With the top 1% of Americans owning 42.5% of America’s money, it’s easy to think wealth preservation is just about cash and liquid assets. Sadly, the gap between the very richest people and the other 99% is only growing.
But even those in the 99% can be conscientious of preserving their wealth.
Everything is more expensive. In recent months, Zillow reported rent for new and established tenants is rising across the country. Memphis Tennessee saw the biggest jump – 7.2% over the previous year. Syracuse, New York, came in a close second, with rent year-over-year rising 6.7%.
What does ‘wealth preservation’ mean? Can it be more than money that you’re looking to protect? And what would wealth look like if we considered all the aspects of keeping our assets safe?
The First Step
Jason Berube, a Wealthtender certified financial planner and owner of Cornerstone Wealth LLC, points out that living below your means is critical to keeping your wealth exactly where you want it to be – in your hands instead of someone else’s. Here’s his advice on how to start preserving your wealth in today’s economy.
“…for almost everything we want or need, there’s a viable alternative that costs half as much. Verizon phone bill is $90/month? There are discount providers like Mint and US Mobile that are easily half that. Want that new fancy designer shirt? Get it used or something similar at Target for half. Driving a car with a $500 car payment? You can drive a GREAT used car for $250/month total cost of ownership. Rent in your area is $1,800? Get a roommate. Now it’s half… Usually, it’s not that we can’t do the cheaper thing, it’s just that it’s not convenient or comfortable. Seeking the alternative option is a key fundamental to preserving your wealth…”
Food, Water, Shelter
When we discuss basic needs, most people think of three things: food, water, and shelter. And rightly so. Taking care of these three things ensures we keep living.
When inflation goes up or if the United States dollar is devalued, your purchasing power greatly decreases. Food becomes more than just a simple trip to the grocery store? If staple items like bread, eggs, and milk will reach astronomical prices, what can you do?
Stocking up on shelf-stable foods, plant fruit-bearing trees in your yard, and plant a garden that yields vegetables that can be canned.
One way to provide water for your family, is to purchase or create a rainwater catching system. Some people live in places where well water isn’t available or suitable for drinking. Some people need to buy bottled water to drink and cook with because their well or tap water is high in iron. Being able to harness rainwater ensures your family has drinkable water.
Food and water can also be used as bartering tools to help you acquire goods or services during extreme economic times. When cash becomes worthless, essentials become a payment system that most people trade for their skills, labor, or goods.
Bartering, Energy, and Security
If and when the dollar gets a value reset and its purchasing power decreases greatly, bartering will quickly become a way for people to afford the unaffordable. The more assets you have in your store of value to use, the better you and your family will handle a period of stagflation or deep recession.
Let’s say you have an excess store of peaches. Fresh, ripe, and unneeded – but valuable when you don’t have an excess of cash.
Suddenly you need a necessary home repair, say after a hurricane, or your septic tank pumped. Cash is tight and the bill would normally be outside your ability to pay. But what if that septic tank owner was in desperate need of food? You might be able to barter that bill down to a much more manageable amount if you traded a bushel of peaches or garden-grown tomatoes and zucchini.
In hard economic times, crime usually increases. Things like food and water drive people to do stupid and often violent things. Keeping your home, family, and valuables safe will be necessary if economic times get much harder. When people become desperate for food, water, shelter, and other basic needs, they’ll start looking for them wherever they can find them, and you don’t want your house to advertise free takeaways.
Not everyone, however, can afford a full-fledged security system with cameras and 24-hour monitoring. But there are other things you can do to help protect your property.
1. Put up a fence. Having a fence is the first line of defense in keeping your home secure. A locked gate will deter those who aren’t seriously desperate.
2. Plants. It might sound odd, but putting up vines and other inhibiting plants like thistle and cactus can also help deter those who don’t want to get scratches and cactus in their backside trying to hop your fence.
3. Get a dog. Not everyone is a dog person, but having a canine friend who wants to take a chunk out of a stranger can go a long way in turning away those brave enough to hop your fence in search of goods your house might hold.
4. The 2nd Amendment. Whether you agree with owning guns or not, they will go a long way in sending a looter packing. Hopefully, you don’t actually have to use one. Sometimes even just a sign saying you have guns on the premises is enough to make someone think twice.
Another area where you have to be diligent is energy production and usage. If you have purchased solar panels for your home, you will be in great shape when it comes to energy and paying for your electric usage. As the value of the dollar purchases less and less, paying for essentials, like electric use, will become harder and harder to manage alongside other big bills like rent or mortgage and car payments. Being able to harness and use energy for a lower cost is going to become a needed process.
Thankfully there are ways to harness solar energy without having solar panels on your roof or in your yard to do so. Some of the most popular ways to do this are listed below.
1. Solar power converters. These adapters allow you to tap into the solar grid without actually needing a panel. They measure your daily energy input and then purchase energy certificates from local solar farms. This fractional purchasing makes it a much cheaper way to access solar energy.
2. Solar-powered devices. Bikes, backpacks, cookers, watches, and even generators can all be powered by the sun.
3. Peer-to-Peer Solar Sharing. This system allows you to ‘borrow’ solar energy from a solar farm. Much like a solar converter, this fee-based system allows you to have access to solar energy close to home by using solar energy your neighbors have. If a close neighbor has panels on their roof, you can access this energy and pay them a monthly stipend for the privilege.
Solar power is going to explode as energy prices get more costly, and peer-to-peer solar sharing not only offers a viable solution but also increases a sense of community that’s going to be central to surviving should the value of the dollar reach a negative equity range.
Community Matters Most
In times of crisis, it’s common for two things to shine through. One is a rise in crime. Unfortunately, desperate times come with desperate and sometimes criminal measures. However, the essential foundation of the ‘American Spirit’ also rises to the occasion. This foundation is what causes neighbors who barely talk, to offer food, water, and shelter to one another. It’s what allows people to give of what they have, even when they’re also struggling, to help someone else out of a jam.
And no matter how bad things get, it’s going to be that American spirit and that sense of community that will see us through the hardest economic times that may lie ahead. Explore these concerns and points of preparation, and when the time comes, you’ll be someone who can offer a helping hand to your neighbors.
This article was produced and syndicated by Wealth of Geeks.