Lessons Learned From The Russian Invasion Of Ukraine

When Russia invaded Ukraine it took the world by surprise.  Putin has a long history of showing his military strength, but rarely exercises it.  Putin rolling tanks into Ukraine and waging a full on war has put the world to an elevated cold war status.  Russia outspends Ukraine 10 to 1 on military spending and is attacking the Ukraine from 3 sides.  Here’s some applicable lessons from the current attack on Ukraine:

Leadership matters: 

Zelenskyy refused multiple offers for extradition to the US and Europe.  He stated “I need ammunition, not a ride!”. He filmed himself in Kiev to show the people, and the world that he was staying in the country and was ready to fight the Russian army.  He’s in combat gear with a rifle.

What does the country do?  The entire country mobilizes.  Citizens are welding up anti-tank obstacles.  They are walking in front of tanks to stop them.  Great grandmothers are training with AK-47s.  Citizens are making Molotov cocktails in an organized fashion.  People from all over the world are coming to Ukraine to help. If Zelenskyy was hiding out in Washington DC, the response would be much different.

Ask For the help you need:

Zelenskyy asked for weapons and ammunition, he is receiving it.  His government told the world that citizens across the world can volunteer to defend Ukraine…and they are coming.  Ukraine asked Elon Musk for help with the internet because the Russians were cutting lines.  More terminals arrived in 48 hours to Ukraine to give un-interfere able high speed internet to Ukraine.  NATO powers are being extremely cautious with sending aid, as they are trying not to escalate into a world war with Putin.  Zelenskyy has asked for a no fly zone over Ukraine and NATO has not been willing to pull the trigger on it.

Crypto Currency Is Important:

The Canadians already showed us why crypto was important when the government began freezing bank accounts of people who donated to the Truckers who were protesting.  The Russian invasion of Ukraine takes it a step further.  Imagine you are fleeing a country being invaded by a super power.  The banks are closed.  It is dangerous.  It’s highly likely you are limited in what you can carry and that in the chaos could face robbery.  By memorizing 12 words (crypto seed phrase) you can access your money on the other end wherever in the world you end up.  Far better than cash or gold as means of wealth transfer.

The time to prepare is before there is an emergency:

Grocery stores are running low in Ukraine.  Soon they will be running low in Russia due to sanctions.  Building up a 6 month supply of food and hygiene items is extremely important.  Not only does it ensure that you will have what you need, it also makes it more likely that others will have what they need as well because the competition for scarce resources will have 1 less participant.

Having Ammo stores is also important, both for individuals and for governments.

Having a trained and ready citizenry is super important.  A danger I see in our society is fewer people being interested in owning and using firearms.  Once Russian boots are on the ground buying ammo and guns becomes very difficult, very expensive, and the supply can not meet the demand.  Having guns and ammo on hand is extremely important for each citizen.

In the US and I’m sure in Europe as well, there is a renewed interest in preparing for a nuclear strike.  Although Putin’s invasion of the Ukraine and current rhetoric certainly push the doomsday clock closer to midnight, Russia has had thousands of nuclear warheads pointed at the US for the last 70 years.  The cold war never ended.  Preparing now is better than never preparing, but we should have been building fall out shelters en masse for decades.

Get Fixed Rate Debt:

Last week I was applying for a 15 year mortgage on a rental property.  The interest rate was set to be 4.65%, but I could buy down the rate to 3.65% with an extra $1,200.  I locked that in.  Even if I had to go with 4.65% that is still a historically low interest rate.  In Russia the base interest rate just skyrocketed from 9.5% to 20% overnight.  You absolutely want to have long term fixed rate debt.  Variable interest rate debt, especially without caps, is dangerous.  Let’s put this in perspective.  Say you had an adjustable rate mortgage on a 15 year deal for $100,000.  The payment at 9.5% would be $1,044.  At 20% it would spike to $1,756 /mo.

Additional Thoughts:

This war will be fully televised on TikTok.  I found that with Tiktok, not only are videos coming through unedited from the war zone, they also are coming through immediately and they are coming from everyone who has a cell phone, which is everyone!  If Russia commits war crimes, it will be instantly shown to the world.  You can’t hide what you are doing anymore.

Thank god for Elon Musk.  I know, I’m an Elon fanboy and my perspective is skewed.  But factually:

Elon with SpaceX built the only way outside of Russia to get to the International Space Station.  Boeing can’t get you there, NASA can’t get you there, and the EU can’t get you there.  The only ride choice for a decade was Russia.  SpaceX ended our dependency on Russia to get to the space station.  Could you imagine with our current tension needing Russia to provide the ride home for our astronauts on the ISS?

Russia also threatened to let the ISS fall onto Europe or the U.S. because their module controls the positioning of the ISS.  Dragon star ships have the ability to replace this function and will if needed.  1 less card for Russia to play.

I also mentioned the Internet piece with Starlink earlier.  Without Elon Musk’s Starlink, Ukraine would be in great danger of losing internet access and effectively going dark to the world.

What lessons have you learned from the war in Ukraine?  Are you taking any action to prepare for a coming war with Russia?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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