Today on Radical Personal Finance, we're going to talk about tough times and some disaster scenarios and we're going to talk about how, hopefully, proper prior planning with your money can lead to better results for you and your loved ones when disaster strikes. Welcome to the Radical Personal Finance Podcast.

My name is Joshua Sheets and I'm your host. Thank you for being with me. This is the show where we work hard to provide you with the knowledge, skills, insight, and encouragement that you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less.

A lot of difficult things going on around the world. I don't know that money is going to improve them, but let's do some planning in case it can for you. I've been wanting to do a show here about disaster planning. There have been a number of things that are kind of coalesced and I wanted to do it at the beginning of June.

You know, June 1 is the start of hurricane season here in South Florida. That's how some of you guys have to live with earthquakes and forest fires and tornadoes. Those all have unique characteristics, but in general, the only natural disasters that we have to plan for here in Florida, well, not the only, but earthquakes are not a major factor.

Winter blizzards and ice storms are not a major factor. The big one for us is hurricanes. Hurricanes sometimes can be associated with tornadoes, but we don't have anything like the tornado activity that those of you in the Midwest of the United States have. This time of year, I always turn my head to hurricane season.

I consider, you know, am I prepared to go through some hurricanes with my family and have I done all the planning that I need to plan? Have I put in position everything that I need to assure their safety and their comfort? It's an important time of year where I kind of go through my checklists and go through our disaster plans and make sure that everything's buttoned up.

So we've been thinking about that, but then there have also been a number of other scenarios that I've just been watching intensely. Probably the two most graphic ones have been the forest fires in Canada, the Fort McMurray forest fires up in Alberta that just swept through this town and just led to incredible video footage.

I mean, incredibly terrible situations, but just the video footage is stunning. And so I've watched it closely to see, you know, all the people fleeing from the forest fires, if you're not familiar with the details of that scenario, you should spend some time on YouTube just looking at some of the footage from people's dash cams, people's cell phones, but just heart stopping footage.

The other one that I have been watching very seriously and very closely is Venezuela. The economic crisis that's been happening in Venezuela over the past year and just intensifying and intensifying and intensifying. And it's just, it's heart wrenching to see the disaster that's happening there. And so I've been considering these and wanting to do this show for a little while of some planning, some intelligent financial planning that you can do to protect yourself from financial planning.

And today I bring it to you. I wasn't sure if I should do the show today because today as I record is Monday, June 13, 2016. This is one day after the massacre here in Orlando, Florida at the Pulse nightclub in Orlando. And obviously that is the primary story that's on the top of mind for the nation and some parts of the world, I'm sure.

And it's an absolutely heartbreaking story. And I'm not specifically doing a show about that story because it's just, in my opinion, too soon. All I've been doing is just been grieving and crying and praying for the people affected and the families who lost loved ones. It's just absolutely heartbreaking.

So I don't like to, I know it's popular these days to jump on things and kind of exploit them for your own goals, but I personally am not interested in participating in that. But I'm going to go ahead and record today's show because there are some aspects that are relevant to that situation.

But also just simply I was sick the last week or so and then had some personal things going on the week before that. So I've played a lot of interviews and then tomorrow I'm leaving town for two days. And so I don't want to just constantly do interview shows.

And this was the show that's been planned since June 1. So I'm going to go ahead and release the show, but just please note that this is not specifically related to the Orlando shooting. There are a few things that you can do to prepare for that financially. There are very few things you can do to prepare for it emotionally, but unfortunately that's the world we live in where in some ways it's just all too common.

And although in some instances it's unimaginable, perhaps few of us are shocked when these occurrences happen. And so there are some things that can be done with planning for such circumstances, but I'm not going to be talking about those today. I am going to be talking about and using as my examples hurricane season and Venezuela and the fires in Canada because those are very current thoughtful things that you can see.

But I want you to use these circumstances to consider what would happen for you. One important theme with financial planning is many people don't consider their own circumstances in light of potential things that could happen until it hits close to home. But most of us go through our lives with generally pretty good circumstances.

Few of us face the death of a close loved ones. Few of us face disaster right at hand. Few of us go through a collapsed economy like those in Venezuela. Few of us go through having to flee our homes in a firestorm like those in Fort McMurray have. Very few of us experience those things, thankfully.

But if you will take the experience of others and apply it to your own life in advance, should you find yourself facing those circumstances, you might be able to get through it from a stronger position. And that's the essence of what good planning is. Good planning is to look at other people's circumstances and situations and then make plans to prepare for those things in your own life.

Thankfully a lot of this is mental. By going through mental scenarios and wargaming the scenarios and thinking, "Okay, in this what will I do?" Those of us who are parents should be instructing our children, "When this happens, here's what you do and let's practice." We should be doing the same thing for ourselves.

Anytime you see a story or a disaster story or whatever it is, you should be considering, "If this happens to me, what will I do?" So today we're going to talk about that. So before I begin today's show, sponsor of today's show is Paladin Registry. Financial planning and wargaming is all about thinking through scenarios, what's going to happen.

If this happens then what would I do? Some of us can do it on our own. Most of us need to do it with other people. Now you can do this with a trusted friend. You can do this with your spouse. You might also need to hire a professional and that's where Paladin Registry comes in.

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They screen them based upon their own internal careful screening protocols and then if you go to RadicalPersonalFinance.com/Paladin, you'll put in your information, your name, your address, the amount of money that you have. You'll put those details in there on that screening form and then they will provide for you a carefully vetted list of a few advisors in your local area.

I can't promise you're going to find a great financial advisor at Paladin but I can promise it's a better place to start than a simple web search because you actually have advisors whose backgrounds have been checked, whose disciplinary records have been checked out. RadicalPersonalFinance.com/Paladin. So let's talk about crisis and money.

The key theme that I want to emphasize to you in today's show is that money either solves or improves most issues in times of crisis. There are many things that money cannot solve. Death, dismemberment, disability, physical problems, these things money cannot solve but even in the context of these situations, the experience of somebody who's done good financial planning prior to the event will be very different than somebody who's not done good financial planning prior to the event.

When I was involved in the life insurance business, it's one thing that life insurance agents would commonly talk about. One of the worst things that can happen is we are perhaps more so than usual keenly aware of today is the death of a loved one. It's a terrible, terrible event.

It rocks your world. But what's worse than the death of a loved one is experiencing the death of a loved one and also experiencing financial stress at the same time. It's one of the reasons why life insurance is such an important part of financial planning. But it goes beyond that because money really does either solve many issues in times of crisis or improve your experience in many issues in times of crisis.

Money is the most marketable commodity in existence. That's what money is. It's the most marketable commodity in existence. So when you're thinking about disaster planning, money should be at the forefront of your planning. You should be considering what to do with money before considering many other things. Toward the latter end of today's show, I will talk about the times when money is not useful in a disaster situation.

There are at least three different circumstances and probably more in which money simply doesn't work and it doesn't solve the problems. But in the majority of circumstances, money will solve the problem. Let's talk about these events that I'm using as a catalyst for today's show. Again, June, hurricane season here in Florida.

Hurricane comes. If you have money, it's pretty simple to get out of the way of it, pretty simple to leave, and everything can be pretty much put together with some money when you get back home. What about Venezuela? Economic crisis. Well, if you have money, your experience of an economic crisis can be very different than the experience of those who don't.

We'll talk about some of the planning steps you need to do. Fires in Canada. Money doesn't solve the initial danger, which is what I'll talk about at the end of today's show. Money doesn't solve the initial danger. Money smooths the way. Money is what allows you to get a hotel room and fill the car up with gas so you can get from the disaster zone to a place where you can get some relief.

So money solves almost all issues in times of crisis. And because of that, you should think about having money available to you in all of its forms under as many circumstances as you can plan for. You do need to approach this problem in an appropriate way. You need to start where you are and consider your current level of wealth and make plans in accordance with where you are in your wealth-building stage.

There's a big difference between a young man or woman, 19 years old, a few hundred bucks to their name, just getting their start on the world, and the type of planning for disasters that they can or should do with money as compared to the middle-aged millionaire. Big difference. But the theme is constant.

So let's talk about some simple preparedness items. Simple financial preparedness. Recognizing and remembering that money either solves issues in times of crisis or it improves your experience of issues in times of crisis. So simple beginner step. Make a habit of carrying an appropriate amount of cash on your person.

Now in times past, this was always just, I guess, at least in my observation, either common practice or a commonly held desire. I remember when I was growing up, my dad always had cash in his wallet. If he needed money, he went to dad. He always had the change that you needed.

If you needed change for a 20, he had change. He pulled out his wallet and pulled open the cash and did what needed to be done. And so I always thought that was normal and you aspire when you're adult, you always have money in your wallet. Well, most people today don't actually carry money in their wallet.

Most of us have a wallet full of plastic and that's about it. My generation especially, but it's gone far beyond my generation, we don't carry cash. We don't use cash. The popular theme nowadays is to have a wallet connected with your cell phone holder and these wallets don't generally have provision for cash.

If people do carry cash, they carry something like a $20 bill wrapped up in an elastic band in their wallet. But this is a tremendous disadvantage because many times in times of disaster, the cards don't work, but cash does. So simple starting places, make sure that if you run into a problem, you've got cash.

Having cash in your wallet will solve many of your problems. From the difficult big disasters, what was the good one to think about is times of blackout. There've been a number of these major electricity outages over the past few years and these events come with very compelling images of people walking home and the bridges are clogged and things like that.

Well, when there's no electricity, the cards don't work. When there's no signal for the credit card machines, the cards don't work. This happens routinely, but cash still works. You can still get what you need. Cash has the unique advantage because it's so marketable. Remember, money is the most marketable commodity in existence.

It has the unique advantage of being universally accepted. You need to ride out of a dangerous situation. There are riots happening in your city and you need to ride out of a dangerous situation. Your Uber pass, your Uber fare may or may not work. Your credit card may or may not work in the taxi company.

But if you can just ask somebody and say, "Hey, 20 bucks, can you get me a few miles down the road?" You can get you and your family out of the area of danger. A $20 bill goes a long way. Now I'm talking about some of the extreme disaster scenarios.

What about smaller disaster scenarios? They won't seat you properly in the restaurant. Guess what? A $20 bill usually fixes that problem. It's much less attractive to the person who's having trouble finding a spot for you on the seating chart to say, "Here, would you be willing to accept my American Express in your swipe card reader in your smartphone than it is to palm a $20 bill in your pocket and reach across and shake the hand?" If you don't know that technique, you should practice it.

All you need to do – it's a little sad that I'm doing this, but the simple way to do it, if you haven't ever practiced passing a $20 bill or a $100 bill or whatever scale is appropriate, fold it up, put your hand out in front of you, curl it up kind of like you're going to go for a handshake.

If you take a bill and you put it right in your fingers there, you can reach out and shake somebody's hand in a situation like that. They'll know what's going on and nobody else around will see. It's good for their privacy. Very, very simple. Very, very easy. Money will solve the problem.

So get in the habit of carrying an appropriate amount of cash on your person. If you right now are stuck, whether it's because you're in Fort McMurray and you've got to get out of town and you're out to eat at a restaurant and all of a sudden something's going on and you've got to get out, look in your wallet and ask yourself, "How much money is there in my wallet?

Would I be able to get from the problem zone to where things are better?" If there's a terrorist attack and things are freezing up and no one's sure what's going on, open your wallet right now and ask yourself, "How much money do I have and would it be enough to get me and my family to safety?" Now, in some circumstances, one person is pretty easy to get out of danger, but what about the other people you're responsible for?

Whether it's children, a little harder to get me with my family and children to safety. What if it's your coworkers? What if it's a team that you're responsible for? How are you going to protect those around you in a time of crisis? Think about how much money is in your wallet right now and ask yourself, "If I removed access to your credit cards and there was a disaster facing you, an acute, current, time-bound disaster, how confident are you with the amount of money that's in your wallet?" Have cash available to you.

Make a habit of carrying an appropriate amount of cash readily accessible to you on your person. Next, make a habit of keeping a substantial amount of cash readily accessible to you without needing to ask anybody for it. I'm not sure that for some of you, maybe carrying $20,000 around on a daily basis is simple for you and you're accustomed to that.

I would say for most of us, most of us are not going to feel very confident or comfortable with $20,000 and $100 bills in our wallet. Maybe someday I will, but I'm not there. You might like to have access to some money though and you might like to have access to it without having to go and ask anybody for it.

Now, sometimes this is in case of a disaster. Disaster can strike at the worst of times. You might come, a natural disaster often occurs when you don't want it, when you're not expecting it. Whether it's a terrorist attack or whether it's a, some of you get faced an earthquake or tornadoes or things that blow up quickly.

Having the ability to put your hand on a few thousand dollars or $10,000 or $20,000, that can be life-changing in many circumstances. Of course, you need to always, with all of these things, you need to make sure that you're keeping things properly secured. Don't be foolish with the money that you keep on your person and don't advertise its existence.

Take care for the safety of your person. Make sure that you have good practice of knowing where your wallet is. With regard to keeping more cash readily accessible, you need to make sure that it's protected, whether that's a safe in your home, a safety deposit box in your local bank or some other method of securing and concealing the money.

Make sure, if possible, that you have a substantial amount of cash readily accessible to you. You might need to make your buddies bail. You might need to make your spouses bail. If you have the means, place some cash where you can get to it quickly. Next, make a habit of keeping bank reserves readily accessible.

What that means is simply don't over-leverage yourself into illiquid investments if you can help it. Money, cash, currency is king, not having valuable stuff that you could convert to cash in a period of time. Money is helpful. So if you've made the mistake of having all your money invested, for example, you put all your money into your 401(k) but you don't keep any of it in a savings account, well, undo that mistake and keep some money in a savings account.

Don't over-leverage yourself and don't ever wipe out your liquidity. Don't ever wipe out your ability to cover your bills for a few months. Also, keep those bank reserves readily and conveniently accessible. Think about how you actually access your accounts. For example, do you have debit cards for all of your appropriate accounts and do you know the PIN numbers to those debit cards or do you keep those PIN numbers?

Perhaps simple idea, keep all the PIN numbers on all your accounts the same. Most of us are not going to keep a huge amount of currency and cash in our checking accounts. So you're going to have multiple accounts. Well, do you have a debit card for that account where you can access the money out of an ATM?

Is your banking system set up in a way that you can easily transfer money from one account to another or is there a three-day hold on the money? A little bit of planning, a little bit of thought with your banking accounts. You can have it set up so you can keep a large amount of money in a savings account and then if you need to make an immediate transfer to your checking account, you can do that.

One very simple and very practical suggestion for you is make sure that you've asked for and gotten permanent high ATM limits on your accounts. I discovered that I could do this a number of years ago. I was buying a car and whenever possible, I prefer to do these types of transactions and using currency, cash.

Quick note, when I use the word cash, I'm usually referring to the idea that we're not using credit. So if I say use cash, it doesn't necessarily mean use a personal check or $20 bills. I try – I make mistakes with this. I try to refer to $20 bills as currency, but I do slip up and sometimes refer to that as cash but I will try to keep an eye on that and try to clarify that for yourself.

So when I do various types of transactions like buying a car, if it's at the smaller end and it works, in the used market, a lot of times going to the transaction with currency is the best scenario. I wanted to buy a car and I needed to get currency out so I could make the transaction that day.

I was seeking to – a quick little lesson in buying. In a transaction, the number involved is only one of the terms. When you're negotiating a transaction between two parties, there are multiple terms that can be negotiated. So one number might be the actual amount of the – the actual dollar amount of the bill.

Another amount or another factor might be the form of payment and another factor might be the timing of payment. Those are usually the three most common things to negotiate in any transaction that you have. So what you should do is get in the habit of looking at any financial transaction and asking, "Is there a way that I can negotiate this to my best interest?" And so sometimes you can pay a higher price, but if you can negotiate more favorable terms, you negotiate a longer payment period.

You negotiate a different form of payment that's more helpful to you. That's going to put you in a better situation. But you can often negotiate the price because that's what most people negotiate and then negotiate off of the price based upon the form of the payment and the timing of the payment.

So having – this is one reason why getting your hand on cash is so valuable. You go to buy a car. Well, you can buy the car and you can buy the car with a wire transfer or a personal check or something like that. You might – a certified check.

You might do that, but you might also be able to take a stack of currency with you and if you are ready to move right then, you use that negotiating chip to negotiate off a bit more off the price or use the fact that you're willing to buy right now to allow you to negotiate some off the price because for the seller, their interest might be to have the highest amount of money, the highest price, or their interest might be to get rid of the thing quickly.

And so having money in your pocket, having currency in your pocket will make a big difference. It's very simple – a very simple negotiating technique if you're buying something like that, something like a used car. Say this car is probably worth – let's say it's worth $5,000. This car is probably worth $5,000 and I think you could probably get that.

It's a good-looking car. I think you could probably find someone that can do that. But I tell you what. I'm not willing to pay you $5,000, but I am willing to buy the car right now and I'd be willing to give you $4,200 for it right now. So if you'd like, here's $4,200 in $20 bills.

I'd be happy to take the car right now and you can have the thing sold. Very simple. There's no manipulation. You're just simply adjusting the terms of your offer. Always keep this in mind when working with service providers. You have a mechanic or somebody is working on your house or something like that.

They prepare the price for their proposal or they prepare the price for the bill. You're going to pay the bill. You can pay that price with a check. You can pay that price with a credit card. Ask them what the discount of cash paying with currency would be. A lot of times by adjusting the form of payment, you'll be able to negotiate a better deal.

So back to the story of the car, I was going to look at a car. I was fairly confident. I'd done my research. I knew this particular car was the one I wanted and I needed to get currency. I didn't have enough currency available to me to make the deal and I wanted to make sure that I was ready to make the deal quickly in order to buy the car.

Called the bank, asked for an increase on the ATM limit so I could go and make multiple ATM withdrawals without them shutting my card down. I found out from speaking with a representative that I could have a permanent higher limit applied to my account. So instead of dealing with the $700 or the $1,200 very low ATM limit, which is common on checking accounts, they raised my limit on my account.

I think it's something like $5,000. So at any point in time without calling them or getting special considerations, I can withdraw $5,000 from an ATM or any ATM in a series of transactions without them flagging my account. That's really useful because what might happen is you might find yourself in a position where you're heading out of town.

You're escaping from the – you're trying to get out of the forest fire zone and so you get just a point of safety, but you don't have any currency in your pocket for whatever reason and you need to go to the ATM. Well, if your account is limited and you can only make a $400 withdrawal and another $400 withdrawal and then they shut you down for the day, you got $800 in your pocket.

But if you can withdraw $400 multiple times up to a total of $5,000 and you can just sit there and do it, it'll take 20 minutes of sitting there at the ATM. But sometimes that's really useful. And if you're doing that at 3 o'clock in the morning while you're fleeing a difficult situation, you'll be glad that you had the foresight to go ahead and set that up.

Also, consider making a habit of keeping those bank reserves readily accessible to you by asking for higher ATM limits. And always consider maintaining a bank account with local banks so you have access to that bank services. I've banked my entire adult life with USAA and have been thrilled with their banking services, but they don't have any local branches.

They have no brick and mortar banking institutions. And so that leads to a couple of things that I can't conveniently do with them. So it's good to make sure that in a circumstance like that, you have a relationship with a local bank so you have access to that bank's services.

Next, back on track here. We're talking about make a habit of carrying an appropriate amount of cash on your person. Make a habit of keeping a substantial amount of cash readily accessible to you, currency available to you. Make a habit of keeping bank reserves readily accessible to you. And then make a habit of maintaining several credit cards with various issuers and have as much credit available to you as possible at all times.

And make sure it's with different issuers. Good recommendation, make sure that in your wallet or secreted on your person or distributed in your baggage in various places if you're traveling, you have access to a Visa card, a MasterCard, an American Express card, and a Discover card. Because some of those will work sometimes in some places, some of them won't work in other times in other places.

I remember one time, I think it was in Costa Rica. I was in Costa Rica and I went to make a withdrawal from the bank or do a credit card transaction. For some reason, that time they wouldn't accept Visa. Okay, well I switched and pulled out the MasterCard. So make sure you have access to several credit cards with various issues.

Consider a scenario such as 9/11. Consider how important it would be to have those credit cards available to you. 9/11, if you were traveling and away from home on 9/11, you were in a tough spot, a very tough spot because all of the air transportation was shut down for a few days.

I think it was at least a few days. And then the resulting mess from having all air transportation shut down for a few days just made a mess of everything else. Well, in a situation like that, what do you do? You should immediately say, "I need to get home with my family," most circumstances.

"I need to get home with my family." So you look and say, "I need to book a bus ticket or a train ticket," or you might just need to go rent a car. Well, if you at that point in time had done your monthly budget and you didn't have money available to you in your checking account because it was all allocated and everything was messed up and you didn't have access to some credit cards, you might not be able to go and rent that car.

But if you can move quickly in a circumstance like that, move before the crowds, go rent the car, and if it takes you a day to drive across the country and get home, at least you're home. Well, think ahead. Make sure that you have various credit cards available to you with different issuers and have as much credit available to you on those cards as possible.

And then next, make a habit of keeping various forms of money available to you. Again, remember, doing this with scale. Consider where you are and consider if you might better your situation by thinking about something else. Currency is good. It's very useful. Credit cards are useful. But are there other valuable items that might also be useful?

Can you lay your hands on some gold coins or some silver coins or gold or silver bullion if you need to to make a transaction? Are you at the point where you should consider having some precious gems around or other items of value? After a hurricane, a chainsaw is a much more useful barter item than is a stack of currency.

After some circumstances, a gun is a much more useful barter item than a credit card. So depending on the situation, you might be able to plan ahead and just by accumulating some things of value, you can set yourself up to where you're in a good situation. In times of trouble, you can trade tools to people pretty quickly and your transactions will go much farther.

Back to doing a deal, form of payment is useful and sometimes currency is the most useful form of payment. Sometimes currency is not the most useful form of payment. And you might be able to trade an item of value to somebody else because they don't particularly have use for the currency, but they'd really like to have the item of value.

Always look for those things because if you can trade something that you have for something that somebody else has that you'd rather have, then they'd like to have your item that can be very useful to them. Think in advance and establish yourself with options, recognizing that money will solve many of your issues or improve your situation.

If you got to get from one side of the country to the other, you need money. You need money to rent the car, put the gas in the car. You need money to buy the bus ticket, buy the train ticket, buy the plane ticket. If you're fleeing from a hurricane, you need money to get yourself a hotel room in another city, money to get some groceries so you have something to eat.

Money improves situations. If you need to, again, bail your spouse out of jail or bail a good friend out of jail, money improves the situations. Now, notice that I've talked a lot in today's show thus far about leaving. The reason I do that is important. In most disasters, the very best thing that you can do for yourself and for your loved ones is to leave.

If you can leave the affected area, leave. Leaving is usually going to be your best option. Obviously, there are situations which is better to stay, but leaving many times gets you out of trouble. If you're in a situation and things are starting to feel a little bit strange, you're noticing people's behavior is a little bit off, get up and leave.

If the hackles on the back of your neck go up and you kind of have a question about maybe this isn't the safest place to be, get up and leave. If you're in a situation and you see political protests going on and people are starting to yell at each other and cause problems, get up and leave.

If you're looking around at your country and you're saying, "My government is causing all kinds of problems. We're starting to have some real warning signs on the horizon here," get up and leave. Leave the country. Leave the city. Leave the bar. Get out before the fight starts. It might be heroic to be on the last plane out.

Fidel Castro is coming into power and you got your family on the last plane out. You might say, "Okay, we got on the last plane out, but how much better to have gotten on the plane out a year ago when it was easy?" It's very expensive to leave last minute.

It's usually a lot cheaper to leave quickly. The reason I'm talking so much about money and leaving is because the best way to escape the impact of most disaster scenarios is not to be there when the disaster happens. It's like things like fights and problems. I heard it from a firearms trainer years ago.

Don't be with stupid people in stupid places doing stupid things. You avoid most of your problems, so leave. But what do you need to do to leave? Well, you need money to leave. A lot of times you need papers to leave and you need money to use while you're gone.

Let's continue talking about money. You need money to buy the tickets or to put gas in the car to get you out of the area. Sometimes you need money to bribe the government officials that are keeping you in or keeping you out. I always think about the stories of the Jews that were fleeing Germany back under the Nazi regime.

They had to wipe out their life savings and they've got jewels and gold and everything secreted in their coats and they basically wiped out their life savings to bribe the government officials to let them out. Well, thank God many of them got out. A lot of them didn't. So you need money on hand to get you out.

You need money on hand to get you on the plane. You need money on hand to get you in the car with somebody who's leaving the affected area. You need money to leave. You also need papers to leave a lot of times. This means make sure that you have a passport that's current for you and for your spouse and for every member of your family.

This is probably the most neglected preparedness item, especially financial preparedness item that most of you listening have neglected. US Americans were terrible about having passports. We just say, "Well, the United States is the best place ever and it's really big so why would I need to go anywhere?" I was considering this recently myself and I realized that I was lacking.

I hadn't gotten around to getting passports for my kids because we haven't really traveled much internationally in the last couple of years. I don't have any plans right now for an international trip and I realized that I hadn't bought passports for my kids. My son's two and a half years.

The last two and a half years he hasn't had a passport available to him. What would I need to do if I needed to get out of the country? Can't go. I was even more chagrined to pull open my passport and realize mine expired about three months ago. What would I need to do if I needed to get out of the country?

Make sure that you have a passport for you and for all of your family members and you're ready to go. A passport and a credit card can get you out of a lot of problems. Good financial preparedness item, get your passports lined up. I'm doing it for me and for my family.

That was one of the things that when I was again going through my checklist and I realized, "Wait a second, I am remiss." Also keep money outside of your affected area if possible. Now this is not generally important for things like natural disasters, but it's very important in times of economic problems.

It's very important in times of political problems. If you're going through economic unrest or recession, depression in your country and maybe the government is mismanaging the currency and you're facing inflation or hyperinflation or deflation, one of the things that's often associated with those circumstances is capital controls or currency controls where you're not allowed to get out of the country.

Now all of a sudden, you're in Venezuela and you had lots of money in a Venezuelan bank account, but now it's all stuck in Venezuela. You are getting out of Venezuela, but you don't have any money. Another thing that happens if you're a political dissident and unfortunately, many of us either have or will become political dissidents in our lifetime.

As our governments change, as what's popular changes, you become a political dissident and now you are labeled with that label and now your access to your money and your stuff is going to be challenging sometimes. Again, these are some of the more extreme human cost scenarios. Hurricane, generally not a problem to have money outside of the affected area.

So pay attention to Venezuela with this regard. Make a habit if you're concerned and many of you listeners are international listeners, make a habit of diversifying your savings in terms of their currency. It's probably a mistake to have all of your money in one currency, especially if you've accumulated a substantial amount.

Again, I'm differentiating here between somebody who has 10,000 bucks. You don't have a lot to worry about with regard to currency selection if you have 10,000 bucks. That's different than somebody with a million dollars. So you need to diversify your currencies. It's very simple to open a bank account in another country and very wise to open a bank account in another country and maintain some reserves there in a savings account in a foreign currency.

Probably for US Americans, Canada is your best bet. It's pretty simple and probably a very important plan for most of you to go up across the border, open a Canadian bank account and keep some money up in a Canadian bank account in Canadian currency, something that's not in the US dollar, something that's diversified.

Now in the United States, we get very lazy with this because the US dollar is the reserve currency of choice of the world. It's the strongest currency. There's no guarantee that continues forever. It's probably not going to continue for as long as those who say, "Well, the US dollar will always be the world's greatest currency." It's probably not going to continue for as long as they say it's going to continue and it's probably going to lose its status a little bit later than those who say, "It's a terrible currency and it's all going to collapse." It's probably going to be somewhere in between those.

But it doesn't mean you shouldn't plan for it. So open up a savings account in another country. Again, thinking of a situation, economic crisis usually comes with currency controls, capital controls, controls on the money. A little bit of planning ahead if you were in Venezuela, making sure that you'd already expatriated some money gives you the money to get through a difficult circumstance.

Hyperinflation, if you get into a hyperinflation economic scenario in your country of residence, hyperinflation usually only lasts for a couple of years. And so the best thing to do, it can't last for any longer. It implodes and they reset it and start a new currency. So the best thing to do in hyperinflation is usually just leave.

If you can set aside enough money in a foreign country where you can go and take your money, and take your family and your loved ones and just be gone for a couple of years and you have enough money outside of your country of origin, outside of that currency of origin to where you can be gone, you can get through those two years in comfort.

And then you can come back and start rebuilding at that point in time. You should also consider having a savings account, keeping foreign currency in a savings account in another country. It's very simple if you're trying to purchase a currency. There are many currencies that are very strong, but they won't allow US Americans especially.

Some of you from other countries can do it, but they won't allow US Americans to open a bank account in that country. Probably the most notable one would be something like the Swiss. If you are a US American, you are persona non grata in Switzerland. Swiss bank accounts are effectively barred to you.

But that doesn't mean you can't buy Swiss francs and put them in a safe deposit box in a Caribbean bank or in a Canadian bank. This allows you to have money in a stable currency outside of your country of origin, but it allows you to do it in a way that you can actually get it done.

There's also some foreign reporting requirements. One little tidbit on foreign reporting requirements. US tax law requires all US taxpayers to report bank accounts held in foreign countries. You need to report all of those bank accounts. They do not require you to report currency that's held in a foreign country.

So if your financial plan and your asset allocation plan calls for you to hold currency, physical currency in a safe deposit box in another country, that might be a way for you to do it and you might not have to fulfill as many reporting requirements. That's my understanding of the law.

So think ahead and if you can leave the affected area, leave. Here I'm dealing again with those big time national disaster scenarios. Now you should note that thus far I've only discussed money and I emphasize to you again that's because in almost every situation all you need is enough money to get you through.

If I have a problem and I have a credit card and a passport for me and all of my family members, I can go down to the airport, I can buy a supplantic to another country, and I can buy a toothbrush in a hotel room when I get there, and I can get everything figured out once I'm there.

Money solves almost all of the situations better than just about anything else. But there are at least three situations and probably more where money doesn't work. One, if you don't have enough money, you've got to go to something else. Either if you don't have enough money or access to enough money.

That's where having a credit card is important, having a home equity line of credit available to you in your house, having lines of credit secured before you need them is important because you might just not have enough money. What is the person who says, "I'm facing a natural disaster, but I have $3,000 and that's not enough to buy plane tickets out of the area.

What do I do?" Or what if they don't have access to enough money to buy plane tickets out? Well, you've got to do another method of planning. The second time that money is probably not going to work is if money is too slow to be of use. Think about it.

Money can buy you great medical care, but if you've just been shot and you don't have a medical kit or if you've just fallen and hit your head or you're bleeding severely and you don't have a tourniquet handy to you and you don't have a first aid kit handy to you or your kid is bleeding from a head wound and you don't have some band-aids or some gauze to put on as a pressure dressing, now you've got a problem.

Doesn't matter how much money you wave around. Help is only minutes or hours away when you need it. Sometimes money is just too slow to be of use. Sometimes the money might, third reason, money might not be valued because of other things that are going on. Let's talk about some examples.

Think about the forest fires in Fort McMurray, Alberta. In that circumstance, what did you need to do to protect yourself and your family? Money was probably not the problem. It's a problem for people who are at the lower end of the economic scale, they're worried about work and things like that, but the money was not the acute problem.

The fire was bearing down on the town. Some people had a 10-minute warning and had to get out. Well, in that situation, the money doesn't help, but having a full tank of gas in your car or at least a half a tank of gas, you've got 200 miles of range, that goes a long distance.

Some things you can't solve with money, but you can solve with simple planning and preparation. Don't let the gas in your car get below a half or a third of a tank. Make sure you always have at least a third of a tank in your car. That requires discipline, but when you got to get your child to the hospital or you got to get out because of the forest fire, you'll be glad you have some gas in your tank.

Think about hurricanes and hurricanes is often gas lines. Gas is available, but you might have hours waiting. You might spend hours sitting, waiting in line, waiting for the gas. You have plenty of money for it, but is it really worth it to you to spend time standing in line for 10 hours?

Wouldn't it be a little bit smarter to have some cans of gas tucked aside? A little bit smarter. Not a financial thing. It's just recognizing that it's not the money that's the problem there. It's which local gas station has a generator to be able to run itself to accept credit cards.

Well, avoid all that nonsense. Store aside 30, 40 gallons of gas in your back shed and you're in good shape. Or think about a situation like Venezuela. Venezuela has food, some. Major problem in Venezuela is the variety of food is very small. They have just a few basic staples.

And because it's being rationed not according to price, what always happens in a situation when prices are controlled, rationing has to happen due to some other force. Usually it's going to be a queue, a line waiting for rations. That's why if you let the free market open, the free market will often regulate itself based upon price.

But if you freeze price, it has to regulate itself some other way. To read the accounts coming out of Venezuela, what you find is that food is available, but you might spend hours standing in line waiting for food. And you might be spending those hours putting your life in danger due to somebody coming and stealing your money or stealing your food.

Times of economic crisis, personal insecurity usually goes up. People are generally willing to commit more crime during times of crisis than other times. So again, how do you avoid the risky situation? Well, a stack of money in your house, but no food means you might have to go out and face the lines and now you're putting yourself at risk due to the criminal element.

Better to go ahead and have the food stocked up in your house so you don't have to put your life in danger. A lot of times also, it's not the money that keeps people from responding to a crisis. It's the lack of a plan, of not knowing where to go.

Many times, look at hurricanes and there have been some very sad ones. It was Katrina and it was Ike in Texas. A lot of times in a hurricane evacuation, people wait and wait and wait to leave because they don't know where to go. Because they don't think they can get off work.

They don't think that they can afford to be gone for a few days and so they wait and wait. But many people that can get off work and can afford to be gone, they just sit and wait because they don't know where to go. The key to getting out is get out early.

So if there's a hurricane coming, make sure you have a plan. My family, I got a plan. Okay, hurricane's going to come up coming up from the Gulf. Well, it means I'm going to head this direction. Hurricane's coming in from the Atlantic. I've got the north plan. I've got the west plan.

I've got the northwest plan. I've got the south plan. I'm down here on the tip of the state. So the south plan is generally not a good idea. I don't want to get trapped on the keys when a hurricane's coming. But the point is have some plans out in advance.

And by plan, I mean, okay, my family lives in X city. It's X number of hours away. I've got enough gas in the car and a gas stored up that I can put gas in the car. I don't have to stop in lines. I know that I can put gas in the car and I have reserves in case we get stuck on the highway in a traffic jam to get where I'm going.

Doesn't take money to do that. It takes planning. So by doing the planning when the disaster hits, you're not sitting there paralyzed. Hopefully, I've never been in this situation. But from watching and studying a lot of disasters, I hope I'm not sitting there paralyzed saying, "Oh no, I can't just get out of town." Leave a day early rather than a day late.

That's one of the key. So what we're talking about here is ultimately a bug out strategy. Think of a military withdrawal strategy. Bugging out is the term that most popularized by the military. I don't know where it came from. I think it came into use most commonly in the '50s when I looked up the etymology of the word one time.

But the point is that when you're in a problem situation, you're being overrun by the enemy, at some point in time, you just say, "Hey, we got to get out. We got to bug out." And in most acute disasters, getting out is the key. So you need different levels of escape.

You need different levels of planning. Sometimes you need a quick plan. Forest fire is coming. We've got 10 minutes. So you need a 10 minutes to get out plan. This happened to thousands of people in Fort McMurray a month ago. So what's the plan? Written list is really useful.

Think it through if you haven't done it. Put the kids in the car. Put the dogs in the car. If we have time, grab our bug out bags. If you got it, you should have a bag ready to go with some basic medicine. If you take medicine, have that ready to go.

Have some basic food. Have some credit cards, some financial papers. Have a checklist on the outside of it. Here, grab the financial papers if we have time. And you just go down the list with as much time as you have. So if you've got 10 minutes to go, be on the road in seven.

But at least then you're on the road in seven with the box of important financial papers and all the insurance paperwork, the box of family pictures. Hopefully that stuff's backed up digitally at this point in time. Still working on my archives. And you've got toys and food for the kid and formula for your baby if you need it.

Whatever you need to get out in 10 minutes. You also need to plan for an hour, a couple hours, and be ready to go. Make sure you don't forget the passports. Make sure you don't forget the extra credit cards. Make sure you don't forget the cash, currency. So you need a quick plan.

You need a slow plan. You need a couple of plans. It's not that difficult to do. One of the things I don't like about all the preparedness people is oftentimes they make things sound so complicated. It's not complicated. You take a bag, like a bug out bag. If you're interested in bug out bags, I hesitate to say go online as people are obsessed with the topic.

But it's really not that big a deal. You take an extra duffel bag or an extra backpack and you toss some stuff in there. You toss an extra phone charger. Buy one for five bucks or 10 bucks if you need one. You put some extra clothes in there. You put some toys for the kids and a couple of books so they have something to do in case you get stuck on the road.

You put in some food. You put some bottled water. And you put in, it's basically it. Book of matches. It doesn't need to be any more elaborate than that. I mean, some of these guys on the internet, I don't understand it. It's like, think they're going to fight World War III.

We're talking about leaving in the face of a forest fire. That's about it. But it does require a little bit of planning. But by putting the plan together, when you're facing the circumstance, now all of a sudden you're ready to go. And that's the key. I think that's just about everything I wanted to share with you in today's show.

It's always difficult to know how to restrict the scope of a show appropriately. The major theme I wanted to convey to you today is that money solves most of your issues in times of crisis. So just think about having access to money and how to set that up. The vast majority of you can set that up now.

Just takes a little bit of planning. Get some currency out. Make a habit of keeping more than $3 in your wallet. Get some currency out. Secure it somewhere in a safe and concealed location in your house or put it in a safe deposit box at the bank so you can get to it.

Then go from there. Call up your bank. Set up an ATM. Order an extra credit card from a different manufacturer, different distributors so that you have access to a different line of credit. Maybe call your current ones. Get the credit lines lifted. Make sure that you have access to money in times of disaster.

Then you're basically done. Some of you probably need to drive up to Canada, open up a bank account and put $20,000 in there. Pretty simple to do. But if you need it, it'll be helpful. So look at situations. Look at situations like Venezuela. I'll put some links in today's show notes for articles on Venezuela.

Look at the situations like Fort McMurray. Think about hurricanes. Think about a terrorist attack like the shooting in Orlando. Just ask yourself, what steps can you take should an economic crisis happen? Should a hurricane come? What steps can you take now to make things better for them? Get the passports.

It'll cost you, I don't know, I can't remember what the fees are, $100 or whatever, but get the passports for you and your kids. Passport and a credit card gets you out of a lot of problems. Number one financial preparedness tool that I know of. Thank you all so much for listening to today's show.

I appreciate it. I'll be out of town the next couple of days running some interviews for you. I hope that you find those useful. When I do interviews, I try to keep them interesting and I hope you find them useful. If you'd like to support the show, I would greatly appreciate your support.

RadicalPersonalFinance.com/patron. You can help me with my financial preparedness plan by helping support this show. It's the primary source of revenue for this show and I thank you for those of you who do. RadicalPersonalFinance.com/patron. Patreon. (upbeat music)