The most astute investors in the world understand that there is no such thing as a risk-free investment.
Every investment carries at least some risk; stocks, bonds, venture capital, real estate… even something as simple as keeping money in a bank.… they all carry some degree of risk.
Sharp investors take steps to identify and hedge their risks, so if the worst happens, they’ll still be protected.
Stock market investors, for example, might purchase ‘put options’ which increase in value in the event that their stocks fall. That way, if there’s a crash, the investor is protected from any major losses.
Bondholders often purchase credit default swaps, which is like an insurance policy in case the bond issuer defaults.
And real estate investors routinely buy insurance to mitigate the risk of property damage caused by fire, flood, and hail.
These are all sensible precautions that can dramatically reduce an investors’ risk.
And this is ultimately what a Plan B is all about– taking sensible steps to reduce obvious, often substantial risks.
Inflation is an easy example; we’ve long argued that misguided government and central bank policies (like paying people to stay home and NOT work, or conjuring trillions of dollars out of thin air) would eventually create painful levels of inflation.
This was a significant risk, but one that could be mitigated with certain investments (like gold, which is up 16% since the start of the pandemic, or silver which is up nearly 60%.)
But there are plenty of risks that don’t have anything to do with money or finance.
Over the past year, for example, we’ve seen an aggressive erosion of our freedom, angry mobs hijacking our children’s education, increased tensions with China, etc. These are all obvious risks.
And one type of ‘insurance policy’ to protect against these sorts of non-financial risks is looking abroad and making sure that you and your family always have another place to go.
That means having either a second passport, or at a minimum, legal residency in another country.
Like any other insurance policy, you might never need to use it. No one goes to bed at night complaining that they haven’t been able to ‘cash in’ on their home’s fire insurance policy.
But if you ever really need it, you’ll be extremely happy that you took the steps to set up residency in another country.
Besides, there’s very limited downside in having another option to travel and live somewhere, especially if it’s a place that you and your family really enjoy spending time.
This is the topic of our podcast today; Viktorija is actually in Panama at the moment applying for residency there, and she recently obtained legal residency in Mexico too.
Or can access the podcast here: