I came across a post on Reddit’s fatFIRE sub: War, sanctions, immigration: my FatFIRE attempt in Russia.

The author, a Russian national, shares a detailed firsthand account of his experiences as an investor following the outbreak of the Russia-Ukraine war.

I think this post holds significant value for us, as we might also face geopolitical risks.

As investors in China, it’s definitely worth learning from his experiences to prepare for the future and take proactive steps.

Some Background Information

What is FatFIRE?

First, let’s quickly explain the FIRE movement. FIRE stands for “Financial Independence, Retire Early.” fatFIRE refers to FIRE practitioners who have a more substantial nest egg – typically millions of dollars – allowing them to maintain a higher standard of living.

Russia-Ukraine War and Sanctions

In early 2022, the war between Russia and Ukraine led to unprecedented economic sanctions against Russia from the international community. This event not only reshaped the geopolitical landscape but also had a massive impact on ordinary Russian citizens and investors.

Regarding the sanctions imposed on Russia, here’s some information from Tencent Yuanbao AI:

SWIFT System Cut-off

In February 2022, the US and Europe excluded 5 major Russian banks and 13 entities from the SWIFT international payment system, severely limiting Russia’s cross-border payment capabilities and disrupting international trade. In 2025, the EU further prohibited the use of Russia’s SPFS financial messaging system, increasing its financial isolation.

Foreign Exchange Reserve Freeze The West froze approximately ¥350,000,000,000.00 of Russia’s foreign exchange reserves, with ¥214,000,000,000.00 stored in Euroclear, depriving Russia of its ability to regulate exchange rates and causing the ruble’s exchange rate to fluctuate threefold. Switzerland also froze ¥60,387,744,000.00 worth of Russian assets held overseas, including real estate and aircraft.

Sanctions on Financial Institutions The EU prohibited transactions with 12 Russian state-owned enterprises and restricted the provision of credit rating services. The US added the Central Bank of Russia and the National Wealth Fund to the Specially Designated Nationals (SDN) List, freezing related assets.

Price Cap and Embargo on Energy Exports

The EU imposed a price cap of [65 - 71] USD/barrel on Russian crude oil, suppressing its energy revenues (reducing their share of the budget from 45% to 27%). In 2025, the US proposed a draft bill imposing a 500% tariff on countries purchasing Russian energy, further impacting its exports.

High-Tech Industry Blockade The US and Europe imposed export controls on critical technologies such as semiconductors, aerospace, and CNC machine tools, restricting Russia’s access to equipment needed for military and industrial development. For example, exports of CNC machine software and drone controllers to Russia were prohibited.

Trade and Logistics Restrictions The EU closed its airspace to Russia, banned Russian ships from entering ports, and imposed port entry bans on “shadow fleets” (ships circumventing the oil price cap). The US also restricted Russia’s access to dual-use goods (such as chemical precursors and tear gas ingredients).

The Real Experiences of This Russian Investor

Getting back to the Reddit post, this Russian investor had a diversified investment portfolio and considerable wealth, but his financial safety net collapsed almost instantly due to the war and sanctions. Here are some of his personal observations:

Foreign Exchange and Currency Difficulties

  • Currency devaluation: The ruble depreciated by 50% in two weeks. Although it partially recovered later, the foreign exchange market had been completely transformed.
  • Foreign currency account freeze: US dollar, euro, and other foreign currency assets in bank accounts were frozen, making them impossible to transfer or cash out freely.
  • Cash premium: Physical foreign currency cash traded on the black market at a 20-30% premium over the official exchange rate.
  • Payment system disruption: VISA and Mastercard cards issued in Russia became completely unusable abroad.
  • Difficulties in cross-border fund transfers:
    • Most banks refused to process SWIFT international transfers.
    • International brokerage firms like Interactive Brokers (IB) refused to open new accounts for Russian residents.
    • Taking more than ¥72,571.20 in cash out of the country was strictly prohibited.
  • Cryptocurrencies as a way out: The author found that cryptocurrencies were almost the only viable channel for asset transfer.

Stock Investment Crisis

  • Local market crash: The Russian stock market was hit hard, with some ETFs and bonds suspending interest payments or being forcibly delisted.
  • Restrictions on international investment: The author had 60% of his assets invested in the S&P 500 and Euro Stoxx 600 indices, but due to sanctions, these holdings were practically impossible to sell and liquidate.

Travel and Other Life Impacts

  • Paralysis of air transportation: Air ticket prices soared, and most foreign airlines suspended flights to Russia.
  • Restrictions on exit: Border controls were tightened, effectively prohibiting citizens from leaving the country.
  • Visa difficulties: The difficulty of obtaining visas to other countries increased significantly.
  • Rapidly changing regulations: Restrictions were constantly updated, and operating guidelines that were valid three months ago were likely to be outdated.
  • Identity crisis: As a Russian citizen, the author was unwelcome in other countries and also experienced a severe identity crisis.

Key Lessons and Coping Strategies

Core Lesson: Your Money Might Not Be Your Money

This Russian investor’s experience reveals a harsh reality: in extreme circumstances, the assets in your name may not truly belong to you:

  1. Overseas ETFs purchased through domestic channels: May be impossible to trade or redeem due to sanctions.
  2. Foreign currency accounts in domestic banks: May be frozen or restricted from use.
  3. Risk of fiat currency devaluation: The local currency may depreciate sharply in a short period of time.
  4. Risk of bond default: Government or corporate bonds may default or be forcibly delisted.

Practical Advice and Coping Strategies

Based on these lessons, we recommend taking the following precautions:

  1. Hold an appropriate amount of foreign currency cash: Maintain a certain proportion of physical foreign currency cash reserves to cope with emergencies.
  2. Open overseas bank accounts: Diversify some assets by depositing them in banks in different jurisdictions.
  3. Use overseas brokerage accounts: Hold overseas stocks and ETFs directly through internationally renowned brokers to avoid the risk of intermediary institutions.
  4. Allocate cryptocurrency assets: Cryptocurrencies and their offline storage methods may be the most effective means of asset preservation and transfer.

Conclusion

As I write this article, Trump has launched a new round of global tariff wars, shocking the capital markets and causing global stock markets to plummet.

In today’s world of declining globalization and escalating geopolitical conflicts, it is more important than ever to plan ahead for asset preservation.

One of the principles of value investors is: don’t predict, just respond. I hope this article will give you some inspiration and prompt you to take action.