Every personal finance book ever written assumes you live in a stable country with a stable currency, a reliable banking system, and a functioning legal system (hello America, this advice is not for you). If you are reading this in Ethiopia, Zimbabwe, Argentina, Lebanon, or anywhere else where the economy is held together by prayers and the tears of the working class, that advice is not just useless. It is dangerous.
“Invest in the stock market” is great advice in America where the market has gone up for 100 years. In Ethiopia, the stock market does not exist the same way. The currency loses value every year (sometimes every month). The bank might freeze your account if the government decides you are politically inconvenient (ask anyone who was on the wrong side of the last political crackdown).
So this series is not for people with 401(k)s and Roth IRAs. It is for people who live in countries where the economy can collapse in a week and the only person coming to save you is you (scary, I know, but better than being surprised).
Three rules to live by:
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Diversify beyond the local currency. If all your money is in birr and the birr goes to shit, you lose everything. Keep some money in USD, EUR, or anything that is not printed by a government that hates you.
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Own physical assets. Land, gold, construction materials. Things that exist outside the banking system. Things you can actually hold. Things that do not vanish when a bank collapses (because banks do collapse).
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Keep cash at home. Not all of it. But enough to survive for a month if the banks close. Because banks in the third world do close. And when they do, your digital money might as well be monopoly money.
Coming soon: Inflation and How to Not Lose Everything