During times of social, economic, or political uncertainty forces can move quickly that can cause havoc in markets, banks and institutions that all rely upon predictability and stability of the future. Without guarantees, whole economic systems can be rendered impotent.
If your economic livelihood is dependent upon these systems then you are inevitably tied to its continuity. While it is nearly impossible to be free from institutional authority as the modern economy is so intertwined with these systems of transactions, it is possible to mitigate the risk that these institutions bring through financial emergency planning.
There are simple methods that can hugely reduce your reliance upon any single institution or state-actor for your well-being. Here are six plan b financial strategies that will prepare you for any emergency.
Open an overseas bank account
Opening an account in a strong bank that has a history of stability, has a strong capital reserve ratio, in a country that is economically and politically stable is likely the most important action that can be taken to safeguard your assets.
Putting your money in a bank that has conservative lending policies, is backed by a government that has a solid finance record, in a country other than where you reside is the most effective strategy in combatting economic, financial, and political uncertainty at home.
Forming an overseas company is perhaps the second most effective way to protect the assets that can also help to reduce taxes, provide a layer of liability protection, and as well as a measure of financial discretion between you and the assets that are held by the corporate entity. Incorporating a foreign-based company through a multi-jurisdictional corporate structure gives you maximum security by using two structures that are based in different countries.
While it may not completely leave you in anonymity as you still have tax liability, though it still provides a good layer of insulation in precarious situations. Combining two offshore structures, using the liability of an LLC and the security of an offshore protection trust helps give you the maximum asset protection that is currently offered in today’s financial marketplace. This will help you diversify, protect and keep confidential what’s important. For more information, visit offshore-protection.com.
Diversify your assets
Diversify your assets across several accounts in multiple denominations in different countries and banking institutions around the world. Diversification is about spreading your risk, and reducing your exposure. This is best achieved by having many different ways that you would be able to get access to assets should a currency crash, a market fail or a bank goes under.
By having several banks in a variety of accounts and countries where you can draw your money from gives you several fall backs that are important in todays hyper digitized world. When all it takes is a push of a button to have your cards frozen having an alternative source where you can withdraw cash is essential. If any single source dries up you will not be dependent upon any single institution for your well-being.
Keeping enough cash on hand in order for you and your family to survive a few months is a simple yet effective strategy. Having hard currency is an easy backup plan and doesn’t require much forethought or justification. Its simple and if your bank goes under you have some quick immediate reserves to tide you over and get you to where you need to go fast.
Store physical gold
Having physical assets such as gold is an important part of a diversification and asset protection plan. While currencies are known to depreciate and inflate, gold on the other hand is stable and provides a valuable asset that is highly liquid and easily convertible should assets need to be liquidated in an emergency.
Gold retains its value and generally appreciates in value at a pace to out preform most indexes. It is a reliable backup plan as well as an investment that will hedge some of the risks of being in a volatile economy or banking system.
Obtain a second passport or residency
Having a second passport in a country where you are free to move as you please is an essential part of any diversified financial plan. A second passport allows greater mobility, autonomy and gives security to you and your family.
While having a second residence can be a suitable alternative if a second passport isn’t possible the goal is ensuring a long term viable solution where you are welcomed to live as a first-class citizen. Having a second residency gives you access to health, social and financial services and can often lead to citizenship possibilities after several years as a permeant resident.
Obtaining a second passport usually requires an investment in either time or money if you are not lucky enough to have a parent or grandparent from another country. In order to maximize your mobility and autonomy a second passport is essential as it gives you flexibility for long-term planning, more possibilities of visa-free travel, and offers a reliable escape option should your first passport become compromised.
Takeaway
Having a sound financial plan is about severing your dependency from any single institution, bank, or country for your well-being. Being financially independent gives you a measure of control during times of emergency. Ensuring you have a plan b gives you options during a time when all else may be lost.
This article originally appeared on Foreign Policy.
