“The Alpha Strategy: The Ultimate Plan of Financial Self-Defense,” a book that was written in 1980 by John Pugsley, outlines how the economy really works and provides an investing strategy that could be a very viable solution for the prepper as well as those who are hesitant to invest in traditional paper investments. While some may consider a book written in 1980 to be irrelevant to today’s situation, I would beg to differ. What the country was going through in 1980 is not unlike the situation that the United States has seen over the last five or six years.
My favorite aspect of this particular strategy is that it revolves around the principle of holding physical assets, with specific emphasis placed on holding future consumables, or property to build or maintain wealth. This results in a situation where the goods invested in are protected from inflation, taxes on future inflation are avoided, the investment risk is mitigated, and the storage of these goods serves as a hedge against a recession or depression. Physical property cannot disappear in a matter of seconds through a computer system. This is a huge advantage for me. I will be honest in that I am not a huge fan of paper investments. I fear that I will work hard and save money, only to find out that it is not there when I need it or even worse, it is available to me but worthless. It seems that either one of these scenarios could play out before I am reach my planned retirement age.
In addition to the obvious advantages of investing in property that is physically held from an investment standpoint, it is also an ideal way to accumulate the beans, bullets, and bandages that are paramount to being prepared for an uncertain future. It is also conceivable that if there were to be a disaster (regardless of whether it is natural or man-made) that the traditional system of three classes; the upper, middle, and lower, could easily become a two class system of the haves and have-nots. If this were to become the case, having invested in physical holding that will support survival will turn you into the wealthy for all intents and purposes.
The Alpha Strategy breaks investments down into four levels. This is the real take away for the prepper. Level one is investment in production which is essentially education, a second trade, and tools with which to produce (emphasis can be placed on skills which are especially useful in a post collapse society). Level two is to save consumables such as items to maintain your home or shelter, foods, beverages, first aid supplies, hygiene items, cleaning supplies, clothing, etc. The third level of The Alpha Strategy is to save real money, this includes manufactured goods for the purpose of resale or barter, raw commodities, and precious metals to name a few (once again, emphasis should be placed on a post collapse society). The fourth and final level is to protect against theft.
With these four levels of investing in mind, I am going to outline the practical applications for the survival and preparedness minded. Something to consider is that many of the mentioned items could fall into more than one category such as food products which could classify as a consumable and a barter item. Examples of investments in survival using the Alpha Strategy include:
LEVEL ONE (Education and Tools)
- Medicine (Human or Veterinary)
- Solar or Alternative Energy Systems
- Construction (Building, Electrical, Plumbing, etc.)
- Engine Repair
- Farming and Agriculture
- Baking and Cooking
LEVEL TWO (Consumables)
- Energy (Batteries, Fuel, etc.)
- Water & Water Filtration Equipment
- Long Term Food Stores
- Tools (Construction and Gardening)
- Medical Supplies and Medicines
- Hygiene Items and Toiletries
- Clothing (All Seasons)
LEVEL THREE (Real Money, Barter Goods, Precious Metals)
- Junk Silver
- Gold & Silver Bullion
- Fishing, Hunting, and Trapping Supplies & Equipment
- Light Sources
- Fire Sources (Matches, Lighters, Firesteel, etc.)
LEVEL FOUR (Security & Protection Against Theft)
- Body Armor
- Non-Lethal Defensive Options
- Security Infrastructure (Barriers, Security Systems, Trip Wires, Lighting, etc.)
- Tactical Gear (Individual Harnesses, Pouches, etc.)
- Night Vision Goggles
- Binoculars and/or Spotting Scope
- Fire Safe
I would even go so far as to introduce the idea of a fifth level that would include protection against loss from natural and man made disasters and networking/community building. This level would incorporate the idea of diversifying the locations of where preparedness stores are located using things like remote caches. In addition to protecting against loss, the practice of networking/building your survival community will allow for a community to capitalize on the learned skills and goods that were invested in by others to further the life and development of the community.
The Alpha Strategy is a great book for the prepper, but is also helpful for the person that just wishes to better understand how the economy works. The bonus is that it contains a written plan for how to invest in tangible assets as a means of securing your future. If you are interested in reading The Alpha Strategy, it can be located online from book retailers. Even if you decide that taking the time to read the book is not for you, consider the idea of putting the basic strategy into play as part of a long term survival plan. It is not only beneficial for those that have a lot of money to invest but it is a practice that can be implemented by even those will very little disposable income.