war portfolio

The Russians’ invasion of Ukraine in February 2022 brings a war to NATO’s doorstep. The fall of a missile in Poland in mid-November reminds that battles are just a click from the “western civilizations” border. That is a good opportunity to review what we have in our most handy, ready-to-use portfolio.

Idea of “war portfolio”

The world gets a new financial crisis every few years. Dotcom bubble, Lehman Brothers, eurozone Greece issue, pandemic crisis or now decades high inflation. All those events were in just last 22 years! Very short time for so many problems. But war behind the corner is something new for NATO participants… So, this article is an example how we should prepare for international or some civil war. Media had some example that even in the USA, some people might start serious and countrywide riots because of death of one person (like BLM movement) or loosing one side in general election (like President’s election after match in 2020).  Climate change might also push you away from your home. A drought is not a matter of urgency, but heavy snow or rain could create a sense of urgency to leave home to safer locations.

All of this made me think (for the first time in 2017!) how to get ready for “s**t hit the fan” situation. Whatever it will be domestic problem with access to bank account or anything from basic needs or a prelude to World War III… An idea to prepare financial bag-out-bag is made from European point of view, but can be easily adopted all around the world!

When you should think of “war portfolio”?

The short answer is NOW! Especially that we have more and more radicalized politics in every country. Italy, Great Britain, France, Germany, USA, Brazil. And some even go as far as to take on quasi-dictatorial forms like Venezuela, Turkey, Hungary, or Poland. But it will be great when you will sort all not necessary financial debts before like credit card, student loan etc. Mortgage is a bit different, so please don’t take this into consideration to pay before ‘war portfolio.’

 Handling and stocking “war portfolio”

A crisis is a situation in which access to external services is restricted. It could be a problem to withdraw money from a bank account, as was the case in Greece in 2015, when the government closed banks for a week and then limited withdraws to €60 daily. There may be an issue with being unable to open the deposit box at the bank due to lack of electricity. Or just rush to leave in the middle of the night when most business is closed. Therefore, it must be convenient and within reach – preferably at home. A good idea would be to keep it to yourself and should-know relatives that such a ‘war portfolio’ exists, and where it’s located.

Creating a plan

For every single person or family, “war portfolio” will be slightly different. Therefore, you need a plan. Perfect plan should be taken into considerations few different problems and ideas to solve it like:

• Where to move if our homeland become a war arena?
• What to do in case of hyperinflation – should we move out to a cheaper country?
• Are there any members of our family living in safer area or other country?
• Do we require any special care, f.e. medical equipment or drugs?

The above list is very general and must take all possible risks in our area. A valley in the middle of the United States is currently more vulnerable to flooding than to war. Be realistic during the planning phase.

When we know where we should move (or temporarily evacuate) in a certain situation, we should gather knowledge about those locations. Specific laws, currency, border crossing requirements, etc. When we have learned all of this, we should create a list of components in a “war portfolio.”

Example of perfect “war portfolio”

My idea of the perfect war portfolio is one that is prepared for a European Union citizen and breaks down into two parts: metals and currencies.

Metals

Most people will have here just gold coins or bars, as it’s high-value and small space requirements. I think there should be a slightly different split.

• 10 gold bullion coins (1 oz/31,1g)
• 90 silver bullion coins (1 oz/31,1g)

Why such split?

1. Price. Gold is significantly more expensive than silver.
2. Different purpose for silver and gold. You can use silver to pay for basic necessities, such as food, water, or temporary shelter. You would rather not give away a golden coin for a leaf of bread when you have a silver coin that the seller will accept.
3. Coins, not bars. Most popular bullion coins are easy to recognize as genuine. You can compare the diameter, thickness, and weight of the coin with the data from the producer without needing professional equipment.
4. Forget platinum or palladium. Those metals are expensive and in the same precious metals group like gold and silver. But, in the event of a catastrophic global situation, these two metals will be viewed primarily as industrial resources than as currency.

Silver is usually used for daily survival, and gold can help us start over or save our lives.

Currencies

We must constantly review the list of hard cash in an inflationary situation, but we must avoid spending our metals in a rush. Moreover, this part is calculated for one or maximum two adults. If our family is bigger, expand those amounts!

• €1 500 – €2 000 – main and only currency in 25 countries, accepted in much wider list of countries all around the world. It will be the first source of our spending in Europe.
• $1 000+ – “all might dollar” is still most popular and quite safe currency! Must have in “war portfolio”.
• £1 000+ – when living in Europe, Great Britain is one of the first “escape locations”. First of all, it’s an island, so any army would have a hard time from the start, like in World War II. It’s maybe not a perfect location in serious financial crisis, but a good hub to travel to almost any location around the world.
• CHF (min. 1 500) or NOK (min. 20 000) – If we are looking for a good place to stay during the war in Europe, Switzerland is the first idea. But Norway is not so bad, either. It depends on our plan and personal requirements, we can choose between these two countries as a backup.

I didn’t include any currencies from other parts of the world (except the US dollar). We can always exchange our money for local currency when we are there. It is important to note that our route and destination may be different during the next ice age than they would be during World War III.

What about cryptocurrencies? High volatility on those assets is too big to make them part of a “safe” “war portfolio”.

It is much easier for U.S. citizens to cover this section, as they only need U.S. dollars plus Canadian dollars and Mexican pesos.

Revision of “war portfolio”

Main reasons to review our portfolio components are simple:

• war – we don’t need currency of the country that is in war.
• changes to local or global market – f.e. the US dollar is losing its dominant position, or the eurozone could break up.
• inflation – rising living costs should raise the size of our “war portfolio,” especially on currencies.
• liquidation of cash – an idea that concerns both people and central banks. Central bank digital currencies (CBDC) could be the next financial revolution, and would force us to change our war portfolio.

But the overall structure of this portfolio is generally safe in most conditions.

Summary

Typical bag-out-bag is a common thing in preppers world. But being properly prepared financially is still “rara avis“. This text should help you get ready for anything. However, I also hope that a plan like “war portfolio” won’t be needed. Imagine: If you had to leave home in five minutes and never return, would that be a difficult experience, or would you have an easy start in another part of the world?