IL Postcard

Three Tips for Surviving the Crash

Date: 09/28/2008 Author: Dan Prescher

Sunday, Sept. 28, 2008

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Listen...

The sound of an empire crashing and burning is pretty easy to hear right now.

The lunatic economics of buying more than you can afford, lending more than you can collect, and printing mountains of money to paper over the gaps have finally sent the world financial system down the chute.

But I have three ideas that might help you brighten your personal future despite the current crisis.

They’re not new ideas...many U.S. and Canadian expats I know here in Mexico and around the world have practiced these ideas for years, some without even knowing it. I’ve simply put names to them.

I call them the Three Pillars, and they are:

1. Simplify
2. Preserve
3. Get real

By simplify, I mean lighten your personal load of useless garbage. Stop buying and doing things that waste your time and money.

This can be hard to do. Most of us have been brainwashed into believing that we keep the world turning by running around like chickens with our heads cut off and burning through as many consumer products as possible.

It’s not true, no matter what your television tells you.

One very efficient way to simplify is to move overseas. It makes you think hard about what you really need to take with you. There’s nothing like relocating to a little beach house or mountain cabin in a foreign country to burn off the useless garbage piled up in your garage, attic, and appointment book.

By preserve, I mean preserve your wealth. Stop chasing the quick hit, the sure thing, the one stock that will put you on Easy Street by this time tomorrow.

Get into value investments. Get into safety.

And do something even more radical...save.

This is stuff our grandparents knew, but again, it can be tough to do. We’ve all been tempted to roll the dice by a decade of seemingly endless upside and idiot-proof profits in the markets.

Now we know the game was rigged. Believe me, the days of chasing triple-digit returns on hot stocks or bizarre trading strategies aren’t over...but they should be for anyone who wants to sleep well at night.

Lowering your cost of living is one sure way to preserve your wealth, and depending on your lifestyle, there are places in the world where you can live comfortably on half what it costs in the U.S. and Canada. I know...I live in one.

By get real, I mean put part of your wealth in things that don’t go away when global financial managers crash the bus.

Real estate and gold are the obvious choices. Their relative value may change, but they never disappear, and they’re always worth something.

The price of gold is just what it is. But the price of real estate varies wildly from place to place, and there are places around the world where it is remarkably cheap. That makes it much easier to have this hard asset as part of your financial plan.

Sorry if this all sounds a little gloomy, but by gosh, it was a gloomy week last week. Not nearly so much for my fellow expats and me, but certainly for all our family and friends back home.

We can’t help but feel their pain deeply.

But I’ve been making my living for the past few years by providing people with information that helps them avoid getting sucked under by just this kind of financial meltdown...information on how to live a simple, happy, full life on just a little money in a warm and beautiful place.

We’ll continue to do that at International Living. In fact, I think it’s more important than ever that we keep doing that.

I’ll be talking more about the Three Pillars in the future. For now, I hope they help you focus on what’s important to you and how you can secure your own best future.

Best regards,

Dan Prescher
Publisher, International Living