1) Physical cash
This is an easy option for just about anyone. Holding cash completely eliminates the risk of keeping your savings in a shaky bank.
You can secure your cash by storing it in a safe at your home, or at a non-bank private vault facility.
It means your savings won’t be gambled away by your banker on the latest investment fad.
You can’t have your account frozen by any one of dozens of government agencies.
And if something goes wrong with the banking system, your savings will survive untouched.
But cash is no panacea. While it dramatically reduces the risk to your savings posed by potential challenges in the banking system, you may also want to consider…
2) Precious metals
While cash is a great hedge against problems in the banking system, precious metals are a fantastic hedge against problems in the broader monetary system.
If the market ever wises up and realizes that all these pieces of paper passed off as money are simply worthless claims on bankrupt governments, OR there comes a day when central banks print the straw that breaks the camel’s back, you’ll want to make sure you own gold and silver.
Gold is a real asset with a 5,000 year history of value and marketability, three times as old as the oldest paper currency still in use (the British pound).
Now, like any form of savings, gold by itself doesn’t produce a rate of return.
Cash in a bank account earns about 0%. Cash in a safety deposit box earns 0%. Gold in a safety deposit box earns 0%.
So in order to earn some return on your savings, it’s necessary to consider owning…
3) Deep-value investments
Own profitable businesses managed by talented people of integrity, and buy them when the share price is below the company’s intrinsic value.
Share prices go up and down day to day. But over the course of several years, wonderful, well-managed businesses perform extremely well in any environment.
In the event of inflation, they go up in value. In deflation, they produce valuable cash flow. Even in a crisis, they’re the first to recover.
Great businesses often pay steady dividends as well, so you can expect to earn healthy cash flow while honest, talented executives look after your savings.