Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation?
"For diversification against local currency's inflation, you have fundamentally 3 options: Depending on how sure you are on your prediction, and what amount of money you're willing to bet to ""short the country"", you might also consider a mix of approaches from the above. Good luck." "If you think your cash will buy fewer goods in the future due to inflation, are there goods you will want or need in the future that you can purchase now? I think the cost of storage would need to be less than the inflation in price for this to make sense. If you used commodity trading there may not actually be a storage cost but likely some fees involved that would need to be weighed against the expected inflation. Basically if ""things"" are going to cost more in the future, making your cash worth less, can you convert cash into ""things"" before prices escalate?" Given those assumptions (which I happen to think are reasonable) it seems to me the obvious place is to buy non-Australian assets, such as the Vanguard VTS (total US share market) and VEU (world ex-US) ETFs, and perhaps also some international fixed-interest ETFs.   I think keeping a certain amount of cash would be prudent anyhow. If you felt very sure this was going to happen, you could borrow in Australia and buy foreign assets, expecting that as the AUD falls, the relative cost of the borrowing will also fall.  This is obviously fairly risky, not least because Australian interest rates are already high and may go much higher, and while the rates go up the exchange rate will also likely go up. As I mentioned on another answer, I think buying gold or other commodity instruments is a poor choice here because the Australian economy and the AUD is so tied to those prices already. Taking into account your POV I would recommend mostly goods that will be harder to obtain, precious metals (not only gold) and forex (although the forex aproach depends on some other country not having troubles with it's own economy which in a world as interconnected as ours by internet and all the new technologies doesn't seem likely)  i highly recommend silver which is cheaper than gold and is stable enough in the long term Typically in a developed / developing economy if there is high overall inflation, then it means everything will rise including property/real estate. The cost of funds is low [too much money chasing too few goods causes inflation] which means more companies borrow money cheaply and more business florish and hence the stock market should also go up.   So if you are looking at a situation where industry is doing badly and the inflation is high, then it means there are larger issues. The best bet would be Gold and parking the funds into other currency. Apart from some of the excellent things others say, you could borrow money in AUD and invest that in another currency (that's risky but interesting) if the AUD interest rate is low and the other countries interest rate is higher, you'll eventually win. Also, look at what John Paulson did in 2007, 2008... I wish I'd thought of that when I was in your position (predicting a housing crisis) The best investment is always in yourself and increasing your usable skills. If you invest the money in expanding your skills, it won't matter what the economy does, you will always be useful.
TL/DR  Yes, The David popularized the Debt Snowball. The method of paying low balance first.  It's purely psychological. The reward or sense of accomplishment is a motivator to keep pushing to the next card.  There's also the good feeling of following one you believe to be wise. The David is very charismatic, and speaks in a no-nonsense my way or the highway voice. History is riddled with religious leaders who offer advice which is followed without question.  The good feeling, in theory, leads to a greater success rate. And really, it's easier to follow a plan that comes at a cost than to follow one that your guru takes issue with.  In the end, when I produce a spreadsheet showing the cost difference, say $1000 over a 3 year period, the response is that it's worth the $1000 to actually succeed. My sole purpose is to simply point out the cost difference between the two methods. $100? Go with the one that makes you feel good. $2000? Just think about it first.  If it's not clear, my issue is less with the fact that the low balance method is inferior and more with its proponents wishing to obfuscate the fact that the high interest method is not only valid but has some savings built in. When a woman called into The David's radio show and said her friend recommended the high rate first method, he dismissed it, and told her that low balance was the only way to go.  The rest of this answer is tangent to the real issue, answered above.  The battle reminds me of how people brag about getting a tax refund. With all due respect to the Tax Software people, the goal should be minimizing one's tax bill. Getting a high refund means you misplanned all year, and lent Uncle Sam money at zero interest(1). And yet you feel good about getting $3000 back in April. (Disclosure - when my father in law passed away, I took over my mother in law's finances. Her IRA RMD, and taxes. First year, I converted some money to Roth, and we had a $100 tax bill. Frowny face on mom. Since then, I have Schwab hold too much federal tax, and we always get about $100 back. This makes her happy, and I'll ignore the 27 cents lost interest.)  (1) - I need to acknowledge that there are cases where the taxpayer has had zero dollars withheld, yet receives a 'tax refund.' The earned income tax credit (EITC) produces a refundable benefit, i.e. a payment that's not conditional on tax due. Obviously, those who benefit from this are not whom I am talking about.  Also, in response to a comment below, the opportunity cost is not the sub-1% rate the bank would have paid you on the money had you held on to it. It's the 18% card you should be paying off. That $3000 refund likely cost over $400 in the interest paid over the prior year. "I don't know Canada very well, but can offer some general points when considering where to park your emergency fund. Savings rates are currently low, but then so is inflation. Always bear in mind that inflation decreases the value of your money, so if you're getting 4% interest and inflation is 2%, you're making 2% gross in real terms. If you're getting 2% and inflation is close to zero, you're actually earning a similar amount, it's just the numbers are going up more slowly. Obviously when and how much tax you pay affects the actual return, it's just worth bearing in mind that low interest and low inflation are actually not that bad a savings environment as they first appear. For an emergency fund the key thing is ease of access, consider keeping some portion of your savings in an instant access account for those emergencies that happen when the banks are closed. In the UK there are various tax-free savings options, I'm guessing Canada has a few too, if so you should explore those options. While these may not have attractive headline rates, you don't pay tax on the interest, this can make them much more competitive (4% tax free is the same as 5% gross if you would have to pay tax at 20%). Normally tax free investments have caps so once you've invested a set amount you can't add anymore. This may be a consideration if you regularly dip into your emergency fund as you might not easily be able to build it up again. My approach is to have about 90% of my ""rainy day"" fund in easily accessible but tax free savings. This discourages me from spending it unless I really need to. I then keep a slush fund sufficient to cover every day disasters (boiler packing up, needing a hire car for a week etc) in instant access accounts ." I was just talking about this with my father in law.  When the min wage was about $1.50 a hour, going camping at a state park for a night was just over $1 a night.   Now, where we live, it's often $20 a night just for a campsite in a state park.  Min wage is $7.25.    My family paid $400 for a Beta vcr in 1980.  Single income family, factory worker, blue collar job.  Could someone do that today, adjusting for inflation?  Absolutely not. I'm all-in on hard silver, a small portion is stored at my house for emergency expenditures and the vast majority is in a high-security vault in Canada. That was actually the cheapest place I could find for long-term storage and insurance, which happened to be off-shore. It could turn out to be beneficial to be off-shore though. In the 1930s gold became illegal to privately own its very possible they could do the same this time, although they didn't in 1979. Oil is too high in volume to reasonably store. Gold isn't as undervalued as silver, which I could spend a full day talking about. But to sum it up in a few points: there is less silver than there is gold, gold has a premium for jewelry which will likely go down in a crash even though you will still see gains, silver is the second most used commodity besides oil, less people are in the know about it, silver prices were actually higher than gold a few times in the past century, simply measuring the dow in silver will show it's further below the historical average compared to gold. I'll stop there, but I could go on though on silver if people want. Real-estate is still very expensive from the 2008 recession, traditionally mortgages are $1.05 per dollar you would spend on renting the same property. Currently real-estate is at like $1.25+ I believe, It peaked at about $1.95. I rent, to save money, which you can spend on other assets.  If one's willing to move to another state for lower taxes, they definitely should. Employment is going to be harder to come by, and they should get as much out of it as possible as they can. If they don't save enough, they could end up just using their entire savings during the whole thing if they can't find a job, in which case at the end you'd never know they knew it was going to happen.  Overall I don't think this crash is going to be like the great depression. I don't feel compelled to store food and buy a generator or anything. I believe the living will be *easier* than it were to live in the 90s for those who are invested in assets. Everything is going to be on sale, meanwhile their wealth will be increasing. Depending on how much they own it could be increasing faster than they need to spend it. Sounds like the life to me. But with that said those without real assets, especially the lower class, will be unemployed and living on food stamps. Perhaps even the food stamps making more people leave the dollar and the economy. This actually might not be a prediction and is what happening already. But I don't believe anybody, in america at least, will be starving. In the 30s we had not mastered industry farming yet and we had the *dustbowl* to make things worse.   Crime though, I'd own a gun. The protesters are here already, and I think we are just passing the half-way point right now, they will get angrier.  I don't know enough about taxes to know the best country or place to store to combat taxes. Maybe someone else can chime in. I'm in canada to avoid high insurance and storage fees.  And for careful selection of primary residence, In the long haul I'd rent a small apartment, as small and cheap as possible. In a safe neighborhood, but not so much secluded that a single grocery store or gas station going out of business could ruin it. "Pay off the credit cards.  From now on, pay off the credit cards monthly.  Under no circumstances should you borrow money.  You have net worth but no external income.  Borrowing is useless to you.   $200,000 in two bank accounts, because if one bank collapses, you want to have a spare while you wait for the government to pay off the guarantee.  Keep $50,000 in checking and another $50k in savings.  The remainder put into CDs.  Don't expect interest income beyond inflation.  Real interest rates (after inflation) are often slightly negative.   People ask why you might keep money in the bank rather than stocks/bonds.  The problem is that stocks/bonds don't always maintain their value, much less go up.  The bank money won't gain, but it won't suddenly lose half its value either.  It can easily take five years after a stock market crash for the market to recover.  You don't want to be withdrawing from losses.   Some people have suggested more bonds and fewer stocks.  But putting some of the money in the bank is better than bonds.  Bonds sometimes lose money, like stocks.  Instead, park some of the money in the bank and pick a more aggressive stock/bond mixture.  That way you're never desperate for money, and you can survive market dips.  And the stock/bond part of the investment will return more at 70/30 than 60/40.   $700,000 in stock mutual funds.  $300,000 in bond mutual funds.  Look for broad indexes rather than high returns.  You need this to grow by the inflation rate just to keep even.  That's $20,000 to $30,000 a year.  Keep the balance between 70/30 and 75/25.  You can move half the excess beyond inflation to your bank accounts.  That's the money you have to spend each year.  Don't withdraw money if you aren't keeping up with inflation.   Don't try to time the market.  Much better informed people with better resources will be trying to do that and failing.  Play the odds instead.  Keep to a consistent strategy and let the market come back to you.  If you chase it, you are likely to lose money.   If you don't spend money this year, you can save it for next year.  Anything beyond $200,000 in the bank accounts is available for spending.  In an emergency you may have to draw down the $200,000.  Be careful.  It's not as big a cushion as it seems, because you don't have an external income to replace it.   I live in southern California but would like to move overseas after establishing stable investments.   I am not the type of person that would invest in McDonald's, but would consider other less evil franchises (maybe?).   These are contradictory goals, as stated.  A franchise (meaning a local business of a national brand) is not a ""stable investment"".  A franchise is something that you actively manage.  At minimum, you have to hire someone to run the franchise.  And as a general rule, they aren't as turnkey as they promise.   How do you pick a good manager?  How will you tell if they know how the business works?  Particularly if you don't know.  How will you tell that they are honest and won't just embezzle your money?  Or more honestly, give you too much of the business revenues such that the business is not sustainable?  Or spend so much on the business that you can't recover it as revenue?   Some have suggested that you meant brand or stock rather than franchise.  If so, you can ignore the last few paragraphs.  I would be careful about making moral judgments about companies.  McDonald's pays its workers too little.  Google invades privacy.  Exxon is bad for the environment.  Chase collects fees from people desperate for money.  Tesla relies on government subsidies.  Every successful company has some way in which it can be considered ""evil"".  And unsuccessful companies are evil in that they go out of business, leaving workers, customers, and investors (i.e. you!) in the lurch.   Regardless, you should invest in broad index funds rather than individual stocks.  If college is out of the question, then so should be stock investing.  It's at least as much work and needs to be maintained.   In terms of living overseas, dip your toe in first.  Rent a small place for a few months.  Find out how much it costs to live there.  Remember to leave money for bigger expenses.  You should be able to live on $20,000 or $25,000 a year now.  Then you can plan on spending $35,000 a year to do it for real (including odd expenses that don't happen every month).  Make sure that you have health insurance arranged.   Eventually you may buy a place.  If you can find one that you can afford for something like $100,000.  Note that $100,000 would be low in California but sufficient even in many places in the US.  Think rural, like the South or Midwest.  And of course that would be more money in many countries in South America, Africa, or southern Asia.  Even southern and eastern Europe might be possible.  You might even pay a bit more and rent part of the property.  In the US, this would be a duplex or a bed and breakfast.  They may use different terms elsewhere.   Given your health, do you need a maid/cook?  That would lean towards something like a bed and breakfast, where the same person can clean for both you and the guests.  Same with cooking, although that might be a second person (or more).  Hire a bookkeeper/accountant first, as you'll want help evaluating potential purchases.  Keep the business small enough that you can actively monitor it.   Part of the problem here is that a million dollars sounds like a lot of money but isn't.  You aren't rich.  This is about bare minimum for surviving with a middle class lifestyle in the United States and other first world countries.  You can't live like a tourist.   It's true that many places overseas are cheaper.  But many aren't (including much of Europe, Japan, Australia, New Zealand, etc.).  And the ones that aren't may surprise you.  And you also may find that some of the things that you personally want or need to buy are expensive elsewhere.  Dabble first and commit slowly; be sure first.  Include rarer things like travel in your expenses.   Long term, there will be currency rate worries overseas.  If you move permanently, you should certainly move your bank accounts there relatively soon (perhaps keep part of one in the US for emergencies that may bring you back).  And move your investments as well.  Your return may actually improve, although some of that is likely to be eaten up by inflation.  A 10% return in a country with 12% inflation is a negative real return.   Try to balance your investments by where your money gets spent.  If you are eating imported food, put some of the investment in the place from which you are importing.  That way, if exchange rates push your food costs up, they will likely increase your investments at the same time.  If you are buying stuff online from US vendors and having it shipped to you, keep some of your investments in the US for the same reason.  Make currency fluctuations work with you rather than against you.   I don't know what your circumstances are in terms of health.  If you can work, you probably should.  Given twenty years, your million could grow to enough to live off securely.  As is, you would be in trouble with another stock market crash.  You'd have to live off the bank account money while you waited for your stocks and bonds to recover." Inflation is basically this:  Over time, prices go up! I will now address the 3 points you have listed. Suppose over a period of 10 years, prices have doubled.  Now suppose 10 years ago I earned $100 and bought a nice pair of shoes.  Now today because prices have doubled I would have to earn $200 in order to afford the same pair of shoes.  Thus if I want to compare my earnings this year to 10 years ago, I will need to adjust for the price of goods going up.  That is, I could say that my $100 earnings 10 years ago is the same as having earned $200 today, or alternatively I could say that my earnings of $200 today is equivalent to having earned $100 10 years ago. This is a difficult question because a car is a depreciating asset, which means the real value of the car will go down in value over time. Let us suppose that inflation doesn't exist and the car you bought for $100 today will depreciate to $90 after 1 year (a 10% depreciation). But because inflation does exist, and all prices will be 0.5% higher in 1 years time, we can calculate the true selling price of the car 1 in year as follows: 0.5% of $90 = 0.005*90 = $0.45 Therefore the car will be $90 + $0.45 = $90.45 in 1 years time. If inflation is low, then the repayments do not get much easier to pay back over time because wages have not risen by as much.  Similarly the value of your underlying asset will not increase in value by as much. However as compensation, the interest rates on loans are usually lower when inflation is lower. Therefore generally it is better to get a loan in times of high inflation rather than low inflation, however it really depends on how the much the interest rates are relative to the inflation rate. "You say you want a more ""stable"" system. Recall from your introductory economics courses that money has three roles: a medium of exchange (here is $, give me goods), a unit of account (you owe me $; the business made $ last year), and a store of value (I have saved $ for the future!). I assume that you are mostly concerned with the store-of-value role being eroded due to inflation. But first consider that most people still want regular currency, so as a medium of exchange or accounting unit anything would face an uphill battle. If you discard that role for your currency, and only want to store value with it, you could just buy equities and commodities and baskets of currencies and debt in a brokerage account (possibly using mutual funds) to store your value. Trillions of dollars' worth of business takes place this way every year already. Virtual currency was a bit of a dot-com bubble thing. The systems which didn't go completely bust and are still around have been beset by money-laundering, and otherwise remain largely an ignored niche. An online fiat currency has the same basic problem that another currency has. You need to trust the central bank not to create more money and cause inflation (or even just abscond with the funds... or go bankrupt / get sued). Perhaps the Federal Reserve may be jerking us around on that front right now.... they're still a lot more believable than a small private institution. Some banks might possibly be trustworthy enough to launch a currency, but it's hard to see why they'd bother (it can't be a big profit center, because people aren't willing to pay too much to just use money.) And an online currency that's backed by commodities (e.g. gold) is going to be subject to potentially violent swings in the prices of commodities. Imagine getting a loan out for your house, denominated in terms of e-gold, and then the price of gold triples. Ouch?" Well, there are also cases where inflation actually helps you, individually, as a consumer. For example, if you have a mortgage or any other debt, debtors benefit from the value of a dollar today decreasing tomorrow.  In a very general sense, psychologically you want to avoid deflationary periods as well as it tends to seize up an economy (why would I spend a dollar today if it will be worth more tomorrow?).  Sure, the absolute value of a dollar decreases over time, but this is intentionally designed to diminish the value of hoarding cash today. Standard income should rise approximately with the rate of inflation, so from an absolute purchasing power standpoint you should remain approximately neutral.