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Workers ration toilet paper to one package per Costco member at a store in Toronto, on March 14, 2020.CHRIS HELGREN/The Canadian Press

The pandemic has receded to the point where it almost seems like a hallucination. Did all those terrible events really happen?

COVID barely came up in the daily news flow this summer, but memories of lockdowns, shortages and illness linger. Before they fade entirely, take some time to prepare for the next black swan event.

The pandemic was a black swan – sudden, unexpected and powerful in its disruption of everyday life. Whether the next black swan is medical, political, infrastructural or financial, there are steps you can take to prepare without looking like a wingnut and scaring your friends. Here are three of them:

Have lots of cash:

Having at least $100 or $200 in cash at home is a must because of the risk of violent storms crashing the electronic payment system temporarily. But there’s another layer of cash you ideally have at your disposal. It’s money sitting in a high interest savings account to cover expenses if you’re suddenly furloughed from work.

You can think of this money in a savings account as the classic emergency fund, but that’s a term people tend to tune out. Let’s call this cash your black swan fund instead. There’s no right amount for this fund – park as much as you can, given your resources. A couple of months’ worth of expenses should provide a high degree of comfort.

In the pandemic, the Canadian Emergency Relief Benefit was rolled out in a flash to support people who were suddenly out of work. Don’t expect CERB II in the next black swan – the federal government’s financial position makes it unlikely.

For your savings, trust nothing that trades:

On a risk-adjusted basis, the return on savings products right now is fine – as much as 2.5 to 4.1 per cent at alternative banks with deposit insurance. Some people won’t be satisfied with that. They’ll be drawn to stocks, crypto, gold, silver – whatever is hot and offers potential for a windfall gain.

Here’s why you should resist the pull of speculative investments for your savings. By definition, black swan events are unpredictable and random. There’s no way to tell what assets will be in high demand and which will be dumped en masse. Pretty much everything tanked in March, 2020, as the pandemic flared up.

Build a strategic stockpile:

One of the lessons of the pandemic was that fear of the unknown triggers a hoarding impulse in people. Hoarding can be anti-social and counterproductive because you tie up your funds in goods that just sit on a shelf. Building a modest strategic stockpile of a few key items your household relies on is different.

For example, buy a few extra packages of toilet paper, masks, batteries and other non-perishables. The pandemic showed us that supply chains may get kinked, but the toilet paper eventually gets through. You don’t need 1,000 rolls – just enough for a couple of weeks.

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Reader comment

A recent newsletter on storage units seems to have hit home. Here’s one of the comments I received: “Hi Rob, thank you for the column on storage lockers. I have been a borderline hoarder for most of my 60 years, while my wife is compulsively tidy to the point that visitors sometimes asked, ‘When did you guys move in?’ after entering our home of 21 years. I finally surrendered to my need to save – in the basement – anything and everything that is or could be useful one day (examples: old faucet, university text books, VCR). We moved last month, and all our belongings fit in just 4/5ths of a moving truck. We have some family heirlooms to pass along to the next generation, but that’s about it. I realized a few years ago that everything I truly need to be happy, I already have inside me. Now I heed my eldest sister’s advice, ‘If you have not worn or used it in the last year, donate it to charity or throw it away.’ She also says, ‘Don’t love something that can’t love you back.’

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

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