Saturday, 9 June 2012

What you can learn from the wave of suicides in Europe (Part 5 of 6)

These are the three steps that I recommend you to take, the sooner the better, in order to make yourself immune to the next economic catastrophe:

[1] Open a bank account in a foreign country: This is the first and most basic precaution to be adopted against a total financial collapse. 

Very few countries in the world forbid their citizens to open bank accounts abroad, and if you are reading this, chances are that you don't live yourself in any of those countries. In any case, you should check that this is legal in your country before actually doing it.

A simple internet bank account in a foreign currency will allow you to make deposits outside your country and keep them there for a rainy day. If the economic situation in your place of residence becomes a total mess, you will always be able to fall back on your foreign savings to ensure your financial survival.

[2] Invest in assets located in other continents: You do not need a large sum of money to be able to do this. Nowadays it has become the easiest thing in the world to invest in mutual funds that will put your cash to work in a specific country or region of the world. 

Most stock markets also offer you the possibility of investing in Exchange Traded Funds (ETF) that will channel your savings specifically into Poland, Finland, the Middle East, South Africa, Australia, China, India, or other growing economies.

By buying shares if any of those ETFs, you can participate in the growth of a specific country or region different from your place of residence. 

The broker fees for purchasing those ETFs are relatively modest, and if you spread your savings amongst several ETFs, you will mightily increase your financial resilience in case that your country falls into a deep economic recession. Geographical diversification is one of the most effective forms of protection.

To be continued in the next post


[Image by Stefano Mazzone under Creative Commons Attribution License. See the license terms under]