Protect Your Wealth: Strategies for Navigating Currency Instability

The values of standard currencies ebb and wane with their founding economies' health and strength. The only way to insulate yourself from the ephemeral nature of currency fluctuation is to invest in items whose intrinsic value does not change -- or at least moves in the opposite direction from currency devaluations. Some say that this includes gold and silver, although both are commodities whose values tend to rise and fall with economic activity and investor confidence. Others find more stable value in art or in other irreplaceable and unique objects. The choice of an inflation hedge (a currency collapse basically results in hyperinflation) ultimately, is yours.

Step 1

Invest in gold and silver. Both precious metals have been a traditional stores of value in economic crisis. Take physical possession of gold and silver as funds and stocks that rely on them may go bankrupt if the currency collapses.

Step 2

Invest in hard goods. Fine art, antiques, classic cars and other rare items hold value through time in any stable currency that emerges. Remember with art and antiques both demand and rarity contribute to value. A Van Gogh or Rembrandt in the multimillion dollar art world is rare and has a strong worldwide collector demand. My 5 year olds one of a kind crayon drawing is as rare as any fine work of art, but has no demand and so no value to a collector of art. Prints from famous artists may have collector demand, but are usually not rare and are thus of little long-term value.

Step 3

Buy assets that are income producing. Rental property is a good example. Your personal residence is not always an asset and not income producing. A good single family home or apartment that has rental demand is a good real estate hedge for inflation as well as a safe place in case of a currency collapse. As the dollar or other currency is inflated and prices rise, rent should rise as well. The same is true for ownership of a business that produces goods that are in demand. As raw foods become expensive and prices rise, the amount you sell an item for rises as well. It is a safer place to put money than just saving cash at a low fixed return.