Sunday, August 19, 2007

Money, Money, Money, Money


First off, I am not a financial genius. I am not some financial guru. I typically ask for financial advice instead of dispensing it. So, take the below for what it’s worth. Please.

It looks to me like there are financial hard times just over the horizon. People out of work, banks and other financial institutions failing, rampant inflation. I’ll let other, more financially astute people explain the whys and hows. I am just another person out here ringing the alarm bell. It could be bad. What’s a family to do?

Basic Preparedness

Basic preparedness goes a long way to cover a myriad of ills. This includes financial ones. If you have six months worth of groceries, a wood burning stove and plenty of split firewood, a creek and some tools you can do okay compared to the person who lives in a condo with one microwave meal in the freezer. But we are not all there – got it.

“Get out of debt” is what I constantly hear. I hear it coming out of my own mouth. You should not carry a balance on your credit cards. You should not take out second mortgages to buy stuff. My grandfather used to say, “If you can’t afford it now, don’t buy it.” Pretty good advice. There are very few things you HAVE to have and must go in debt to get. Instead of doing that, curb your “I want it NOW” urge and save up the money ahead of time. I think houses are a possible exception and maybe college fees. But for goodness sakes – do some thinking ahead of time. Before you accept that mortgage – make sure you’ll be able to pay it. Don’t buy more house than you need.

A small house on a large plot of land is so much better than a McMansion within spitting distance of four others. Maybe not for your ego. It probably won’t impress the Joneses. Until the crash.

What would you do if your electricity was cut off because you could not pay the bills? Basic preparedness takes care of that. If you are prepared it doesn’t matter why the juice stopped – storm, pandemic, or your busted checking account – you are prepared to deal with it nonetheless.

What would you do if your house was foreclosed upon due to non payment of mortgage? If you have basic preparedness taken care of you could go camping. Not an ideal solution, granted. But it beats slitting your wrists.

What about investments?

I’m not messing with my 401k. Why? Because I am not a prophet of God. I cannot see the future. I could be wrong. The future could be bright. My 401k investments are for my optimistic side. It could all vanish over night. Yep, it could. Then what? If mine goes “poof” so will millions of others. We will all receive a setback. Relatively though, I will be in a better position than many, many others. Because I prepare.

See, I don’t put all of my investment monies in stocks and bonds and what not. Oh no. I also invest in goats, and chickens, and garden implements, and … well, you get the idea. I do consider them investments though – all those preps.

What about precious metals (PM)? You know: silver, gold, platinum. I don’t know where I’m at on those. I think if you are trying to invest in something that will retain its buying power it might be a good idea. But I think you should have your other preps taken care of first. I almost dropped several hundred bucks on junk silver last Friday. At the last minute there was a glitch in the transaction and I decided that I could probably do better by investing that money in more food. Have you noticed the price of food lately? It’s going up pretty fast. If I buy it now, that’s money I don’t have to spend later.

Another problem I have is this: who is going to take your 1/10th ounce Krugerand in exchange for some green beans? I mean really… I don’t see that happening in the short term. Long term, to preserve your long term investments – yeah. But before one invests in long term instruments, one probably should have the basics taken care of first. Some people consider copper and lead to be PMs as well. Have you been watching the price of ammo? Wow.

It might be a good idea to pull some of your cash out of your checking and savings accounts. They don’t provide any real interest anyway so you aren’t losing a lot there. There could be a problem getting at that cash in an emergency. In emergencies (like Katrina) many merchants only accepted cash. Keep it safe. From burglars, from fire, from flood.

I think another good thing to invest in is “stuff”. During inflation, the price of everything goes up. The price of things like shovels, and wire fence, and oil filters, and seeds, and… If you were thinking about getting some survival/preparedness related stuff now might be a good time. Just please don’t run up your credit card to do it. We just bought a Big Berkey from Frugals. Did we need it? No – I can always boil water to purify it. But it’s something we have wanted and I don’t see the prices coming down anytime soon.

How to generate cash

Take a second part time job. Listen to Dave Ramsey on the radio - he gives great (albeit hard) advice. Have a garage sale. Here’s the deal on garage sales: right now people have excess cash. They are still “consuming”. After the crash they will not be. Sell all your useless stuff (Xbox, baseball cards, clothes) and buy preparedness stuff with the cash others give you. Check into Ebay. Sell your 3rd vehicle. People will buy it now – they’ll even take out a second or eighth mortgage to generate cash to buy a car they don’t need. They won’t be able to buy it later when the economy crashes (if it crashes) so therefore you won’t be able to sell it then. Sell now while folks have disposable income.

My wife recently took a part time job. The kids are mostly out of the house so she has some free time. We now have more money. Good for us. Perhaps you could do the same, perhaps not.

Another way to generate cash is to drastically reduce your expenditures. Stop eating out. Period. Make a sandwich or take leftovers from last night’s supper for today’s lunch. Stop shopping. Just stay away from Chinamart. When you do need to purchase something, PLAN out what you want to buy and when it’s time (when you have the cash) go buy just those things. Not that “ooh! such a deal!” item on the shelf looking all pretty.

Become more self sufficient.

I have a buddy living out in the Ozarks with his family in a house he and his teenaged son built. I respect this man more than almost any other I know. Not only is he a God fearing man (many profess to be so) he is putting his faith in God very high on his priority list. Jehovah Jirah. God provides. He left a high paying job for a more simple life off the grid. He raises much of his own food, lives life to much slower rhythms, and spends a good bit of time fellowshipping and in worship. He doesn’t drive a new SUV, he doesn’t have a home theater system, his family doesn’t wear the latest fashions – but they are happy. The world could come crashing down and he might not notice for a good while. He certainly would not be inconvenienced all that much. His life would change little. All because he doesn’t need.

You don’t need a lot either. You could do a lot of things for self also. The more you do now – the less of an issue it will be later. Do you have a vegetable garden? Why on earth not? You can’t buy better veggies than you can grow – not by a long shot. Do you raise your own food? Any of it? You can keep rabbits in a very small area. You could fish or hunt. Think about doing things for yourself now. Try it – you may like it.

So, no great words of wisdom in this one. Just please give some thought to what you would do, how you would live, how you would provide if another Great Depression happened. Take a few steps. Take some action.

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If you have any comments I’d love to hear them.
If they really interest me, I may even post them.
You can reach me at vikingservices@hotmail.com

Prepared Americans for a Strong America

1 Comments:

At 28/1/08 11:24, Blogger theotherryan said...

Gold should be considered much more of a way to preserve wealth then a way to make money or TOETWAWKI bartering item. Why should it not be considered a good investment item? Since the time of Shakespere an ounce of gold has been able to buy a mens suit of clothes. Gold has not gone up in relation to the price of other goods in the long run. In the short run it is terribly unstable. Why should it not be considered a good barter item? First of all you can not eat gold, you can not shoot it out of a firearm and you can not run an engine on it. Secondly in a society where change will be difficult to make it is way too high of a bill. Going to bartertown with one ounce gold coins is like taking only 500 dollar bills to a small town garage sale. After your firearms battery and food storage are set up if you have cash to spare (don't neglect investing, 401k, stocks, etc) then maybe a few gols coins and some junk silver would not be a horrible thing to have.

 

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