Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insights, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. My name is Josh Reichits and today we wrap up our three-part series on financial lessons from recent crises.

Part one was financial lessons from Ukraine. Part two was financial lessons from Russia. Today part three, financial lessons from the current crisis in the United States. That word crisis is a bit too strong for me. I wouldn't generally use it because I don't think we're living in a crisis, but there are certainly many yellow and red warning lights on all sides.

You have a few examples here for you to consider. Number one, of course, you have significantly elevated levels of inflation based upon what we've been accustomed to over previous years. Right now the most recent median CPI figures that are available show that the median inflation rate is approaching 5%.

That's a significantly higher inflation rate than we are accustomed to dealing with in the United States. You see the practical effect of that on all sides and you see concerns about the future, of where that could go in the future. In addition, related to the inflation, you see very practical impact in people's pocketbooks with very high fuel prices, which are causing a restructuring of people's budgets.

Even areas that are traditionally associated with prosperity, such as high housing prices, I don't get the sense that most people feel all that great about the high housing prices. Oftentimes when there's a run up in housing prices, it leads to people feeling good because their wealth has increased. Just like when they have fat 401k accounts and fat housing prices, they feel wealthy and they can borrow money out and spend it, etc.

But I get the impression that many Americans rather feel the pinch of high housing prices. They feel the pinch that if I sell my house, I have to buy another one and I'm going to get priced out of the market. How am I going to get an affordable house?

There are a lot of people who would like to get into real estate who find it very difficult to summon the necessary funds to get into real estate. This traditional measure of prosperity feels different when it's put together with all of the other areas of high prices that people are experiencing right now.

I think there are many other things that people are concerned about. There's concerns about security. Even though the United States is not involved directly, kinetically, in the war with Russia and Ukraine, the United States of course has been involved for many years in the war with Ukraine and Russia.

People are concerned about escalation. People are concerned about getting involved with that. People are concerned about the impact of financial sanctions. There are significant concerns about even the basics of life such as food supply. I myself am very concerned about the possibility of widespread food shortages and even famine over the coming year or two because every single agricultural input, the price is very, very high right now.

It seems difficult to see how given the disruptions in certain agricultural centers such as Russia and Ukraine, given the disruptions in the supply chain, the ability to redistribute food supplies around the globe, and given the massive high cost of agricultural inputs right now, everything from the basics of fertilizer to diesel fuel, etc., it seems difficult to see how the global food production is going to be high enough in the next couple of years to meet the world demand.

When you think about the hundreds of millions of people who live on the edge, very well could lead to widespread famine in the next year or two, which is a very, very concerning trend. This is all on top of the widespread disruption, societal disruption that we've experienced in the United States and around the world.

The arguments around the global pandemic, which has cost the lives of millions of people around the world, the massive disruption from that in terms of lifestyle, the arguments among neighbors as to how that should be managed and should have been managed, the destruction to many businesses, many jobs because of the economic fallout from responses to the pandemic, changes in supply and demand, you have this exacerbated by other hardcore conflicts.

This is not just limited to the United States, which is a very argumentative and violent culture, a culture prone to loud and public argumentation. This is happening in cultures that we traditionally understand to be more unified. You look at the disruption in the Canadian culture and the government response to the protests and the protesters and the counter protesters, and you see a traditionally unified culture such as the Canadian culture significantly disrupted compared to what we normally consider it to be.

Even in authoritarian culture right now, there are widespread protests across China, people protesting the Chinese zero COVID policy, which has led to very widespread draconian lockdowns to limit the spread of coronavirus. And the people there are protesting, which is quite unusual for the authoritarian experience in China. And so when you look at these, the question is, well, what are the lessons that I can be learning from this stock market down this past quarter, worst quarter performance in the last few years?

What are the lessons that I need to be learning from this experience? The first lesson I would like to draw your attention to is the experience, the situation in the United States is fundamentally different than the situation in Ukraine or in Russia. It's so fundamentally different that I feel a twinge of remorse and guilt even drawing a comparison, even pulling the three together in a series like this.

And I'm doing so because my point is they're very different, but they're so different that you feel bad even looking at any problems. Because if you compare the problems being faced by Ukrainians defending their homeland or the problems being faced by Russians having their country isolated from the rest of the world, the problems in the United States seem like light and ordinary experiences, not even worthy of being talked about.

But yet this is what I would say, this is the point. One of the things that I wrote in my notes in preparing for this is that it's good to be the king. And I think here in this situation, you see how it's good to be the king of the world.

It's good to be in the United States right now, because for all the problems that the United States has, which are significant and worth paying attention to, worth discussing, worth planning for, those problems pale in severity as compared to many places in the world. It's good to be the king.

And this is a point that I've made for a long time, that one of the best ways to improve your situation in life is to be where the problems are not. When I talked about Ukraine, I drew the point, I said the best way to survive an actual war with bombs and guns, etc., is not being in the war, not being there.

And while that's really hard to say, because I think we all look at, understand, and applaud those who take up arms to defend their homeland from a foreign invader, the most justified form of violence that exists, the impact of that violence, even in its most justified form, will change a generation.

I made the point that it's very difficult to survive in a war zone, physically, with your life. But even if you do survive, it's very difficult, because you lose your life. You lose everything that is normal to you. You lose everything that is dear to you. You lose your family, if you send your family away to safety.

You lose your family if your family stays, because you're isolated from them. You're trying to keep them in a safe little country town somewhere while you go and fight the invaders. You lose your business, not necessarily because your business is bombed, although that can happen, not necessarily because the demand disappears, although that does happen, not just because the market is completely disrupted, although of course that is true.

You lose your business because you have no higher priority than saving your life and your homeland from the foreign invaders. It's like stress. If you're drowning in a swimming pool, you're not thinking about the stress of the stock market decline. You're thinking about, "How do I get air?" That's what happens in war, because the stress and the threat is so acute, you can't think about anything else.

Even if the war ended today, there was an immediate ceasefire, the Russian troops withdrew, the Ukrainian troops withdrew, you lose years and years of your life. Because you have to rebuild, you have to clean up the rubble in the streets, you have to rebuild infrastructure, you lose years to the nightmares, the broken society, the lack of trust, the broken markets.

So I made the point that if you can get out, the best thing to do is to get out. If you have to stay, at least try to feel like you need to stay and that's the right thing for you to do, to stay and be together with your neighbors and defend your homeland, then getting your family out is your highest priority so that you can spare them to the greatest degree possible the trauma of war.

Then in Russia, I made the point that in Russia, you lose your life and your lifestyle. No, you're not worried about the same level of physical danger of death, but you lose the ability to build your business, you lose the ability to improve your job and career, you lose the ability to think long term, which means that when you're living in a place where you're facing sanctions and the severe opprobrium and sanctions that the Russian people are facing, you're going to lose years and years and years of your life being there.

And if possible, the best way to get those years back is to go someplace where you don't face those same levels of sanctions and build something where you can get back on a track of stability to build. When you compare the United States to that, what you see is the United States has none of those features.

You don't have to be worried about the loss of your life on a daily basis from a bomb falling on you. You can build. Things are stable. You can start something new. You can build something new. You're not worried about that. And so when you look at that and you look at even the potential threats to the United States of things that could make things worse, one of the best places to be right now in the world is the United States.

In fact, my travels of the world over the last years have raised my opinion of life in the United States quite substantially. When I first left the United States about three years or over three years ago now, I was pretty dark and negative in my outlook for the country.

I was watching things internally that made me say, you know what? I don't know if life is the best here. But after three years of being abroad, living abroad, traveling back and forth the United States, traveling the world in over a dozen countries, I've come to the perspective of no, actually, in many cases, it's hard for me to say that there's a better place for most people than the United States.

And in terms of practical evidence of that, what is the practical evidence of it? Well, number one, things are much more stable in the United States. It seems from an outside, especially when you look at the cultural strife and the arguments and whatnot, it seems from the outside that things are difficult.

It often feels like, well, the culture is splitting apart, the country is splitting apart. I think that's true to a significant degree. But yet at its core, there's a giant bureaucracy, there's a giant system that just kind of trundles forward the way the things, the way that more or less the way things always have been, doesn't change much.

And so that leads to a sense of stability. From a financial perspective, you have the US dollar, which for all of its lacks, for all of its difficulties, for all of its injustices, is the world reserve currency and is the world's most stable in-demand currency. It is, it's inconceivable that the US dollar, for all the problems that it will face, will face the same problems as so many other currencies around the world.

And so your money is safer. You look at the American stock market, you try to draw a comparison between the collapse of the Russian stock market and the declines in the American stock market recently. And it's just not even a valid point of comparison. The US stock market cannot collapse the way that the Russian stock market collapsed.

Because if the US stock market did collapse that way, it would not signal, it's not the signal of a temporary thing, it's a signal of a complete implosion of the world, literally, because of the companies that are listed there, because of the centrality in the global market space. And so while it's certainly theoretically possible that you could have that kind of widespread collapse, it's just not practically conceivable in any reasonable, practical sense of analysis.

When you look at the situation that the Russians and the Ukrainians face, the Russians being concerned about invasion, so then invading Ukraine, the Ukraines being concerned about invasion and getting invaded, you look at the European context, you realize how low the threat of war is for Americans. The US is so geographically insulated from virtually all violence from its neighbors, friendly neighbors to the north and to the south, two large, stable countries that don't have any meaningful military power compared to the United States.

The United States is the king of the seas on a global basis, isolated and insulated on all sides. The idea of somebody invading the United States with a land invasion is laughable. It's utterly risible that somebody would think of invading the United States. The most hardcore of a scenario you could come up with would be somebody simply launching missiles at the United States.

And even that is very hard to believe that would actually happen, although not outside of the realm of possibility. But the idea of somebody invading is utterly risible. The US is financially insulated from virtually all outside forces. You look at how deeply impacted Russia is and is going to be by the global sanctions, then you go back and you look at the United States.

Here's a country that produces massive amounts of food, that manufactures massive amounts of stuff. Here's a country that has the world's dominant currency, the world that controls political maneuverings in virtually the entire world. The scale of power, economic power, financial power, military power, is so lopsided in favor of the United States that it's just impossible to believe that at this stage in world history, the United States would face any of the same kind of trials that other very powerful countries face.

And the USA simply has the clout and the authority and the bullying power to get almost everything it needs. It has the clout to get what it needs. It has the internal resources to get what it needs in terms of very tremendous reservoirs of intelligence, hard work, companies, skills, etc.

All united around a basic core identity, an identity of being an American people who is resilient, who is able to change. I think you saw this in the early stage of the pandemic when all of a sudden all across the country, all of these companies immediately turned themselves to producing face masks and to printing things for respirators and little valves and whatnot.

But the level of creativity and the level of resources in the United States is so deep that the culture, when united around a central purpose, can respond very, very quickly and change things very, very quickly. And then the United States is vastly underpopulated. And so because it is so vastly underpopulated, it has room to maneuver.

It has room for the population to adjust, change, to go and relocate within the country and follow the available trends. And so for all of the downsides of the United States, I look at the country after being gone for three years and a good sober analysis and I say it's very hard to believe that there's a better place to be on a broad scale for most people.

It's very hard to think that there's some place better. And so the risk level being in the United States is much, much lower than it is in many other places. And I think that you see this with regard to even how the pandemic has played out. Now here you have to look a little bit at the...

It's important you look at the death rate. Death rates in the United States high, much higher than many other nations of its peers. And you say, "Why is that?" And I think there are good reasons to that. But one of the things that I thought was so obvious is where did the, for example, vaccines, where did the vaccines get developed the most quickly?

Well, the ones that worked got developed in the United States. You had vaccines developed quickly in Russia. You had vaccines developed quickly in China. You had various approaches throughout the Americas of different companies researching them. And in many of those, the efficacy proved to simply not be sufficient. The high-risk performing vaccines were developed by American companies, and then they were available very quickly in the United States.

So back to the clout of the United States, both in terms of internal ability to develop things and also the financial power to go and buy vaccines from international manufacturers and get them brought into the United States quickly. The widest availability of vaccines, the quickest, was in the United States as compared to many other places.

And it was so widespread that basically at that time, any tourist could fly to the United States, get vaccinated, and go. They were begging people to get vaccinated all across the country, giving out prizes and whatnot in the United States. And so it shows as just kind of a microcosm.

I looked at that and studied it all the way through, and I thought, "This is a good example of the power of these United States." And so when you look at that, and to be clear, that's not an all-consuming thing. I don't live in the U.S. I'm not going back to the United States to live.

But when you study it, honestly, if you're in the United States, as most of my audience is, don't think that it's just magically better somewhere else. It's not. I have come from the last few years of travel, I have come to the conviction that most people should stay where they're from, and that includes Americans, and that there are very good reasons as to why you'll probably have the best long-term possibility of success in the United States as compared to other places.

But when you look at these yellow warning signs that are around, it does give you reason to pay attention. So what do you need to pay attention to? What are the financial lessons? Well, I think the financial lessons are really the same ordinary run-of-the-mill lessons that I have been talking about for many years.

And it's not to pat myself on the back, it's to say that I don't see anything new at the moment. Number one, you must protect your income. That is the number one goal that you have. Right now, in any place in the world, if you have an income, you're okay.

And in the United States, if you have an income, you're okay. Why are the Russian sanctions so devastating? Well, for many reasons. One of the reasons they're devastating is it's destroying the incomes of many people. It's destroying the incomes of people living in Russia who work outside of Russia, meaning work online, publish things online.

Their isolation in the banking system has made it impossible for many of them to get hold of the money that's owed to them for their work abroad. Because of the social probrium that the world is leveraging against Russia, then many people are simply dropping all of their Russian clients, even though those ordinary...

Sorry, dropping Russian clients, yes, but dropping Russian workers, even though those Russian workers themselves have not done anything wrong. And then inside Russia, you have a massive economic crisis because the people are facing loss of work. You have companies, international companies, shuttering their shops, laying off their workforce. And that ripple effect spreads throughout the economy.

If you have thousands and thousands and thousands and thousands of people without work, then those people don't have the income now to go and buy, and that puts more thousands and thousands of people out of work. And so it's loss of income that's the primary problem. It's not the loss of power of the ruble, which has declined in value and then come back.

If you're living in Russia, the ruble is still working fine. There's been no widespread inflation. The prices haven't shot off. There's no widespread shortages right now. But if you've lost your income, you've lost your ability to buy. You've lost your ability to live. But that's just because you lost your income.

And so again, if you could protect your income in a crisis, you can get through that crisis very well. So looking at the United States, if you can keep your income, you can absorb the increases in the cost of your food. You can absorb the increases in the cost of your fuel.

You can absorb it if you can keep your income. So your goal is to keep your income, just to maintain it, if that's all you can do. If you can grow it, of course. But if all you can do is maintain it, you maintain it. Because the maintenance of that income will allow you to weather the economic crisis extremely well no matter how bad it gets.

That's the core lesson. So focus on keeping your income. Make a plan of, if I lost my income, how would I get more income quickly? Make a plan to make sure that you're not in the first round of layoffs if your company lays off. That's lesson number one. And there's no change from that today versus 10 years ago.

The principle still remains true. Those who can keep their income through a crisis are generally going to be fine. Next, you cannot be living near the edge with your finances. That's the lesson that we see right now. You cannot have everything built so you're right on the edge. A guy who's got a good, healthy six-figure income, who's fixed an ordinary expenses or say 50% of his income, that guy doesn't care about increased cost of food, increased cost of fuel because you've got an ability to expand and to adjust.

Okay, maybe you have to save less money. Maybe you have to work a little bit of overtime or something, but you can adjust your budget to match changing prices. But the guy who's got a low income or the guy who's got his fixed expenses as a very high percentage of his income, that guy's got major problems.

There's a statement that is a really tone-deaf thing to say, but I think it's really true. And so even at the risk of it being offensive, I think it's worth saying. I've thought of it several times in watching the situation. The statement is this. "If the price of gas makes a major difference to your daily life, you're doing it wrong." "If the price of gas makes a major difference to your daily life, you're doing it wrong." Let me expand that statement because it's a provocative and inflammatory statement, but it holds a lesson that I think is the right lesson to hold.

There's a small subset of businesses that are high consumers of fuel whose business will be majorly disrupted by the price of gas. I'm not arguing that those people are doing it wrong because they can simply adjust their business. If you run a trucking company and you're consuming thousands and thousands of gallons of fuel, then you will simply adjust your prices.

You'll adjust your freight charges. You'll adjust your end product prices, whatever, very quickly to adapt to the increased cost of inputs. And that's as you should. That's what you should do. But for an individual, an ordinary consumer, the price of gas should be a very, very small component of your situation.

And because if you have a high amount of income and a low amount of other expenses, you can easily adjust your spending on fuel. You can easily absorb the increased costs. If you have a low income, then your number one focus should be to figure out how can I find an alternative that doesn't expose me to the high price of fuel.

And so the way to get ahead financially is to do your very best to keep your expenses low as compared to the amount of your income. Where I think you see the people who are hurting the most right now with fuel prices is those who have not structured their finances in a way that thinks about frugality and spending rates.

I think here of a guy that I-- this is who I would have been when I was younger. But I had a family member who has a young boyfriend. And this guy, young guy, 18 years old. And he was from kind of the rural redneck culture in the United States.

And so his daily driver vehicle was a big Dodge pickup truck with a 5.7 liter Hemi, which is a fuel sucking vehicle that he was using exclusively to transport himself around. And that's what I would have wanted, except I didn't want a Hemi. I wanted a big old diesel.

That's what I wanted in high school. I never got enough money together to get it. But he was able to do it. The problem is he's rolling around getting 10 miles per gallon. And so I think of him. Find out. I'm sure by this time he's sold his pickup.

Because when fuel prices go up, it just becomes crazy for an 18-year-old to be trundling around doing tons of miles in a fuel sucking pickup truck that he has no useful need for. And so that same 18-year-old can intelligently turn into a small economic car, can go to a motorcycle, a moped, something that gets 50, 80, 100 miles per gallon, and get the same basic functionality.

That's what you need to do. If you have enough money that you want to drive a fuel sucking car, go for it. But if you're still trying to get money together, you can't indulge your whims of having a beautiful cool pickup truck that sucks fuel down. You got to get a moped, something that's going to get you around and solve your transportation needs until you get your income coming in.

So when you look at people who complain the most about gas and you look at the structure of their life, their lives are not ordinarily structured towards wealth. They're not making decisions to keep their expenses low as compared to their income so that they can invest money. What's happening is they're often living high consumption lifestyles as compared to their income.

I don't want to drive a moped on a daily basis, but I have to find a solution to my transportation needs that still allows me to save money and absorb changes. I think in the current fuel price increase, you see the importance of that. If the price of gas makes a big difference in your daily life, you're doing it wrong.

It's a sign that your ratio of expenses to your income is out of whack and you need to change. That's the same in 2022 as it was in 2012. If you want to build wealth, you have to have your expenses much, much lower than your income. Then when there are changes in the prices of things, you can absorb those changes.

Let me add one bit of mathematical analysis to why I say this at the risk of it being so... I'm trying to say it clearly, but at the risk of it being quite offensive. Let's say that your expenses are 50% of your income and there's a 10% change in your expenses.

You suffer a 10% inflation of expenses. Now your expenses are 55% of your income rather than 50%. You can still save money. You're still okay. You can absorb a 10% inflation rate even if your income doesn't change to keep up with it. What if there's a 20% increase in your expenses, but you started with a structure of 50% expenses to income ratio?

If your expenses increase by 20%, then they would go from 50% of your income to 60% of your income. That's a massive change, 20% increase. In your life, you can absorb that increase. You can absorb that uncertainty. Now let's say that you're living right at the edge. Ordinarily, you have 90% of your income devoted to expenses.

You're saving 10%. And then there's a 10% change in your expenses. Well, a 10% change in your expenses would take your expense level from 90% to 99% of your income. What about a 20% change? Well now it's going to take you over 100% of your income and you're going to immediately be in the red.

So the key is to make sure that your expenses are modest as compared to your income. That is what makes the difference in your ability to weather difficult circumstances and hard times. Brings us to the next point. All the basics still apply in that you must have savings. If you have savings, liquid money, emergency fund, buffer funds, savings, money that you haven't consumed, then you can absorb the temporary increases in price while you restructure your life.

You can absorb several months of being in the red. Even the guy who's got expenses at 90% and now due to over 10% inflation, he's over 100% of his expenses, he can absorb with savings. He can take up the slack. He can handle his expenses for a few months until he can restructure his life.

He can go and buy a moped or figure out some solution to deal with the price of gas. He has time to figure out how to get his garden in and get it productive to get food so he can lower his food budget. Now those are silly but practical examples that if it's at that point, that's what you need.

You need the savings in order to absorb it. And that's what savings do. They give you a buffer zone against unanticipated expenses. Why do we have emergency funds? Why do we have savings funds? Well, they give us a buffer against disruptions that we can't anticipate perfectly. They allow us to be calm and relaxed while we figure out how to solve problems.

That's why when you have a buffer on a production line, you have a buffer of materials, if there's a disruption of materials, you can keep your supply line, you can keep your production line going. In every business, having a buffer allows you to say, "All right, how do I make new, fresh, good decisions in this situation?" That hasn't changed because of high inflation rates.

What's happened is it's become more important in high inflation rates. Your savings haven't just lost their value because there's a 5% inflation rate. It's the exact opposite. Your savings have become more valuable because there's a 5% inflation rate. They're much more valuable to you as you figure out what to do.

By the way, I just hear so many of the audience saying, "5%, Joshua, 5%! It's much more than that." It may be. In some cases, it is. But it doesn't change the fundamental point. If you're facing a 15% inflation rate in your personal level of expenses, your savings are now much more valuable to you as you figure out, "What should I do?

Should I take this and go and buy a bunch of food? Should I go and buy a bunch of fuel? Should I go and buy a bunch of hard assets? Should I go and keep the money in case of future disruptions?" The savings become more valuable in times of inflation than they do in other scenarios.

Next lesson. I still continue to believe that most "normal" financial planning moves will work out. Meaning that if you look at the situation in the United States, there's no reason to panic and sell stocks. There's no reason to panic and say, "This is forever." There's no reason to panic at all.

I still continue to believe that ordinary day-to-day financial advice is still sound. There's no big structural problem that needs to be changed immediately. And if you look at the availability of things, being in the United States is one of the best places to be in the world. Now, I don't think that all countries are going to weather the current difficulties as well as the United States will.

And going forward, how could things get worse? And will other countries weather? So let's talk about how things get worse. My biggest concern right now is not nuclear war, although that is a concern. My biggest concern right now is food supplies. And I think it should be a concern for you.

You need to watch this very, very carefully. But if you don't have any food, if you don't have any kind of stockpiles of food, I beg you, go this weekend and turn some of your US coins, your token fiat money, into food. Food that your family will eat eventually, whether it's available or not.

Whether it's widespread availability or not. Go and buy food. Because right now, there are red flashing warning lights all over the global food system. I'm hoping that things can change. I'm hoping that by changing the price of food, it becoming much more expensive, we can keep it available. That's going to have a big impact because you'd be spending a lot more money, but at least it would be available and there wouldn't be widespread famine.

I'm hoping that there can be a quick response to the high prices and there can be more food planted. But right now, there are big, big problems on the horizon for that. In that situation though, what works? Ordinary preparedness works. Ordinary prepping. I have for years made these statements.

Number one, ordinary financial planning works until it doesn't. Everything I've said works, has been ordinary financial planning. What could happen that would make ordinary financial planning not work? Well, it would be if there was literally not enough supplies of food. That could lead to, would lead to widespread social disruption.

If you thought social disruption was bad during COVID, you ain't seen nothing yet. Wait till there's famine in the land and all of a sudden now, everything falls apart. But you can avoid that for you and your family by having food. So I've been stockpiling significantly over the last couple of weeks, trying to make sure that our larders are full.

That could be a big thing. That could be a big, big trend over the next year or two that could be seriously disruptive. I'm hoping that we can avoid it. I'm planning for the fact that we can't. That wouldn't make financial planning fall apart. It would just mean that you need to have money to buy the food and the cheapest time to do it is now.

And then later, you need to have the money to buy the food then, assuming that it is available. That's not a remaking and that's not a reason to leave the United States. In fact, I think that the United States will have the least impact of any country from, if it happens, of disruptions in the global food supplies.

What I really worry about is so many other nations around the world that have far higher levels of poverty and that are far more dependent on exports. The United States is very highly food independent. And if food became short, the United States makes plenty of food to feed itself, the basic staple crops, and then that can be easily supplemented, especially with modern growing technology of all the stuff around the edges, vegetables, etc.

That stuff can be brought into production quickly. The United States is so technologically advanced, I think it could be brought into production very quickly. I'm not too worried about that in the United States. What I'm worried about is on a global basis, where there's far higher levels of poverty and far lower levels of production and lower levels of ability to respond.

If food became scarce in the United States, people left and right, the best business to be in would be selling UV lights, grow lights, greenhouses, hydroponic kits for salad greens, things like that. Maybe it would be a great thing to point our culture more and more towards a localized production where every kitchen has one of those cool little salad walls in it, and every backyard has a little vegetable plot in it, and there's a little hen coop of chickens outside every kitchen window.

Maybe that would be a good thing. I'd love to see it, but maybe it would be a good thing. The point is that the United States, because there's so much money, people can respond. They can adjust to that. I worry about it on a global basis more than I do about the United States.

The other thing, of course, is the threat of war. A few weeks ago, I talked about my biggest concern with cyber warfare. At this point, none of that has emerged. It's been an interesting question is why has, for example, Russia, that the world believes and has believed has a very sophisticated ability to engage in cyber warfare, why have they not seemingly used those abilities?

They haven't done much in Ukraine, and they haven't done much around the world. I can understand why they haven't done much around the world, but why they haven't done much in Ukraine is a harder question to answer. It seems to me that the risk level has come down. As long as the Russians will be able to finish their war in some way that allows them to save face, then I think it would lower the risk of the conflict spreading beyond the region.

I think that the risk is much, much lower. However, it is interesting to think about what if you did get, instead of an erroneous alert, what if you got an actual alert that said, "Hey, there's a nuclear missile inbound to your city. Do you have a plan for that?" It's not something that most of us think about, but the lesson that I look at it is wouldn't you feel better if you had a plan for that?

Wouldn't you feel better if you actually had a bunker, a blast room in your basement, or a bunker in your backyard, or a little piece of land that you could get to where you had a bunker and supplies, etc.? Wouldn't that make you feel better? As I've gone through it in the analysis, I think that when you look at these scenarios, you recognize that, "Hey, if I have the money, if I'm a millionaire, it might be worth it for me to go ahead and build out a bunker.

It might be worth it for me to make sure that I was well protected from those things in case the financial markets collapsed and it didn't work anymore." You cannot pretend that the world is just going to be at peace for the rest of your life and so making a plan that that is the case doesn't make sense.

You have to make a plan that works no matter what. Final thing I point out is I think when you look at the situation in the United States, you see how, or on the world, excuse me, when you look at the situation in the world, you see how you don't get to choose and necessarily get one disaster after another.

And that's oftentimes what can provoke a crisis. The Ukrainian people have gone through a very difficult flu pandemic with widespread loss of life, widespread economic disruption, political unrest, et cetera. And then that was exacerbated by their country being invaded. The Russian people have gone through a very difficult flu pandemic, widespread loss of life, widespread restrictions, et cetera, and then they go through global sanctions being levied against them.

The American people have gone through a disruptive event, a disruptive flu, widespread economic difficulties, widespread disruptions, and now all of a sudden got to deal with high gas rates, high gas prices, increasing rates of inflation, et cetera. So you don't get to choose one crisis at a time. They often come together.

And so when you do deep level planning, it's often because you recognize that while any one particular threat may not be such a big deal, I don't get to choose whether one threat comes at a time or not. There have been a lot of businesses wiped out over the last couple of years completely.

Those people are still suffering and trying to figure out how to get things forward. And they're really upset about high gas rates. Maybe they were perfectly set up to where, hey, gas prices aren't a big deal in my life before, but now gas prices are a big deal. And they used up all their savings trying to keep their business afloat.

And now you have uncertainty, you have economic uncertainty, inflation, risks of war, et cetera. So the reason you do planning, even for hardcore deep level scenarios, is that you can't predict the scenario that you specifically will face. You don't know specifically when it will happen to you. And so because of that, you acknowledge it and you do the deep level planning.

That's the lesson from the United States. I think that things in the United States are really not that bad. And I don't think they're really going to be that bad, especially when held on a global basis. I think that if you can get to the United States and you're not thriving where you are, one of the best places to be in the coming year is going to be in the United States.

But all of the basics still apply. And even hardcore planning still applies. And by planning for disasters and disruptions, it puts a sense of stability in your life that allows you to keep building for what you want to actually have happen. I see this as the fundamental reason why do I talk so much about disaster planning.

As I see it, it's so that you can go on and ignore the disasters without worrying about things so much. There's interesting research people do about what causes children to be economically successful. And there are some who argue with data to indicate good strength to their arguments that the children of wealthy people always do better than the children of non-wealthy people.

And people try to figure out why is that. Is it because they went to better schools, because they were given more money, et cetera? But one of the arguments that I think is pretty powerful is the children of wealthy people don't worry about getting wiped out. They don't worry about having enough food to eat.

They don't worry about going bankrupt and being homeless. They don't worry about those things. And because they don't worry about those things, they can take bigger risks. They can go for things that other people wouldn't do. In my own life, I observed this that when I was in college, I was worried about having enough money to pay for school.

And because of that, I didn't go after some of the high-level internships that other people went after because I needed to make money today. Looking back, I now see that I made the wrong choice. I should have gone after those high-level internships instead of worrying about making money today because it would have been a significant advance in my life and in my career.

I was wrong. I did the wrong thing. But I didn't know better. And so you see this played out, right? You see that the children of wealthy people will go and take the unpaid internship that has much better access. They'll go and start a business that may or may not go and that may or may not have any cash flow today and it still works.

And yet the children of poor people often feel more pressure to make it today, to make money today, to be okay, to not get wiped out, to not be a burden on mom and dad, etc. I think there's really good evidence to say that that can be true. Now, there are countervailing arguments, right?

You can appreciate the hunger that poor people have that rich people often don't express so seriously. But on the whole, I can't see how you're better off if you don't have a safety net psychologically. So that's why you build a safety net under yourself now. I can't go back and change what I did or didn't do at 18 years old.

But you build a safety net under yourself now so that you can move on. And if you've got a year's supply of food in your pantry, you don't need to spend time worrying about food on a weekly basis. You don't spend time worrying about food and, "I gotta go to the store." Even just the simple convenience of, "I gotta go to the store." You have it covered.

They got plenty. No big deal. We'll make a big shopping trip once a month. And then if prices go up, okay, we'll keep buying. But if we don't need to buy, it's no big deal. And so by being conservative in your financial planning, it allows you to be more aggressive in your business planning, in your career planning, in your income planning.

That's how I see it. I've tried to figure out where's the right balance of conservatism and being aggressive. And as I see it, that's the balance. Be conservative in your consumption so that you can be aggressive in your income. And then you can go after the opportunities that you see knowing that you have a safety net, knowing that you're not likely to get wiped out, knowing that you can fall back on your reserves in the same way that the child of wealthy parents knows that, "Hey, I'm never gonna be homeless.

So therefore, I can be more aggressive in the opportunities that I go after." Hope these lessons are useful to you. We're not in a period of prosperity for many people, but yet prosperity is often created out of times of crisis. And so my hope for you is that you and your family would be able to navigate whatever level of crisis you're facing personally, be it war, be it sanctions, or be it inflation.

My hope is that you'd be able to navigate it. And my hope is that you would have great wisdom to be able to figure out, "How do I capitalize on this crisis? How do I find ways to improve? How do I find ways to adjust it?" I'm seeking to do that myself.

And I have a brand new course called International Escape Plan. I haven't talked about that on this class much, but it's my way of capitalizing on a crisis. It's my way of saying, "Hey, here's things I've taught for a long time. Let me reteach it brand new." Because as part of that, it's a matter of saying that if you're prepared to leave your country, as I talked about and showed with Ukraine and Russia, if you're prepared to leave your country, you can be prepared to thrive in the middle of a crisis.

So let me just close today's show with an ad that in addition to what I have said, if you do not have a plan to get out of your country, then I think that that is a real blind spot in your overall thinking. There are many things that can happen that could cause you to want to leave your country.

Your country could be very robust in a great economic state, but they shut you in your apartment and don't let you leave for weeks at a time, months at a time. Just imagine living in China right now. They say you can't come out. They got robotic dogs trotting through the street with loudspeakers and cameras going to a central place, keeping you in your apartment.

They literally bolt you into your apartment building in some buildings. Today they're doing that. I can't even imagine living in that kind of place. Imagine that happens in your country. Get out, man. Go somewhere free. Right? If you're living in Canada and you don't want to live in it, get out.

Go somewhere free. What if they pass some medical mandate that you don't think is right? They say you've got to get this. You've got to take the jab or you've got to go and get this medical procedure done or you can't be here. You're not allowed to have rights like the rest of people.

Get out. It's crazy to live under that kind of stuff. Get out and go somewhere else. Or it could be the fact that, hey, I'm living in a place and all of a sudden there's a threat of war from our neighbor or to the threat of economic problems due to our country going to war.

Get out and go build somewhere. Don't lose the most precious thing that you have, which is time to these outside circumstances. So if you're interested in building a practical, reasonable plan for that and you're interested in my walking you through how to do it cheaply, quickly, and very effectively, go to internationalskateplan.com.

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