With the rise of AI, growing U.S. debt, and the possibility of WWIII, there’s been some talk about how to invest if society collapses. These discussions often get dramatic, and most theories about end-of-the-world investments are misguided. A common argument is that you should own gold or more recently Bitcoin in case of societal collapse. However, both would likely be worthless in this scenario. Internet money and a shiny rock only have value in a functioning civilization, not in an apocalypse.
If the world as we know it ends, many things we rely on today, like the internet, might be unavailable. In such a scenario, what we value would change dramatically. Traditional stores of value like Bitcoin, gold, and stocks would be almost useless. Things we once took for granted would become immensely valuable overnight.
But what are those things? And should you invest in them to hedge against societal collapse? Let’s take a look.
What is Always Valuable to Humans?
If the apocalypse comes, the things that will remain valuable are those that satisfy our basic needs. According to Maslow’s hierarchy of needs, these would be related to our physiology and safety:
- Food/Water: The highest priority is staying alive. Canned goods, emergency water, and farmland would be extremely valuable. While having a farm is expensive, having emergency food and water is a must. Ideal emergency foods include honey, canned goods, dried beans, white rice, and sugar. Store food in airtight containers in a cool, dry place. Consider getting a LifeStraw, a survival tool that allows you to drink unpurified water.
- Shelter: Once you have enough food, you need a safe place to stay. This could be your home or a safe house. During WWII, some French citizens escaped to countryside safe houses when cities were taken over. While there's no perfect shelter, having a place to protect you from the elements and other threats is crucial.
- Medicine: Without healthcare systems, access to medicine can mean life or death. Stock up on prescriptions, over-the-counter medications, first aid supplies, and hygiene items. Learn basic first aid and CPR and have reference books on emergency medical care.
- Survival Gear/Weapons: Besides food, water, and medicine, having the right gear and weapons can greatly enhance your survival chances. Essential gear includes fire-starting equipment, portable lighting, communication devices, and other tools. Weapons for self-defense, such as pepper spray, a taser, knife, and firearms, are also important.
- Community: Following a societal collapse, a community of trusted people can make all the difference. If you’ve seen The Walking Dead, you know who we’re talking about, the Hershels and Daryls of the world. A strong community allows you to share resources, knowledge, and protection, and provides emotional support.
In all seriousness, while the chance of a global societal collapse is low, preparing for such an event can be beneficial even if it never happens. For some, it provides a level of comfort and sometimes, your preparedness helps in situations you never planned for.
The Problem with Gold
In conversations with clients over the years, we’ve encountered a few who were very alarmed by scary news headlines suggesting the world was on the brink of collapse. One common reaction was the impulse to move all their money into gold, believing it to be the ultimate safe haven.
We typically explain why gold would be useless in an "end of world" scenario. Gold is heavy and difficult to transport, making it impractical if you need to move quickly. It also needs to be hidden, which isn't always feasible, and it's hard to divide for trade or bartering. Instead of providing security, gold could actually become a burden in a true crisis.
Where Bitcoin & Gold Still Have Value
In a global apocalypse, Bitcoin and gold would likely be worthless. But in a localized collapse, like a country experiencing a coup or hyperinflation, they could be valuable. As long as these assets are recognized as stores of value by the rest of the world and can be transported to a stable location, they will retain value.
Some people who own Bitcoin and gold live in stable countries but own them as a hedge against a global financial system collapse. While there are reasons to own these assets, hedging against total financial collapse is one of the least convincing. If such an event ever occurs, we will have much bigger problems than our portfolios…