RPF0347-Money_in_Times_of_Crisis
00:00:00.000 | Today on Radical Personal Finance, we're going to talk about tough times and some disaster
00:00:05.040 | scenarios and we're going to talk about how, hopefully, proper prior planning with your
00:00:12.580 | money can lead to better results for you and your loved ones when disaster strikes.
00:00:21.000 | Welcome to the Radical Personal Finance Podcast.
00:00:38.480 | My name is Joshua Sheets and I'm your host.
00:00:39.960 | Thank you for being with me.
00:00:41.280 | This is the show where we work hard to provide you with the knowledge, skills, insight, and
00:00:45.920 | encouragement that you need to live a rich and meaningful life now while building a plan
00:00:50.400 | for financial freedom in 10 years or less.
00:00:52.960 | A lot of difficult things going on around the world.
00:00:57.280 | I don't know that money is going to improve them, but let's do some planning in case it
00:01:02.280 | can for you.
00:01:03.280 | I've been wanting to do a show here about disaster planning.
00:01:11.880 | There have been a number of things that are kind of coalesced and I wanted to do it at
00:01:14.760 | the beginning of June.
00:01:15.760 | You know, June 1 is the start of hurricane season here in South Florida.
00:01:19.160 | That's how some of you guys have to live with earthquakes and forest fires and tornadoes.
00:01:24.800 | Those all have unique characteristics, but in general, the only natural disasters that
00:01:28.800 | we have to plan for here in Florida, well, not the only, but earthquakes are not a major
00:01:33.800 | factor.
00:01:35.720 | Winter blizzards and ice storms are not a major factor.
00:01:39.040 | The big one for us is hurricanes.
00:01:42.000 | Hurricanes sometimes can be associated with tornadoes, but we don't have anything like
00:01:44.760 | the tornado activity that those of you in the Midwest of the United States have.
00:01:49.000 | This time of year, I always turn my head to hurricane season.
00:01:52.320 | I consider, you know, am I prepared to go through some hurricanes with my family and
00:01:57.320 | have I done all the planning that I need to plan?
00:01:59.520 | Have I put in position everything that I need to assure their safety and their comfort?
00:02:05.440 | It's an important time of year where I kind of go through my checklists and go through
00:02:10.640 | our disaster plans and make sure that everything's buttoned up.
00:02:14.440 | So we've been thinking about that, but then there have also been a number of other scenarios
00:02:18.760 | that I've just been watching intensely.
00:02:21.440 | Probably the two most graphic ones have been the forest fires in Canada, the Fort McMurray
00:02:27.680 | forest fires up in Alberta that just swept through this town and just led to incredible
00:02:35.520 | video footage.
00:02:36.520 | I mean, incredibly terrible situations, but just the video footage is stunning.
00:02:42.680 | And so I've watched it closely to see, you know, all the people fleeing from the forest
00:02:45.880 | fires, if you're not familiar with the details of that scenario, you should spend some time
00:02:50.640 | on YouTube just looking at some of the footage from people's dash cams, people's cell phones,
00:02:56.200 | but just heart stopping footage.
00:02:58.160 | The other one that I have been watching very seriously and very closely is Venezuela.
00:03:04.120 | The economic crisis that's been happening in Venezuela over the past year and just intensifying
00:03:09.240 | and intensifying and intensifying.
00:03:11.080 | And it's just, it's heart wrenching to see the disaster that's happening there.
00:03:16.240 | And so I've been considering these and wanting to do this show for a little while of some
00:03:19.520 | planning, some intelligent financial planning that you can do to protect yourself from financial
00:03:23.840 | planning.
00:03:24.840 | And today I bring it to you.
00:03:27.880 | I wasn't sure if I should do the show today because today as I record is Monday, June
00:03:31.680 | 13, 2016.
00:03:34.200 | This is one day after the massacre here in Orlando, Florida at the Pulse nightclub in
00:03:42.120 | Orlando.
00:03:43.120 | And obviously that is the primary story that's on the top of mind for the nation and some
00:03:51.960 | parts of the world, I'm sure.
00:03:52.960 | And it's an absolutely heartbreaking story.
00:03:57.360 | And I'm not specifically doing a show about that story because it's just, in my opinion,
00:04:05.840 | too soon.
00:04:06.840 | All I've been doing is just been grieving and crying and praying for the people affected
00:04:15.160 | and the families who lost loved ones.
00:04:17.640 | It's just absolutely heartbreaking.
00:04:19.120 | So I don't like to, I know it's popular these days to jump on things and kind of exploit
00:04:24.400 | them for your own goals, but I personally am not interested in participating in that.
00:04:30.760 | But I'm going to go ahead and record today's show because there are some aspects that are
00:04:33.840 | relevant to that situation.
00:04:36.560 | But also just simply I was sick the last week or so and then had some personal things going
00:04:42.240 | on the week before that.
00:04:43.600 | So I've played a lot of interviews and then tomorrow I'm leaving town for two days.
00:04:47.040 | And so I don't want to just constantly do interview shows.
00:04:50.000 | And this was the show that's been planned since June 1.
00:04:53.080 | So I'm going to go ahead and release the show, but just please note that this is not specifically
00:04:57.000 | related to the Orlando shooting.
00:05:00.000 | There are a few things that you can do to prepare for that financially.
00:05:05.000 | There are very few things you can do to prepare for it emotionally, but unfortunately that's
00:05:10.280 | the world we live in where in some ways it's just all too common.
00:05:15.680 | And although in some instances it's unimaginable, perhaps few of us are shocked when these occurrences
00:05:24.400 | happen.
00:05:25.400 | And so there are some things that can be done with planning for such circumstances, but
00:05:30.000 | I'm not going to be talking about those today.
00:05:31.640 | I am going to be talking about and using as my examples hurricane season and Venezuela
00:05:37.360 | and the fires in Canada because those are very current thoughtful things that you can
00:05:42.720 | see.
00:05:43.720 | But I want you to use these circumstances to consider what would happen for you.
00:05:49.640 | One important theme with financial planning is many people don't consider their own circumstances
00:05:56.120 | in light of potential things that could happen until it hits close to home.
00:06:01.520 | But most of us go through our lives with generally pretty good circumstances.
00:06:06.560 | Few of us face the death of a close loved ones.
00:06:08.960 | Few of us face disaster right at hand.
00:06:11.960 | Few of us go through a collapsed economy like those in Venezuela.
00:06:14.880 | Few of us go through having to flee our homes in a firestorm like those in Fort McMurray
00:06:20.800 | have.
00:06:21.800 | Very few of us experience those things, thankfully.
00:06:26.040 | But if you will take the experience of others and apply it to your own life in advance,
00:06:32.400 | should you find yourself facing those circumstances, you might be able to get through it from a
00:06:39.160 | stronger position.
00:06:41.520 | And that's the essence of what good planning is.
00:06:43.200 | Good planning is to look at other people's circumstances and situations and then make
00:06:47.120 | plans to prepare for those things in your own life.
00:06:51.680 | Thankfully a lot of this is mental.
00:06:53.560 | By going through mental scenarios and wargaming the scenarios and thinking, "Okay, in this
00:06:58.280 | what will I do?"
00:07:00.600 | Those of us who are parents should be instructing our children, "When this happens, here's what
00:07:04.060 | you do and let's practice."
00:07:06.120 | We should be doing the same thing for ourselves.
00:07:08.200 | Anytime you see a story or a disaster story or whatever it is, you should be considering,
00:07:13.600 | "If this happens to me, what will I do?"
00:07:17.560 | So today we're going to talk about that.
00:07:19.080 | So before I begin today's show, sponsor of today's show is Paladin Registry.
00:07:25.640 | Financial planning and wargaming is all about thinking through scenarios, what's going to
00:07:29.120 | happen.
00:07:30.320 | If this happens then what would I do?
00:07:32.800 | Some of us can do it on our own.
00:07:34.880 | Most of us need to do it with other people.
00:07:36.400 | Now you can do this with a trusted friend.
00:07:39.080 | You can do this with your spouse.
00:07:41.520 | You might also need to hire a professional and that's where Paladin Registry comes in.
00:07:44.720 | If you've thought about hiring a financial advisor or if you've thought that perhaps
00:07:48.640 | you'd like to get a financial advisor's opinion or perspective on your personal financial
00:07:52.640 | situation, check them out.
00:07:55.060 | Check out Paladin Registry.
00:07:56.060 | Paladin Registry is a registry service of financial advisors.
00:07:59.520 | They take applicants for the system and for the service.
00:08:02.320 | They screen them based upon their own internal careful screening protocols and then if you
00:08:07.640 | go to RadicalPersonalFinance.com/Paladin, you'll put in your information, your name,
00:08:12.400 | your address, the amount of money that you have.
00:08:14.760 | You'll put those details in there on that screening form and then they will provide
00:08:18.440 | for you a carefully vetted list of a few advisors in your local area.
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00:08:38.960 | RadicalPersonalFinance.com/Paladin.
00:08:39.960 | So let's talk about crisis and money.
00:08:45.480 | The key theme that I want to emphasize to you in today's show is that money either solves
00:08:53.720 | or improves most issues in times of crisis.
00:09:01.000 | There are many things that money cannot solve.
00:09:04.280 | Death, dismemberment, disability, physical problems, these things money cannot solve
00:09:09.820 | but even in the context of these situations, the experience of somebody who's done good
00:09:15.040 | financial planning prior to the event will be very different than somebody who's not
00:09:20.960 | done good financial planning prior to the event.
00:09:24.440 | When I was involved in the life insurance business, it's one thing that life insurance
00:09:28.780 | agents would commonly talk about.
00:09:30.480 | One of the worst things that can happen is we are perhaps more so than usual keenly aware
00:09:36.780 | of today is the death of a loved one.
00:09:42.720 | It's a terrible, terrible event.
00:09:46.120 | It rocks your world.
00:09:48.440 | But what's worse than the death of a loved one is experiencing the death of a loved one
00:09:52.160 | and also experiencing financial stress at the same time.
00:09:55.200 | It's one of the reasons why life insurance is such an important part of financial planning.
00:10:02.780 | But it goes beyond that because money really does either solve many issues in times of
00:10:08.260 | crisis or improve your experience in many issues in times of crisis.
00:10:15.020 | Money is the most marketable commodity in existence.
00:10:20.720 | That's what money is.
00:10:21.720 | It's the most marketable commodity in existence.
00:10:25.520 | So when you're thinking about disaster planning, money should be at the forefront of your planning.
00:10:31.500 | You should be considering what to do with money before considering many other things.
00:10:39.340 | Toward the latter end of today's show, I will talk about the times when money is not useful
00:10:44.760 | in a disaster situation.
00:10:45.760 | There are at least three different circumstances and probably more in which money simply doesn't
00:10:51.240 | work and it doesn't solve the problems.
00:10:53.680 | But in the majority of circumstances, money will solve the problem.
00:10:57.640 | Let's talk about these events that I'm using as a catalyst for today's show.
00:11:03.760 | Again, June, hurricane season here in Florida.
00:11:07.340 | Hurricane comes.
00:11:08.340 | If you have money, it's pretty simple to get out of the way of it, pretty simple to leave,
00:11:14.560 | and everything can be pretty much put together with some money when you get back home.
00:11:22.240 | What about Venezuela?
00:11:24.240 | Economic crisis.
00:11:25.240 | Well, if you have money, your experience of an economic crisis can be very different than
00:11:29.000 | the experience of those who don't.
00:11:30.920 | We'll talk about some of the planning steps you need to do.
00:11:34.800 | Fires in Canada.
00:11:37.000 | Money doesn't solve the initial danger, which is what I'll talk about at the end of today's
00:11:42.600 | show.
00:11:43.600 | Money doesn't solve the initial danger.
00:11:45.240 | Money smooths the way.
00:11:47.040 | Money is what allows you to get a hotel room and fill the car up with gas so you can get
00:11:50.440 | from the disaster zone to a place where you can get some relief.
00:11:54.160 | So money solves almost all issues in times of crisis.
00:11:56.760 | And because of that, you should think about having money available to you in all of its
00:12:02.660 | forms under as many circumstances as you can plan for.
00:12:07.920 | You do need to approach this problem in an appropriate way.
00:12:11.920 | You need to start where you are and consider your current level of wealth and make plans
00:12:19.000 | in accordance with where you are in your wealth-building stage.
00:12:23.080 | There's a big difference between a young man or woman, 19 years old, a few hundred bucks
00:12:28.420 | to their name, just getting their start on the world, and the type of planning for disasters
00:12:34.000 | that they can or should do with money as compared to the middle-aged millionaire.
00:12:40.120 | Big difference.
00:12:41.500 | But the theme is constant.
00:12:44.040 | So let's talk about some simple preparedness items.
00:12:49.080 | Simple financial preparedness.
00:12:51.440 | Recognizing and remembering that money either solves issues in times of crisis or it improves
00:12:57.880 | your experience of issues in times of crisis.
00:13:01.760 | So simple beginner step.
00:13:03.680 | Make a habit of carrying an appropriate amount of cash on your person.
00:13:09.240 | Now in times past, this was always just, I guess, at least in my observation, either
00:13:17.080 | common practice or a commonly held desire.
00:13:19.400 | I remember when I was growing up, my dad always had cash in his wallet.
00:13:22.680 | If he needed money, he went to dad.
00:13:24.960 | He always had the change that you needed.
00:13:26.560 | If you needed change for a 20, he had change.
00:13:28.960 | He pulled out his wallet and pulled open the cash and did what needed to be done.
00:13:34.080 | And so I always thought that was normal and you aspire when you're adult, you always have
00:13:39.760 | money in your wallet.
00:13:41.000 | Well, most people today don't actually carry money in their wallet.
00:13:46.680 | Most of us have a wallet full of plastic and that's about it.
00:13:51.040 | My generation especially, but it's gone far beyond my generation, we don't carry cash.
00:13:56.720 | We don't use cash.
00:13:59.680 | The popular theme nowadays is to have a wallet connected with your cell phone holder and
00:14:05.160 | these wallets don't generally have provision for cash.
00:14:08.360 | If people do carry cash, they carry something like a $20 bill wrapped up in an elastic band
00:14:13.640 | in their wallet.
00:14:14.640 | But this is a tremendous disadvantage because many times in times of disaster, the cards
00:14:20.080 | don't work, but cash does.
00:14:24.320 | So simple starting places, make sure that if you run into a problem, you've got cash.
00:14:30.500 | Having cash in your wallet will solve many of your problems.
00:14:39.600 | From the difficult big disasters, what was the good one to think about is times of blackout.
00:14:46.320 | There've been a number of these major electricity outages over the past few years and these
00:14:52.440 | events come with very compelling images of people walking home and the bridges are clogged
00:14:58.360 | and things like that.
00:14:59.360 | Well, when there's no electricity, the cards don't work.
00:15:03.000 | When there's no signal for the credit card machines, the cards don't work.
00:15:07.120 | This happens routinely, but cash still works.
00:15:11.060 | You can still get what you need.
00:15:13.760 | Cash has the unique advantage because it's so marketable.
00:15:17.120 | Remember, money is the most marketable commodity in existence.
00:15:19.800 | It has the unique advantage of being universally accepted.
00:15:24.020 | You need to ride out of a dangerous situation.
00:15:25.960 | There are riots happening in your city and you need to ride out of a dangerous situation.
00:15:30.320 | Your Uber pass, your Uber fare may or may not work.
00:15:33.160 | Your credit card may or may not work in the taxi company.
00:15:35.700 | But if you can just ask somebody and say, "Hey, 20 bucks, can you get me a few miles
00:15:38.640 | down the road?"
00:15:39.640 | You can get you and your family out of the area of danger.
00:15:42.640 | A $20 bill goes a long way.
00:15:45.920 | Now I'm talking about some of the extreme disaster scenarios.
00:15:48.160 | What about smaller disaster scenarios?
00:15:49.880 | They won't seat you properly in the restaurant.
00:15:51.880 | Guess what?
00:15:52.880 | A $20 bill usually fixes that problem.
00:15:55.920 | It's much less attractive to the person who's having trouble finding a spot for you on the
00:16:00.280 | seating chart to say, "Here, would you be willing to accept my American Express in your
00:16:05.180 | swipe card reader in your smartphone than it is to palm a $20 bill in your pocket and
00:16:10.480 | reach across and shake the hand?"
00:16:11.880 | If you don't know that technique, you should practice it.
00:16:14.560 | All you need to do – it's a little sad that I'm doing this, but the simple way
00:16:21.520 | to do it, if you haven't ever practiced passing a $20 bill or a $100 bill or whatever
00:16:25.720 | scale is appropriate, fold it up, put your hand out in front of you, curl it up kind
00:16:30.480 | of like you're going to go for a handshake.
00:16:32.340 | If you take a bill and you put it right in your fingers there, you can reach out and
00:16:36.480 | shake somebody's hand in a situation like that.
00:16:38.760 | They'll know what's going on and nobody else around will see.
00:16:41.400 | It's good for their privacy.
00:16:42.840 | Very, very simple.
00:16:44.400 | Very, very easy.
00:16:45.840 | Money will solve the problem.
00:16:48.040 | So get in the habit of carrying an appropriate amount of cash on your person.
00:16:53.140 | If you right now are stuck, whether it's because you're in Fort McMurray and you've
00:17:01.680 | got to get out of town and you're out to eat at a restaurant and all of a sudden something's
00:17:06.120 | going on and you've got to get out, look in your wallet and ask yourself, "How much
00:17:10.200 | money is there in my wallet?
00:17:11.640 | Would I be able to get from the problem zone to where things are better?"
00:17:16.080 | If there's a terrorist attack and things are freezing up and no one's sure what's
00:17:21.160 | going on, open your wallet right now and ask yourself, "How much money do I have and
00:17:26.760 | would it be enough to get me and my family to safety?"
00:17:32.000 | Now, in some circumstances, one person is pretty easy to get out of danger, but what
00:17:38.720 | about the other people you're responsible for?
00:17:41.800 | Whether it's children, a little harder to get me with my family and children to safety.
00:17:49.160 | What if it's your coworkers?
00:17:51.820 | What if it's a team that you're responsible for?
00:17:55.080 | How are you going to protect those around you in a time of crisis?
00:17:59.600 | Think about how much money is in your wallet right now and ask yourself, "If I removed
00:18:04.800 | access to your credit cards and there was a disaster facing you, an acute, current,
00:18:12.320 | time-bound disaster, how confident are you with the amount of money that's in your wallet?"
00:18:19.200 | Have cash available to you.
00:18:21.600 | Make a habit of carrying an appropriate amount of cash readily accessible to you on your
00:18:27.160 | person.
00:18:28.880 | Next, make a habit of keeping a substantial amount of cash readily accessible to you without
00:18:34.580 | needing to ask anybody for it.
00:18:37.480 | I'm not sure that for some of you, maybe carrying $20,000 around on a daily basis is simple
00:18:43.880 | for you and you're accustomed to that.
00:18:46.080 | I would say for most of us, most of us are not going to feel very confident or comfortable
00:18:51.120 | with $20,000 and $100 bills in our wallet.
00:18:55.440 | Maybe someday I will, but I'm not there.
00:19:00.400 | You might like to have access to some money though and you might like to have access to
00:19:05.980 | it without having to go and ask anybody for it.
00:19:10.300 | Now, sometimes this is in case of a disaster.
00:19:14.240 | Disaster can strike at the worst of times.
00:19:17.620 | You might come, a natural disaster often occurs when you don't want it, when you're not expecting
00:19:23.460 | it.
00:19:24.460 | Whether it's a terrorist attack or whether it's a, some of you get faced an earthquake
00:19:29.620 | or tornadoes or things that blow up quickly.
00:19:34.320 | Having the ability to put your hand on a few thousand dollars or $10,000 or $20,000, that
00:19:38.860 | can be life-changing in many circumstances.
00:19:42.020 | Of course, you need to always, with all of these things, you need to make sure that you're
00:19:45.180 | keeping things properly secured.
00:19:48.980 | Don't be foolish with the money that you keep on your person and don't advertise its existence.
00:19:53.300 | Take care for the safety of your person.
00:19:55.800 | Make sure that you have good practice of knowing where your wallet is.
00:19:59.260 | With regard to keeping more cash readily accessible, you need to make sure that it's protected,
00:20:04.220 | whether that's a safe in your home, a safety deposit box in your local bank or some other
00:20:08.980 | method of securing and concealing the money.
00:20:12.040 | Make sure, if possible, that you have a substantial amount of cash readily accessible to you.
00:20:18.520 | You might need to make your buddies bail.
00:20:20.960 | You might need to make your spouses bail.
00:20:23.820 | If you have the means, place some cash where you can get to it quickly.
00:20:30.180 | Next, make a habit of keeping bank reserves readily accessible.
00:20:37.140 | What that means is simply don't over-leverage yourself into illiquid investments if you
00:20:41.420 | can help it.
00:20:42.980 | Money, cash, currency is king, not having valuable stuff that you could convert to cash
00:20:49.580 | in a period of time.
00:20:52.260 | Money is helpful.
00:20:54.020 | So if you've made the mistake of having all your money invested, for example, you put
00:20:58.780 | all your money into your 401(k) but you don't keep any of it in a savings account, well,
00:21:04.820 | undo that mistake and keep some money in a savings account.
00:21:08.060 | Don't over-leverage yourself and don't ever wipe out your liquidity.
00:21:11.180 | Don't ever wipe out your ability to cover your bills for a few months.
00:21:16.220 | Also, keep those bank reserves readily and conveniently accessible.
00:21:21.260 | Think about how you actually access your accounts.
00:21:25.340 | For example, do you have debit cards for all of your appropriate accounts and do you know
00:21:29.460 | the PIN numbers to those debit cards or do you keep those PIN numbers?
00:21:34.100 | Perhaps simple idea, keep all the PIN numbers on all your accounts the same.
00:21:38.860 | Most of us are not going to keep a huge amount of currency and cash in our checking accounts.
00:21:44.820 | So you're going to have multiple accounts.
00:21:46.180 | Well, do you have a debit card for that account where you can access the money out of an ATM?
00:21:51.100 | Is your banking system set up in a way that you can easily transfer money from one account
00:21:56.260 | to another or is there a three-day hold on the money?
00:21:59.260 | A little bit of planning, a little bit of thought with your banking accounts.
00:22:04.700 | You can have it set up so you can keep a large amount of money in a savings account and then
00:22:08.220 | if you need to make an immediate transfer to your checking account, you can do that.
00:22:13.380 | One very simple and very practical suggestion for you is make sure that you've asked for
00:22:19.460 | and gotten permanent high ATM limits on your accounts.
00:22:24.380 | I discovered that I could do this a number of years ago.
00:22:25.980 | I was buying a car and whenever possible, I prefer to do these types of transactions
00:22:31.300 | and using currency, cash.
00:22:35.180 | Quick note, when I use the word cash, I'm usually referring to the idea that we're not
00:22:41.140 | using credit.
00:22:42.700 | So if I say use cash, it doesn't necessarily mean use a personal check or $20 bills.
00:22:51.220 | I try – I make mistakes with this.
00:22:53.100 | I try to refer to $20 bills as currency, but I do slip up and sometimes refer to that as
00:22:58.980 | cash but I will try to keep an eye on that and try to clarify that for yourself.
00:23:03.140 | So when I do various types of transactions like buying a car, if it's at the smaller
00:23:10.540 | end and it works, in the used market, a lot of times going to the transaction with currency
00:23:15.420 | is the best scenario.
00:23:17.980 | I wanted to buy a car and I needed to get currency out so I could make the transaction
00:23:21.860 | that day.
00:23:23.220 | I was seeking to – a quick little lesson in buying.
00:23:28.040 | In a transaction, the number involved is only one of the terms.
00:23:33.060 | When you're negotiating a transaction between two parties, there are multiple terms that
00:23:38.540 | can be negotiated.
00:23:40.460 | So one number might be the actual amount of the – the actual dollar amount of the bill.
00:23:48.260 | Another amount or another factor might be the form of payment and another factor might
00:23:53.180 | be the timing of payment.
00:23:54.420 | Those are usually the three most common things to negotiate in any transaction that you have.
00:24:00.000 | So what you should do is get in the habit of looking at any financial transaction and
00:24:03.860 | asking, "Is there a way that I can negotiate this to my best interest?"
00:24:08.340 | And so sometimes you can pay a higher price, but if you can negotiate more favorable terms,
00:24:16.620 | you negotiate a longer payment period.
00:24:19.460 | You negotiate a different form of payment that's more helpful to you.
00:24:22.500 | That's going to put you in a better situation.
00:24:24.900 | But you can often negotiate the price because that's what most people negotiate and then
00:24:29.080 | negotiate off of the price based upon the form of the payment and the timing of the
00:24:34.500 | payment.
00:24:35.500 | So having – this is one reason why getting your hand on cash is so valuable.
00:24:40.940 | You go to buy a car.
00:24:41.940 | Well, you can buy the car and you can buy the car with a wire transfer or a personal
00:24:46.400 | check or something like that.
00:24:47.840 | You might – a certified check.
00:24:50.860 | You might do that, but you might also be able to take a stack of currency with you and if
00:24:58.060 | you are ready to move right then, you use that negotiating chip to negotiate off a bit
00:25:06.860 | more off the price or use the fact that you're willing to buy right now to allow you to negotiate
00:25:13.300 | some off the price because for the seller, their interest might be to have the highest
00:25:17.460 | amount of money, the highest price, or their interest might be to get rid of the thing
00:25:21.500 | quickly.
00:25:22.680 | And so having money in your pocket, having currency in your pocket will make a big difference.
00:25:28.180 | It's very simple – a very simple negotiating technique if you're buying something like
00:25:32.660 | that, something like a used car.
00:25:34.180 | Say this car is probably worth – let's say it's worth $5,000.
00:25:38.980 | This car is probably worth $5,000 and I think you could probably get that.
00:25:42.020 | It's a good-looking car.
00:25:43.540 | I think you could probably find someone that can do that.
00:25:46.240 | But I tell you what.
00:25:47.240 | I'm not willing to pay you $5,000, but I am willing to buy the car right now and I'd
00:25:52.060 | be willing to give you $4,200 for it right now.
00:25:55.660 | So if you'd like, here's $4,200 in $20 bills.
00:25:59.660 | I'd be happy to take the car right now and you can have the thing sold.
00:26:03.980 | Very simple.
00:26:04.980 | There's no manipulation.
00:26:05.980 | You're just simply adjusting the terms of your offer.
00:26:08.980 | Always keep this in mind when working with service providers.
00:26:11.220 | You have a mechanic or somebody is working on your house or something like that.
00:26:17.220 | They prepare the price for their proposal or they prepare the price for the bill.
00:26:20.180 | You're going to pay the bill.
00:26:21.920 | You can pay that price with a check.
00:26:23.260 | You can pay that price with a credit card.
00:26:25.780 | Ask them what the discount of cash paying with currency would be.
00:26:29.980 | A lot of times by adjusting the form of payment, you'll be able to negotiate a better deal.
00:26:35.540 | So back to the story of the car, I was going to look at a car.
00:26:39.220 | I was fairly confident.
00:26:40.220 | I'd done my research.
00:26:41.220 | I knew this particular car was the one I wanted and I needed to get currency.
00:26:43.820 | I didn't have enough currency available to me to make the deal and I wanted to make
00:26:47.740 | sure that I was ready to make the deal quickly in order to buy the car.
00:26:52.260 | Called the bank, asked for an increase on the ATM limit so I could go and make multiple
00:26:55.660 | ATM withdrawals without them shutting my card down.
00:26:58.260 | I found out from speaking with a representative that I could have a permanent higher limit
00:27:03.300 | applied to my account.
00:27:04.300 | So instead of dealing with the $700 or the $1,200 very low ATM limit, which is common
00:27:09.500 | on checking accounts, they raised my limit on my account.
00:27:12.020 | I think it's something like $5,000.
00:27:13.780 | So at any point in time without calling them or getting special considerations, I can withdraw
00:27:18.220 | $5,000 from an ATM or any ATM in a series of transactions without them flagging my account.
00:27:26.340 | That's really useful because what might happen is you might find yourself in a position where
00:27:31.060 | you're heading out of town.
00:27:32.260 | You're escaping from the – you're trying to get out of the forest fire zone and so
00:27:37.020 | you get just a point of safety, but you don't have any currency in your pocket for whatever
00:27:40.920 | reason and you need to go to the ATM.
00:27:42.980 | Well, if your account is limited and you can only make a $400 withdrawal and another $400
00:27:48.180 | withdrawal and then they shut you down for the day, you got $800 in your pocket.
00:27:52.540 | But if you can withdraw $400 multiple times up to a total of $5,000 and you can just sit
00:27:57.220 | there and do it, it'll take 20 minutes of sitting there at the ATM.
00:28:01.660 | But sometimes that's really useful.
00:28:03.940 | And if you're doing that at 3 o'clock in the morning while you're fleeing a difficult
00:28:07.100 | situation, you'll be glad that you had the foresight to go ahead and set that up.
00:28:11.920 | Also, consider making a habit of keeping those bank reserves readily accessible to you by
00:28:17.040 | asking for higher ATM limits.
00:28:19.520 | And always consider maintaining a bank account with local banks so you have access to that
00:28:22.600 | bank services.
00:28:23.600 | I've banked my entire adult life with USAA and have been thrilled with their banking
00:28:27.760 | services, but they don't have any local branches.
00:28:30.720 | They have no brick and mortar banking institutions.
00:28:34.040 | And so that leads to a couple of things that I can't conveniently do with them.
00:28:38.860 | So it's good to make sure that in a circumstance like that, you have a relationship with a
00:28:42.500 | local bank so you have access to that bank's services.
00:28:46.040 | Next, back on track here.
00:28:48.440 | We're talking about make a habit of carrying an appropriate amount of cash on your person.
00:28:52.140 | Make a habit of keeping a substantial amount of cash readily accessible to you, currency
00:28:55.480 | available to you.
00:28:56.620 | Make a habit of keeping bank reserves readily accessible to you.
00:28:59.840 | And then make a habit of maintaining several credit cards with various issuers and have
00:29:04.340 | as much credit available to you as possible at all times.
00:29:09.360 | And make sure it's with different issuers.
00:29:12.540 | Good recommendation, make sure that in your wallet or secreted on your person or distributed
00:29:17.320 | in your baggage in various places if you're traveling, you have access to a Visa card,
00:29:22.000 | a MasterCard, an American Express card, and a Discover card.
00:29:26.240 | Because some of those will work sometimes in some places, some of them won't work in
00:29:29.260 | other times in other places.
00:29:30.600 | I remember one time, I think it was in Costa Rica.
00:29:33.680 | I was in Costa Rica and I went to make a withdrawal from the bank or do a credit card transaction.
00:29:39.000 | For some reason, that time they wouldn't accept Visa.
00:29:41.520 | Okay, well I switched and pulled out the MasterCard.
00:29:44.680 | So make sure you have access to several credit cards with various issues.
00:29:48.560 | Consider a scenario such as 9/11.
00:29:51.920 | Consider how important it would be to have those credit cards available to you.
00:29:55.160 | 9/11, if you were traveling and away from home on 9/11, you were in a tough spot, a
00:30:00.920 | very tough spot because all of the air transportation was shut down for a few days.
00:30:08.400 | I think it was at least a few days.
00:30:11.240 | And then the resulting mess from having all air transportation shut down for a few days
00:30:17.520 | just made a mess of everything else.
00:30:20.200 | Well, in a situation like that, what do you do?
00:30:22.920 | You should immediately say, "I need to get home with my family," most circumstances.
00:30:26.400 | "I need to get home with my family."
00:30:28.080 | So you look and say, "I need to book a bus ticket or a train ticket," or you might
00:30:31.600 | just need to go rent a car.
00:30:33.400 | Well, if you at that point in time had done your monthly budget and you didn't have
00:30:37.920 | money available to you in your checking account because it was all allocated and everything
00:30:42.640 | was messed up and you didn't have access to some credit cards, you might not be able
00:30:45.800 | to go and rent that car.
00:30:47.800 | But if you can move quickly in a circumstance like that, move before the crowds, go rent
00:30:51.680 | the car, and if it takes you a day to drive across the country and get home, at least
00:30:55.920 | you're home.
00:30:56.920 | Well, think ahead.
00:30:58.640 | Make sure that you have various credit cards available to you with different issuers and
00:31:02.400 | have as much credit available to you on those cards as possible.
00:31:07.480 | And then next, make a habit of keeping various forms of money available to you.
00:31:12.680 | Again, remember, doing this with scale.
00:31:14.640 | Consider where you are and consider if you might better your situation by thinking about
00:31:18.280 | something else.
00:31:19.680 | Currency is good.
00:31:20.680 | It's very useful.
00:31:21.680 | Credit cards are useful.
00:31:22.680 | But are there other valuable items that might also be useful?
00:31:25.920 | Can you lay your hands on some gold coins or some silver coins or gold or silver bullion
00:31:30.240 | if you need to to make a transaction?
00:31:33.080 | Are you at the point where you should consider having some precious gems around or other
00:31:37.280 | items of value?
00:31:39.480 | After a hurricane, a chainsaw is a much more useful barter item than is a stack of currency.
00:31:48.160 | After some circumstances, a gun is a much more useful barter item than a credit card.
00:31:55.080 | So depending on the situation, you might be able to plan ahead and just by accumulating
00:31:59.340 | some things of value, you can set yourself up to where you're in a good situation.
00:32:06.320 | In times of trouble, you can trade tools to people pretty quickly and your transactions
00:32:09.720 | will go much farther.
00:32:11.320 | Back to doing a deal, form of payment is useful and sometimes currency is the most useful
00:32:16.320 | form of payment.
00:32:17.960 | Sometimes currency is not the most useful form of payment.
00:32:22.100 | And you might be able to trade an item of value to somebody else because they don't
00:32:25.600 | particularly have use for the currency, but they'd really like to have the item of value.
00:32:30.680 | Always look for those things because if you can trade something that you have for something
00:32:34.400 | that somebody else has that you'd rather have, then they'd like to have your item that can
00:32:39.120 | be very useful to them.
00:32:43.820 | Think in advance and establish yourself with options, recognizing that money will solve
00:32:50.280 | many of your issues or improve your situation.
00:32:54.800 | If you got to get from one side of the country to the other, you need money.
00:32:57.760 | You need money to rent the car, put the gas in the car.
00:33:01.560 | You need money to buy the bus ticket, buy the train ticket, buy the plane ticket.
00:33:06.120 | If you're fleeing from a hurricane, you need money to get yourself a hotel room in another
00:33:10.080 | city, money to get some groceries so you have something to eat.
00:33:15.280 | Money improves situations.
00:33:19.100 | If you need to, again, bail your spouse out of jail or bail a good friend out of jail,
00:33:24.400 | money improves the situations.
00:33:27.440 | Now, notice that I've talked a lot in today's show thus far about leaving.
00:33:34.160 | The reason I do that is important.
00:33:37.880 | In most disasters, the very best thing that you can do for yourself and for your loved
00:33:42.620 | ones is to leave.
00:33:45.840 | If you can leave the affected area, leave.
00:33:51.160 | Leaving is usually going to be your best option.
00:33:54.000 | Obviously, there are situations which is better to stay, but leaving many times gets you out
00:33:59.680 | of trouble.
00:34:02.120 | If you're in a situation and things are starting to feel a little bit strange, you're noticing
00:34:06.580 | people's behavior is a little bit off, get up and leave.
00:34:11.100 | If the hackles on the back of your neck go up and you kind of have a question about maybe
00:34:14.680 | this isn't the safest place to be, get up and leave.
00:34:18.040 | If you're in a situation and you see political protests going on and people are starting
00:34:22.920 | to yell at each other and cause problems, get up and leave.
00:34:28.100 | If you're looking around at your country and you're saying, "My government is causing all
00:34:31.640 | kinds of problems.
00:34:32.640 | We're starting to have some real warning signs on the horizon here," get up and leave.
00:34:41.120 | Leave the country.
00:34:42.120 | Leave the city.
00:34:43.120 | Leave the bar.
00:34:44.120 | Get out before the fight starts.
00:34:48.120 | It might be heroic to be on the last plane out.
00:34:53.920 | Fidel Castro is coming into power and you got your family on the last plane out.
00:34:58.520 | You might say, "Okay, we got on the last plane out, but how much better to have gotten on
00:35:01.720 | the plane out a year ago when it was easy?"
00:35:05.080 | It's very expensive to leave last minute.
00:35:07.080 | It's usually a lot cheaper to leave quickly.
00:35:09.760 | The reason I'm talking so much about money and leaving is because the best way to escape
00:35:14.980 | the impact of most disaster scenarios is not to be there when the disaster happens.
00:35:21.320 | It's like things like fights and problems.
00:35:24.480 | I heard it from a firearms trainer years ago.
00:35:28.380 | Don't be with stupid people in stupid places doing stupid things.
00:35:31.400 | You avoid most of your problems, so leave.
00:35:36.280 | But what do you need to do to leave?
00:35:37.480 | Well, you need money to leave.
00:35:38.880 | A lot of times you need papers to leave and you need money to use while you're gone.
00:35:43.400 | Let's continue talking about money.
00:35:45.000 | You need money to buy the tickets or to put gas in the car to get you out of the area.
00:35:51.140 | Sometimes you need money to bribe the government officials that are keeping you in or keeping
00:35:54.920 | you out.
00:35:55.920 | I always think about the stories of the Jews that were fleeing Germany back under the Nazi
00:36:02.400 | regime.
00:36:03.400 | They had to wipe out their life savings and they've got jewels and gold and everything
00:36:07.800 | secreted in their coats and they basically wiped out their life savings to bribe the
00:36:11.940 | government officials to let them out.
00:36:14.080 | Well, thank God many of them got out.
00:36:16.280 | A lot of them didn't.
00:36:18.880 | So you need money on hand to get you out.
00:36:22.480 | You need money on hand to get you on the plane.
00:36:24.120 | You need money on hand to get you in the car with somebody who's leaving the affected area.
00:36:31.240 | You need money to leave.
00:36:33.080 | You also need papers to leave a lot of times.
00:36:36.900 | This means make sure that you have a passport that's current for you and for your spouse
00:36:43.440 | and for every member of your family.
00:36:45.740 | This is probably the most neglected preparedness item, especially financial preparedness item
00:36:51.900 | that most of you listening have neglected.
00:36:53.920 | US Americans were terrible about having passports.
00:36:57.120 | We just say, "Well, the United States is the best place ever and it's really big so why
00:37:01.400 | would I need to go anywhere?"
00:37:02.960 | I was considering this recently myself and I realized that I was lacking.
00:37:06.900 | I hadn't gotten around to getting passports for my kids because we haven't really traveled
00:37:11.320 | much internationally in the last couple of years.
00:37:13.620 | I don't have any plans right now for an international trip and I realized that I hadn't bought passports
00:37:19.380 | for my kids.
00:37:20.380 | My son's two and a half years.
00:37:21.380 | The last two and a half years he hasn't had a passport available to him.
00:37:23.580 | What would I need to do if I needed to get out of the country?
00:37:26.780 | Can't go.
00:37:30.260 | I was even more chagrined to pull open my passport and realize mine expired about three
00:37:34.960 | months ago.
00:37:35.960 | What would I need to do if I needed to get out of the country?
00:37:40.520 | Make sure that you have a passport for you and for all of your family members and you're
00:37:43.580 | ready to go.
00:37:44.580 | A passport and a credit card can get you out of a lot of problems.
00:37:51.460 | Good financial preparedness item, get your passports lined up.
00:37:54.600 | I'm doing it for me and for my family.
00:37:56.720 | That was one of the things that when I was again going through my checklist and I realized,
00:38:00.840 | "Wait a second, I am remiss."
00:38:03.860 | Also keep money outside of your affected area if possible.
00:38:07.660 | Now this is not generally important for things like natural disasters, but it's very important
00:38:16.260 | in times of economic problems.
00:38:19.740 | It's very important in times of political problems.
00:38:23.540 | If you're going through economic unrest or recession, depression in your country and
00:38:29.540 | maybe the government is mismanaging the currency and you're facing inflation or hyperinflation
00:38:34.460 | or deflation, one of the things that's often associated with those circumstances is capital
00:38:38.940 | controls or currency controls where you're not allowed to get out of the country.
00:38:45.340 | Now all of a sudden, you're in Venezuela and you had lots of money in a Venezuelan bank
00:38:49.140 | account, but now it's all stuck in Venezuela.
00:38:52.780 | You are getting out of Venezuela, but you don't have any money.
00:38:58.180 | Another thing that happens if you're a political dissident and unfortunately, many of us either
00:39:03.460 | have or will become political dissidents in our lifetime.
00:39:06.900 | As our governments change, as what's popular changes, you become a political dissident
00:39:11.380 | and now you are labeled with that label and now your access to your money and your stuff
00:39:18.520 | is going to be challenging sometimes.
00:39:21.820 | Again, these are some of the more extreme human cost scenarios.
00:39:26.180 | Hurricane, generally not a problem to have money outside of the affected area.
00:39:30.940 | So pay attention to Venezuela with this regard.
00:39:33.940 | Make a habit if you're concerned and many of you listeners are international listeners,
00:39:38.140 | make a habit of diversifying your savings in terms of their currency.
00:39:42.660 | It's probably a mistake to have all of your money in one currency, especially if you've
00:39:47.100 | accumulated a substantial amount.
00:39:49.060 | Again, I'm differentiating here between somebody who has 10,000 bucks.
00:39:52.900 | You don't have a lot to worry about with regard to currency selection if you have 10,000 bucks.
00:39:59.580 | That's different than somebody with a million dollars.
00:40:01.220 | So you need to diversify your currencies.
00:40:04.320 | It's very simple to open a bank account in another country and very wise to open a bank
00:40:09.300 | account in another country and maintain some reserves there in a savings account in a foreign
00:40:13.220 | currency.
00:40:16.460 | Probably for US Americans, Canada is your best bet.
00:40:18.820 | It's pretty simple and probably a very important plan for most of you to go up across the border,
00:40:27.620 | open a Canadian bank account and keep some money up in a Canadian bank account in Canadian
00:40:31.300 | currency, something that's not in the US dollar, something that's diversified.
00:40:34.460 | Now in the United States, we get very lazy with this because the US dollar is the reserve
00:40:37.780 | currency of choice of the world.
00:40:38.980 | It's the strongest currency.
00:40:40.540 | There's no guarantee that continues forever.
00:40:43.460 | It's probably not going to continue for as long as those who say, "Well, the US dollar
00:40:48.620 | will always be the world's greatest currency."
00:40:52.220 | It's probably not going to continue for as long as they say it's going to continue and
00:40:56.180 | it's probably going to lose its status a little bit later than those who say, "It's a terrible
00:41:02.020 | currency and it's all going to collapse."
00:41:03.580 | It's probably going to be somewhere in between those.
00:41:05.740 | But it doesn't mean you shouldn't plan for it.
00:41:09.240 | So open up a savings account in another country.
00:41:11.540 | Again, thinking of a situation, economic crisis usually comes with currency controls, capital
00:41:16.900 | controls, controls on the money.
00:41:18.980 | A little bit of planning ahead if you were in Venezuela, making sure that you'd already
00:41:22.980 | expatriated some money gives you the money to get through a difficult circumstance.
00:41:31.340 | Hyperinflation, if you get into a hyperinflation economic scenario in your country of residence,
00:41:37.180 | hyperinflation usually only lasts for a couple of years.
00:41:39.500 | And so the best thing to do, it can't last for any longer.
00:41:42.260 | It implodes and they reset it and start a new currency.
00:41:44.740 | So the best thing to do in hyperinflation is usually just leave.
00:41:47.980 | If you can set aside enough money in a foreign country where you can go and take your money,
00:41:54.440 | and take your family and your loved ones and just be gone for a couple of years and you
00:41:58.540 | have enough money outside of your country of origin, outside of that currency of origin
00:42:04.340 | to where you can be gone, you can get through those two years in comfort.
00:42:08.260 | And then you can come back and start rebuilding at that point in time.
00:42:13.420 | You should also consider having a savings account, keeping foreign currency in a savings
00:42:17.220 | account in another country.
00:42:19.300 | It's very simple if you're trying to purchase a currency.
00:42:21.660 | There are many currencies that are very strong, but they won't allow US Americans especially.
00:42:26.660 | Some of you from other countries can do it, but they won't allow US Americans to open
00:42:30.100 | a bank account in that country.
00:42:31.740 | Probably the most notable one would be something like the Swiss.
00:42:35.300 | If you are a US American, you are persona non grata in Switzerland.
00:42:39.500 | Swiss bank accounts are effectively barred to you.
00:42:41.780 | But that doesn't mean you can't buy Swiss francs and put them in a safe deposit box
00:42:46.380 | in a Caribbean bank or in a Canadian bank.
00:42:49.940 | This allows you to have money in a stable currency outside of your country of origin,
00:42:55.260 | but it allows you to do it in a way that you can actually get it done.
00:42:58.500 | There's also some foreign reporting requirements.
00:43:01.780 | One little tidbit on foreign reporting requirements.
00:43:04.580 | US tax law requires all US taxpayers to report bank accounts held in foreign countries.
00:43:12.380 | You need to report all of those bank accounts.
00:43:14.700 | They do not require you to report currency that's held in a foreign country.
00:43:20.260 | So if your financial plan and your asset allocation plan calls for you to hold currency, physical
00:43:25.820 | currency in a safe deposit box in another country, that might be a way for you to do
00:43:30.020 | it and you might not have to fulfill as many reporting requirements.
00:43:33.940 | That's my understanding of the law.
00:43:36.820 | So think ahead and if you can leave the affected area, leave.
00:43:40.660 | Here I'm dealing again with those big time national disaster scenarios.
00:43:46.740 | Now you should note that thus far I've only discussed money and I emphasize to you again
00:43:55.060 | that's because in almost every situation all you need is enough money to get you through.
00:44:04.220 | If I have a problem and I have a credit card and a passport for me and all of my family
00:44:09.380 | members, I can go down to the airport, I can buy a supplantic to another country, and I
00:44:14.700 | can buy a toothbrush in a hotel room when I get there, and I can get everything figured
00:44:19.120 | out once I'm there.
00:44:22.240 | Money solves almost all of the situations better than just about anything else.
00:44:29.340 | But there are at least three situations and probably more where money doesn't work.
00:44:34.540 | One, if you don't have enough money, you've got to go to something else.
00:44:39.940 | Either if you don't have enough money or access to enough money.
00:44:43.820 | That's where having a credit card is important, having a home equity line of credit available
00:44:46.900 | to you in your house, having lines of credit secured before you need them is important
00:44:50.860 | because you might just not have enough money.
00:44:53.940 | What is the person who says, "I'm facing a natural disaster, but I have $3,000 and
00:45:00.020 | that's not enough to buy plane tickets out of the area.
00:45:02.740 | What do I do?"
00:45:04.060 | Or what if they don't have access to enough money to buy plane tickets out?
00:45:07.180 | Well, you've got to do another method of planning.
00:45:11.480 | The second time that money is probably not going to work is if money is too slow to be
00:45:16.780 | of use.
00:45:19.060 | Think about it.
00:45:20.480 | Money can buy you great medical care, but if you've just been shot and you don't have
00:45:26.540 | a medical kit or if you've just fallen and hit your head or you're bleeding severely
00:45:32.940 | and you don't have a tourniquet handy to you and you don't have a first aid kit handy to
00:45:36.100 | you or your kid is bleeding from a head wound and you don't have some band-aids or some
00:45:40.020 | gauze to put on as a pressure dressing, now you've got a problem.
00:45:44.660 | Doesn't matter how much money you wave around.
00:45:47.460 | Help is only minutes or hours away when you need it.
00:45:52.180 | Sometimes money is just too slow to be of use.
00:45:57.420 | Sometimes the money might, third reason, money might not be valued because of other things
00:46:02.000 | that are going on.
00:46:03.000 | Let's talk about some examples.
00:46:04.880 | Think about the forest fires in Fort McMurray, Alberta.
00:46:08.220 | In that circumstance, what did you need to do to protect yourself and your family?
00:46:13.560 | Money was probably not the problem.
00:46:15.880 | It's a problem for people who are at the lower end of the economic scale, they're worried
00:46:20.200 | about work and things like that, but the money was not the acute problem.
00:46:26.000 | The fire was bearing down on the town.
00:46:27.600 | Some people had a 10-minute warning and had to get out.
00:46:29.800 | Well, in that situation, the money doesn't help, but having a full tank of gas in your
00:46:33.840 | car or at least a half a tank of gas, you've got 200 miles of range, that goes a long distance.
00:46:41.280 | Some things you can't solve with money, but you can solve with simple planning and preparation.
00:46:47.700 | Don't let the gas in your car get below a half or a third of a tank.
00:46:51.300 | Make sure you always have at least a third of a tank in your car.
00:46:53.640 | That requires discipline, but when you got to get your child to the hospital or you got
00:46:57.360 | to get out because of the forest fire, you'll be glad you have some gas in your tank.
00:47:03.320 | Think about hurricanes and hurricanes is often gas lines.
00:47:07.260 | Gas is available, but you might have hours waiting.
00:47:10.240 | You might spend hours sitting, waiting in line, waiting for the gas.
00:47:14.520 | You have plenty of money for it, but is it really worth it to you to spend time standing
00:47:21.120 | in line for 10 hours?
00:47:22.680 | Wouldn't it be a little bit smarter to have some cans of gas tucked aside?
00:47:27.800 | A little bit smarter.
00:47:30.320 | Not a financial thing.
00:47:31.320 | It's just recognizing that it's not the money that's the problem there.
00:47:34.440 | It's which local gas station has a generator to be able to run itself to accept credit
00:47:39.320 | cards.
00:47:40.320 | Well, avoid all that nonsense.
00:47:42.560 | Store aside 30, 40 gallons of gas in your back shed and you're in good shape.
00:47:48.120 | Or think about a situation like Venezuela.
00:47:50.800 | Venezuela has food, some.
00:47:55.320 | Major problem in Venezuela is the variety of food is very small.
00:47:59.360 | They have just a few basic staples.
00:48:03.280 | And because it's being rationed not according to price, what always happens in a situation
00:48:09.080 | when prices are controlled, rationing has to happen due to some other force.
00:48:14.200 | Usually it's going to be a queue, a line waiting for rations.
00:48:18.040 | That's why if you let the free market open, the free market will often regulate itself
00:48:22.640 | based upon price.
00:48:24.280 | But if you freeze price, it has to regulate itself some other way.
00:48:27.720 | To read the accounts coming out of Venezuela, what you find is that food is available, but
00:48:33.320 | you might spend hours standing in line waiting for food.
00:48:36.640 | And you might be spending those hours putting your life in danger due to somebody coming
00:48:43.420 | and stealing your money or stealing your food.
00:48:47.440 | Times of economic crisis, personal insecurity usually goes up.
00:48:53.020 | People are generally willing to commit more crime during times of crisis than other times.
00:48:58.520 | So again, how do you avoid the risky situation?
00:49:02.080 | Well, a stack of money in your house, but no food means you might have to go out and
00:49:07.520 | face the lines and now you're putting yourself at risk due to the criminal element.
00:49:13.080 | Better to go ahead and have the food stocked up in your house so you don't have to put
00:49:17.080 | your life in danger.
00:49:23.240 | A lot of times also, it's not the money that keeps people from responding to a crisis.
00:49:28.000 | It's the lack of a plan, of not knowing where to go.
00:49:32.000 | Many times, look at hurricanes and there have been some very sad ones.
00:49:34.920 | It was Katrina and it was Ike in Texas.
00:49:36.840 | A lot of times in a hurricane evacuation, people wait and wait and wait to leave because
00:49:44.640 | they don't know where to go.
00:49:46.940 | Because they don't think they can get off work.
00:49:49.160 | They don't think that they can afford to be gone for a few days and so they wait and wait.
00:49:52.680 | But many people that can get off work and can afford to be gone, they just sit and wait
00:49:56.420 | because they don't know where to go.
00:49:58.920 | The key to getting out is get out early.
00:50:00.840 | So if there's a hurricane coming, make sure you have a plan.
00:50:04.960 | My family, I got a plan.
00:50:06.320 | Okay, hurricane's going to come up coming up from the Gulf.
00:50:08.560 | Well, it means I'm going to head this direction.
00:50:10.840 | Hurricane's coming in from the Atlantic.
00:50:12.160 | I've got the north plan.
00:50:13.200 | I've got the west plan.
00:50:14.200 | I've got the northwest plan.
00:50:15.200 | I've got the south plan.
00:50:16.200 | I'm down here on the tip of the state.
00:50:17.560 | So the south plan is generally not a good idea.
00:50:19.280 | I don't want to get trapped on the keys when a hurricane's coming.
00:50:23.800 | But the point is have some plans out in advance.
00:50:26.840 | And by plan, I mean, okay, my family lives in X city.
00:50:29.820 | It's X number of hours away.
00:50:31.480 | I've got enough gas in the car and a gas stored up that I can put gas in the car.
00:50:35.920 | I don't have to stop in lines.
00:50:37.560 | I know that I can put gas in the car and I have reserves in case we get stuck on the
00:50:40.720 | highway in a traffic jam to get where I'm going.
00:50:43.480 | Doesn't take money to do that.
00:50:44.480 | It takes planning.
00:50:45.480 | So by doing the planning when the disaster hits, you're not sitting there paralyzed.
00:50:49.160 | Hopefully, I've never been in this situation.
00:50:51.400 | But from watching and studying a lot of disasters, I hope I'm not sitting there paralyzed saying,
00:50:56.160 | "Oh no, I can't just get out of town."
00:50:58.560 | Leave a day early rather than a day late.
00:51:04.600 | That's one of the key.
00:51:05.600 | So what we're talking about here is ultimately a bug out strategy.
00:51:08.680 | Think of a military withdrawal strategy.
00:51:11.000 | Bugging out is the term that most popularized by the military.
00:51:14.840 | I don't know where it came from.
00:51:15.840 | I think it came into use most commonly in the '50s when I looked up the etymology of
00:51:19.760 | the word one time.
00:51:21.000 | But the point is that when you're in a problem situation, you're being overrun by the enemy,
00:51:26.080 | at some point in time, you just say, "Hey, we got to get out.
00:51:28.520 | We got to bug out."
00:51:30.120 | And in most acute disasters, getting out is the key.
00:51:33.880 | So you need different levels of escape.
00:51:35.720 | You need different levels of planning.
00:51:38.720 | Sometimes you need a quick plan.
00:51:40.480 | Forest fire is coming.
00:51:41.480 | We've got 10 minutes.
00:51:42.480 | So you need a 10 minutes to get out plan.
00:51:47.440 | This happened to thousands of people in Fort McMurray a month ago.
00:51:52.160 | So what's the plan?
00:51:53.760 | Written list is really useful.
00:51:55.080 | Think it through if you haven't done it.
00:51:56.600 | Put the kids in the car.
00:51:57.600 | Put the dogs in the car.
00:51:58.600 | If we have time, grab our bug out bags.
00:52:01.120 | If you got it, you should have a bag ready to go with some basic medicine.
00:52:04.120 | If you take medicine, have that ready to go.
00:52:05.640 | Have some basic food.
00:52:06.640 | Have some credit cards, some financial papers.
00:52:09.000 | Have a checklist on the outside of it.
00:52:10.880 | Here, grab the financial papers if we have time.
00:52:12.880 | And you just go down the list with as much time as you have.
00:52:14.560 | So if you've got 10 minutes to go, be on the road in seven.
00:52:17.200 | But at least then you're on the road in seven with the box of important financial papers
00:52:21.280 | and all the insurance paperwork, the box of family pictures.
00:52:24.200 | Hopefully that stuff's backed up digitally at this point in time.
00:52:26.800 | Still working on my archives.
00:52:28.880 | And you've got toys and food for the kid and formula for your baby if you need it.
00:52:32.420 | Whatever you need to get out in 10 minutes.
00:52:35.480 | You also need to plan for an hour, a couple hours, and be ready to go.
00:52:40.920 | Make sure you don't forget the passports.
00:52:41.920 | Make sure you don't forget the extra credit cards.
00:52:44.160 | Make sure you don't forget the cash, currency.
00:52:48.080 | So you need a quick plan.
00:52:49.800 | You need a slow plan.
00:52:50.800 | You need a couple of plans.
00:52:53.680 | It's not that difficult to do.
00:52:57.360 | One of the things I don't like about all the preparedness people is oftentimes they make
00:53:02.120 | things sound so complicated.
00:53:03.640 | It's not complicated.
00:53:05.140 | You take a bag, like a bug out bag.
00:53:07.520 | If you're interested in bug out bags, I hesitate to say go online as people are obsessed with
00:53:11.560 | the topic.
00:53:12.560 | But it's really not that big a deal.
00:53:13.600 | You take an extra duffel bag or an extra backpack and you toss some stuff in there.
00:53:17.520 | You toss an extra phone charger.
00:53:19.280 | Buy one for five bucks or 10 bucks if you need one.
00:53:21.680 | You put some extra clothes in there.
00:53:23.040 | You put some toys for the kids and a couple of books so they have something to do in case
00:53:26.120 | you get stuck on the road.
00:53:27.960 | You put in some food.
00:53:29.040 | You put some bottled water.
00:53:31.080 | And you put in, it's basically it.
00:53:33.640 | Book of matches.
00:53:34.640 | It doesn't need to be any more elaborate than that.
00:53:36.480 | I mean, some of these guys on the internet, I don't understand it.
00:53:39.120 | It's like, think they're going to fight World War III.
00:53:40.800 | We're talking about leaving in the face of a forest fire.
00:53:43.720 | That's about it.
00:53:45.920 | But it does require a little bit of planning.
00:53:47.560 | But by putting the plan together, when you're facing the circumstance, now all of a sudden
00:53:54.460 | you're ready to go.
00:53:56.640 | And that's the key.
00:53:58.640 | I think that's just about everything I wanted to share with you in today's show.
00:54:05.280 | It's always difficult to know how to restrict the scope of a show appropriately.
00:54:14.960 | The major theme I wanted to convey to you today is that money solves most of your issues
00:54:19.400 | in times of crisis.
00:54:21.000 | So just think about having access to money and how to set that up.
00:54:25.120 | The vast majority of you can set that up now.
00:54:28.040 | Just takes a little bit of planning.
00:54:30.000 | Get some currency out.
00:54:31.000 | Make a habit of keeping more than $3 in your wallet.
00:54:34.700 | Get some currency out.
00:54:36.200 | Secure it somewhere in a safe and concealed location in your house or put it in a safe
00:54:40.840 | deposit box at the bank so you can get to it.
00:54:45.480 | Then go from there.
00:54:46.480 | Call up your bank.
00:54:47.480 | Set up an ATM.
00:54:48.800 | Order an extra credit card from a different manufacturer, different distributors so that
00:54:53.520 | you have access to a different line of credit.
00:54:55.640 | Maybe call your current ones.
00:54:56.760 | Get the credit lines lifted.
00:54:58.240 | Make sure that you have access to money in times of disaster.
00:55:00.160 | Then you're basically done.
00:55:01.920 | Some of you probably need to drive up to Canada, open up a bank account and put $20,000 in
00:55:07.400 | there.
00:55:08.400 | Pretty simple to do.
00:55:10.400 | But if you need it, it'll be helpful.
00:55:13.760 | So look at situations.
00:55:16.200 | Look at situations like Venezuela.
00:55:17.920 | I'll put some links in today's show notes for articles on Venezuela.
00:55:21.360 | Look at the situations like Fort McMurray.
00:55:23.960 | Think about hurricanes.
00:55:24.960 | Think about a terrorist attack like the shooting in Orlando.
00:55:28.160 | Just ask yourself, what steps can you take should an economic crisis happen?
00:55:36.920 | Should a hurricane come?
00:55:39.280 | What steps can you take now to make things better for them?
00:55:42.520 | Get the passports.
00:55:43.520 | It'll cost you, I don't know, I can't remember what the fees are, $100 or whatever, but get
00:55:47.240 | the passports for you and your kids.
00:55:49.920 | Passport and a credit card gets you out of a lot of problems.
00:55:53.120 | Number one financial preparedness tool that I know of.
00:55:55.920 | Thank you all so much for listening to today's show.
00:55:57.920 | I appreciate it.
00:55:58.920 | I'll be out of town the next couple of days running some interviews for you.
00:56:01.800 | I hope that you find those useful.
00:56:03.560 | When I do interviews, I try to keep them interesting and I hope you find them useful.
00:56:06.800 | If you'd like to support the show, I would greatly appreciate your support.
00:56:10.120 | RadicalPersonalFinance.com/patron.
00:56:11.880 | You can help me with my financial preparedness plan by helping support this show.
00:56:16.080 | It's the primary source of revenue for this show and I thank you for those of you who
00:56:19.520 | do.
00:56:20.520 | RadicalPersonalFinance.com/patron.
00:56:21.520 | Patreon.
00:56:24.100 | (upbeat music)