven't been lots of other wars, right?

00:05:03.520 | Tons of them over the last year.

00:05:04.520 | It's active right now, but this one is different because of the scale.

00:05:08.560 | So I want to begin by making two points that will seem like a paradox, but I believe it's

00:05:14.320 | important to consider both of them.

00:05:16.720 | Number one, Russia is worth paying attention to because it is one of the clearest examples

00:05:23.680 | of what is going through.

00:05:24.680 | It's one of the clearest examples that you and I have of a large modern nation state

00:05:29.880 | going through massive stress.

00:05:33.860 | Many people don't understand just how large Russia is.

00:05:37.720 | You may be familiar with the idea that Russia is the largest country in terms of geographic

00:05:42.280 | territory in the world, which is true.

00:05:44.400 | I think pretty sure continental Russia crosses 10 time zones, which is just enormously large.

00:05:51.880 | So we know that Russia is geographically large, but Russia is very large in terms of its population

00:05:57.000 | as well.

00:05:58.360 | Russia has something like 145 million people in its overall population, which is huge.

00:06:07.900 | In terms of population size, that would put Russia ninth in the world, right between Bangladesh

00:06:14.260 | and Mexico.

00:06:15.260 | The largest population in the world, of course, is China with 1.4 billion people, India 1.3

00:06:19.980 | billion.

00:06:20.980 | They're the two huge winners in population by a factor of three, followed by the United

00:06:26.060 | States with about 332 million people.

00:06:29.700 | Indonesia is in number four place with 272 million people.

00:06:33.540 | Pakistan 225 million, Brazil 214 million, Nigeria 211 million, Bangladesh 172 million,

00:06:40.980 | followed by Russia with 145 million people, Mexico 126, Japan 125.

00:06:48.580 | So Russia is on the top 10 in terms of population.

00:06:53.380 | A very large country geographically, a very large country measured by population as well.

00:07:02.500 | In addition, Russia has the capital city of Moscow, which is certainly the largest city

00:07:08.300 | in Russia, but more importantly, it is the most populated city in Europe by a very good

00:07:16.060 | margin, and it is really the only true mega city in Europe.

00:07:24.620 | The city population is a little bit harder to estimate because you have to talk about

00:07:29.060 | the city limits or the urban area or the metropolitan area, but Moscow, Russia has something like

00:07:35.900 | 17 million people in the overall city population, which of course is not nearly as large as

00:07:43.380 | Tokyo with 40 million or Guangzhou with over 40 million or Shanghai or Jakarta, etc.

00:07:50.420 | Delhi is of course a huge city, but it is very comparable in some ways to New York City

00:07:56.780 | in the United States or to Osaka, Japan, Los Angeles, almost very similar to Los Angeles,

00:08:05.140 | a little bigger than Buenos Aires, a little bigger than Istanbul.

00:08:08.940 | So a huge world city and the only true mega city in Europe, which is I think extremely

00:08:17.060 | important by context.

00:08:19.980 | If we go with the official population and city limits, Moscow has 12.6 million people

00:08:26.380 | in city limits.

00:08:27.380 | The city of London in the UK has 9 million people, so a very large city.

00:08:31.340 | And what's more important is that it's a very advanced city, beautiful skyline, sparkling

00:08:35.460 | skyscrapers, highways, malls, everything.

00:08:40.780 | From a cultural perspective, Russia of course has such an ancient culture.

00:08:43.780 | Good friend of mine, a Canadian who travels all over the world, used to work for the United

00:08:47.100 | Nations.

00:08:48.100 | His comment to me, his son was, I almost went to Russia last year to see his son's, among

00:08:54.340 | other things, using it as an excuse, his son was graduating with a PhD from the Tchaikovsky

00:08:58.900 | Conservatory in Russia, which is a quite star-studded music conservatory.

00:09:07.180 | His son actually had gone from, had declined a scholarship to Juilliard in order to study

00:09:12.700 | at the Tchaikovsky Conservatory.

00:09:15.200 | And so we were talking about it and his comment to me, after traveling all around the world,

00:09:18.580 | all around Europe, he said, "I think that Moscow is the most cultured city in Europe."

00:09:23.100 | He says, "Of every city, it's the most cultured, the best city in every way."

00:09:27.340 | And of course that's one person's opinion, totally subjective.

00:09:31.140 | But to give you an idea that we're not talking here about the kind of culture or the kind

00:09:36.220 | of city that's foreign to you and me.

00:09:37.820 | We're talking about a huge city and a huge country.

00:09:41.660 | Now that's the strong case.

00:09:42.660 | And I want you to recognize this because this is something that we often don't think enough

00:09:47.220 | about when it comes to collapse.

00:09:48.620 | I've made this point again and again with regard to Venezuela.

00:09:51.500 | When I was in college, my leftist college professors were continually trumpeting Venezuela

00:09:57.980 | as the paragon of success, pointing out how this is the richest country in South America.

00:10:04.140 | And look, they've been able to balance progressive values of caring for people with business

00:10:09.300 | success, et cetera.

00:10:10.940 | And so I was very clued into Venezuela early on and then watching Venezuela collapse utterly

00:10:15.820 | over the last 15 years and become a nightmarish place to be has shown me that, "Hey, if it

00:10:22.260 | can happen there, it can happen here."

00:10:24.380 | Similar thing with Moscow, right?

00:10:25.660 | We're dealing with a huge country and a huge city, very modern, advanced, the kind of society

00:10:31.060 | that you and I would probably be very comfortable in, if we had some language proficiency at

00:10:35.980 | least.

00:10:37.560 | We're not dealing with a grimy 1960s Soviet Union.

00:10:40.840 | We're dealing with a modern, well-developed city and infrastructure.

00:10:45.820 | Now that's the strong case.

00:10:47.660 | The flip side is important to comment on.

00:10:51.540 | I think that while sometimes we underestimate Russia and Moscow, et cetera, I think we often

00:10:57.420 | overestimate Russia and Moscow with regard to their overall economic situation.

00:11:04.860 | Now when we look at the... try to find comparisons of Russian economic strength to other countries

00:11:14.220 | in the world, it's a much more sobering picture.

00:11:21.020 | Because of the massiveness of the Second World associated with the Soviet Union, because

00:11:28.220 | the Soviet Union was truly a superpower for so long, and because Russia has inherited

00:11:34.360 | some of the legacy of the Soviet Union, some of that reputation, we often, I think, overestimate

00:11:40.540 | the size of the Russian economy.

00:11:41.900 | After the collapse of the Soviet Union, Russia was completely decimated and extremely poor.

00:11:46.820 | To put it into context, Russia has an annual gross domestic product of something like 1.6

00:11:54.060 | trillion.

00:11:55.380 | That's certainly about 20 times smaller than the US gross domestic product, with about

00:12:02.620 | 23 trillion of gross domestic product.

00:12:06.180 | And it's comparable in some ways to Canada, 2 trillion dollars of gross domestic product,

00:12:12.060 | Korea 1.8 trillion, Russia 1.6 trillion, I think Spain would come next.

00:12:18.460 | So in some ways, economically, from a total GDP perspective, Russia is analogous in size

00:12:25.620 | and strength to Brazil, Canada, Korea, et cetera.

00:12:31.180 | However, if we divide that into Russia GDP per capita, meaning how much per person, Russia

00:12:38.780 | is extremely low on the list, with friends like Malaysia, Bulgaria, China, just extremely

00:12:47.780 | low with the GDP per capita.

00:12:49.100 | Let's see, the UN estimate is about $10,000 per year.

00:12:54.500 | The IMF estimate is about $11,200 per year.

00:13:00.100 | So much, much less prosperous per capita than any of the leading wealthiest countries in

00:13:06.620 | the world.

00:13:07.720 | So let's not overestimate Russia, but let's not underestimate Russia.

00:13:11.300 | As we go through this current crisis, I hope that you see that while Russia is not a perfect

00:13:17.460 | parallel for necessarily what you and I could theoretically face in the United States or

00:13:23.340 | in Germany or Russia, it's a pretty good place for us to learn our lessons.

00:13:29.100 | In the next episode in this series, I'll talk specifically about the United States, but

00:13:34.500 | we can learn something from Russia.

00:13:36.300 | So let's talk about what has worked and what is happening in Russia.

00:13:41.460 | First of all, what Russia is experiencing is all out economic warfare.

00:13:48.140 | The sanctions levied against Russia by so many of the leading countries in the world

00:13:55.500 | are the heaviest that I have ever seen of any country in my lifetime.

00:14:01.260 | And those sanctions have been made even stronger by the voluntary actions of many companies

00:14:10.900 | to simply withdraw or shut down their operations or personally boycott Russia, even if they

00:14:18.500 | weren't officially sanctioned by a government.

00:14:21.720 | This is something that is going to bear very careful study in the years to come.

00:14:27.460 | The Russian invasion of Ukraine is so universally condemned on a global basis that individual

00:14:33.860 | companies are taking actions beyond what is required of them by their government.

00:14:38.100 | And these individual actions are potentially in some ways way worse than anything done

00:14:46.140 | by government.

00:14:47.300 | Let me give two examples that I think are going to prove to be devastating in the days

00:14:52.620 | and months to come.

00:14:55.120 | Many countries around the world have completely closed their airspace to Russian airlines

00:15:01.540 | and airplanes.

00:15:03.700 | That's devastating to the ability of these airlines to run various routes.

00:15:09.200 | For example, you can no longer fly directly from Moscow to London.

00:15:12.860 | That's a big deal, right?

00:15:13.860 | Because I would imagine that a lot of these big international flights were very significant

00:15:18.180 | in terms of profit centers for Russian airlines.

00:15:21.060 | The loss of airspace is a big deal.

00:15:23.700 | There used to be a flight from Moscow to Cuba, to Havana.

00:15:29.500 | But of course, that flight now, if it were to happen at all, has to take such a circuitous

00:15:35.540 | route to avoid all of the closed airspace that is just not really profitable and not

00:15:41.020 | feasible anymore.

00:15:42.300 | To have that aeroflot flight from Havana to Moscow.

00:15:49.620 | That's just the start of it, though.

00:15:51.060 | There's all the other news with countries around the world repossessing airliners, actual

00:15:57.660 | airplanes that release to Russian airlines.

00:16:00.900 | What Russia has done, if my memory is right on the figures, they have something like 700

00:16:05.460 | to 800 airplanes that are registered to Russian airlines.

00:16:11.100 | But about 400 or 500 of them are leased.

00:16:14.660 | In order to keep their airplanes from being repossessed internationally, they've had to

00:16:19.100 | readjust all of their airplane fleets and designate those specific airplanes to domestic

00:16:26.840 | routes instead of international routes so that there's no danger of the airliners being

00:16:31.700 | repossessed by the leasing company due to that leasing company facing either government

00:16:37.980 | sanctions or facing an internal decision simply to not do business with Russian companies

00:16:41.980 | anymore.

00:16:42.980 | So, this is a big deal.

00:16:44.940 | But what's a bigger deal is that it's my understanding that Boeing has not only said,

00:16:50.980 | "We're not going to supply spare parts.

00:16:53.580 | We're not going to support these things."

00:16:55.620 | But they've even taken an action such as closing Russian access to the Boeing repair manuals.

00:17:05.720 | When I saw the news of it, I thought, "Wow, I had never even considered that."

00:17:08.980 | But it makes all the sense in the world.

00:17:10.860 | If you think of an airplane, you have an extremely complex piece of machinery that will have

00:17:16.820 | a very detailed repair manual, a very detailed system for going through and fixing it.

00:17:23.980 | That repair manual can of course be more efficiently delivered and delivered at a higher quality

00:17:31.900 | if it is electronic in nature rather than a physical paper book because then it can

00:17:37.860 | be updated from a central source and the information in it can be more easily accessed.

00:17:44.940 | I've never been in an aircraft repair manual hanger or seen those systems, but it makes

00:17:51.140 | all the sense in the world to me that Boeing would say, "If you're going to be a mechanic

00:17:54.220 | working on our airplanes, this is the system," and they would charge some kind of licensing

00:17:58.260 | fee to keep it up to date, make sure that people have the best information, and that

00:18:03.460 | each airplane, each individual aircraft would have its own maintenance schedule, its own

00:18:08.140 | logs, everything maintained there in the system.

00:18:11.300 | That makes all the sense in the world to me.

00:18:13.300 | But then there's a massive vulnerability where now Boeing has cut off the Russian airlines

00:18:19.500 | and the Russian airplanes from access to that system.

00:18:23.500 | Some analysts posit that within a period of months, most of Russia's air fleet will simply

00:18:30.600 | be inoperable or at least it won't be able to be operated safely.

00:18:36.940 | That's a staggering impact when you think about it, not being able to gain access to

00:18:41.820 | parts, not being able to gain access to a repair manual.

00:18:46.900 | I want you to think about a situation in the West.

00:18:49.500 | Think about the car shortage that has happened over the last year and a half because of not

00:18:54.820 | being able to gain access to computer chips.

00:18:58.460 | Think about how massive the impacts of that have been on your ability to buy a new car,

00:19:03.940 | used cars, et cetera.

00:19:05.580 | The whole market has been changed.

00:19:07.380 | That market that has been changed in many other industries as well.

00:19:10.940 | Now crank that up by about five or 10, and of course I'm just making those numbers up,

00:19:15.300 | but much, much more severe, and that's the market that virtually every industry in Russia

00:19:19.540 | is going to be facing, meaning a complete disruption because of the inability to get

00:19:23.740 | spare parts, keep things going, et cetera.

00:19:26.420 | That's a big deal.

00:19:27.900 | The other one was that there are a lot of companies that produce equipment needed for

00:19:33.420 | the maintenance and repair of pipelines.

00:19:37.100 | Russia's primary source of income right now is selling energy products to the world, especially

00:19:42.460 | to Europe.

00:19:43.460 | Well, those pipelines are still flowing in order to supply Europe with gas, but they

00:19:49.940 | may cease to function simply due to lack of spare parts, or they may be severely hampered

00:19:56.500 | because you see this kind of dual fold set of sanctions.

00:19:59.980 | You see the official sanctions, and then you see all of the unofficial voluntary sanctions

00:20:05.100 | being exercised by individual companies.

00:20:09.180 | Now why am I laboring this point?

00:20:11.820 | It's because I think that when we consider situations that can affect us, in some ways

00:20:18.620 | we need to be more creative than we often are.

00:20:21.180 | I have a hard time being an American, talking from an American perspective and saying, "Oh

00:20:26.340 | yeah, there's going to be economic crisis in the United States on a severe level," because

00:20:30.340 | of the economic powerhouse that is the United States.

00:20:34.260 | It's just a world of different economy versus any other place in the world.

00:20:42.060 | And so I have a hard time being a doom and gloomer and saying, "Hey, there's going to

00:20:45.660 | be massive levels of disruption."

00:20:47.980 | But what's interesting to me is observing how it's not just nation state actors who

00:20:53.540 | have power now, that if a country develops a bad reputation, that country can face significant

00:21:02.500 | problems by the private sector as well as by governments.

00:21:07.860 | I think this is important because, and I'm not going to labor on the United States, but

00:21:11.700 | when I think about the United States, I often wonder, okay, you have this mega power that

00:21:17.500 | basically in some ways controls the whole world.

00:21:21.260 | What will happen when other countries that are often embittered about what the United

00:21:26.500 | States does, how it throws its weight around, et cetera, what could happen if some of those

00:21:32.260 | countries start responding in a similar way to the United States or to Canada or to smaller

00:21:38.180 | countries that you and I might live in?

00:21:40.860 | It's interesting to think about.

00:21:42.780 | And I think that this will be a long-term trend as we're going to see more nationalism

00:21:46.500 | expressed.

00:21:47.620 | It seems to me that countries all around the world, or at least if I were the emperor of

00:21:53.780 | a middle-tier country, I would be looking at what's happening to Russia right now and

00:21:58.980 | say, this very well could happen to me.

00:22:01.860 | And we've got to make sure that we build our own national companies that aren't so dependent

00:22:07.440 | on the global markets, because if Boeing can cut them off, Boeing can cut us off.

00:22:12.860 | And since the way that this is done is not very predictable, we see these political winds

00:22:19.420 | changing frequently, the issues changing, we're in a kind of an unstable environment,

00:22:24.300 | I think there's going to be a rise of nationalism and people building companies and things that

00:22:29.500 | are more nationalistic, focused on the domestic market for national sovereignty and security.

00:22:35.460 | So we'll see if that comes to fruition or not, but I think it will probably happen.

00:22:39.820 | Let's now pivot and say, what is happening to you and your money if you are living in

00:22:44.060 | Russia?

00:22:45.060 | Because that will teach you and me what to do.

00:22:48.260 | So first of all, you're living in a society where things are not collapsing precipitously,

00:22:55.180 | but yet the long-term trend is not great.

00:22:59.800 | It's very important to note that the current crisis in Russia is not in any way a total

00:23:09.500 | collapse.

00:23:10.500 | It's not a total economic collapse.

00:23:12.520 | It's not Mad Max in any way.

00:23:15.260 | It's severe, but it's not riding around and shooting people in the streets and stealing

00:23:19.300 | what they have.

00:23:20.300 | And this is important to me because to me, what you see in Russia is a much more realistic

00:23:26.340 | disaster scenario that can happen in so many places.

00:23:30.300 | I have a fondness for dystopian fiction, apocalyptic dystopian fiction.

00:23:36.220 | I enjoy it.

00:23:37.220 | One of my favorite books is James Wesley Rawls' Patriots novel, a novel of the coming collapse.

00:23:43.500 | I enjoy a lot of the modern prepper novels that people write about.

00:23:46.580 | I find them interesting and enjoyable to read.

00:23:51.740 | But what I realized so clearly in the COVID, the economic crisis associated with COVID,

00:24:00.740 | the current crisis in Russia, the crisis in Venezuela, and studying more and more historical

00:24:06.660 | accounts is that you cannot take your expectations of reality from a novel.

00:24:12.580 | It sounds silly to say it outright, like of course you can't, but you've probably done

00:24:17.420 | it just like I've done it.

00:24:19.580 | In order to keep a novel or a movie interesting, the writer of that story has to keep the plot

00:24:27.500 | moving.

00:24:30.120 | Reality is much more mundane, much more banal, much more dreary and boring.

00:24:36.380 | And the collapse is not instantaneous.

00:24:38.820 | The collapse takes a long amount of time to happen.

00:24:42.420 | I point this out because in my experience, some people have a strange idea that they're

00:24:47.300 | going to know that the collapse is definitely here and they're going to race out and stock

00:24:51.740 | up at the last minute.

00:24:56.460 | There was a number of years ago, James Rawls, the author of that novel, he's been on the

00:25:01.180 | show a couple of times and I like Rawls.

00:25:03.740 | He wrote a course just basically designed around the idea of, hey, if you knew the collapse

00:25:09.060 | was happening tomorrow, what would be your last day shopping trip?

00:25:12.900 | Where you'd rush to the store and you'd stock up on, what would you do?

00:25:15.780 | And I thought it was a great, it's a great idea.

00:25:19.140 | If you knew there was a collapse happening tomorrow and you just had to go to Costco

00:25:22.960 | for one last trip, what would you do?

00:25:25.180 | What would you get?

00:25:26.180 | And it's fun to think about, but I don't think it's realistic that it actually happens.

00:25:31.480 | It does happen when there's a natural disaster or something like that.

00:25:33.900 | But an economic crisis, you're never quite sure that the crisis is happening.

00:25:37.220 | You're never quite sure that the collapse is actually coming on.

00:25:40.340 | And that's what you see in Russia.

00:25:41.740 | I've been following closely a number of Russian vloggers and YouTubers who are showing the

00:25:46.420 | situation.

00:25:47.940 | And from the outside, you're reading the news and you're saying, this is a collapse.

00:25:51.120 | But from the inside, you're looking at it and saying, well, it's not so bad.

00:25:55.100 | And the reality is it's not so bad.

00:25:58.460 | Similar things with COVID, right?

00:25:59.900 | You're looking at the news and saying, oh, it's bad.

00:26:01.820 | But then you go to your local store, you're like, it's not so bad.

00:26:05.020 | Things are happening, but it's not so bad.

00:26:07.780 | And it's important because I view this as a lesson to say, you're probably never going

00:26:12.180 | to be quite sure that the collapse is here until it's gone.

00:26:16.980 | And then when you're in it so deep that you're sure it's there, it's probably too late to

00:26:20.260 | do much of anything.

00:26:22.420 | So the Russian collapse is not a total collapse.

00:26:25.380 | Even something like Venezuela.

00:26:27.880 | This really sobered me when I started looking at Venezuela.

00:26:30.300 | You had a country that had a million percent inflation in a year, hyperinflation.

00:26:35.780 | And everything fell apart, except everything didn't totally fall apart.

00:26:41.260 | People lost weight, stuff became unavailable.

00:26:44.140 | They lost all the value of their money, but it didn't totally fall apart.

00:26:47.860 | And so recognize that you're always going to face this problem.

00:26:50.960 | The vast majority of Russians have not fled their country.

00:26:54.380 | In my newest course, I talk a lot about this.

00:26:57.140 | Why don't people leave when they should?

00:26:59.400 | As we'll talk about, every single asset in Russia is imploding in value.

00:27:05.180 | You say, well, why didn't people leave?

00:27:06.420 | Why don't they leave?

00:27:07.620 | Well, because it's hard to know for sure if the collapse is coming.

00:27:11.340 | Just like prior to the Ukraine invasion, it was hard to know for sure if the army was

00:27:15.620 | going to invade.

00:27:17.380 | There was a long point where the world's intelligence, the US intelligence agencies and others were

00:27:22.420 | saying, they're going to invade.

00:27:23.900 | They're going to invade.

00:27:24.900 | We watched the news stories.

00:27:26.260 | All of the insight was there.

00:27:27.580 | They're going to invade.

00:27:28.580 | They're going to be pulling up for weeks at a time.

00:27:30.220 | And then we're not sure.

00:27:31.700 | And very smart, well, you know, smart thinking analysts up until the very last minute were

00:27:38.260 | predicting that, no, they're not going to invade.

00:27:41.860 | And all that changed when they invaded.

00:27:44.020 | And then within a couple of days, it was illegal for men, fighting age men to leave the country.

00:27:50.100 | Everything started to shut down, et cetera.

00:27:52.940 | So recognize that here we are watching a collapse of Russia.

00:27:59.700 | But you can go on YouTube and you watch people showing the videos that it's not a collapse

00:28:03.460 | like in the movies.

00:28:05.520 | Don't expect a collapse to be like what's in the movies.

00:28:09.980 | It's not going to be like that.

00:28:12.380 | The roads are still working.

00:28:14.180 | People are still going to work.

00:28:16.100 | Nobody's having all their credit card debt canceled in Russia.

00:28:18.740 | You know, you got these preppers who go out and say, well, I'm just going to take up hundreds

00:28:21.940 | of thousands of dollars of credit card debt, and then I'm just going to not pay my debts

00:28:24.880 | in the collapse.

00:28:25.880 | It's not happening.

00:28:26.880 | It's not going to happen.

00:28:28.980 | So it's not a total collapse, but it is severe.

00:28:32.780 | Now, what is being affected?

00:28:35.060 | I would say all financial assets in Russia are being affected.

00:28:40.420 | So if you were a Russian and you were a wealthy Russian, let's not go to the level of an oligarch,

00:28:46.420 | somebody who was a billionaire who had built wealth after the collapse of the Soviet Union.

00:28:50.460 | Let's just say you were a hardworking, upper class, upwardly mobile Russian citizen.

00:28:58.460 | Tell me what plan worked for you.

00:29:03.500 | Was it money in the bank?

00:29:04.500 | Well, what we see is an absolute collapse in the value of the ruble as measured against

00:29:11.420 | other currencies around the world.

00:29:14.860 | So money in the bank has not worked.

00:29:19.100 | And when you needed to go and get the money out of the bank, it's very hard to get out.

00:29:22.660 | You have a very significant loss of value.

00:29:26.380 | Not a total loss of value, but a very significant loss of value.

00:29:32.180 | You've had long lines at banks, ATMs.

00:29:35.580 | I was going to play a clip.

00:29:36.580 | Maybe I'll do it at the end.

00:29:37.580 | We'll see.

00:29:38.580 | But I was going to play a clip from a news story, and it's showing on the PBS news story

00:29:44.020 | from a few days ago, showing a line at a city bank.

00:29:47.420 | And then here they are in the middle of the day, and they have to come out and close the

00:29:49.860 | bank because they ran out of cash.

00:29:51.660 | So you can't even get your rubles out of the bank in that situation.

00:29:54.780 | And those rubles have massively devalued compared to other things.

00:29:58.940 | So the money itself is not stable.

00:30:01.700 | What about the stock market?

00:30:02.700 | Is the stock market in Russia a good source of value?

00:30:05.980 | Well, the answer is no.

00:30:08.780 | Obviously, depending on what company, you had a complete collapse in the value of shares.

00:30:14.340 | You go and you look at the value of the shares, you get a complete collapse.

00:30:16.660 | Then the market was closed.

00:30:18.620 | So the market has been closed for weeks now.

00:30:20.780 | There's no clear plan of it reopening.

00:30:22.940 | We'll see if and when it does reopen.

00:30:25.140 | But your shares are not saleable.

00:30:28.100 | You might have an account statement that says you still own these shares, but the market

00:30:31.660 | is closed and your shares are worthless.

00:30:36.660 | What else?

00:30:37.660 | What about hard assets?

00:30:38.660 | Well, real estate is something that many people would think would protect them.

00:30:44.100 | One of the things that I observe about real estate is, although it's a better store of

00:30:49.340 | value, it's still not great in the current environment, at least in the short term.

00:30:55.140 | Why?

00:30:56.140 | Well, number one, there's a massive increase in the supply of houses for sale all across

00:31:00.540 | Russia because many people are trying to liquidate their Russian assets and get out.

00:31:06.480 | In addition, this is driving a decline in demand.

00:31:14.480 | Russia has a major demographic problem.

00:31:18.140 | Like many countries that we're from, Russia's population is shrinking and it's predicted

00:31:25.300 | to shrink significantly.

00:31:27.460 | This is one of the reasons why I think President Putin had to act now if he was going to accomplish

00:31:32.940 | his ambitions of expanding and rebuilding and fortifying the Russian empire, is that

00:31:38.820 | he's facing a demographic crisis.

00:31:41.460 | And if he waits much longer, he's not going to have enough soldiers to populate his armed

00:31:45.580 | forces to go and successfully invade his neighbors.

00:31:50.180 | But what this is also showing is that there is a decreasing demand in housing because

00:31:54.140 | you have a country that is difficult to immigrate to, not friendly to immigrants, has not tried

00:32:00.140 | to attract immigrants outside of the Eurasian economic zone anyway, and a declining population.

00:32:06.940 | And so the actual fundamental demand for real estate is significantly lower.

00:32:13.180 | Another reason the demand is low is, as I said, that people are leaving now.

00:32:17.660 | And now the prospects for success in Russia have massively diminished.

00:32:23.660 | Thus, in the long run, there's going to be even lower of a demand for real estate.

00:32:29.000 | If people wanted to immigrate to Russia before, which was not unknown, I've known people who

00:32:34.260 | I myself have thought about moving to Russia, not taking serious action on it.

00:32:38.980 | They've got a great tax program.

00:32:40.180 | They had a 13% flat tax.

00:32:43.340 | They've got a lot of things, as I said, cultured city, lots of opportunities, reasonable prices,

00:32:48.380 | nice people, lots of good reasons to consider immigrating to Russia and using it as a base

00:32:55.520 | to be based from.

00:32:57.600 | But now, based upon the Russian actions, the vast majority of people who ever considered

00:33:02.240 | it will simply not consider it now for very good reason.

00:33:05.460 | They're not going to go to Russia.

00:33:09.120 | Other problems with the real estate.

00:33:10.620 | Well, in the middle of the crisis, you have an absolute collapse in the employment market.

00:33:18.420 | As the country, as the companies pull out, you have tens of thousands and tens of thousands

00:33:23.780 | and tens of thousands of people who are now out of work.

00:33:28.180 | What do those people do?

00:33:29.180 | Well, they don't have any money, which means they're going to be spending less money.

00:33:32.780 | The economy is going to shrink down.

00:33:34.940 | They're going to be depending more on family members to support them in their time of need.

00:33:40.260 | So those family members, previous luxury spending that they would have given is now going to

00:33:45.380 | be dedicated to more essentials to support their family members.

00:33:49.780 | And you're going to continue to have a massive contraction of the economy, which means that

00:33:53.940 | in and of itself, you're going to have less demand for real estate.

00:33:57.820 | People are going to be sharing more housing, moving in together, trying to cut costs in

00:34:02.980 | every way possible.

00:34:04.900 | And part of that is going to mean not having your own apartment.

00:34:07.720 | So even real estate, though it's a hard, tangible asset, even real estate in and of itself is

00:34:14.180 | still not, it's not performing.

00:34:17.460 | It may preserve some wealth, but it's not performing.

00:34:21.460 | So what can work?

00:34:24.020 | What is working right now in Russia?

00:34:27.700 | The first thing that is working is geographic diversification.

00:34:33.860 | Any Russian who didn't have all of his chips in Russia has been able to keep his assets

00:34:41.140 | that were outside of Russia pretty much as things were.

00:34:45.180 | So any Russian that had a bank account in the United States, in Switzerland, in London,

00:34:52.660 | in the Caribbean, any Russian who had a bank account, especially and most importantly,

00:34:57.780 | a bank account in foreign currency, has been able to maintain his bank balances because

00:35:04.180 | of his foreign currency exposure.

00:35:06.340 | As long as he hasn't been targeted by an oligarch and had his stuff forcibly taken, any normal

00:35:12.340 | Russian has been able to maintain at least the value of his wealth in bank accounts abroad.

00:35:20.460 | Notice that there have been sanctions on Russians.

00:35:24.660 | And most of these sanctions at the moment have been kind of high level targets, but

00:35:29.100 | there have been major new restrictions imposed on ordinary Russians, ordinary Russians with

00:35:33.900 | nothing to do with the Russian government, with the oligarchy, etc.

00:35:40.740 | So if you can avoid that, which is a big if, if you can avoid that, then you have been

00:35:47.100 | able to maintain some of your assets held abroad.

00:35:53.460 | So bank accounts in other countries have been fine.

00:35:57.220 | Notice that it hasn't really mattered what country your bank accounts were in.

00:36:04.020 | So it's not like, as the Russian ruble has collapsed, there has been no knock on contagion

00:36:13.740 | that has affected every other European country.

00:36:16.380 | A bank account in Jersey or in Switzerland has been just as, or in Portugal, has been

00:36:21.460 | just as good as a bank account in the United States or in any other place.

00:36:24.900 | It's just a bank account.

00:36:26.700 | And if any other foreign currency has been fine, it's just the ruble that has collapsed.

00:36:32.500 | So people often get bent out of shape and they say, well, Joshua, what country has the

00:36:37.540 | best banking in the world?

00:36:38.540 | Well, you can answer that objectively, but depending on where you are, it really doesn't

00:36:42.980 | matter.

00:36:43.980 | Almost any other country.

00:36:44.980 | You just need some diversification from your home country where you work, where you live,

00:36:50.380 | where you make your money, and you need some, a bank account in some other country and you

00:36:54.660 | need some other currency.

00:36:56.900 | So that's the first thing is bank accounts abroad have sort of worked.

00:37:00.540 | What hasn't worked about those bank accounts abroad?

00:37:02.180 | Well, getting the money back in.

00:37:04.540 | So your debit card from a foreign bank faces serious problems being used in Russia.

00:37:10.820 | It's my understanding, although it's been hard for me to verify all the details, Russians

00:37:14.660 | are doing fine in terms of using their cards inside of Russia.

00:37:19.580 | They've had to adjust and change the systems.

00:37:21.620 | They're bringing in a Chinese system, but the internal systems are still working for

00:37:26.580 | digital bank management.

00:37:28.380 | But Russia is being cut off and isolated from the rest of the world.

00:37:32.020 | So by the way, forgive me if this is pedantic or too long, but I want to show you as I've

00:37:41.300 | been working on this stuff, none of this is new.

00:37:43.660 | I've been talking about this the entire history of radical personal finance and I've worked

00:37:46.460 | through these problems.

00:37:47.620 | I want to show you the problems and show you the solutions and why I'm more convinced than

00:37:51.060 | ever that the solutions that I've been telling you about for years and that I teach at internationalskateplan.com,

00:37:57.060 | these solutions work.

00:37:58.220 | They're working right now for Russians.

00:38:00.340 | So a Russian who had a bank account abroad was able to retain his wealth and the Russian

00:38:04.540 | who was able to leave Russia and use his debit card from his bank account abroad has been

00:38:10.620 | able to use, maintain his spending power.

00:38:13.720 | What about investments?

00:38:15.380 | Well once again, investments in markets outside of Russia, those investments have held their

00:38:21.500 | power.

00:38:24.100 | Russian who has an investment account in the US stock market doing the same as all the

00:38:28.260 | rest of the people with an account in the stock market.

00:38:30.380 | A Russian who has stock accounts on other markets has been doing fine.

00:38:37.340 | So no problems there.

00:38:39.080 | Everything works.

00:38:40.260 | And if he can get the money in and out, which is difficult, it works.

00:38:44.540 | Third thing that has worked, physical assets.

00:38:47.380 | Importantly, physical assets such as precious metals.

00:38:52.020 | Now here's where I think we see the problem with precious metals.

00:38:57.380 | In my understanding, there aren't any Russians who are currently going out and using gold

00:39:04.580 | and silver coins to buy and sell loaves of bread.

00:39:10.380 | The ruble is still the currency of choice.

00:39:14.180 | But precious metals will maintain their value if the Russian can find a suitable buyer.

00:39:27.060 | So here, you're not really going to see precious metals used as daily currency.

00:39:34.740 | That is not happening and did not happen in Venezuela.

00:39:39.060 | It hasn't happened in any economic collapse that I've been able to find.

00:39:44.340 | That's not the world that we live in.

00:39:45.500 | You still need the electronic money and you still wind up using the currency.

00:39:48.940 | In Venezuela, even though the boulevard has completely collapsed, they still use it in

00:39:53.360 | bundles and bundles, packed in backpacks, but you still use it or use a Colombian peso

00:39:57.940 | or the Brazilian real or US dollars, small denomination US dollars.

00:40:03.700 | Nobody's doing business with gold and silver.

00:40:05.260 | But what the gold and silver can do is they can maintain value because the gold and silver

00:40:10.100 | can still be converted either for valuable local items.

00:40:13.780 | And if you're working with wealthy people, that still has value.

00:40:17.540 | And if you're working abroad and your gold and silver is abroad, then you can convert

00:40:22.420 | that into foreign currency, which is spendable when you need it.

00:40:26.060 | And so I think precious metals in terms of protecting some wealth and serving as an insurance

00:40:31.140 | hedge for some wealth, I think they are really working and are good for the long term.

00:40:37.960 | They're not subject to the same stress that real estate is.

00:40:42.060 | And because they're much more portable, they can potentially be more flexible.

00:40:46.980 | Now, again, as I point out, the best place for those precious metals to be is not inside

00:40:52.020 | Russia.

00:40:53.100 | The best place for those precious metals to be is stored in a vault in another country

00:40:58.780 | outside of the primary country.

00:41:01.220 | That's why I teach in my newest course, internationalskateplan.com, we go extensively over precious metals.

00:41:07.620 | And you should have some precious metals close to you.

00:41:11.420 | But the majority of your precious metals, if they're large holdings, should be held

00:41:15.020 | in a foreign vault.

00:41:19.540 | What's the next thing that is working right now?

00:41:22.960 | What's working right now for Russians is Bitcoin.

00:41:29.300 | Any Bitcoin holdings, even though the Russian government has placed restriction, the Bitcoin

00:41:33.880 | marketplace has not collapsed because the ruble collapsed.

00:41:38.380 | And yet the Bitcoin marketplace is solving the problem for getting money back and forth,

00:41:44.060 | especially in a time of financial sanctions.

00:41:47.860 | All over the world, you have the Russian diaspora.

00:41:51.940 | You have Russians all around the world trying to figure out how do I send money to mom and

00:41:56.020 | dad, or grandma and grandpa, or my distant cousin so and so.

00:42:01.000 | If Western Union won't get you the money, and I can't transfer it into their bank account

00:42:06.500 | because all the banks are cut off, what remains?

00:42:10.260 | Either your mailing dollars, or euros, or francs, or rubles or something, which isn't

00:42:15.860 | going to work across borders.

00:42:18.540 | Mailing money works great inside of a country.

00:42:21.100 | It does not work across international borders.

00:42:24.540 | Or you're finding electronic system.

00:42:26.020 | But how do you find an electronic system that allows you to transact when you're cut off

00:42:30.700 | from dollars and dollars can't flow to Russia?

00:42:33.300 | Well, thus you see the rise of Bitcoin, and it's working.

00:42:41.300 | Very important point there.

00:42:44.340 | And privacycourse.com, of course, will teach you how to own it anonymously.

00:42:48.220 | Hope you don't mind the excessive advertisements, but I'm building out a suite of courses, which

00:42:52.660 | I've been planning to do for a long time, but it's solving these problems in a systematic

00:42:56.020 | way that I can't do in a podcast.

00:42:57.380 | And I'm showing you why I'm teaching you how to do it this way.

00:43:02.740 | What else is working?

00:43:03.980 | Well, if you can maintain your business, and you can maintain your job, then you're in

00:43:09.900 | good shape, or at least you're in better shape.

00:43:14.620 | If you can't maintain your business, and you can't maintain your job, then you have to

00:43:17.780 | go somewhere where you can maintain your business and where you can maintain your job.

00:43:24.220 | The biggest, when we get past financial assets, these are the ways that I see the financial

00:43:28.980 | assets being maintained.

00:43:32.900 | I don't see any big growth anywhere.

00:43:34.900 | I'm not aware of anybody.

00:43:36.220 | Maybe there'll be some big investment story, but we're just trying to preserve your wealth.

00:43:40.420 | The way you preserve your wealth is through diversification, and especially through international

00:43:45.340 | diversification.

00:43:46.660 | So that if the country that you live in, and you work in, and you earn your money in, if

00:43:50.540 | that country implodes on some kind of national level, at least you're not entirely run by

00:43:57.580 | that country.

00:43:58.580 | At least you have some foreign currency abroad, some gold abroad, some Bitcoin held in a way

00:44:07.740 | that is safe, kind of sort of abroad, some assets abroad, et cetera.

00:44:14.660 | But then fundamentally at its core, you want to be able to create income.

00:44:19.060 | So all over Russia, there are people who are having their income cut off.

00:44:23.900 | This ranges from people making their living online, cut off from Patreon, cut off from

00:44:29.140 | AdSense revenue.

00:44:30.140 | They're being cut off, and so all of their online money that they were making is being

00:44:34.540 | cut off, and they can't get it into themselves.

00:44:37.740 | In some cases, they can still get it into a bank account in another country, but they

00:44:42.700 | can't really get it into Russia.

00:44:44.740 | That's a major problem.

00:44:45.740 | You have a guy who says, "Hey, I've built this great YouTube channel showing videos

00:44:48.900 | of Russia, and now my income is cut off.

00:44:51.020 | I can't get it into the country."

00:44:53.500 | There may be solutions in the days to come, but it's difficult right now.

00:44:58.900 | So it's a disaster for people earning money outside the country.

00:45:01.620 | Then there are lots of people who are more normal situations.

00:45:06.220 | You got a guy who works as a programmer.

00:45:08.140 | I've seen and followed people who just lost their jobs.

00:45:10.540 | "Yeah, we don't want to employ Russians right now," because you're in Russia.

00:45:13.620 | It doesn't matter that you have nothing to do with the government.

00:45:15.780 | You're a programmer in Russia.

00:45:16.780 | We don't want to employ you.

00:45:18.740 | And so you have people losing their jobs there.

00:45:21.380 | And then you have the total economic crisis of a more, what I'll call run-of-the-mill

00:45:25.940 | but severe economic crisis.

00:45:28.080 | All the stuff that we're accustomed to, high unemployment, recession, people not having

00:45:34.860 | work, economic malaise, no growth, too many people applying for every job, decline in

00:45:39.300 | the value of wages because employers have low revenue, low profitability, and they have

00:45:45.100 | lots of people applying for jobs, et cetera, just that general economic malaise.

00:45:49.080 | So what is the best solution for that?

00:45:51.900 | The best solution there is to leave where the crisis is and go to a place where the

00:45:57.980 | crisis is not.

00:45:59.980 | So any Russian who has a work permit in Canada or a green card in the United States or a

00:46:07.920 | dual citizenship in Panama or anything else, if that Russian can go to another country

00:46:16.500 | that's not experiencing the severe economic crisis, then there's possibly a better opportunity

00:46:23.560 | to be able to earn money to support himself, to support his family, both with him and back

00:46:29.480 | in Russia through figuring out how to get remittances back.

00:46:34.160 | But you have to have that work permission.

00:46:36.320 | And so that's where we get into the concept of residencies, having a residency that offers

00:46:40.980 | work permission in another country, multiple citizenships, having work rights due to citizenship

00:46:46.900 | in another country, et cetera.

00:46:48.740 | And what I think is so important to observe is that right now, all of the trends that

00:46:54.520 | I talked about where countries are opening up for Ukrainian refugees, all those same

00:47:03.040 | countries and all those same trends are going exactly against Russian refugees.

00:47:10.240 | In the show that I did on Ukraine, I talked about how the neighboring countries of Ukraine

00:47:13.800 | have opened their doors just beautifully to the fleeing refugees, both at the national

00:47:18.760 | level with government policy, as well as even at the local level, people in a Berlin train

00:47:24.160 | station going down to meet the trains and holding signs saying, "I can take a mother

00:47:28.180 | and two babies home with me."

00:47:29.640 | It's a beautiful outflowing of love towards the Ukrainian refugees, and rightly so.

00:47:36.560 | All of those trends are exactly against Russian refugees.

00:47:41.120 | Because Russia is in this context so clearly the aggressor, and Ukraine is so clearly in

00:47:48.920 | this context the victim, all of the same sympathy for Ukrainians is galvanized into hostility

00:48:00.880 | against Russians.

00:48:02.960 | Regardless of any individual actions on the behalf of any Ukrainian or any Russian.

00:48:12.560 | Individual Ukrainian citizens and Russian citizens have nothing to say about the doings

00:48:16.520 | of their government, right?

00:48:17.840 | They have nothing to do with the war.

00:48:20.560 | War is a racket.

00:48:21.840 | It's a racket.

00:48:22.840 | It's a game that rich men play with the blood of poor people's children.

00:48:28.000 | The average Russian and the average Ukrainian have nothing to do whatsoever with the war

00:48:32.520 | in any sense, and they want nothing to do with any of it.

00:48:36.040 | But if you are unfortunate enough to be associated or allied with that government that is currently

00:48:45.000 | not in favor, then your life can be affected dramatically.

00:48:50.600 | And so in the same way that the European Union is opening up new programs to allow temporary

00:48:55.520 | residents with working rights for Ukrainian refugees, et cetera, all of those same doors

00:49:00.040 | are slamming shut for ordinary Russians.

00:49:04.160 | You've had a significant number of countries that have come out and said, "We're not giving

00:49:08.640 | any kind of tourist visas to Russians," which is to be expected, right?

00:49:13.960 | Countries don't want people coming in as tourists and then choosing to squat and overstay their

00:49:19.520 | tourist visas.

00:49:20.880 | And so you have ideological closure of visa programs for tourists as well as official

00:49:28.960 | closure.

00:49:30.560 | What I mean is some countries...

00:49:32.600 | I saw that...

00:49:33.600 | What was it?

00:49:34.600 | Croatia...

00:49:35.600 | Not Croatia.

00:49:36.600 | Yeah, no, it was Czech Republic.

00:49:37.600 | Czech Republic said, "We're not issuing any visas to Russian citizens at all on tourist

00:49:40.960 | visas."

00:49:41.960 | So that's an administrative point.

00:49:43.720 | There's other countries as well.

00:49:45.600 | But then practically speaking, a Russian who wants to go into another country will face

00:49:50.360 | much more serious scrutiny.

00:49:52.960 | Do you have the money?

00:49:54.040 | Do you have the money to support yourself?

00:49:55.480 | Are you sure you're not here working?

00:49:56.880 | Are you sure you're going to leave?

00:49:58.760 | Because anybody looking at that individual citizen would say, "Well, there's a much higher

00:50:02.280 | chance that a Russian tourist coming in now is possibly going to overstay his tourist

00:50:08.200 | visa and stay and squat in our country."

00:50:10.680 | And so you have much bigger hurdles.

00:50:13.520 | And then you have a complete closing of all the doors to Russians of various immigration

00:50:19.000 | programs.

00:50:20.000 | It's my understanding that all of the Caribbean citizenship by investment programs are now

00:50:22.200 | said we're not currently taking Russians.

00:50:25.160 | Many of the residency by investment programs or residency programs said we're not taking

00:50:29.040 | Russians.

00:50:30.040 | You had many countries that have been friendly to Russians among other as well as on the

00:50:35.480 | same level as anyone else specifically saying we are no longer working with Russian people.

00:50:41.960 | And this is really unfortunate if you wind up being a person who is from that country

00:50:48.380 | that's currently not in favor.

00:50:50.960 | Again, don't look at Russians and think that, "Well, those Russians, of course they're in

00:50:57.000 | favor.

00:50:58.000 | They voted for Putin."

00:50:59.080 | Don't look at Russians that way.

00:51:00.600 | That's you and me.

00:51:03.120 | That's you and me.

00:51:06.240 | I find it very much within the realm of possibility that the actions of my own government, the

00:51:11.800 | American government, which are just horrifically immoral, more war crimes committed and more

00:51:17.200 | bloodshed around the world over the last couple of decades than any other country in the world,

00:51:21.960 | I find it very reasonable to think that I would be judged just like a Russian based

00:51:26.480 | upon the actions of my government.

00:51:28.360 | At the moment, it just so happens that the places where all that bloodshed has, no one

00:51:31.760 | really cares about.

00:51:33.000 | And it just so happens that the United States is so big and so powerful that it's a big

00:51:37.400 | price for countries to discriminate against Americans.

00:51:42.200 | Although there certainly are certain countries that do, as is their perfect right to do so.

00:51:47.560 | My point to you is, if you're that Russian and you have the misfortune of being embroiled

00:51:55.480 | or entangled in this unpleasant association, now everything is much more difficult.

00:52:05.120 | And so this is where you need multiple nationalities.

00:52:10.480 | You need multiple places you can go to work.

00:52:14.800 | And you need multiple skill sets that can be applied in different places so that you

00:52:18.480 | can still earn money to support your family.

00:52:21.980 | Notice again that it doesn't have to be necessarily in the same way that the Russian could protect

00:52:30.160 | his income or his bank accounts by their being in another country, as long as they weren't

00:52:35.680 | confiscated, in the same way that it was almost any country was good.

00:52:41.760 | You have the same basic expression where for the Russian citizen, almost any other second

00:52:48.320 | citizenship is good.

00:52:49.320 | It doesn't have to be the world's greatest citizenship.

00:52:52.160 | It doesn't have to be Canadian or American or German or UK.

00:52:59.000 | Obviously there's benefits of those big, fancy, powerful countries.

00:53:04.000 | But really it could be any other citizenship.

00:53:08.160 | Belarus.

00:53:10.960 | Belarus is certainly very much entangled with the Russian situation.

00:53:18.000 | But any person who held dual citizenship with Russia and Belarus, which was much easier

00:53:23.480 | than many other nations.

00:53:24.720 | Belarusians, it's my understanding that Belarusians had a very fast access to Russian citizenship

00:53:31.440 | and a lot of cooperation.

00:53:34.960 | Any person who had both of those under the Belarus identity, they could escape less scrutiny.

00:53:42.760 | Very few people, very few employers, very few banks have a clue even where Belarus is

00:53:47.520 | or anything about it.

00:53:49.280 | And so although the geopolitical class certainly understands that Belarus and Moscow have a

00:53:54.000 | very close relationship, that's not common knowledge globally.

00:53:59.780 | So if you had a Russian and a Belarusian passport or nationality identification, that would

00:54:06.120 | be pretty good.

00:54:07.640 | Or there's any number of other countries where there's a high degree of connection with Russian

00:54:18.120 | culture or friendlier to Moscow, and any one of those countries is as good as any other

00:54:24.640 | for a Russian who needed a second nationality.

00:54:28.380 | So you don't have to just be from the UAE or Singapore or one of these from Luxembourg,

00:54:34.680 | right, a rich, successful country.

00:54:37.300 | It's almost any other country is good to minimize the stigma of that nationality.

00:54:43.820 | We often don't appreciate how important this is.

00:54:46.480 | Go back to the apartheid era in South Africa.

00:54:51.200 | And the way that that came about is basically South Africa became a global pariah on the

00:54:57.440 | world stage, and South Africans faced severe opposition and discrimination based upon the

00:55:03.980 | system of apartheid that was in the country.

00:55:07.040 | In the same way, it didn't really matter if they had the world's best second nationality,

00:55:13.280 | it just mattered that they had something else.

00:55:16.360 | So if you don't have a second citizenship, a second nationality, you see now why it matters.

00:55:23.720 | More importantly, I think for most people, or at least more accessibly, not more importantly,

00:55:28.040 | but more accessibly, notice again, residency visa.

00:55:32.900 | Residency visa with right of employment and the skills to go to another place and earn

00:55:37.900 | a living.

00:55:38.900 | Today, you and your country, as long as it's not Russia, you have the world's options available

00:55:44.960 | to you.

00:55:45.960 | So many places that you can go, you can get a residency visa, you can have the right to

00:55:49.100 | work there, you can establish connections to the country, etc.

00:55:54.420 | And even if you never used it, knowing that you could go to another place and legally

00:55:57.980 | earn a living for your family is such a valuable thing.

00:56:01.340 | That's what I want you to see is how it works.

00:56:03.660 | Even if your whole wealth was destroyed in Russia, if you have the ability to go somewhere

00:56:08.940 | else and work, then you are in pretty good shape.

00:56:12.380 | Or if you had skills that you could figure out how to market, then you can get through

00:56:16.020 | this thing okay.

00:56:17.020 | The third and final thing that I want to point out is that prepping works in Russia.

00:56:25.860 | All of the basic preparedness system, it works.

00:56:28.260 | I don't think it works as well as the idea of going to another place, but I think it

00:56:32.820 | does work.

00:56:34.180 | My favorite pithy example of this comes from a YouTube channel that I have started watching

00:56:44.380 | to try to get an idea of what's happening in Russia.

00:56:47.380 | The channel and the host of it is named Dan Shekoz.

00:56:53.740 | He seems like an ordinary everyday Russian guy.

00:56:55.860 | He says I'm just an ordinary Russian guy and that he learned English from watching American

00:57:00.740 | movies and so he and his wife speak English.

00:57:03.780 | And soon after the imposition of sanctions, he posted a video.

00:57:07.540 | And the video title was called this.

00:57:09.380 | It said how are Russians going to survive under sanctions.

00:57:15.260 | The basic plot of the video was him driving to his parents-in-law's, wife's parents' house

00:57:22.540 | in a more rural country town and they spent a couple of days planting potatoes.

00:57:27.540 | I thought isn't that a perfect example?

00:57:29.220 | We're going to go plant potatoes.

00:57:32.260 | Potato is a miracle food, a miracle food that you can live basically exclusively on potatoes.

00:57:37.900 | It's amazing.

00:57:38.900 | It's easy to grow.

00:57:39.900 | You basically just pop potatoes in the ground and if the conditions are right, they grow,

00:57:42.620 | you harvest them, they store.

00:57:43.900 | It's just a wonderful food.

00:57:45.820 | And it was the perfect example of how are Russians going to survive.

00:57:49.340 | We're going to plant potatoes.

00:57:50.940 | The idea is if you have a house that doesn't have a mortgage on it that you can't pay because

00:57:59.740 | you lost your job.

00:58:00.740 | If you have a house.

00:58:03.940 | If you have the things in the house that you need to be comfortable, furniture, source

00:58:08.740 | of heat, source of cool, source of light, etc.

00:58:12.820 | You can probably figure out a way to make it even in a collapse.

00:58:18.320 | You can figure out a way to pay the power bill and if you got a little backup battery,

00:58:22.940 | a little kind of a secondary power system, you're in pretty good shape.

00:58:27.020 | If you've got a way to cook some food, you're in pretty good shape.

00:58:31.380 | You can find food.

00:58:32.860 | It can be grown in perhaps your backyard or there's somebody who will start growing it.

00:58:38.020 | And so that's where practical preparedness, meaning having things that are not connected

00:58:42.740 | to the financial system, can allow you to come through a crisis, a financial crisis

00:58:48.260 | and collapse in pretty good comfort.

00:58:52.020 | Although the value from a financial perspective of your real estate might decline due to the

00:58:59.260 | sanctions, due to the people leaving, etc.

00:59:03.660 | Meaning measured in financial terms.

00:59:05.140 | Again, I want to repeat so you understand exactly what I'm saying.

00:59:07.620 | Although the value of your real estate that you own might decline in dollar terms, in

00:59:12.300 | ruble terms, in euro terms, in whatever, peso terms, whatever.

00:59:16.840 | The value of your house that you live in does not decline just because fewer people want

00:59:21.900 | to buy it.

00:59:25.300 | You can have a complete evaporation of your currency value today.

00:59:30.300 | And the house that you live in will be just as valuable in terms of sheltering your family,

00:59:37.380 | keeping your family warm, keeping your family cool, keeping your family safe as it would

00:59:43.700 | be yesterday.

00:59:46.900 | So when I talk about preparedness, I always position it in this way.

00:59:52.700 | Financial preparedness is usually your best way because money works in all situations

01:00:00.560 | up until money doesn't work.

01:00:03.420 | And I know it sounds silly, but I mean something by it.

01:00:06.340 | That money works until money doesn't work.

01:00:08.140 | A financial collapse is not a societal collapse.

01:00:11.960 | It's a financial collapse.

01:00:14.500 | A financial collapse doesn't have to mean that your marriage collapses.

01:00:19.220 | Your marriage and your finances are two separate things.

01:00:22.900 | They're certainly correlated and interrelated.

01:00:25.200 | You might have more difficult marital discussions if your finances are collapsing, but they

01:00:31.940 | don't have to be.

01:00:34.780 | You can have a financial collapse and come out the other side with a stronger marriage.

01:00:42.460 | So look at the world not just through a financial lens.

01:00:47.360 | How is this Russian family going to survive under sanctions?

01:00:51.060 | Well they're going to plant potatoes.

01:00:53.420 | And in that video they went to his in-laws house and it's just so funny because it's

01:00:59.380 | just a beautiful domestic scene of this elderly grandmother and grandfather and they're sitting

01:01:05.860 | at the table having their breakfast and their tea and then they go out and grandpa is drinking

01:01:14.980 | and then they go out and start planting potatoes and grandpa does what he can but then he has

01:01:18.940 | to stand back and watch and so you have this, Dan, you have him being the younger, healthier

01:01:26.540 | guy out planting and his wife is taking care of the baby and basically the point is that

01:01:30.300 | life goes back to the way it's always been.

01:01:33.260 | That even if there's a financial collapse, if you're prepared for that financial collapse

01:01:38.380 | then you don't have to flee.

01:01:39.780 | You don't have to go and try to figure out how to get out.

01:01:42.340 | That might be the best plan.

01:01:43.700 | I think in many cases it will be the best plan for many people but it's not necessary.

01:01:49.780 | You can stay put.

01:01:51.780 | And what's so amazing about the world that we live in, more and more every day, you can

01:01:57.900 | take money of which its value is unstable, unpredictable, subject to international sanctions,

01:02:07.660 | subject to foreign currency risk, etc. and you can turn that money into useful goods.

01:02:17.020 | You can turn that money into sticks and bricks that keep your family warm and sheltered from

01:02:23.020 | the storms and you can pay off those sticks and bricks with the exception of your taxes.

01:02:29.400 | You can take your money and you can turn it into light.

01:02:32.780 | You can do that of course by paying your power bill but you can also do it by purchasing

01:02:38.260 | some things that run on batteries.

01:02:40.140 | I'm an aficionado of cool gear and we're living in a time in which you can get just amazing

01:02:45.980 | lighting systems with amazing batteries that last for years and are just wonderful.

01:02:52.020 | I have a backup lighting system in my house that means that if the lights go out and there's

01:02:58.660 | no electricity, we can live not quite as bright as we live on a daily basis but pretty close

01:03:08.560 | to it just on battery power.

01:03:11.460 | You can buy these nifty little things called solar panels that recharge those batteries

01:03:15.580 | from the sun that falls on your house and it's not that expensive to do.

01:03:22.060 | You can have a way to put water in your house.

01:03:24.980 | You can put a tank up so that you can fill up the tank and you have a water source and

01:03:28.100 | have a filtration system so your house can still work even if the grid goes down.

01:03:32.380 | It's pretty uncommon that a water grid goes down.

01:03:35.540 | You go through the list and you can put in place the systems so that your family can

01:03:39.780 | be well fed, food storage, gardening ability, maybe some animals for those who wish to take

01:03:48.620 | on that responsibility.

01:03:50.660 | You can make sure that your family is warm, backup sources of heat, etc.

01:03:55.300 | Your life can continue on even if there is a financial collapse.

01:04:00.620 | I think this is what most of us want.

01:04:02.300 | We want a life that is limited, where we don't have just constant worry.

01:04:09.360 | My emphasis here is to say that all of these things are accessible to you.

01:04:12.700 | If you look at Russia, I think you see a perfect example of how a financial collapse is simultaneously

01:04:26.980 | totally shocking and a big deal and not as big of a deal as I feared.

01:04:34.660 | It's a paradox.

01:04:37.060 | The sanctions and the effects on Russia right now are huge from an economic perspective.

01:04:45.460 | For those who have wealth and are trying to preserve the value of their wealth, I've tried

01:04:50.940 | to show you how you do it.

01:04:53.140 | But then for those who don't have wealth, you can still preserve your living ability

01:04:58.300 | by recognizing that you need to diversify out of exclusively financial assets by building

01:05:06.460 | in local community, having relationships, by building in terms of physical structures,

01:05:14.180 | and then by making sure that you're insulated against the worst-case scenario.

01:05:20.660 | I don't rush out to tell people they should pay off their mortgages quickly because as

01:05:24.580 | a financial advisor, when you've got mortgage rates at 3%, it's kind of hard to believe

01:05:28.580 | that you should rush to pay that off.

01:05:32.540 | On the other hand, when someone says I want to pay off my house, I've almost never told

01:05:38.100 | someone not to pay off a house because you can build more stability in your life and

01:05:52.940 | that stability can be very valuable in good times and in bad times.

01:05:56.860 | I can't put that into an interest rate.

01:05:59.220 | The financial world should work the way that it is now, but if it doesn't, think about

01:06:05.940 | how to protect these other things.

01:06:08.540 | In closing, I would say that I've tried to point out what I see working in Russia, what

01:06:22.060 | I see not working.

01:06:23.580 | If you would like to be prepared for a situation like you have right now in Russia, I've spent

01:06:29.860 | the last week putting all of this into a very careful, systematic, organized structure which

01:06:35.900 | is now available for you to buy.

01:06:38.900 | If you would like to do that, go to www.internationalscapeplan.com and let me explain to you what I have built

01:06:43.940 | there.

01:06:45.020 | Most of the time when I do these ads, I'll make them fairly short, but I want you to

01:06:48.220 | know what's there.

01:06:50.060 | First thing I put is a very careful, phased approach into a plan.

01:06:54.940 | I've taken all the stuff that I've taught and that I've done for years and I've said,

01:06:58.260 | what is the most accessible way to do this with a minimum amount of time and a minimum

01:07:02.700 | amount of effort?

01:07:04.140 | Genuinely, I believe that the first step that you need is just to be able to walk out your

01:07:08.500 | door with a passport, a credit card, and a cell phone.

01:07:11.340 | That's phase one.

01:07:12.700 | The idea is you're going to walk out your door with a passport, credit card, and a cell

01:07:15.780 | phone and you're going to board a train to the next country or a flight to the next country

01:07:19.980 | and you're going to get out from a time of trouble.

01:07:22.620 | You see when I talked about Ukraine, you see how much of a big deal that is to make sure

01:07:27.940 | that you're protected so that if the bombs start falling or the tanks start coming in,

01:07:31.820 | you can say, "Guys, we got to get out and get out fast."

01:07:35.900 | You don't need much, a passport, a credit card, and a cell phone.

01:07:38.860 | That's phase one.

01:07:40.940 | I give you some more detail of some other ways to make it better and more comfortable,

01:07:45.180 | but there's nothing more necessary than a passport, a cell phone, and a credit card.

01:07:49.940 | Then I say, "Well, let me tell you about that I think this will work in the most situations,

01:07:53.500 | but let me tell you about the times when I think this might not work and how you can

01:07:56.700 | make it more robust."

01:07:58.620 | Phase two, we talk about things like having a foreign residency.

01:08:02.180 | Instead of being a tourist in another country, you have a country that you can go and you

01:08:05.380 | have the legal right to live in, to work in.

01:08:08.740 | We talk about setting up bank accounts abroad.

01:08:11.260 | You can go with a credit card, but if your credit card is drawn on a Russian bank and

01:08:15.180 | you're a fleeing Russian citizen, your Russian credit card is now going to have trouble working

01:08:19.340 | in the global financial system.

01:08:20.540 | It would be a lot better for you if in addition to your Russian credit card, you had a debit

01:08:25.500 | card or a credit card from a UK bank or from a Canadian bank or from some other country

01:08:30.860 | in the world.

01:08:32.140 | Then we go through about how to make it more robust.

01:08:34.580 | In phase two, I'm still not going to ask you to go abroad or to move or to leave or anything

01:08:39.380 | like that.

01:08:40.380 | It's just a matter of how can you put more redundancy in place.

01:08:43.980 | Then in phase three, we talk about how could you actually have another home.

01:08:50.780 | Because one of the things you can do if you're willing to invest the money and the time into

01:08:55.420 | it is go ahead and set up another home.

01:08:58.420 | I think right now, if you look at the world, you can see how nice it would be to have a

01:09:02.740 | home in another country that you could go to.

01:09:06.020 | Imagine you were a Canadian, you got sick and tired of living under these draconian

01:09:09.820 | COVID stuff that the Canadian government did because of their own incapacity and lack of

01:09:16.140 | hospital capacity and the collapsing medical system.

01:09:21.700 | Wouldn't it be nice if you had a second home in the Bahamas and you could go and live with

01:09:27.140 | relative freedom as a Canadian abroad?

01:09:30.740 | Wouldn't it be nice if you were in a scenario where you said, "Hey, I'm not so sure if the

01:09:36.140 | Russians are going to invade or not.

01:09:38.060 | But I'll tell you what, let's go to our vacation house and let's just be out for a while, maybe

01:09:42.180 | go for a couple of months and let's wait and see so we don't get caught in some kind of

01:09:46.380 | back last minute thing."

01:09:49.980 | Phase three is all about setting up a second home abroad.

01:09:52.860 | I think this is one of the best things that you can do for those with money.

01:09:56.500 | You can start to put it together in different ways.

01:09:58.500 | Now you have a second home, a place that you like to go.

01:10:01.540 | You can use the second home to get your residency permissions.

01:10:04.140 | You can use a second home to get your citizenships.

01:10:06.460 | You can use a second home as a base of operations for your financial infrastructure.

01:10:10.340 | This allows you to get out and go to another place.

01:10:12.540 | I always remember years ago, I used to love listening to talk radio.

01:10:16.740 | I think the best example of this would be when you've got a job where you've got to

01:10:20.900 | keep going, you need to get out of a disaster zone.

01:10:23.260 | I used to listen to Rush Limbaugh.

01:10:24.420 | Rush Limbaugh had his famous Southern Command down in Palm Beach, Florida where I lived.

01:10:31.000 | When there'd be a hurricane coming, Rush would never stay in the hurricane zone because he's

01:10:35.380 | got to be on the air.

01:10:37.460 | You get on an airplane and you leave and you have a second studio set up and another place

01:10:42.540 | that you can just go to and you can work and you have a second home set up.

01:10:46.780 | Although you or I might not be Rush Limbaugh, I think that should be our basic idea of how

01:10:51.860 | to approach things.

01:10:52.860 | If we have the money and are willing to dedicate the money, big if, then we should put ourselves

01:10:59.420 | in a situation where we can live and work and function relatively seamlessly in multiple

01:11:04.620 | countries.

01:11:05.620 | Then the fourth phase is, "All right, I'm going to be an expat.

01:11:08.140 | I'm actually going to get out."

01:11:10.180 | That's a step that I think most people should not do, but I explained to you how to do it

01:11:13.940 | if you think it is and how to really profit from it.

01:11:16.460 | The course is just under eight hours.

01:11:18.660 | It might be more than eight hours if I add more bonus content in the future, but right

01:11:21.340 | now it's just under eight hours.

01:11:23.040 | Very carefully presented, tight video presentation, audio is available as well, and careful notes,

01:11:28.900 | working it through in a phase-by-phase approach with detailed action steps, laying it out

01:11:33.040 | to you.

01:11:34.040 | What I want to do is that I have done every single one of these.

01:11:37.300 | I have spent the last years of my life testing this stuff, proving this stuff out, systematically

01:11:43.700 | putting it in place.

01:11:44.700 | It started for me when I looked at the situation in the United States and I said, "I'm not

01:11:49.620 | going to say that there's a big risk right now, but I think that there could be risk

01:11:54.420 | in the future and I don't have a plan B."

01:11:57.860 | I started putting in place the plan B. I have gone through every single one of these phases,

01:12:02.380 | one, two, three, and four, tested them, learned what works, what doesn't work, and put that

01:12:08.620 | knowledge into a course for you.

01:12:12.260 | That's interesting to you.

01:12:13.260 | Go to internationalescapeplan.com.

01:12:14.260 | Thank you so much.

01:12:15.260 | I'll see you back soon for part three of this series where we talk about financial lessons

01:12:22.720 | from the current situation/crisis in the United States.

2022-03-23-2_of_3-Financial_Lessons_from_Russia