5 “G’s” That Hold Value During a Recession

During an economic recession, we should all be prepared for the worst. Arbitrary possessions and luxuries become less attractive during a downturn. Basic necessities become coveted and demand for these can skyrocket. When an economy fails, fear grows. People start seeking out items that they believe will keep their family safe.

These are Robert Kiyosaki’s¹ five “G’s” you need to survive any economic crash.

Gas

Vehicles queue at a petrol station at a gas and a petrol station during a fuel shortage at the country in Cairo

Vehicles line-up at a gas station during a fuel shortage in Cairo June 26, 2013.

Gasoline represents transportation and mobility. Imagine being uncertain if your surrounding gas stations will stay operational during a recession. Kiyosaki says that gas companies can do very well in these situations.

Grub

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A Soldier stands guard in a grocery store in San Antonio de Tachira, Venezuela 2016 during a severe food crisis

This ‘G’ can also be substituted for Groceries. Essentially it represents food and nutrition. You have to eat to survive right? Robert takes a bigger approach to this concept and wants to own the land/farm that grew food. Kiyosaki’s research showed that people who owned food producing land during times of recession did very well.

Guns

ammunition-shortage

Empty shelves during an ammunition shortage

Firearms represent protection and physical safety. ‘Demand for guns in the United States is at or near record levels. The FBI conducted a record-high 23.1 million firearm background checks in 2015 — outstripping the previous annual high of 21 million checks in 2013 — indicating that 2015 was also a record-breaking year for actual gun purchases’ according to MoneyTalkNews.

From the Modern Survival Blog: ‘When severe shortages (in general) develop, it can be a remarkably long time before supplies get back to normal. This has to do with a number of factors including our just-in-time (JIT) systems of forecast/manufacture/distribution for ‘normal’ demands.

It also has to do with the instinctive reaction of shoppers who may notice a small quantity of re-stock – and then they immediately buy it all up (because of the shortage). This puts even more demand on the re-supply system – making it even longer to ‘catch up’

Ground

for-rent

Ground is real estate and land – including farm land. It is no secret that Kiyosaki has made a fortune in real estate and he has a passion for assets that he can physically touch and hold. Real estate is shelter, a necessity to survive. People will always need a place to live as a basic human need. Even during a recession, strong demand for rental houses come from displaced homeowners. During times of inflation, owning real estate is wise. Property values rise, if you are a landlord, your rents rise. Your payments stay the same. It is important to note that Kiyosaki is adamant that a house is a liability unless you are receiving rental income from it. He goes on to say on his website – ‘To me it only matters if a little property appreciates in price. I care only whether it provides cash flow every month. It’s the only sure way to build wealth and assure a secure retirement in terms of real estate investing—and it’s the only true way to appreciate real estate as an investment.’

Gold

gold-bars

Since precious metals throughout history have run on opposite tracks to stocks, currency and paper-backed assets, they’re the best way to protect long-term wealth. They’re the ultimate diversifier — the simplest ways to balance your portfolio. They’re the perfect way to guard and grow hard-earned savings.

Regardless of your investment strategy, physical assets like gold and silver can serve as a protective harbor against financial storms. They’re a hedge against inflation. They buffer savings against political and economic risk. They’re tangible.

As stocks fall, gold and silver generally rise in value. Precious metals also shine
as the U.S. Federal Reserve prints money, leading to inflation. Or as the dollar weakens against foreign currencies. Or as banks risk failure. Gold and silver also do well as governments such as the United States spend deeply into the red. Or as governments worldwide fail to payback their loans.

In the past decade, the value of the Dow Jones Industrial Average has ticked up 60 percent. During the same period, gold has more than doubled in value, by 120 percent.

Gold and silver, added to your individual retirement account, can greatly boost your investment portfolio and reduce risk during economic turmoil.

Robert has stated that he does not trust paper assets, especially currencies like the U.S. dollar and Japanese yen. Kiyosaki prefers gold and silver instead. Gold you can hold.

_____

¹Robert Kiyosaki is an American businessman, investor, self-help author, educator, motivational speaker, activist, financial commentator, and radio personality. Kiyosaki is the founder of the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books, videos, games, seminars, blogs, coaching, and workshops.

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