Let's face it. Catastrophes happen, and as much as we'd like to merrily assume that they'll happen to someone else, they may actually happen to us someday. Mother Nature's savagery over the past year has made many of us think more seriously about the possibility of one day facing such a catastrophe.
If you need to leave your home immediately, perhaps never to return, what will you take with you? (This can happen in the case of home fire, spreading wildfire, gas leak, terrorist attack, flood, or some other catastrophic event.)
Maybe you've prepared by having some photo albums ready to go. And you'll also likely remember to take Fluffy, Fido, and any children with you. Don't forget your important financial papers, though! Leaving them behind can cause massive headaches, at the very least.
Here are the kinds of things you may want to have ready to take with you, per the Happy Capitalist blog:
- Key to your safety deposit box
- Phone numbers for insurance agents, banks, attorneys, and financial advisors
- Account numbers for bank, credit card, and investment accounts
- Social Security numbers for all family members
- Current backup of computer files
- Last three years' worth of tax returns, both federal and state
- Copies of the documents in your safety deposit box (insurance policies, wills, deeds to house and cars, and your house inventory)
- Medical information, such as doctors' names and phone numbers, prescriptions, and immunization records
- Phone numbers for family and friends
- Photocopies of birth certificates, passports, marriage certificates, and powers of attorney
Don't neglect cash, because if ATMs aren't working or banks are temporarily closed or hard to reach, you'll want cash to procure things you need.
Where should you keep all of these items? A fire-resistant safe or lockbox is a good place. (Places like Home Depot offer such items, rated as fireproof for up to a few hours.) You might even keep the items in sealed plastic bags, so they're ready to be transported and are protected from water damage.
The Happy Capitalist also suggests keeping your safety deposit box at a bank not too close to home, in case your entire neighborhood is inaccessible. It's also smart to keep your credit cards paid off as much as possible, since you might need to run up a big tab during several weeks of hard living.
For more guidance on how to prepare for a catastrophe, read Dayana Yochim's excellent tips in "Disaster-Proof Your Prized Possessions." (For example, she suggests also storing your various passwords and personal identification numbers in a safe place, although you need to be extra careful protecting these.) Robert Brokamp also offered some great advice in "Be Prepared for an Emergency."
While you prepare for the kind of disaster that has you seeking a temporary roof over your head, be sure to also make plans to avoid another kind of financial disaster that looms in front of too many people: a gruesome retirement. Begin planning now. We can help you with our Rule Your Retirement newsletter. It's issued each month, is readable in a single sitting, and contains lots of valuable tips, as well as inspiration and motivation. (You've got little to lose and a lot to gain by trying it for free.) One of my favorite features is the frequent stories of people who explain how they retired early and well.
Finally, be prepared for investment disasters, such as when your stock falls in price by 50%. It can happen quickly. Seth Jayson recently reviewed some large ($1 billion-plus) companies that have sunk significantly in just the past few months, such as Affymetrix
You can best prepare yourself against such losses by focusing your investments on a "basket" of holdings you have the most confidence in, by keeping up with your investments, and by being prepared to be very patient with quality stocks.