You don’t need me to tell you that we live in uncertain times. If you are like me you are sitting inside your home watching the entire world enter into a state of paranoia.

Don’t get me wrong, we all have reason to be worried, as we are dealing with a threat that is hard to mitigate, however, often the dangers that come in times of uncertainty are not as a result of the danger itself, but our response to it.

Uncertainty is a result of being unprepared for the events unfolding around the world, nation, state, family etc…If we are prepared, then events that transpire around us have less reason for us to loose sleep over.

There are fractures seen in banking and financial system all over the world. Global institutions are again feeling the strain of an increasingly fragile system. This is a clear example of how external shocks can have such drastic effects and this may just be the beginning.

The most elemental aspect of any financial security strategy is financial diversity. It is far too risky to keep all your eggs in the same basket. If the totality of your life is dependent upon the functioning of any single system you are at risk.

If you have all your accounts in one country, as well as all your real estate, investments, IRA, portfolio, you are setting yourself up for a potential disaster.

Within our lifetime we have seen numerous countries experience recessions, bank failures, capital controls, currency manipulations, and economic collapses. If you haven’t been living under a rock the last decade you would have seen the disasters that took place in Greece, Cyprus, Argentina, and Venezuela just to name a few.

It's not so much about ‘if an economic recession will happen’ the question is ‘when’.

No system is immune from cycles. The only thing that we can do is to be prepared for when it arrives. Luckily, we can do more than just stockpile toilet paper, and dig a hole in the backyard to bury all our treasures.

The first step is to diversify assets in foreign jurisdictions in such a way that a downturn of any one sector, currency, or country will not seriously affect your overall finances.

That means opening a brokerage or bank account in a country that has a solvent banking system, is not hugely in debt and has supportive financial regulations that keep both the banks and governments in check.

Benefits of an Overseas Account
Opening an offshore account offers many simple practical solutions. Again the basic idea behind all this is to spread your risk, and not have all assets in one country, currency, bank, asset class, or account, such that you are liable to loosing it all such one domino falls.

A foreign banking system accomplishes this by way of offering a few things, such as:

1) Diversification (in a different country, bank, currency)

2) Greater returns through higher interest rates

3) Greater confidentiality

4) Asset security

5) Access to investment options

Still not convinced? If you are skeptical you might be asking yourself, “is it really such a problem to just keep all my money in the bank down the street or here in my own backyard?”

The short answer is, “yes”.

Many banking systems around the world in all honesty are toxic.

In the US for example, the 2008 crisis left nearly 500 banks bankrupt! Not to mention in places like Cyprus and Greece where many individuals lost a significant part of their life savings due to government confiscation.

Many banks in the US especially are unstable because they have low liquidity and capital reserves, are overly exposed to risky investments, offer very little privacy and tiny interest rates, and exist in a financial system that is completely insolvent.

Banks in favorable overseas environments such as Singapore, Germany, New Zealand, Hong Kong, have much more supportive banking system that does not engage in the same investment tactics and without the same level of debt. which means safer banking practices and ultimately a more solvent financial system.

Even if you are lucky enough to live somewhere with a relatively stable banking system, such as Canada or Australia, it is generally still in your interest to diversify overseas as jurisdictional diversification is still likely to be the single most important thing you can do to safeguard your assets.

Minimize Your Risk
Diversification is the simplest antidote to the risk faced in today's global economy. We never know what the future holds, and recessions can sweep through a country at any time and literally wipe out decades of gains in an instant.

It is often understood the necessity of financial diversification, however, it is not commonly applied to jurisdictional diversity. Spreading your capital across countries and accounts minimizes drastically reduces the risk you are exposed to.

This is why it is important to take the necessary steps to protect your assets before the crisis hits so that you are not scrambling to get everything done in the midst of it.

There are a vast number of available jurisdictions, account types and structures each with its own advantages depending on your personal needs.It is highly recommended that you seek expert advice before opening an overseas account as everyone's financial situation unique and what might work for you might not work for your neighbor.

Whatever course you decide to take, financial diversification of some form is a simply viable solution that ensures that whatever comes you will be well-prepared.