Money Management

Wildfires are devastating and can lead to costly homeowners insurance claims. Read on for seven steps homeowners can take to reduce this risk. 

Wildfire seasons have grown longer and more severe in recent years, devastating entire cities and leading to some costly homeowners insurance claims. When fires get truly out of control, there’s not much homeowners can do other than evacuate and hope for the best. But there are plenty of steps homeowners can take before then to reduce the risk of a wildfire breaking out around their property. Here are seven steps to take if you haven’t already done so.

1. Have 30 feet of defensible space around your home

Clearing the area around the home of combustible materials can reduce the risk of the home or any other buildings on the property catching on fire. Limit the amount of flammable plants around the home and keep the lawn neatly trimmed. Even better, stick to materials like brick or concrete in this area.

2. Keep embers out of attic vents

Blowing embers can carry fires across long distances. If these find their way into an attic vent, they can cause a home to go up in flames, even if the area around it is otherwise free of debris. Homeowners can reduce the likelihood of this issue by installing wire mesh screens over their vents to prevent the embers from getting inside.

3. Keep the roof and gutters clean

Even if embers don’t make it into the home, they can still start a fire if there’s leaves or other debris on the roof or in the gutters. Regularly cleaning these can further reduce the likelihood of a home catching on fire.

4. Seal gaps in exterior walls

Cracks in a home’s foundation or exterior walls can let in smoke and embers. Sealing these helps protect the dwelling. Whenever possible, look for fire-resistant materials like mortar or fire-resistant caulk or expanding foam to fill gaps.

5. Build or remodel with noncombustible materials

Though it may be more expensive, building or remodeling a home with noncombustible materials, like a Class-A rated roof or fire-resistant siding could pay off big time in the long run if a wildfire comes through the area. Even the best building materials may not stop all wildfire damage if one comes through, but it can reduce the damage and thus, the cost of the homeowners insurance claim.

6. Keep water on hand

When a wildfire is coming toward a home, homeowners can spray their homes and yards with water to help protect the property. Ensuring that garden hoses can reach all parts of the home and having barrels of water on hand saves crucial time during a fire. Even better, homeowners might consider installing a sprinkler system with its own power and water sources.

7. Review the homeowners insurance policy

There’s no wildfire precaution homeowners can take that will stave off disaster in all situations. So adequate homeowners insurance coverage is key. The policy limits should be enough to cover a full rebuild if the home is destroyed in a fire. Keep in mind that building costs can rise sharply following a natural disaster.

Those who aren’t sure how much homeowners insurance coverage they need can reach out to an insurance agent or even talk to a builder in their area about what they think is appropriate.

Everyone hopes that a wildfire never comes to their doorstep, but it’s happening to more and more people every year. Even if wildfires aren’t all that common in your area, it never hurts to take some of the above precautions to help yourself sleep a little better at night.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Nobel economist Paul Krugman recently called cryptocurrency worthless and pointless. Read on to learn why his view is such a negative one. 

Cryptocurrency has largely been a topic of debate since its inception. On one hand, it has been praised as the future of money, a decentralized, secure way of making transactions without the need for intermediaries. On the other hand, critics have pointed out its susceptibility to use in money laundering and financing terrorism. Nobel-Prize-winning economist Paul Krugman recently came out with some strong criticism of cryptocurrency, calling it mostly useless and overvalued. Here are his reasons.

Crypto is volatile and not widely adopted

Although cryptocurrencies like Bitcoin were designed to meet consumer payment needs, a recent report from the Federal Reserve reveals that they have not been widely adopted. He believes that crypto’s volatility and lack of stability make it difficult to use for everyday transactions.

Crypto can also be difficult to navigate, and consumers can experience loss, theft, and fraud. Crypto is primarily used as more of a niche asset for speculators and investors.

Crypto is overvalued

According to Krugman, crypto is currently overvalued, meaning that many cryptocurrencies are priced higher than their actual worth or economic value. Krugman’s primary argument is the lack of intrinsic value in cryptocurrencies.

He believes that unlike traditional assets like gold or real estate, which have inherent value, cryptocurrency’s value is entirely subjective and driven only by market sentiment. Krugman even goes as far as calling crypto a “Ponzi scheme.” He suggests the value of cryptocurrencies is largely fueled by inflated hype and reckless speculation. As a result, the value of crypto continues to be volatile and unstable.

Criminal use

Krugman also focuses on the prevalence of criminal activity in the crypto space, such as money laundering and financing terrorism. He argues that the anonymity of crypto transactions makes it easier for criminals to carry out illegal activities and that crypto poses a threat to the stability of the financial system.

Crypto is unregulated

When it comes to legitimate crypto transactions, stablecoins are a popular choice. These coins are backed by a promise to redeem them for traditional dollars. However, it’s important to note that stablecoin issuers essentially operate as unregulated banks. They lack the protection and guarantees provided by conventional banks.

In fact, the stablecoin sector has already experienced significant failures resulting in coin holders losing their entire investment.

How to safely invest in crypto

While there have been stories of individuals who have made a lot of money through cryptocurrency trading, as Krugman notes, there have also been many who have lost significant sums of money.

If you decide to invest in any digital currency, it’s important to do your homework, ensuring that you understand the technology behind it, as well as the market conditions that could affect its value. It’s also crucial to have a clear understanding of your risk tolerance and investment goals.

One key factor to consider is which type of cryptocurrency to invest in — there are numerous options available, each with its own unique benefits and risks. In addition, it’s important to research the various exchanges and storage wallets available, and to only use reputable and secure platforms.

If your stance on cryptocurrency aligns with Krugman’s, there are many other alternative investment options available. You can consider investing in real estate, commodities, or even private equity, provided you have sufficient funds. However, if you are still intrigued by digital currencies, non-fungible tokens (NFTs) may pique your interest. Despite the potential risks involved, NFTs represent unique, inimitable digital assets that can hold considerable value.

Paul Krugman has been critical of crypto since its beginnings. The lack of intrinsic value, criminal use, and limited adoption are all valid concerns that need to be addressed for crypto to reach its full potential. However as with any emerging technology, it is important to remain informed and open-minded about the possibilities that lie ahead.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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