9 things I’m doing to protect my wealth during unprecedented times — 9 simple ways you can protect your assets during uncertain times. I am not a licensed investment advisor and this article is not investment advice.
My life has been relatively simple up until recently.
Of course, there was the global financial crisis of 2008. But I missed out on that experience because I was finishing up school and just beginning my career. I didn’t have a portfolio of my own at the time to feel its effects.
Since 2020, though, I can truly say that I have experienced unprecedented times.
As such, I wanted to write a post about the things I’m doing to protect my wealth during these times.
Let’s dive in.
Things I’m Doing To Protect My Wealth During Unprecedented Times
Most of the things I’m doing to protect my wealth are simple things that anyone can do.
Even though I am not in a bad situation financially, I am naturally taking a more cautious approach.
If I’ve learned anything over the past two years, it’s that anything and everything can happen.
You almost have to consider the worst case scenario and prepare for that.
But at the same time, you have to continue to be optimistic that this too shall pass.
Here are things I’m doing to protect my wealth in these uncertain times.
9 Things I’m Doing To Protect My Wealth During Unprecedented Times
9 Things I’m Doing To Protect My Wealth During Unprecedented Times
1. Working More Hours To Increase My Income
I am fortunate to have a flexible job that provides the opportunity to work overtime.
Personally, I am glad I don’t have a salaried job where my income is set regardless of how many hours I work. But I realize that most people prefer to earn a living that way.
Nevertheless, I have been trying to work as many extra hours as I possibly can lately.
The more money I earn, the more I have to invest. Also, it helps to combat the ridiculous level of inflation that we have been experiencing since the pandemic began.
In my view, earning more money is the easiest way to protect my wealth.
Instead of worrying about what is happening to my assets, I can add to them or build up cash to have a larger safety net.
2. Becoming More Frugal
Naturally, I have become more frugal over the past year.
This is especially since I began to notice how much more I was spending on groceries, thanks to inflation.
I typically allocate around $250 per pay towards groceries. This includes coffee and any restaurants or ordering in. But over the past year, I found myself exceeding that amount regularly.
As such, I switched back to drip roast coffee instead of using Keurig pods, even though I love the convenience. I also started to stretch my groceries by an extra or day or two before going shopping again.
Otherwise, my significant other and I are looking for other areas to save. For instance, we recently switched our home insurance which will save approximately $40 per month. Every little bit counts.
3. Diversifying My Assets
During unprecedented times, it’s important to diversify your assets in order to avoid significant losses.
If you hold all your money in cash, you would have lost over 5% in buying over the last year.
If you held all your assets in a growth stock like Shopify, you would be down as much as 50%.
However, if you diversify well, you can mitigate downside risk.
For example, crude oil has been surging because of inflation, higher demand, and now due to what is happening with Russia and Ukraine,
I hate to admit it, but Gold still appears to be the ultimate safe haven for unprecedented times. I had hoped that Bitcoin would be the ultimate safe haven. However, it appears to be strongly correlated with growth stocks. Meanwhile, gold has been up since these geopolitical tensions began.
Although I do not hold Gold nor am I advocating the ownership of it, it does show the value of diversification.
Ideally, investors should not keep more than 5% of their wealth in one single position to protect downside risk.
4. I Am Not Panic Selling
The worst thing an investor can do is panic sell during volatile markets.
You don’t want react to some news article and sell a holding just because of that.
That is not investing.
Of course, some things could directly impact one of your assets. So it is important to be aware of what you are invested in and understand how it will be impacted.
But it’s wise to refrain from overreacting. You don’t want to make a rash decision. Instead, review your investments in detail and carefully consider if any changes must be made.
Most of the time, it’s probably better to do nothing.
Related: What To Do When Markets Crash – 9 Timeless Tips
5. Studying History
Just like studying and properly preparing for a test can put you at ease, studying history can help prepare you for unprecedented times.
Over the past year, I have increasingly been interested in history.
I’ve been watching documentaries on World War 1 and 2, and I’ve been going back and rereading old books that discuss the history of the stock market and inflation. I’ve learned about how both wars started, Hitler’s rise to power, and how inflation affected stock markets.
In addition, I have been listening to podcasts and speeches from very smart people on inflation and economics.
A few of the brilliant minds I’ve been learning from are Charlie Munger, Ray Dalio, Milton Friedman, and Ben Graham.
I’ve also kept my eyes and ears open online for anyone who is talking about inflation, interest rates, and the economy. I try to listen to everyone, even the people that don’t know what they are talking about.
6. Maintaining A Long-Term Perspective
With everything in life, I always try to maintain a long-term perspective.
In fact, I can’t help but think about the long term. It’s just how I’m wired.
This long-term mindset is present even throughout these unprecedented times.
It’s true that the world is going through challenging times right now.
But I maintain a long-term mindset because I know this too shall pass.
Related: Buying Stocks Long Term – 5 Clear Benefits Of Long-Term Investing
7. Buying Assets More Aggressively
This might sound like a contradiction, but I am protecting my wealth by becoming more aggressive with buying stocks.
My original plan was to save 15% of my income for stocks this year while I save for a house or condo. Of course, the main reason why I was saving less was to eventually buy a property. However, it was also because the market seemed to be outrageously priced. It was honestly becoming difficult to find attractively priced stocks.
As such, I opted to invest less than I usually do.
But now that another variant, inflation, rising interest rates, and war have forced the Nasdaq and S&P 500 into correction territory, I am planning on increasing the amount of capital I invest in the stock market.
In short, I am protecting my wealth by getting more money out of cash that is losing its buying power. Instead, I am investing it in quality businesses that are generating cashflow and trading at a discount.
Related: What Are Assets That Generate Income? (Best Assets To Buy Now)
8. Being More Selective With Stocks
As I mentioned above, I plan on increasing the amount of money I allocate towards stocks now.
But at the same time, I am being more selective with the stocks I buy.
Simply put, I am seeking the highest quality stocks that generate massive amounts of cash.
I am looking for companies that have experienced significant dips in the share price even though the business fundamentals are as strong as ever.
Surprisingly, there are quite a few technology stocks that fit this description.
9. Speak To A Professional Accountant Or Lawyer
I am not an expert when it comes to wills, insurance, accounting, or legal advice.
For most topics, I am comfortable doing my own research and making my own decisions.
But when it comes to these methods of protecting your wealth, it’s best to speak to a professional accountant or lawyer.
Things I’m Doing To Protect My Wealth During Unprecedented Times — Final Thoughts
As always, I am sharing what I am doing to protect my wealth and not advising on what you should do.
Everyone’s situation is different.
Since I do not have any children or anyone to take care of, I am able to take on greater risk.
As such, it’s important to plan according to your own unique circumstances.
In summary, these are the 9 things I’m doing to protect my wealth during these unprecedented times.
Just remember that this too shall pass.
Similar Articles To Check Out
How Does Inflation Affect Families? 6 Tremendous Consequences
What Are Assets That Generate Income? (Best Assets To Buy Now)
Buying Stocks Long Term: 5 Clear Benefits Of Long-Term Investing
What To Do When Stock Markets Crash: 9 Timeless Tips
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How Does Inflation Affect Families? 6 Tremendous Consequences
