Adventure Capitalist

Survivalism has a number of “Rule of Three’s”, for instance one states that a man can only survive for a maximum of 3 hours without shelter under extreme weather condition, a maximum of 3 days without water and a maximum of 3 weeks without food.
Survivalism author Ragnar Benson has turned this rule into tangible survival advise, stating that under survival conditions, you should strive to:

• Have three separate sources of water
• Have three separate sources of food
• Have three separate places of shelter

Bensons idea behind this is to lower your risk and increase your chances of survival, should one or even two sources be contaminated, destroyed or otherwise unavailable. In a survival situation, having contingency sources for your basic needs can become a matter of life and death.

Turbulent Financial Times
We currently live in a time of almost unprecedented economic and social turbulence: the banking crisis may soon enough become the sovereign debt crisis. Economies in developed countries are barely recovering from a deep funk.
Questions have to be raised: can you trust the value of your money? (the dollar has lost 99% of its purchasing power in the last 100 years..)
Are you sure governments won’t impose new confiscatory taxes, or even means test or outright expropriate your pensions to save their own skin? (Spain is already propping up its sovereign debt by forcing pension funds to “invest” in it).
Is what you do for a living now still going to be able to sustain you in five years time?

The short answer is: you can’t be sure of anything. Going on as if everything will always be the way they are in a comfortable status quo is a surefire way to get badly burnt when the next crisis hits (they always eventually come around).
A good way of hedging against being caught out by the next financial storm is to adapt Benson’s Survival Rule of Three to your finances.

Assets: Derisk Your Asset Holdings
Don’t hold everything in one currency or asset class. Don’t tie yourself in to one geography, make sure you could potentially move at least part of your assets around the globe if the proverbial shit hits the fan: banks collapse, governments go bad or collapse, the economy hits a depression etc. Ideally:

• Hold assets in at least three different locations across the world.
• Hold at least three different, somewhat uncorrelated asset types.

Income: Don’t Rely on a Single Source
Your very worst-case starting point should be at least investing in yourself, making sure you have a skills advantage over others doing the same or similar things, though it is generally a bad idea to rely solely on employment income.
You should really look at establishing multiple sources of income:

• Business income: you should aim for having business income that is sourced from at least three different primary clients, preferably more.
• Investment income: This goes back to your asset strategy. Ideally, you would have three sources of investment income, for instance dividends, interest and rental income.

Costs: Live Well Within Your Means
This should be common sense, but to millions of people it is not. The smaller the financial footprint you require to live a decent life, the better you will fare in the face of financial setbacks or difficulties. The less junk you have to carry around, the more mobile you can be in your pursuit of new opportunities. For happiness, it is better to collect experiences, not things.
Unlike others, I am not advocating all out “minimalism”, I could certainly not live with less than 50 things (or whatever the perceived limit is these days). Most of us like having some creature comforts around, I certainly do. But at the same time, a lot of the clutter we amass over the years is just an unecessary ballast holding us back - tokens of consumerism that cost us more in money than they gave us in satisfaction.
If you can at least reign in your consumerist tendencies and keep clutter down, you will not only have more money in the bank, but you will also have more freedom and less stress. Building wealth is all about under-consuming to enable investment.

Survivalisms Rule of Three: Applied to Your Finances
As you can see, Benson’s Survival Rule of Three can easily be applied to your financial survival. If you’re lucky, applying these rules will just give you a leg up on building your wealth for the future. If the proverbial s*** hits the fan, these rules might just be the difference between financial oblivion and successfully navigating stormy waters and surviving.