Some people would say we are already in a recession and the government just hasn't caught up yet to let everyone else know. Whether or not we are in a recession, it's time to consider how you are holding on to excess resources you do not need to meet your monthly cash flow needs.
On the spiral path of the Journey to Financial Liberation, the financial planning model I've created, "stewardship" is stage two on the spiral. This is my recommended plan for wise stewardship of what you have.
Once you can generate what you need, and you begin to have any accumulation at all, it's time to invest wisely by stewarding what you have well. If you do not steward wisely, Life either doesn't give you more or it takes what you have.
Stewarding wisely means investing your time, energy, attention and money, your TEAM resources, not just your money.
Here are the ten places you should be investing any excess you have, numbered in the order I recommend you invest first, second, third, and so on. That means I wouldn't invest in crypto or the public stock markets until you have the first six categories dialed.
1. Cash at Home for Ease of Trading and Exchange
First and foremost, keep enough cash at home, in a safe, in small bills in case needed for immediate exchange. That means $1s, $5s, $20s, $100s and silver, which is easier to transport and exchange than gold. Most people I speak with generally keep between $1,000 and $20,000 here, depending on their excess available cash.
2. Food at Home for One to Three Months
Keep an emergency supply of non-perishable food at home to feed you and your family for one to three months. Investment in a generator, solar power, and water filtration devices would fit into this category as well.
3. The Ability to Live Independently on Land for Two Weeks to a Month
This means camping gear, including water filtration and the gear needed to rehydrate, cook, and source your own food in the woods if needed.
It also includes knowing where to go. Scout your local community to know where you could go into the woods and hunker down for fourteen to thirty days, if needed.
In this category, I've got a Sprinter van, and this summer I'm building in a water filtration system. I'm also putting together backpacks for everyone in my family, plus water filtration devices, freeze dried food, and a cooking source in everyone's bag.
4. Liquid Funds at a Local Bank for One to Twelve Months of Living Expenses
The amount here depends on how quickly you could generate income if needed, based on your skills and your ability to create something from nothing. If you can always generate what you need, when you need it, on demand, with no dependence on the outside economy or a boss, you can keep this amount quite low. In any event, keep this amount under the FDIC limits.
5. Relational Investments in the Most Important People
Once you've got your basics covered, your next investments should be in the humans close to you having their basics covered, and in developing social and relational capital.
This means investing in the people helping you raise your kids, or who will help you in the future, or in your own kids if they are grown. It means investing in local farmers growing food in your area, your parents and siblings where healing may be needed, and trusted advisors and supporters who can help you with everything else you will invest in beyond these first five categories.
Human capital is the least appreciated, and yet most valuable, investment you can make after the investments you make in yourself.
6. Life Insurance and Estate Planning
Get the right amount and type of life insurance, ideally with a built-in long-term care rider or the ability to access your insurance for long-term care needs, plus the estate planning to make sure it and your other assets are handled with ease after your death or in the event of your incapacity.
While you could use a DIY estate planning solution, I only recommend that if you are still working on maxing out the first five of these investment categories. In that case, yes, have a DIY estate plan in place to cover just the very basic basics.
But once you have the first five handled, get professional support to buy the right type and amount of insurance, and to get the right estate plan in place to save your family massive headaches once you start investing in anything else. Of course, I recommend you work with a Personal Family Lawyer to get this all dialed in.
7. Real Estate
First and foremost, invest in a place you could live if you had to, whether you live there now or you don't and rent it out.
When I was building my investment portfolio, after I invested in my Sprinter van and built that out, I invested in a condo that my kids or their dad could live in. Looking back, I wish I had never sold the two-acre farm I bought in 2010 and instead rented it out, but it turns out there's now an entire fracking setup literally across the street from it, so at the same time that's not the right place for us anyway.
I do steward land in Alegria Village, an eco-community in Costa Rica, where I'm beginning to plant and invest in regenerating the land, and I'll likely build there one day.
Currently, I rent the homes I personally live in, as the cost of buying is far greater than the cost of renting, and I split my rent cost with my businesses because I also use the homes I rent for business purposes at a far greater percentage than I do for personal use.
8. Private Investments
I see private investments as on par with building relational capital. Once you've got your real estate, life insurance, and personal family survival-to-thriving needs met, making investments in the people you are close with, who you believe in, and who are doing great things in the world is most likely to lead to the kind of long-term benefits you really want to see in your own life.
Make these investments through a self-directed IRA, maxed out via contributions to a Roth IRA first, so that if they sell for millions or billions down the road you don't pay taxes on the gains. Or, if you've invested all of your retirement assets already, consider an irrevocable trust for maximum asset protection.
9. Crypto
There are a few types of investments in crypto. As I see it, there are two main ways to invest in crypto: invest to buy and hold, which should almost always involve staking so you earn a form of "interest" on your holdings, or invest to trade, including yield farming, which allows you to gain rewards on your trades in exchange for providing liquidity to certain markets.
If these terms are all foreign to you, just buy some of the blue-chip crypto assets, like BTC, ETH, and SOL to start, and then branch into some of the alt-coins as you learn.
10. Public Market Investments
Many would disagree with me for putting public market investments last on the list, but they are the investments that are most out of your control. If you are going to invest in the public stock markets, you are probably best off investing through a low-cost ETF, such as the S&P 500 via Vanguard. Or invest in individual stocks of companies you know, trust, and love to use yourself.
It may seem as if there aren't a lot of great places to invest right now if you are only looking in the traditional places, like real estate or the public markets. But my guess is that you haven't been looking at investing the way I've laid out here.
These principles are rooted in permaculture, and explored further with tools for you to apply these principles in your own life in The Enough Course, a creation of the Eyes Wide Open Collective.
Generation Comes First
The first stage of the spiral is generation, or knowing how to generate what you need in alignment with your values. Once you are generating what you need, it's time to learn to steward what you have.
If you aren't yet generating what you need in alignment with your values, your primary investment needs to be in getting there. That may require you to invest in learning what you need, learning to provide a valuable service, or increasing the value of the services you already provide.
If you have not yet built yourself a generation machine that supports you to give what you have in exchange for what you need, invest fully in that first. You can earn what you need being a business owner or by working for someone else as an intrapreneur, but you want to ensure that your income source and ability to earn is within your control at all times, and that if all else fails, you can always provide a service or sell a product that people want and need.
Investing in your contribution and generation machine comes first.