HS 452 FBF: How to Save Your Home, Business and Life by Peter Yanev

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Welcome to the Holistic Survival Show. This is your host, Jason Hartman and this is episode number 33. So today we're going to talk about earthquakes and really what this talk relates to is not exactly what you'd probably think about on an earthquake survival show. Now I'm here in California in earthquake country and when we talk about the third pillar of holistic survival, protecting profits. I always tell my mother who was following the sort of the old traditional plan of real estate investing income properties, you know, I think is the most historically proven asset class and the best investment, bar none, in America today. And I always say to her, hey mom, you're not diversified enough with your properties. You need to own them in, in multiple states like I do because all of your properties and this is not true anymore. But years ago it was before she started to follow my plan and diversify, are straddling the San Andreas fault and very few people have earthquake insurance. And then she doesn't. We want to talk about earthquakes today from perspective of safety, of course, and how you save your life and your property, but also from the financial perspective and how you can save your property from financial ruin. So before we get into the interview with Peter Yanov who is an expert on earthquakes, a structural engineer, I wanted to talk to you about that third pillar of holistic survival and that is protecting profits. And my real estate company, Platinum Properties Investor Network has a twice annual event coming up here in October in Irvine, California. And this is one of our really important events. It's called the Massers Weekend, a gathering of experts. And what we do here is we fly experts in from all over the country to talk about all different areas of income, property investing and how to create wealth in a prudent manner and how to diversify your portfolio and get away from that criminal enterprise. Well, I think it's criminal enterprise called Wall Street. I think Wall street is the modern version of organized crime that makes Al Capone look like mot. Teresa. And if you're a holistic survival show listener, you probably agree with me, don't you? So we want to get away from Wall Street. We want to get away from the institutions. We want to be direct investors. And that's commandment number three of my ten commandments of successful investing. And that is thou shalt maintain control, thou shalt be a direct investor. So we have a little contest going on. Of course you can register for the Masters weekend by just going to jasonhartman.com and getting tickets and we'd love to have you attend. We are also doing another one of our events the day before. So if you're flying in from out of town, you actually can take advantage of the Creating wealth boot camp on Friday and then the Masters weekend on Saturday and Sunday. Now also instead of just buying a ticket, which we'd love to have you do, and you're certainly welcome to, you can actually win free tickets. This is a fifteen hundred dollar value and you can do that by just going to jason hartman.com contest. So I want to play a little 1 minute and 30 second audio track of a video I record while on vacation recently in St Martin in the Caribbean. And that will explain to you how you can win tickets. And this is also interesting from a viral marketing perspective. If you have a home based business, if you have your own business of any sort, if you are in the Internet business, you definitely want to learn and know more about viral marketing. So you may listen to this from the perspective of hey, I want to win free tickets for the Masters weekend, a gathering of experts. And you may also listen to this from the perspective of wow, how could I use viral marketing? How could I use this in my own business? And I think you'll get some insight into that as well. So it's 1 minute and 37 seconds long, I believe. And then we'll go to the interview with Peter Yanov and we'll talk about earthquake safety. So here we go.

Hi, it's Jason Hartman and I'm on vacation, but I didn't want to miss.

This opportunity to tell you about a.

Very unique contest we're having where you can win two free tickets to the Masters Weekend, a gathering of experts. Now here's what makes this contest real special. First of all, let me tell you about the event, we only hold this event two times each year, so it's very exclusive. We fly in experts from all over the country to talk about the latest ideas in income generation and wealth creation. And you can get your two free tickets very, very easily. Now all you need to do is take 10 seconds, fill out the web form and you will get an entry into the contest. But it gets much better than that. You get a special tracking link. And with this link, you can share it on your Facebook account, you can share it with your Twitter followers. And every time one of those people enters, you get an additional entry into the contest. You can share it via email as well. So imagine this, say you've got 200 Twitter followers, for example. You share it with your Twitter followers, they enter, they share the link, and then you get additional entries each time that happens. So your chances of winning are extremely, extremely high. Again, fifteen hundred dollar tickets, you get two of them and it's super, super easy. Take ten seconds, fill out the web form, share the link, and you're done. We will notify the winner and we look forward to seeing you at the Masters Weekend at Gathering of Experts.

It's my pleasure to welcome Peter Yanov to the show. He is the author of a book on earthquake safety. And this is all too important for those of you who may have properties or live in earthquake prone areas. The book is entitled Peace of Mind in Earthquake how to save your Home, Business and Life. Peter, welcome.

Thank you, Jason. Nice to talk to you.

It's great to have you on the show. We have not covered this topic as of yet and I think it is vitally important. As we were talking for just a moment before coming on the air, you mentioned that in a lot of cases, the building code is really meant to protect life and safety, which is great. But someone's investment may be completely over even though the people are safe. So there's really two sides of it. There's first of all safety and then the economics that happen after the incident.

Right, that's correct. That's something actually that I would say only engineers understand enough. And that is that the code as it is written is intended to protect life safety. In a moderate earthquake, you should have some damage, allow some damage. It's too expensive to allow no damage. But the building should fundamentally be okay in the worst of a very strong earthquake. In the worst of earthquakes, like the big ones we've had in Los Angeles, San Francisco, for example, or Seattle in the future, the code really provides for life safety. You should be able to get out of your building. But the investment, that is not the code's issue, that's your issue. With other words, if you want a better building, you can always put some more money up front and build it better, not just to the code. So the real thing to understand here is to meet code essentially means to barely be legal. If you want to have investment safety, especially in the bigger new buildings, you need to go beyond code. You have a pretty high risk now for houses that is not the same. Houses are a much lower risk in a large earthquake. I'm talking about the new ones built to code because we have such very, very good statistics on houses and they're built out of wood. The wood is much more flexible than the new concrete multi story buildings and tends to perform very well. So again, the code as we have it today is pretty good for the new houses. And it is a very dangerous thing to assume that the code is good enough for investing in anything other than houses.

This is very timely that we're talking about this subject because there have been a stream of articles in the media lately talking about California specific. I think they say that we're due for a big earthquake every 88 years or something like that. Now, I know they're just playing probability there, but do you have any thoughts or studies on predictions or anything like that you want to share with the audience?

Absolutely. Prediction is a science that we haven't conquered yet. We're working hard on it. We're down to basically understanding how frequently we've had strong earthquakes on various faults. The Hayward fault in Northern California, the Seattle fault in Northern Seattle, the Northridge fault in la. So we have a pretty good idea how often we get an earthquake. When it's going to happen is very difficult. So, for example, currently the highest probability we know of, we think of is the Hayward fault in the San Francisco Bay area. Itself has three segments, so we don't know exactly which one. Let's say the middle. It is a very inexact science. When you say 88 years, that means that's history. But like the stock market, if you rely on history, you're in big trouble.

Right. Because you can't necessarily predict it based on history, right?

That's right. That's right. We don't know enough to say we'll have an earthquake next year or the year after that, or next week or a couple of months from now. But what we do know is some faults are much closer to breaking based on their past history. And our knowledge of how the faults tend to move before Earthquakes.

What's interesting, some people may not really know this sort of basic stuff. Can you just give us a very quickie overview on how earthquakes happen and how are they measured?

Well, the fundamental way they happen is the plates, the continents and the ocean bottoms of the world move around adjusting themselves all the time. Because the world, after all, is not solid. It is soft down below. And because of that we have frequent readjustments of the crust. The movements in tend to happen along faults. Those are weaknesses, geologic weaknesses in the crusts where we have sudden motion and we have an earthquake. And we have thousands of earthquakes per year, most of those around the world. Most of those are trivial. They just show you where the faults are. But now and then we get a big one, like the Haiti earthquake earlier this year, or the really big one, the Chilean earthquake this year, which are fundamentally predictable on the basis of the frequency at which they occur, but not whether it's going to be tomorrow, next month or next year. But in effect, the EARL is a dynamic place and we need to be prepared for when it shakes nearest us.

We certainly do. So one of the things that a lot of people don't realize, and I didn't many years ago, is how the Richter scale is counted. Whereas you'll get a very seemingly small difference. You'll hear about a quake being a six Quaker versus a 6.5. Now that's a hugely different occurrence. It's not just 0.5. Right. As most people would think of it. It's a geometric progression, right?

That's right. It's even more than geometric. Each number is 30 times bigger than the previous number. So it takes roughly the way the scale was created. It measures the amount of energy released in an earthquake, the total amount of ground moved. In effect, the energy that is released in this sudden break of the fault and the way that the scale was created by Professor Richter, whom I used to know well, that a magnitude 5 earthquake is 1/30amagnitude 6. It takes 30 magnitude 5 to make a magnitude 6. It takes 30-magnitude 6 to make a magnitude 7. So it would take 900. These are rough numbers, roughly 900 magnitude 5 to make a 7. And so many people have asked me in the past, so will the little earthquakes that we feel all the time get rid of the big one because they release the energy?

Great question, great point.

And the answer is absolutely not. Because I don't think I want to have 30 magnitude 7. I'd rather have 1 magnitude 8 and get it over with. And if the small earthquakes released Enough energy, we wouldn't have the big earthquakes. So obviously we're going to continue having big earthquakes and you've got to be prepared for it.

It's interesting you say that, because I've heard that since I was a kid that those small earthquakes are good. They relieve tens from the earth and they lessen the likelihood of a big one. No, not true. Huh? Not enough.

No, it's true. They relieve energy, but not enough. There's enough energy left. The big is not released. And so you have sudden large earthquakes. There are parts of the world, for example, around the small town of Park Field in California, where the fault is kind of loose enough that it continuously slips and it seems to be not capable of generating more than about a magnitude six and a half earthquake, which is still a strong earthquake. But we are pretty sure, based on many years of studying now, that that area doesn't get big earthquakes. However, Los Angeles, Seattle, San Francisco, San Diego, not so lucky, or St. Louis for that matter.

And back to the measurement, just for a second. Why is the scale so unusual that it has that 30 times multiple? Why was it designed that way? I never understood that it was designed that way.

Because to understand earthquakes from a scientific engineering perspective, you need to learn about magnitude 3s, which are trivial. Magnitude 4 5, 6, 7 8, and the scale of energy released between them is so big that you need some simple scale, in this case geometric progression, as you said, to make it simple. Otherwise we'll be talking about the equivalent of this earthquake is the equivalent of, let's say, 100 horsepower, 1,000 horsepower, a million, a billion, a trillion, a quadrillion or whatever. Numbers get up too high too quickly. And because of that, scientists thought it was easiest geometric progression. Many of you are used to it and everybody has to get used to it.

So what do people need to know about rock, about soil, about the foundation for their property? What are the things there that they need to understand?

Okay, to have a safe property, you start with the local geology and the location. No matter how well you build a house or a building, if it's on top of the fault or on top of a landslide, it's dangerous. You're not accomplishing your purpose of having a safe investment, both from a life perspective and a financial. So you need to understand, when buying a property or after you bought a property, are you in a landslide? If you're on a landslide prone area and many houses in the hills are, then chances are in a strong earthquake that landslide will move. So you don't want to be there you don't buy that or you have to maybe hire geologists to fix if it is fixable, best for that is ahead. Same thing with a fault. If you buy a house on top of a fault, good luck. Nothing is going to stop the fault from moving that we know of. We cannot do it. So it will rip the house apart just like a big landslide would. And then how far from a fault is far enough? In California we have the so called alculus prior zones where we've plotted very, very carefully the faults and the zone is defined as about an eighth of a mile on each side of the known zone fault. And building new properties, new buildings within that zone. Today is highly controlled. Unfortunately, we have many thousands of buildings throughout the world in the United States inside the fault zone, but they constitute a very small proportion of properties. Best advice, stay out of the zones. If you need to buy a house in the zone or near the fault, you better talk to a geologist and a structural engineer.

Now how do they know the zone? How did they look at the earthquake map, the fault map? And how do they get this? Easily. Is there a website people can go to?

If you go to the U.S. geological Survey, you will go to various sites within their site that show you some of the maps. In California we have the California Geological Survey. It publishes a series of maps that show all the known faults, the ones we know about, and you can actually locate your house within a couple of yards of the known faults or a few yards of the known faults. Keeping in mind that this is geology, so nothing is that exact. Just because it shows it 50ft away doesn't mean 50, it might mean 25 to 75, but it's pretty accurate. So that information is available in my book Peace of Mind. I have those sources where you can go and find the property. And if you're close, let's say you live next to to the Berkeley campus at the University of California, Berkeley in California. The best thing to do there is you're right near the fault. Get a local engineer to help you figure out is it too close and if it's close, what you should be doing about it.

And what about soil? I mean there are different types of soil. I hear about clay in the soil and give us a basic overview of soil types, if you would.

So the obvious observation for anybody going to an earthquake is that buildings on rock tend to perform much better than buildings on soil for the same earthquake. And buildings on really soft soil like fill, like along San Francisco Bay or Seattle on fill tend to perform very poorly. Compared to the buildings on rock. Why? Because soil amplifies the ground motion coming out of the rock. In the rock, the motion is very small. We're talking about, you know, a few inches of displacement, vacuum and forth. Whereas once you get into the soils, as you get softer and softer and softer, the salt kind of amplifies that motion. I always like to think of it in terms of a bowl of jelly. You shake the wall a little bit and the jelly shakes a lot. Fundamentally, that's what we're talking about. So the worst soils are the softest soils. For that, we have special procedures for building new buildings. But no matter what, if you're in that kind of a soil, generally you will have much more damage than you are in the hills on rock. In the hills on rock, however, you don't want to be on a landslide, as I said before. So everything's got its advantages and disadvantages. Then some of the better soils, like stiff clays, well drained soils, and so on, are better than the soils along watercourses and bays Simply because they're stiffer. The water tables tend to be sometimes lower. The earthquake is amplified less by the ground.

So what are some of the other hazards that the property may have? It is where it is. Maybe the listener already owns this property and now they just want to watch out for the other hazards. What do they need to know about?

You know, it's really common sense. It's like if you buy a house in one of the fire prone areas, then you have a high risk of fire. With earthquake is the same thing. You probably don't want to be right below a dam, for example. I mean, it seems natural that a dam is a structure, a man made structure. It has a probability of failure and a strong earthquake for a whole different reason. We have evaluated the dams pretty carefully, especially the bigger ones, but still the probability of something goes wrong is higher. You don't want to be under a dam. There are better locations than that. Another thing is if you buy, let's say a house, regular house, right next to a taller building, and especially if that's an older building, especially for example, if it has parapets, those parapets can come off. Your building can be okay, but the building next door, debris can come down and smash your house up. So if you're buying a building next to an adjoining taller building, have your engineer look at both buildings and tell you how he or she expects the taller building to perform so it doesn't damage your building that you're buying. So, so it's really common sense.

All right, that's good to know. Let me take a brief pause. We'll be back in just a minute.

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How does a building work? How does it perform in an earthquake in terms of its resistance to the quake? I mean, I've always heard that the thing to have is a building that is not too rigid, something that will bend and flex with the movement. And I know that the high rise buildings are built, some of them on rollers, right?

Not on rollers, buddy. We have a special system called base isolation. But yes. So it's simple. They're not built on rollers. That's one of the common misconceptions. We don't put things.

I always wondered exactly how that looked below the building. And I've never seen it, but I've.

Heard, okay, that's a technique that we've used worldwide for a few hundred buildings. So let's not even worry about that one. What we worry about is the building built properly and first the people. We go to earthquakes. I just went to Chile. I sent colleagues to the earthquake in Southern California last month. I sent colleagues to, I went to the Italian earthquake last year. I've been to over 50 earthquakes around the world. And the reason we go, the reason structural engineers, earthquake engineers go, is to see how the buildings perform, what new things we might learn, where the codes are deficient. Where the codes are okay. And so every earthquake teaches us new lessons and we keep improving the codes. What I'm saying by this is that the older codes are not nearly as good as the newer codes. That automatically means the older buildings are not as good as the newer buildings. And this is especially true for houses. Houses built before the 1940s throughout the United States did not require several features that today are required that eliminate 80% of the damage to houses. 80%. There are two or three features that eliminate most of the damage in houses. The first one is, again, old houses don't have it. New houses have it. Is the foundation bolted, the wood foundation, the sill bolted to the concrete foundation below the house. If it's not, the house can just slip off, fall down, and you have anywhere from severe damage to total damage, including life safety. Next step is the house braced with plywood in the crawl space. That would be the space usually between the ground and in the first floor of the house. Sometimes it's a couple of feet, sometimes a full basement, depending where you are and if it's a hill or not critical to put plywood around the periphery of the building. That did not used to be required in California until about the 1971 San Fernando earthquake, where many brand new houses, 1971 brand new houses in LA, in the San Fernando Valley, collapsed because they didn't have the simple plywood bracing. And you have to nail it per specifications in the code, meaning every 2, 3, 4 inches, very tightly nailed strong. You put these two features in the typical older house in the United States in earthquake area, you probably fundamentally eliminate 80% of the potential damage. It's a huge number for very small effort. But you have to do it for all the houses. The code doesn't say go back, you have to fix, you have to retrofit. Yeah, we haven't gotten to that stage yet.

Any estimates on what that would cost to do that? You know, just a typical.

I have advised lots and lots of people on how to do it and how much to do it. And it depends on how expensive it is. But we are talking bolting the house down is. Let's say you're talking maybe putting 50 bolts in the house, 100 bolts at 20, maybe 20, 30, $40 a bolt, whatever. Depends on the contractor in the area. You're talking maybe a couple of thousand dollars gross. Could be less, could be more, depending the plywood. It takes a number of hours for somebody that knows how to do it, a carpenter, to get into the house and nail it down might be a couple of thousand dollars, maybe more. But the thing that tends to be more expensive, if your house has a lot of glass or it has a garage with one or two stories above it, where you need something more sophisticated, you need an engineering help that gets more expensive. But usually to bolt the house down and to put the bracing in the crawl space is you're talking 5,000, $10,000 max. Now, what's interesting here, that if you do that, you might wipe out the need for insurance. And right there, you may be spending anywhere from 1,000 to $5,000 a year for insurance. You would pay very quickly for some of the necessary retrofits to the house or to your building.

Do you think that earthquake insurance is worth it? Most people seem to think it's not worth it. They're also afraid that claims won't be paid. The big disaster hits and the whole State is basically destroyed.

Well, we won't be all destroyed. Look what happened in Chile. This was a monster earthquake compared to 1906 in San Francisco. Yet we only lost, only. It's a big number still, but 400 people compared to 200,000 in Haiti. Chile knew how to build good buildings. Most of the people killed actually were from the tsunami. That's a different story. So we know how to build buildings. So technically insurance should be only if something unusual happens. Technically. Okay, in earthquakes that's not the case. So to give you a simple answer, in most cases it doesn't make sense to buy insurance. Because in for houses, because in most houses, especially the newer ones with a few important features and you need an engineer for that, most houses will not have enough damage to get over the deductible. The typical deductible in California is 15%. To keep things simple, okay, a half a million dollar house, that is $75,000 of damage, that's a lot of damage. So you pay the first $75,000 on a half a million dollar house and the rest is covered by insurance. Well, that is a lot of damage to happen. If it's a good house, it shouldn't happen. Now another house, if it's not bolted down, if it doesn't have plywood in the basement, if it's got too much glass, if it's got these huge brick chimneys that can come through and crashing through the house and causing all sorts of damage. Yeah, you should buy insurance. But no, before buying insurance, maybe you should fix the house and don't waste your money on insurance. And then you get insurance kind of as a last resort in case we don't know something or we're completely surprised by an earthquake, or there's a fault underneath your house that we don't know about yet. So insurance is not a bad idea in most cases. However, people should put the money in the house, fix the property, and then the insurance is sort of redundant.

So self insurance and taking action, being proactive is maybe the best thing. What are some of the best types of construction for resistance to earthquakes? Maybe just outline when we talk about residential, what are the different types of construction people see out there and then what's the best to survive a quake?

Okay, so in tall buildings, just to get it out of the way. In tall buildings, the best construction we know based on our extensive experience is steel frame buildings, preferably with massive concrete walls inside around the elevator. Course, that's one of the best construction in houses. Steel houses are fantastic, but they don't happen often. Most houses are wood frame. And it turns out that by luck and some engineering principles, wood is the best thing for smaller buildings because it's flexible, not in the way that it moves around a lot, but it can absorb energy, not deform that much. And it's just the right material for earthquakes. So we're lucky in that respect. However, if you have a brick house built 80 years ago, 100 years ago, 20 years ago in some of the PWN areas of the United States around St. Louis for example, that is very dangerous. Brick construction that hasn't been retrofitted afterwards for earthquakes is the most dangerous. Smaller old construction of the new construction, as far as I'm concerned, the worst performance are larger reinforced concrete buildings, not steel. And again, coming from having sand teams for over 100 earthquakes, including Chile, concrete buildings, especially the older ones, were very poorly detailed. For example, in 1971 we had a brand new hospital three months old. The Olive View Sanatorium in the middle of the San Fernando Valley of LA collapsed 1971. What that tells you is any concrete building prior to 1971 is probably a much higher risk than a conventional other building, especially the wood frame.

That hospital was three months old and it just collapsed in that quake. Huh?

And the new apartment building that collapsed in Concepcion in Chile was also six months old. And that's a complex reason why it collapsed. We have studied it in quite a lot of detail. I know the reasons. But fundamentally, concrete construction is much more dangerous than steel and wood. That doesn't mean that steel and wood cannot be dangerous if it is improperly designed. Okay, but relatively so now. So what happens today is if you're buying an apartment in some of the new taller buildings, as I said before, the code is really for life safety. So if you're buying an apartment in one of the taller new reinforced concrete buildings, you better talk to a good structural engineer. Because the risks for losing your investment in that building are much, much higher than if that's a steel frame building or if the three, four story would frame building that's also of the same new vintage. Huge difference in expected performance, especially if these are speculative buildings.

We'll be back in just a minute.

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So how does someone minimize damage to the interior the, the utility of the property and the equipment in the property. What we're talking about here is there's a lot of stuff on earthquake safety, and people have been to some extent educated and being prepared and so on and so forth for their own safety. But we're talking a little bit about the economic side of it. That's what people don't really talk about is after the quake, the economic devastation that occurs. Right, that's right.

For office buildings, for the typical public buildings, actually, one of the biggest problems is what happens to the functionality of the building. I just came back from Chile, spent with my son, two weeks there, and then colleagues looking carefully at the damage, and there were thousands of new buildings with no structural damage inside. They looked like a tornado had gone through them. The ceilings are down. Heating, ventilating, air conditioning ducts are hanging all over the walls. The fire sprinklers turned on, flooded the place. The control equipment that controls the air conditioning, the boilers for the water, etc. All over the ground.

Why?

Because those details were not properly connected. Our code is a little better than the Chilean code in that respect, but it was a really good lesson. What we need to do is, once we're safe in the buildings, make sure that that building functions after the earthquake, that the ceilings haven't come off, that the computer floors haven't collapsed. Then the critical equipment, like in a house, your water heater hasn't fallen down and ruptured the gas line and start a fire. That's simple. You put a strap around. You have to do the same thing for all of the important equipment inside a building. In the basement buildings, or the roof where the elevators are, for example, the controls, you have the electrical control system in a building. These are motor control centers, switch gear. If those things are not properly bolted, and I'll tell you, 90% of the time, they're not, the equipment falls over, breaks. Everybody's equipment breaks in the earthquake. And then for two months you cannot get any equipment. So you sit there waiting. We were in a hotel in the near the epicentral area in Chile just a couple of months ago, and the hotel was charging one. What was it? It was $150, normal rate. The charge was $30 a night. Why did they charge US$30 a night? The hotel was okay because they didn't have hot water, couldn't take a bath. The reason they didn't have hot water is because they hadn't strapped down the water heater or bolted it down in their case, it fell over. Everybody else has fell over. They're all busted. They don't have hot water. So they were losing 125 out of $150 per day per person because of four stupid bolts. I can't think of a better word for that. Four bolts would have taken care of.

Very good point, Peter. I mean, just preparedness and thinking this stuff through. Very important. Good example. Any others on that? Oh, yeah.

Oh, yeah. You go into the typical, let's say, high tech plant in the United States. I don't care which company. We can name a whole bunch of them. The high tech, the manufacture chips. The code requires that the fire protection lines are properly connected and a few other things are properly connected. The code says nothing about the equipment inside the manufacturing equipment, which is the heart of those buildings. Silicon Valley, for example, around San Jose. Most of the equipment there is not anchored because the code doesn't require it. It's a trivial thing to do. It an earthquake happens. The buildings are okay because they're designed to code. The equipment's all over the ground, busted. It takes them weeks and weeks and weeks and weeks with horrendous business interruption losses because they didn't put bolts there. Now, we require extensive bolting of equipment in hospitals so that the hospitals are functional after an earthquake. We require bolting of the equipment in school so that it doesn't come over and hit the kids. But we don't require any of that for a manufacturing plant where the building costs $50 million and the contents are a billion dollars. It's interesting, but if it's your plant, all you need to do is get an engineer and a construction company and go bolt down all the equipment. It's not that expensive, and it prevents huge amount of damage and a huge amount of business interruption. In Chile, that kind of damage and business interruption is by far the largest percentage of the damage. Overall, it's probably the financial damage. Equipment, building contents and stoppage of work is probably 75% of the loss.

That kind of insurance, that kind of preparedness just makes simple economic sense. And it's so cheap to do many times. Hey, Peter, let's close with just an overview of what to do before, during and after a quake.

Okay. Well, I think we've said it several times different ways. What you do before the earthquake is find out what will happen to your property. If there's any concern about life, Obviously you have to do something, but you need to understand the risk. Step one, understand the risk. Get an engineer to help you. Get a geologist in a landslide area, whatever it takes. Next step, evaluate what you can do to reduce the risk to an acceptable level of risk in a house. You don't want the chimney to fall down and go through the roof and break the house or the house light of the foundation. You fix that, what does it cost? Usually pretty reasonable in a taller building. Find out what the risk to the building is. Find out what the risk to the contents is and then do a simple cost benefit analysis. If I spend so much money, I'll reduce the risk so much. If I spend a bit more, I'll reduce it that much more. Stop at the point where it makes sense. You know, a couple of days of business interruption won't kill anybody. It's okay, but it may not be worth six. And the third step? Fix it. Do the construction. So understand the risk. Decide what is an acceptable level of risk for you and how much it will cost to get it down to that level. And then go ahead and spend the money. And in addition, if you need it, you can always buy insurance.

Peter, give out your website so people can find out more and tell them where they can get the book.

Probably the best site would be theearthquakebook.com theearthquakebook.com quakebook.com It's a single word or just peteranev.com Excellent.

Peter, I've got to mention to you that I really appreciate the book you sent over. There are some fantastic pictures and illustrations in the book. It's really enlightening to look through this and to see how to do kind of the forensic analysis and see what happens and in some cases how easily things could have been prevented. You have some amazing photographs in this book. So again, Peter Yanov, thank you for joining us today. The book is Peace of Mind in Earthquake how to save your home, business and life. We appreciate the insights today and everyone should go out and take a look at the website in the book.

Thank you, Jason. That includes you, too.

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