Strategies You Can Use to Live Outside the Financial System in the 2020s and Beyond
Some people already choose to live outside the financial system. Some of these people live in developing nations where banks are not prevalent, but some also live in wealthy countries like the US, Switzerland and Canada. In this post, we’ll explore how to survive without a bank account or credit card and what problems and challenges that creates for those who live outside the financial system.
Many people worry about the whole financial system blowing up and that’s why they choose to live outside the financial system. However it’s more likely nowadays that your personal financial system blows up. This can be with your bank accounts being frozen because of a government investigation or because of a pending divorce or some other kind of litigation. Any funds stored in a traditional bank account are constantly at risk. Particularly if it’s a bank account in your home country. Bank accounts like this can be frozen or seized at the stroke of a bureaucrats pen. This is the biggest argument for seeking to live outside the financial system
Traditional Bank Accounts
What is a bank account? A bank account is an agreement with a financial institution to store and protect your money. Banks are typically not accessible without identification. You’ll need a social security number, passport information, or driver’s license data. There are some exceptions, but they’re generally limited to the wealthy.
When you deposit money with a bank you’re effectively lending money to the institution. It’s completely unsecured and you’re dependent on the financial strength of the bank and any deposit guarantees from the government. Not wishing to lend money to big banks is another reason some choose to live outside the financial system.
What’s a credit card? A credit card is an agreement with a financial institution that allows you to buy things without cash by borrowing money from them. Credit cards are also not accessible without identification, so in order to get one, you’ll need at least one of these pieces of information: social security number, passport information, or driver’s license data.
What are some ways to live outside of the financial system in 2020s? Here are a few examples:
A) Find informal work that does not require identification and has low cost for entry (e.g., freelance work). This type of work is more and more common around the world.
B) Find a landlord who doesn’t ask for credit history or identification and has low cost of entry (e.g., housesitting). Or buy a property with cash.
C) Become an entrepreneur-owner of a small business. Keep your assets liquid and invest in physical assets – not stocks or bonds.
D) Become an entrepreneur-owner of a microbusiness, which is essentially just running the entire show yourself (e.g., baker). You’ll need to be creative about how you make money if you want to live outside the financial system.
E) Become a digital entrepreneur of an online business. This is the most popular and easiest way to start living outside the financial system in 2020s if you’re on your own. With modern communications it’s possible to have clients around the world.
F) Buy and sell precious metals like gold and silver for cash
G) Mine crypto-currencies like Bitcoin and spend trade your crypto for the things you need.
H) Become your own bank by creating a cryptocurrency wallet, which is possible to do in 2020s without identification through one’s computing power.
I) Invest all assets into precious metals that are not dependent on the financial system (e.g., gold, silver, platinum).
J) Live by the principle of bartering, which is trading one good or service for another. This never works as a dependable way to make money over time because it’s too dependent on factors like how many people you know and what they need at any given time.
What are some challenges of living outside the financial system in 2020s?
What if I want to live outside the system in 2020s because my government restricts certain types of transactions? There are some countries where living without identification and bank accounts is possible for the wealthiest residents because there are no restrictions on how people spend their money.
In these cases, it’s possible to create a system of cash and bartering that allows you to go about living without the traditional financial infrastructure for certain types of transactions (e.g., buying groceries).
What are some advantages and disadvantages to living outside the financial system? Living without bank accounts or credit cards has both benefits and drawbacks. You’ll save money on banking fees, but you also risk losing your savings if something happens to them while they’re stored with someone else. Many people who live this way report feeling more independent and in control of their finances.
Living outside the traditional financial system as a wealthy person has both benefits and drawbacks, too. The biggest benefit is that you’re not paying fees to use your money because it’s completely under your control.
Crypto-currencies like Bitcoin are perhaps the best way to live outside the traditional financial system in the 2020s.
What is Bitcoin? A crypto-currency, which means it’s an encrypted digital currency used in transactions across the internet without having any country of origin. It was created by Satoshi Nakamoto, which is actually a pseudonym. The most popular crypto-currency in the world right now is Bitcoin, but there are many others like Ethereum Litecoin and Monero.
The downside of living outside your traditional financial system as a wealthy person is that you don’t have access to credit or loans if you need them for emergencies or investments. You also have to be careful about saving for retirement, as you’ll only have access to physical assets that can’t earn a return.
How can I live outside of the traditional financial system? There are many ways that someone could survive without a bank account or credit card in 2020s. You’ll need access to an informal economy with low cost for entry (e.g., freelance work, housesitting), property ownership with cash, or some sort of entrepreneurial endeavor (e.g., baker).
What are the best crypto currencies for privacy?
Bitcoin has been an amazing innovation and it’s changing the financial system. For the first time you can store electronic money without a counterparty. It’s perhaps the greatest innovation ever for those who wish to live outside the financial system. However Bitcoin is not private.
Every transaction is logged on the blockchain and it’s possible to see how much money is in every wallet. I can see how many Bitcoins the creator of Bitcoin, Satoshi Nakimoto has. He has over 1 Billion Bitcoin making him a billionaire many times over. In fact I can see how many Bitcoins any account has and every transaction made by those accounts.
For some that’s just not private enough. That’s why privacy coins were made.
The best crypto-currencies for privacy are Monero and Zcash. Monero was created in 2014 to be a currency that is more private than Bitcoin. Zcash was created in 2016 as an experiment with the idea of zero-knowledge proofs, which are basically just mathematical equations demonstrating proof without revealing any information about what actually happened.
To put it simply it’s impossible for anybody to see the transactions made with Monero and other privacy coins. This gives another layer of privacy for those wishing to store assets in crypto.
Of course it’s possible to gain a degree of privacy with Bitcoin too. You can have multiple accounts and sweep all your Bitcoin into an account that’s not connected with you. There are also services that will mix Bitcoin so that it’s practically impossible to find out the origin of the Bitcoin.
-Where can I find more information about Bitcoin?
What are some challenges of living outside the financial system in 2020s?
One problem is that you lose access to the convenience of credit cards. Another issue is that you’ll need higher income and assets because you won’t be able to take loans for emergencies or investments, which reduces your ability to save money for retirement. That being said anybody who’s invested in Crypto or Gold over the last 20 years has done pretty well.
The inability to send wire transfers will be a problem for some too. Particularly if you’re running a business. If you’re doing freelance work online and being paid through the big platforms you’re going to need a bank account to receive payments.
A Hybrid Strategy is Best
One of the most powerful things you can do to live outside the financial system is store your assets in a way that doesn’t require trusting a counterparty like a bank or a brokerage. There are many ways to have this kind of control over your assets. One popular option for some people is Bitcoin. Another idea would be gold or silver which has been used as money since ancient times with no middleman needed.
The point is, yes it’s possible to live outside the traditional financial system but you’ll face challenges. For example finding a landlord who’s happy to be paid in crypto or in cash or even gold. Trying to rent a car or check into a hotel without a credit card is almost impossible.
The best strategy is a hybrid strategy. Keep some bank accounts in offshore locations with credit cards linked to them so that you can access things like hotels and car rental when you need to. Also keep your own stash of assets like gold and crypto currencies which remain firmly outside the mainstream financial system. These are assets you’ll continue to have access to even if the whole financial system blows up.
What are your strategies for living outside the financial system?