A little while ago I wrote a post talking about why we should all be preparing for a financial crisis. In it I said that I would address HOW to prepare at a later time.
Since that time I’ve gotten a few emails asking me how I’m preparing for the future.
I actually address the basic outline of my plan in my book, iSucceed, so I’ll share some of that with you today as well as go into why I have chosen to do so.
Now, before I get started, I would like to start off by saying a few things.
First off, I’m not a financial adviser.
Most of the advice I pass on to people is simply information I have gotten from people far smarter than I am. They have spent years studying financial markets, stocks and gold. Me, I’m an amateur.
I will say that I spend about 5-7 hours reading up on articles they recommended each week and have done so for the better part of the last 4 years.
The conclusions I have come to are based in no small part due to their hard work and analysis.
Another thing to keep in mind is that these days it is easy to find so-called “experts” that support a variety of investment ideas.
Some people say tech stocks are the way to go and with companies such as Apple and Google blazing ahead of their competition it’s easy to see why.
Others are into mutual funds which are often considered the safest investment route as they keep a bundle of investments thereby limiting your losses.
Another group of people say to stay in cash because the markets will crash and with cash in hand you’ll be able to get houses or stocks at rock-bottom prices.
So, bear in mind, my suggestions are based on what I see as happening in the near future.
Moving forward I see three areas in which one would be well advised to invest in.
- Hard assets
- Agriculture
- Energy
When I refer to hard assets I’m talking about tangible things – real estate does fit this bill but as most of you know housing prices are still dropping so you might be wise to proceed with caution should you want to buy land.
Rare items such as works of art, first edition comics, stamps and other such things would also be a wise investment but out of the reach of most people.
And finally the one hard asset that people can buy – gold. This is essentially the easiest and most practical investment I believe people can make today. It’s easy to carry. It’s accepted worldwide. And most importantly, central banks are buying it. What does that tell you?
Energy and agriculture are easy to explain – the world’s population is growing, and it’s growing fast.
We need food to eat and energy to stay warm in winter and cool in summer. And with the middle class growing quickly in such countries as India and China, it’s easy to see that companies that supply food and energy will be winners.
It’s important to remember that should a financial crisis occur people aren’t going to be clamoring to get the latest iPhone, they’ll be desperate to get food and other basic necessities.
I would like to say that if you are thinking of investing for a rainy day then please do your homework.
Don’t just trust someone because they said so.
Too many times I’ve been burned this way. Do your due diligence and decide what is right for you and your situation.
Sadly, we’ll only know the right answer AFTER the fact.
In the years to come I’ll find out if I made the right choice.
Thankfully with the mentors I have in my life today I believe I’ll do quite nicely. (fingers crossed)
Adrian Shepherd