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Thursday, October 11, 2012

How much Cash Should I have?

Original Article

If you have been reading this blog for some time you already know that there’s much truth in the “cash is king” saying.
When disaster strikes the “cash only” signs go up. When you have to buy / sell on the go, cash makes it happen. When banks go on holydays and everyone is looking for an ATM with some money left, Cash not only buys you good and services, it allows you to get some pretty nice deals. Since we’re talking deals, nothing gets you as many of those as a wad of cash at the right time. For someone looking to close a sale, the money being physically within hands reach, literally speaking, is an important factor.
When you have to leave everything behind, what you carry with you and what you have in the bank is all you have left, and if the banks happen to go down along with whatever is forcing you to leave, then what you have with you is all you have left.
Looking at different events around the world, if there’s one thing all refugees have in common is that they can all use a fat wad of cash.

Supplies are very important and what you have at hand may be all you have, so having a good supply of food, water, and basic gear is essential, but there’s areas where you can go overboard.
Remember that in the event of a)a disaster that compromises your home b)an event that forces you to move out and leave everything behind, in any long term bug out situation, your gear is reduced to what you can carry, the rest is gone. Sometimes it’s a couple suitcases, sometimes it’s a backpack, but what gets left behind I can assure you, you will wish you had the chance to have turned it all to cash on craiglist or a garage sale.  This is why balance and common sense is so important.
Should I have a life supply worth of nails and hammers? A year supply of toilet paper and other households instead of the cash saved up to buy those? Well… look at it this way, if you are in a situation where you’re using up the last of your year long TP supply, you should have left 11 months ago! A month goes by without a store being opened for you to buy TP or soap? You should be evacuating or relocating already.

A good supply of gear and supplies is important, but every once in a while do ask yourself:  What’s your situation if you have to leave everything behind? What if bugging in just isn’t an option? What could I take with me? More important, how much are you forced to leave behind?
Once we understand that cash as means of purchasing goods and services is important, the question is how much do I need. Here’s a quick approach that might work for you:

Minimum:
One month worth of basic expenses in cash. Think mortgage/rent, bills, car fuel and food.
Better:
One month worth of basic expenses + plane ticket for each family member to out of state/out of the country alternative location.
People have been forced to relocate abroad many times in history. It has happened to millions in recent history, it could happen to you.
ok:
Three months worth of expenses + plane tickets for each family member + 1month deposit plus two more months worth of rent in potential BO country.
This should cut you some slack to get settled and get back on your feet.
Even better:
Three months worth of expenses + plane ticket per family member + 1000usd/gold eagle bribe per family member + deposit and three months worth of rent + money for ok used car

The more financial resources you have, the better your chances are and the less traumatic will the experience be. Some of this could be in the form of gold. During war scenarios an ounce of gold may make all the difference in the world, and precious metals (our Sponsor, Precious Metal House) have the advantage of not going down along with paper money if the nature of the disaster affecting you compromises the fiat currency as well.
Join the forum discussion on this post!
FerFAL