how not to lose what you have

In this article, I wrote the main things that I have been thinking about for the last week: what risks do current events carry for the financial situation, and how can they be minimized. On Habr – only the practical part; full version of the post here.

How to make decisions?

Hereinafter, I will mainly talk about the financial side – about how not to suddenly be left without a livelihood and not lose what you have previously accumulated.

The main thing to understand is that any forecasts are now pretty useless. No one knows exactly what will happen and how everything will work in a situation of uncertainty.

Asking “can it happen that …” is meaningless. Assume that any scenario is possible. Now every day there is new information that makes us overestimate the degree of pessimism of the possible consequences in depth – to those levels that no one even seriously thought about a few days ago.

A few general considerations about the principles of decision making:

1. Think not about how to earn, but about how to save. In investment chats, you can meet people who are going to sell an apartment or take out a loan to “buy cheap Sberbank shares for the whole cutlet.” Despite the fact that in some scenarios this can really “work” – such behavior in the current conditions seems unreasonable to me.

2. Optimize decisions to minimize regret in worst-case scenarios. In normal situations, the people of the part try to make decisions that give the optimal expected outcome in the most likely scenario. Now the probabilities of different scenarios are changing almost hourly (and mostly not for the better). So it is better to do something that will not make you very sorry if the future reality turns out to be bleak. Even if you think that this scenario is not the most likely.

3. Don’t panic. The previous paragraph does not mean that you need to wind yourself up with the most apocalyptic forecasts and start acting on emotions. It is best if you are not emotionally afraid of anything, but rationally ready for anything. Even though it’s difficult.

4. Diversify. If, after weighing all the data, you are in doubt about whether it is better to do with money – to do A or to do B, then it would be reasonable to divide the available capital into piles, and do both A and B at once, and C to boot (and leave a little more in case of full G and G). So you increase the likelihood that at least one of the letters will be a loss of funds; but on the other hand, you drastically reduce the likelihood that the money will be lost entirely at once.

5. Choose an option. In conditions of uncertainty, those decisions are good that leave maximum flexibility for further adjustment. Roughly speaking, good decisions are those that leave as many options as possible for making various other decisions in the future. So-so decisions are those that fix for you one inflexible corridor for further actions.

Finance: for those who live in Russia

There are two main sources of risk for permanent residents of Russia:

  1. Political risks: sanctions from the West and response of the Russian authorities. On the one hand, this is a possible ban on any financial relations with Western institutions for Russian residents/citizens, on the other hand, any hypothetical scenarios in the style of “in the context of the confiscation of gold and foreign exchange reserves by hostile forces, restrictions on the free circulation of currency are introduced …”.

  2. Economic risks: the consequences of international isolation for the Russian economy and prices for various assets.

In order of thought flow:

  • If you have previously thought about emigration, perhaps now is a good time to realize your intentions. If you have a sought-after modern profession (read: IT specialist / programmer), then now many are ready to help with work and relocation. Later, perhaps, this option will be more difficult (at least if they decide to go along this path at the same time so many of people).

  • Accordingly, if you are going abroad in the near future, then it makes sense to think about how to transfer capital somewhere outside (most likely, this can be done only if there is an infrastructure prepared earlier – open bank / brokerage accounts with passed KYC / AML checks).

  • If you are going to stay in the Russian Federation in any case and you have capital abroad (for example, investments), it may be worth considering returning the capital inside, because. as various sanctions come into force, the risks of freezes/blockages and the like increase for Russians. In any case, it would be nice to have spare accounts in various foreign brokers/banks, but they had to be opened in advance – right now, most likely, new accounts will not be opened anywhere for Russian residents.

  • If there is currency or foreign securities in sanctioned banks/brokers, it makes sense to withdraw them from there. Currency can most likely be picked up in cash, papers can be transferred to some unauthorized broker.

  • The pessimistic scenario, in my opinion, looks something like this: 1998-style economic environment plus Iran-style international isolation. Inflation like we haven’t seen in a long time.

  • The presence of the MIR card instead of VISA / Mastercard will soon be relevant, you can already order.

  • Having some amount in a commonly accepted currency (dollar/euro) might be a good backup option.

  • As for physical gold, coins and all that, I think in which case it will be possible to use all this only with huge discounts to the real value. I wouldn’t think in that direction.

  • Your own property is good, it is worth holding on to.

  • The stock market is a dark horse. Having exposure to the international market from within Russia may now become difficult. Investing exclusively in collapsed Russian securities – well, I’m not going to give any forecasts here, any scenario is possible (from “a unique historical opportunity to enter” to “what is dead may never die”).

  • In any situation, remember about liquidity. If you have a beautiful percentage of profitability somewhere on your account, but in fact you cannot withdraw money and you don’t know when you can buy food with it, perhaps the joy from the chart on the screen will not be so great.

  • Be prepared not only for an economic blockade, but also for disconnection from various international services, software, etc. Moreover, both outside and inside. Back up everything in the cloud or elsewhere.

Just in case: I do not want to say that it will necessarily be very bad. What I’m saying is that it’s better to be prepared for the worst and end up in a “normal” scenario than the other way around and watch it sink to the bottom without being prepared for it.

Finance: for those who do not live in Russia

  • It makes sense to attend to the withdrawal of the remaining capital from Russia, if you still have them there.

  • Keep in mind that sudden (unusual for you) large transfers from Russian to Western banks at the moment could theoretically become red flags and triggers for a temporary freeze and enhanced KYC / AML procedures. Discuss this with your host manager in advance.

  • Just in case, I’ll clarify: most likely, it will not work to come with a suitcase of cash to a Western bank and deposit it into the account without any questions.

  • If you are registered as a citizen of the Russian Federation in foreign financial institutions, then the likelihood of falling under sanctions or under some kind of preventive measures remains.

  • I believe less in scenarios like “suddenly freeze and confiscate all assets from all Russians”, and I think options like “we don’t want to do business with you anymore, transfer all assets from us somewhere within 30 days” are somewhat more likely.

  • Based on this, it is better to have as many fallback options and escape routes as possible (here is a list of brokerswho were previously ready to work with the Russians). A couple of brokers in the USA will not be superfluous (if IB eventually closes from the Russians, it will be easier to transfer from there within the country to some Score Priority or Citi NA). The second line is brokers from the European Union, such as Saxo or Exante. If the US and EU come together with tough sanctions, then a bank or broker in Switzerland like SwissQuote could potentially be useful. It might be worth considering an Asian broker like Tiger Brokers.

  • I do not know how ready all these brokers are now to open accounts for those who have Russian citizenship combined with non-Russian residency. In any case, it’s worth a try. Be prepared to provide proof of residency (long-term rental agreement, utility bills in your name, etc.).

useful links


I lead TG channel RationalAnswerwhere I try to find reasonable approaches to personal finance and investments.

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