How To Prepare For A Natural Or Man-Made Calamity

by Neal Frankle, CFP ®

The devastation and hell that has been unleashed on the people living in the Philippines is truly beyond words. And as if a typhoon and earthquake weren’t enough, the aftermath of these events are beyond depressing. People are fighting and dying over food and water because they completely lack basic resources.

At least events like these bring people together. It’s heartening to see how many countries and organizations are doing everything they can to help.

After the dust settles a little, tragedies like these and the current television shows like Doomsday Preppers, Revolution and Blackout make you think about how best to safeguard your family and your assets before tragedy strikes.

I wrote a post for Forbes about how to prepare for doomsday. It was published several weeks before this calamity occurred.

No….I don’t have a crystal ball. But we live in a world where bad things and bad people happen. It just makes sense to be ready. And because I experienced my own personal doomsday as a kid, I am predisposed to being ready for the other shoe to drop. I like having a strong defense.

I thought I’d share some of the important points I wrote about for Forbes in an effort to jump start a discussion you might want to have with your family about protecting your loved ones and hard earned wealth.

How To Safeguard Your Family And Assets Against “The Big One”

1. Chill

Yes there are steps you should really take but please don’t go coo coo. You have to rationally consider your most likely risks as opposed to trying to get ready for any and all calamities.

Yes…there is an outside chance that society will disappear for good (ala Planet of the Apes) but it isn’t likely. Most natural disasters are limited. They usually aren’t global and the disruptions normally don’t persist for very long.

2. Be Realistic

The risk you have to prepare for depends on where you live. And you have to differentiate between man-made and natural disasters.

3. Man Made Disastersprepare for disaster

If you live in a country with a government that is unstable or a society that doesn’t much respect the rule of law, you have to be willing to move fast if things heat up. Wars, revolution and pogroms still happen.

Your best bet is to have liquid assets. Cash isn’t bad but diamonds are better. That’s because these stones store a lot more value per square inch than paper money. That means you can carry more wealth and conceal it easier too. If you live in Junta-Land, a good strategy is to learn about diamonds before you have to start packing.

Another good idea is to buy property and/or a business in a more stable area of the world. That will provide an anchor and income source if you have to leave your current place of residence. This move may also make it easier to get out of the hot zone. Win-win.

4. Natural Disasters

If you are more worried about floods, earthquakes, typhoons, tornadoes and fires you’re problems are cheaper to fix That’s because you don’t need cash and diamonds. Those resources won’t help you.

If anything, wealth could be a big problem when the levee breaks. It can be washed away, burned up or blown away pretty easily. On top of that, the bad guys will have more opportunity to rob and loot because the police will be too busy saving lives. Don’t give the thieves a reason to visit you.

Put some time and money into securing survival supplies. If you want to be super-conservative, have a 30-day supply of food, water and medical supplies. Put some brain power into where to store these supplies too.

You want to make sure they are accessible in time of need yet protected from the natural disaster itself. Despite your best efforts your resources might be destroyed in floods, typhoons and tsunamis. There are no guarantees but it still makes sense to do the best you can.

flood

From the financial side, keep meticulous records and have the right property insurance. I suggest you take pictures and videos to document your household belongings and keep a copy of your inventory in some other physical location far away from where you live. While you are at it, keep a paper copy of your investment statements and other financial documents off site as well. This increases your odds of having some proof if you need it.

calamity

5. Chill Out Again

You can work yourself up pretty good just thinking about all this stuff. But worrying isn’t going to help anybody. It’s true that in today’s world, there aren’t many places that are free of natural and man-made calamity risk. I guess that’s the cost of “doing business” these days. But take a reality check. The chances of something really terrible happening that will impact your life for a very long time are very small.

Keep in mind that natural disasters don’t last as long and don’t hurt as many people as man-made calamities. If you live in a very poor country, the effects of a physical disaster could last a very long time. But in wealthy countries, the impact is much shorter lived.

And if you are lucky enough to live in a prosperous country with a stable government, the chances of an armed military action happening on your own turf are also pretty remote – despite what the slick home bunker salesman keeps telling you.

But if you are concerned about man-made disasters, you have to take different steps. Be ready to relocate quickly and if this is something you are really worried about make sure to keep some physical wealth around that is very accessible.

Of course nobody knows when the next “big one” is going to hit. And as the book says, bad things happen to good people. What are you doing to safeguard your family and your assets?

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