Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts

Tuesday, December 13, 2011

Budgeting for Christmas and the Holiday Season

It is pretty early yet but we are approaching the holiday season so it is time to start thinking about how to not let it ruin our finances. I am going to come out and say I don’t think this one is really that hard. Seriously it is checkers, not chess.

Total Expenditures:
I am not going to tell you how much or how little to spend. Provided that you are not going into debt and are continuing your other financial plans (bills, investments, savings, and such) on schedule then spend as much as you want to.

Events and Gatherings
Most people with normal lives have jobs, family, friends, a couple clubs or associations and who knows what else. This means a slew of parties and activities and such. Many of these things are cheap but some cost money, potentially a lot of it. Being choosy about what you really want to be involved in is a darn good start. Do you really need to go to the annual hockey game and bar night with 3 guys you barely liked back when you worked with them a decade ago? If you do in fact like the guys but don’t want the expense suggest a cheaper activity, possibly at an alternate time. You might just find they could cut out the expensive evening also.

Gifts:
This is where I could say something about the spirit of Christmas and family and all that but I am not going to. Gifts are a big one that gets a lot of people. I think that in general it is a lot easier to be reasonable in a family where other people are reasonable. Both Wifey and I are part of solidly reasonable families. We don’t buy gifts for random uncles and cousins or anything but with both of our families and some close friends the list gets long in a hurry even when we are pretty strict about it. Here are some strategies I have found work to keep everybody happy and costs in line.

With pretty much everybody we exchange gifts with there is an (approximate) agreed upon value. Often it is unspoken and other times it is spoken. In my family over the last few years we have had kids born and people get married and various income changes. We have had discussions about how these various events affect gift giving.  At times when things are particularly tight for an individual we have found that giving people a heads up that for whatever reason gift giving is going to be a bit lighter than normal works really well. Here is a hint, they know it already and don’t care. I don’t know anybody who wants somebody close to them to hurt their self financially to give gifts. The emphasis is on making sure nobody gets unpleasantly surprised, has an awkward moment or hurt feelings.

Budgeting for Gifts:
You certainly want to plan for this one and might want to save a bit of money out of every paycheck for a couple months if money is tight. I and then we did this for a long time. In the last couple years our income has gone up and our expenses have gone down which gives us more disposable income. That coupled with our relatively modest gift giving means we don’t need to save up this year.

My advice is that you (or you and your spouse) figure the total amount you have to spend on gifts, give it a 10% haircut and then decide how to divide it up figuring about how much you want to spend on each person. My experience has been that if you plan to spend 25 bucks a person some gifts will be 21 and others 28 so it sort of averages out and with the 10% set aside you have a small cushion. We have used both cards and cash for gift shopping but typically use cards. If you don’t have the discipline to do that then take an envelope of cash to the store.

Tipping: I hear about this on the TV every year and to be honest I don’t get it at all. Is this some sort of an east coast thing? Is it a big city thing? The list of people they talk about tipping and the amounts are staggering to me. I know folks typically make more money over there (on paper at least as it is largely eaten up by much higher cost of everything) but it seems nuts to me. My folks used to give our paperboy a card with a few bucks if he had done a good job and I think MIL gives a bigger than normal type to her hair dresser around the holidays but both of those are for one person and are a small amount (20 or less I think). Maybe the news is totally out of reality but it seems like some folks are sending giant wads of cash to all kinds of people. Maybe it is a cultural difference but it seems ridiculous to me. We don’t tip anybody just because of Christmas.

Giving:  Times are really hard for a lot of folks right now so consider that in your financial planning. If you can afford it and want to then good for you, if not that is fine also. We do gift giving for a few kids via those tree things. In general we are cheap and I am heartless (Wifey has a big heart but is also cheap so that keeps it reasonable) but little kids shouldn’t have a bad Christmas because their parents are having a hard time or just plain suck at life.  If memory serves me correctly we have also done some food bank donations in the past. Both are causes we will continue to support in the future.

Saturday, April 30, 2011

Simplicity

The word simple has gotten a bad rap in recent times. We either think of it as a psuedonym for crappy or ugly or a nice way of refering to the developmentally disabled 30 year old who lives in his mom's basement, rides a bike and does handywork/ semi skilled labor. I don't see it that way.
 
Some of my favorite things are simple. One of my favorite meals is a good steak served medium rare with nothing on it, a potato with some fixings and some vegitables. My favorite drink is Scotch (blended typically but occasionally a single malt if I am celebrating or feeling fancy) with a handfull of ice. In a pinch the ice isn't essential. I like simple guns like AK's, Glocks, pump shotguns and double action revolvers. It is hard to beat a plain black wool pea coat.
 
When it comes to saving and investing simple things make or break you. If you simply live on less than you make and put the difference (after setting some aside for a 'rainy day') into a diversified set of instruments that make money things will go quite well. The way people mess up isn't by (assuming reasonable diversified choices) going with the wrong stocks or mutual funds or whatever but by not putting money away. See it is really simple.
 
I don't think simple vehicles or homes are a bad thing either. A simple reliable vehicle that will run reliable and get you where you want to go is a good thing. Often with reasonable planning you can (GASP) actually pay cash for them. Personally I would rather have a simple home, that I can afford to pay off in a reasonable amount of time and have money to save for the future, fund my child (and his planned sibling yet to be born)'s education and to be comfortable instead of having some cheesy wanna be Mansion which leaves us stretching and straining every month. It doesn't have to be a shack (though a small cabin or cottage if your family situation fits in it) but the idea of a normal modest 3-4 bedroom house with a couple normal bathrooms has slipped away recently. Not that a big house is bad if you can actually afford it but most folks, me included, can't. Why people set themselves up for failure buying stuff they don't need to impress people they don't like escapes me.
 
Simple plans are best too. It is said that a simple plan boldly executed will consistently give good results.
 
My point is that simple things are good. We rarely get ourselves in trouble by doing something in too simple of a fashion. Ever heard of that highly paid doctor who got himself in huge trouble by purchasing and living in a simple little house? I don't think so. Ever heard of an average Joe who got himself in trouble purchasing and living in a McMansion he just couldn't afford? I think we all have to realize that starting with a simple foundation and then, if we are truly able maybe expanding a bit is a prudent course of action. However I think that once we get past the silliness of it all, many folks are pretty happy with simple things and even when able see no reason to move away from them.

Friday, February 11, 2011

Please Welcome Care One Credit

Our newest advertiser CareOne Credit offers credit counseling, debt consolidation and a variety of other services. I was a bit skeptical about working with them because credit consolidation types are often shifty and do not have peoples best interests at heart. I did some looking and they seem like good honest folks who give people good information and don't pressure them.

If you are in a bad spot get in touch with these folks and they can help you see what your options are.

Thursday, February 3, 2011

Failure To Adapt

A few people in our loose social grouping have had some real financial issues recently. Serious problems that, if not handled or mitigated quickly will completely destroy them financially. I have noticed some commonalities.

1. Failure to adapt. Some of these folks faced (by choice or circumstance) a truly economic life altering event. They failed to really look at and truly recognize how much their situations had changed and that it was not just a bad month or whatever. Really this is more about being honest with theirself than anything. They probably know but are not willing to accept their change in circumstances.

2. Debt. This goes along with the first one. The thing is that since debt is a promise of future earnings if your circumstances and earnings change it is a real problem. When a high percentage of your potential income goes to debt your ability to adapt is very minimal. You have to have the cash to make the payments or stuff starts going wrong in a hurry. On the other side if one earns a good living and has no debt then something happens, all they have to do is earn enough money for food, fuel, maybe property taxes, etc. That is a lot easier than food, fuel, property taxes, mortgage, car loans, credit card payments, etc.

3. They failed to consider probably situations that would occur for them. Two of them got caught in a steriotypical pitfall that they definitely should have seen coming.

Friday, September 17, 2010

Random Thoughts On Fitness, Finances and Life

I wish people would realize that if your body doesn't work you don't have jack squat. My current sickness has been a big reminder of this. No matter what preparations I had made when I was down for the count it didn't matter at all. People who try to do all sorts of great stuff but have significantly limiting medical issues that are at least slightly lifestyle based are missing the point. They can have all the pre positioned supplies and skills but without the functional use of their body it is all for not. Instead of working to shoot a squirrel in the butt at 800 meters work on being able to maneuver wearing full kit. Instead of focusing on (while wonderful) redundant food storage and production capabilities think about being able to carry a pair of 5 gallon buckets full of food up the stairs from the basement.

Common sense says most people aren't 25-30 with perfectly healthy bodies. Of course if you are older or have some injuries or whatnot it isn't easy. However you must be brutally honest to figure out what sort of conditions and past injuries you can improve upon. Many "pre existing conditions" and "life long injuries" are miraculously cured by moderating your caloric intake (particularly fat and booze), exercising regularly and getting to a reasonable body weight.

Without the capability to use your body you are screwed plain and simple. Do whatever you can to improve or keep that capacity.

As for money today. It seems that things are just sorta slogging along. The boat has a slow leek that the bilge pumps can keep up with and the engines are making nasty sounds but still working. No clear and definite stuff seems to be happening, certainly not positive stuff. Some ominous things that could be bad but like anything else if you look hard enough for it you will find something. I think a lot of us look that hard and claim it as clear indicators that doom is days away.

Unemployment is high and shows no signs of getting better. Business owners and corporations are scared that some crazy regulation is coming down the pike (it may well be) so they are staying lean and holding cash instead of putting it back into operations. As this is not likely to change soon I don't expect the unemployment situation to improve dramatically for some time.

However despite all the gloom and doom we read and often pass on most folks are still working and all that jazz. As for what to do I think a lot of common sense personally conservative stuff still applies. Your mortgage/ property taxes or rent payment aren't going away. Sorry but lets be real. It makes sense to try and get out of debt because even if inflation may be looming increased costs of everything, inflation (arguably the same thing but you know what I mean) and potential future job losses may make those somewhat cheaper dollars harder to get.

Even if you are fortunate (don't believe the hype 9.5% unemployment [we could discuss the validity and significance of reported unemployment numbers but lets just rock with it for this discussion] means 91.5% of people are employed) enough to keep your current income there is a real likelihood that not so long from now it will buy significantly less. Maybe you will keep the exact same income and it will buy less or maybe your income will drop a bit, who knows. Think about what you would do if you lost 10, 20 or even 30 percent purchasing power.

Maybe you want to live cheaper now to get ready for what may come but darn sure you want to have the capacity to live cheaper pretty darn quick. It is easy to buy steak and shrimp this week then beans n rice next week, particularly if you are used to producing and consuming decent tasting food from cheap staples. Same thing with going out to a fancy night on the town this week and having a DVD at home next week. However it is a lot harder to ditch the payment on the new fancy car you need to get to work, the Visa bill or heaven forbid a home you can't really afford. If by good choices and some luck you are still in a comfortable position by all means enjoy the benefits of it. I am not classist and don't begrudge you anything. Just saying that it is good to be in a position where you can drastically (I think a 30% change in purchasing power would be pretty darn drastic) change your normal operating expenses.

Personally we can eat pretty decently with good healthy food we are used to eating for very little money. Also I am working on home brewing which helps.  I love Chimay but it is expensive even in the best of times. I can have good quality beer for less than the cheapest commercially produced stuff which is pretty cool.

We have a house guest right now. Wifey's Vice Sister who will hereby be referred to as  Miley came to help out for awhile when Walker comes. Interestingly enough her father has been our only other house guest in Germany to date. Other then the realization that I can't walk to or from the shower naked (well I could but it would be sorta awkward) it is cool. Wifey has really enjoyed her presence while I was gone and is just ecstatic that she is here.  She has said before that she needs a wife and proclaimed earlier today that Miley is filling that role nicely. Though I have spent a good amount of time around Miley it is always at those busy family things where there are a ton of people and lots of stuff going on. I am enjoying being able to hang out with her in a less hectic situation.

Anyway back to the point somehow we got to talking about gold yesterday. It occurred to me that we have at least theoretically (since it doesn't pay dividends or benefit from compound inflation and we aren't going to sell it) we have made good money on the gold we purchased a couple years ago. Not a couple points or an above average 10 percent but about 70 percent. We could sell and have done far better than we would have anywhere else over the same period of time. Heck I ordered some silver about a month ago and the price has gone up a couple bucks an ounce since then. I think there is money to be made right now if you have the cash and some tolerance for risk. Personally I have a bit of cash and a decent tolerance for risk, if just because my investment time line is so long.

I think in a way this whole economic crisis is good for us. It is kind of good for America at large because hopefully it will remind people to live in a reasonable fashion somewhere below their means and save a bit for the future instead of being in some sort of home equity/ credit based drunken orgy of consumer spending. Furthermore I think it is good for survivalist/ preppers to learn or be reminded that we need to be realistic and prepare for numerous likely scenarios as well as stockpiling bulk grains and semi automatic rifles. The sort of cold war era/ Y2K preparations that skip all kinds of likely issues and goes strait to Mad Max modern world is gone and we're all killing each other over Krispix thinking is seriously and fatally flawed. A reminder to also cover the more realistic bases is a good thing.

I am bored of writing for tonight. Going to drink a glass of water and have some home made pizza then go to bed.

Saturday, June 12, 2010

A Mans Got To Know His Limitations

I guess a woman does too but that title doesn't flow so well. The thing is that you really have to know yourself and make choices based upon your strengths and weaknesses. Mostly your weaknesses. If you consistently handle liquor very poorly then it is probably a bad idea to keep whole bunch in the house. If you make poor choices with credit cards then don't have a credit card.

There are two significant limitations Wifey and I have. First of all we are degenerate movie renters. We rent a movie and it sits in our house for days or even a couple weeks just racking up late fees. It is a really simple and ridiculously easy thing we just can't seem to get right. In Alabama we lived within (assuming the line of sight was clear) an easy rifle shot of the darn movie store and still we returned them late more than 50% of the time. Late fees don't really hurt us but do add up. In any case the issue is mostly conceptual. So we gave up. We got tired of payout out the ears in late fees. We got Netflix and get movies from the library sometimes. Secondly we do not keep snack/ junk food in any quantity in the house. I tend to keep a good stock of just about everything but not junk food. We don't keep it around because we would eat it at a glutinous pace much to the detriment of our health.

The limitations I just talked about really have nothing to do with preparedness except that we will not have lots of chips and cookies if things go all to heck. The applicable lesson is probably that for stuff which you believe is important you need to look at and figure out a way to mitigate those limitations. For example We keep some cash in the house because well that is something smart people do. We can keep cash in the house and not spend it (we borrow $40 for dinner occasionally but always put it back). If we had an issue with that maybe we would put our cash in a little box, cut open the wall to make a cache and then plaster/ paint it in. That would make it a real annoyance to get to. Break wall in case of emergency if you will.

Friday, March 12, 2010

Comment Moderation Fun, Savings and Debt, Life Choices and Education

 I moderate comments and have been doing so for some time. IMO comment sections on a relatively popular (ie read by other than immediate family, friends, etc) open blog often regularly turn into a huge mess of flame wars with spam and extremist hate speech in between.  I really tried and it just doesn't work. I don't know a blogger who has had success with it. At the end of the day I am Captain of this ship so I sail it the best I can, or at least the way I want. One of the biggest downsides of moderating comments is that they slow down the flow of ideas and make those great sideline discussions which either nail down a point or move in an otherwise interesting direction harder. However you take what you can get.

I do like that I get to see all the comments. Usually if it is about a fairly recent post I know what is going on. Sometimes I go back and comment. Other times something jumps out at me, maybe it is interesting or brings us in a new direction or whatever. This is one of those times. Here was a comment from my recent post on Savings and Debt.

5:59 said "Chris: It's easy to say, "they made their bed", but it's not that simple. When an 18 year old is leaving high school, everyone in the world in telling them "you should go to college"; they don't know any better. They go and get a piece of paper and end up with 50k in loans and an entry level job and realize by about age 30 that they should have taken up a trade. It is a problem with our society, and you can't blame an 18 year old for listening to "older, wiser" people.

It is damn near impossible for a family to pay off 50k in student loans, have a decent used car, a house that is out of the city enough to be somewhat safe, and still put away a 3 month emergency fund.

That is not an accident, it is all by design of the government to keep everybody underfoot, and I realize that, but it still pisses me off. We make decent money and are not living above our means, but I can barely afford to buy a little extra food to put back every month let alone put back 3 months savings."


TOR here: Well  now it is time for my thoughts. This comment reeks of a lack of accepting responsibility. It is full of they and them and everybody and society in an effort to somehow pass on responsibility to everyone else. We will revisit this theme in a minute.

Educational costs, debt and career prospects/ income are an interesting discussion. Our society seems to want people to do hard jobs (education and social work come to mind) for modest pay and require expensive degrees. We can't seem to understand why these jobs often (certainly not saying it is all of them but if you work in either you know there are some) attract lazy or not particularly capable people and that the turn over is high. Don't know what the answer is but I imagine either things will keep slogging along dysfunction-ally as usual or something in the equation will change. In any case getting back to the point.

On average a college graduate (BA/BS) earns a heck of a lot more in their lifetime (think it is a million dollars) on average than non college graduates. I do think those statistics are somewhat skewed for two reasons. First in general (remember we are talking about millions of kids, not onesies and twosies) the young adults who graduate from college are far more motivated, smart and hard working then their non college peers. They could be locked in a closet for 4 years and still demolish the other kids in earnings. Secondly I think we are talking about one fairly narrowly defined group and a very poorly defined one. We are comparing adults who went to and graduated from a university or 4 year college with all other adults. Those other adults include highly skilled craftsmen, union workers, various professionals, laborers, small business owners, service employees and shiftless layabouts. The stats would probably not be so skewed if we compared say college graduates and highly skilled craftsmen.

Revisiting my first point. I have a suspicion you were talking about yourself but that doesn't really matter. I do not know you and am going to make some generalizations. Maybe they apply to you and maybe not but they likely apply to some other people. Certainly I do not want to make you or anyone else feel bad. Well except when I obviously bash somebody for being a jerk which is rare these days. I have never heard of Tony Soprano and his friends coming to anyone's house to force them to go to a certain college or take out a bunch of loans or go into a certain career field afterwords.  Eighteen year old kids can get married, sign legally binding documents, buy firearms and fight in wars. They certainly do not make perfect decisions and often don't even make good ones but that is called life. For heavens sake take some personal responsibility.

Far too often people box themselves into a corner and then complain that they are trapped in a corner. Every individual decision they make might be reasonable on its own merit but together they are not reasonable.  Lets break this down with commentary. 5:59's words are in italics and mine are not. 

...It is damn near impossible for a family. Consider your financial situation before getting married, let alone having kids. Like many things in life it is not romantic or feel good but inherently practical.

...to pay off 50k in student loans, have a decent used car, a house that is out of the city enough to be somewhat safe, Here is where many people box themselves in. They say they 'have to have' a certain sort of car and live in a certain type of place and then turn around and blame society and "the system" for their choices. They got those loans to get that degree from that school. They also chose that car and decided they just had to live in a certain place. Nobody put a gun to their head and said to drive a 3 year old shiny SUV instead of a 10 year old Honda Civic with a dented fender or forced them to live in a nice house in the burbs instead of a trailer park or a little apartment.

I really hate when people talk about how there is some sort of a system by our government to keep them down in terms of life expenses, bills, housing, etc. To be blunt that is a very unsuccessful attempt to somehow pass ownership for ones decisions to anyone but their own self. I can get how people back themselves into a corner or stay in a less than ideal situation because of work/ family/ etc. I do have empathy but that doesn't mean they didn't make and aren't still making those choices. Don't get me wrong there are all sorts of legitimate criticisms such as inflation and zoning but that is a different discussion. Pretty much everywhere Americans can make broad and diverse choices about lifestyles and housing. You can go all Dakin and shred your monthly expenses with the purchase of a travel trailer and a bit of land. If that isn't practical because of your urban setting or zoning you can get a tiny apartment and have room mates. Yeah, neither of those options are any fun but that is a reoccurring theme of most practical decisions.

...and still put away a 3 month emergency fund. Lets revisit the last point. Of course you can't save up 3 months of household expenses when you spend almost everything that comes in. In order to be able to save real money or aggressively pay down debt you are going to have to earn more money or go crazy slashing expenses. [Not saying this applies to you but it is a thought I have right now. It amazes me how people don't understand how they stay stuck just barely getting by but haven't changed anything like say; increased their income or slashed their expenses. Somehow the same pay and the same bills come out more or less the same every month. Isn't a definition of insanity continuing to do the same thing and expecting a different result?] I agree that with what was laid out as your/ the above situation the math on an emergency fund just doesn't work. If one diligently saved  the surplus 2-4% of their income towards an emergency fund it would take a really, really long time (not willing to do the math) to save 3 months of income.

Do whatever you want, it is your life. I would like to leave you with two questions to mull over. First, are you willing to take some responsibility for where you are? Second, are you willing to do some unpleasant things in the short term to make your life better in the long term?

Sunday, February 21, 2010

Don't Walk, Don't Jog, RUN Away From Adjustable Interest Debts

It is difficult to buy a conventional home (let alone one on land) or get an education without taking on debt. For some folks using a loan to get a modest 3-5 year old gently used car with low-reasonable mileage makes more sense than getting $500'ed to ruin by an unreliable vehicle. No debt is ideal. However not all debt is created equally.

Right now I would be seriously concerned if I had adjustable rate debt, doubly so for credit card debt. The rates are going to go up, and up and up. This article is out of the UK but the same stuff is happening here. I do hesitate to suggest specific priorities for people without knowing their situation; however if I had adjustable rate debt I would do everything realistically possible to get it paid off or at least paid down as soon as possible.

Tuesday, October 6, 2009

Tired of Stupid Crap

Yesterday Wifey and I were watching the news which should have been called Stupid People Getting Eaten By Dangerous Animals. Sometimes folks get eaten by dangerous animals, I get it. You can do all the right things and just be jogging down your city street and get your head bit off by a Cougar. Bears eat a few hikers a year throughout North America. These folks by and large just have bad luck.

Not the stupid folks on this show! These idiots made a variety of choices which directly lead to their deaths. One fellow broke into a Siberian Tigers cage! Yes an enormous killing machine, seriously what in the hell was this guy thinking. Another lady got killed by the bear she kept in her back yard as a pet. She was not a zooligist or a professional animal trainer or anything like that, just some lady with a frickin bear in her back yard.

There were a couple other cases I can not recall specifically but the theme of idiots doing super stupid things and getting killed by dangerous animals was a common link.

On behalf of the world I am really glad all of these idiots are dead. Hopefully they didn't pass on their obviously weak genes and worst case maybe their unlucky offspring will have a better chance at life not being raised by these idiots.

They also talked about some poor unfortunate family who had their credit card payments get jacked up by the evil bankers. Of course that means their interest rates were raised. Does this suck for them, yes. It sucks the same way that getting your knee whacked by Vito because you are two weeks behind on the vig sucks. However the common theme is that if you take these peoples money you accept the conditions that it comes under. Credit card companies HAVE THE RIGHT to change the conditions of your credit basically however they want, it says so in the contract. And regardless of if he directly states it you know what Vito will do if you don't pay him back. At the end of the day the folks who use these services have nobody to blame but themselves, just like the guy who jumped in the Tiger cage.

People who do stupid things with and around dangerous animals often die.

People who make (serious or regular) stupid money decisions almost always have serious financial problems. The good news is that unlike dangerous animals people can usually bounce back more or less intact (and hopefully wiser) from foolish financial choices.

Comparing the two is a bit farcical and (personal responsability as a common theme aside) the only reason I mentioned them both is that they were on the telly last night but why should we feel any more compassionate for the folks with the credit card debt than the idiot who got eaten by a tiger? They both made choices and eventually faced the probably consequences of those choices.

Monday, September 21, 2009

A Year Ago This Season,

Last night I could not sleep for shit. Spent a lot of time thinking about life and blog junk and all sorts of stuff. I have been hearing all this stuff about recovery and lame duck recovery and jobless recovery. I got to thinking about a year ago. I am going to look at a lot of indicators and have some discussion. Doubt any huge conclusions will come from this but since it interested me you get to read about it.

First lets see what I was writing about roughly a year ago: I lived in an RV, This amused me,I was thinking about finances a lot with significant worry about institutional failures. I was also just beginning to really purchase precious metals. Too much more to list.

Second lets look at precious metals prices. Last year at about this time gold was in the $750-800 range and these days it is right around $1,000. Silver went from about $12 to about $16 but methinks that is going to drop a bit soon at least for awhile.

Thirdly the stock market has gone from around eleven thousand to a bit over nine thousand.

My last indicator is going to be unemployment. For this I will have to go with August numbers because Sep ain't over yet. Unemployment has increased by roughly 30% from the low 6 range to within spitting distance of that dreaded 10% mark.

For the unquantifiable I will go with what I remember which is fear. Banks folding left and right and the stock market dropping hundreds of points was a normal day. One day in particular I remember vividly. It seemed that the stock market dropped hundreds of points for the third or fourth day in a row. I slipped out for a few minutes to get as much cash as the ATM would allow me to because it seemed like a perfect storm for a banking holiday. Honestly I probably would have handicapped it at 1/4 one was going to happen.

Lets touch real quick on what has happened between then and now:

Barrack Obama won the presidential election. Who the heck saw that one coming!

For awhile it was darn near impossible to find Glocks, AR's, AK's, mags at any sane price or a bullet to go into anything. Eventually that situation got better though ammo prices still remain high.

Bail outs after bail outs after bail outs. Maybe we threw good money after bad and then used that good money to light our stack of really good money on fire. Maybe we will look back in 20 years and see the decisions made in those dark times as saving our financial system. I do not know and for a conclusive answer we will have to look to the history books in years to come.

Lots of people lost their jobs.

My memory isn't perfect but depending on the exact timeline I picked up a few guns or several over this period of time. Socked away a few hundred rounds of 30.06, about the same in shotgun ammo, a case of 9mm and a case of .38 with a few boxes of .357 mag for variety. Also we saved a good chunk of cash and got some precious metals.

Where are we going?

If I could predict this with significant accuracy I would be writing this from my 200 acre retreat in Idaho where I made a gazillion dollars a year playing the money game a few hours a day. That I don't have a 200 acre retreat in Idaho and today I worked a 12 hour day during which nobody asked (even once) what they should do with their money even once is a testiment to the fact that at best my great talents have not yet fully surfaced.

This seems like a good time to circle the wagons, munch on some leftover corn bread, sip a bit of water and watch vigilantly for rustlers, indians or desperadoes. While of course you will have to have a watch rotation so people can cook hot food, do chores, drink a little whisky by the campfire and get some sleep it is definitely NOT the time to have your cattle spread over the prairie, the Mrs at the creek washing clothes and your youngest off playing somewhere while you doze in the shade.

In slightly more practical terms this is a good time to suck up to your boss a bit more than usual, work extra hard and live very conservatively. Unless there is a very compelling reason otherwise every dollar you can get your greedy little hands on that doesn't go to basic living eexpenses should go under the mattress.

If your car is running reasonably well I would keep it and put off getting a new one. This is also not the time to go on that two week trip to Europe or buy a ski boat or do that big remodel on the kitchen. I would stick with whatever job you have now even if it is pretty lame unless something that is a serious step up comes along. You do not want to quit the job you hate to start a new dream carrear in X right now. Also since we don't have a clue what is going to happen to the stock market or the value of the dollar if I was seriously considering retirement hard thought would be put into potentially working for a couple more years to delay starting to draw from my savings and allow what I have in the market to bounce back.

I would also run full speed away from any debt that has a variable interest rate be it a home mortgage, a HELIC or just a maxed out AMEX card. Between the value of the dollar dropping and the increased defaults on all debt it is going to get ugly and painful for those holding variable interest debt.

Thoughts or observations on anything I said?

Sunday, September 20, 2009

Replying to Comments on My Last Post.

So I wrote my first rant in awhile and it got a lot of comments. Some folks agreed with me and others spoke about ancillary issues. I do want to talk about a couple comments on here though.

To Occdude: As for bankers getting money at 0% and loaning that money out at 20%. I do not think that is entirely true. TOM wrote a great post on banks these days back on Oct 12, 2008. Banks are loaning money to credit worthy businesses and individuals with reasonable debts and they are doing it at reasonable interest rates. Also on the specific topic of loans home mortgages have not been so cheap in years. People getting quoted or given ridiculous interest rates are probably not very credit worthy. In short I think that argument is pretty flawed. I do think the bailout was pretty crappy and if this humble guy would have done anything it would have been handled differently.

to 1:20: I do not have a ton of experience with credit cards (some would argue that is a good thing:) but I am under the impression that when you get a credit card you sign a bunch of stuff which basically means they can change whatever they want whenever they want to. Going back to my original post "If you don't like the terms a bank will offer you then don't borrow their money." I can see why some people choose to have credit cards and the Mrs. and I each have one. Once during the time I have had mine they informed me the interest rate was going up. Instead of being financial doomsday for me it was just another thing to throw away because I do not carry a balance and when I charge something I pay it off in full when the bill comes due. These rate adjustments should be a reminder to everyone not to carry credit card balances.

So I completely reject your argument that people who took unsecured adjustable rate loans (essentially what credit cards are) are victims when the interest rates adjust.

Medical care in general and private vs "public" plans is a whole other topic. I can not help but observe that sick people are not flocking from our evil greed based private for profit medical system to good fair public systems when they get very sick; in fact quite the opposite happens all the time.

Saturday, September 19, 2009

Quit Bitching- First Rant in Awhile

I am tired of people bitching and griping about bankers and 'the elite' plus of course the trilateral commission or some other such junk. [Now if you are complaining about how the derivative collapse and or government bailouts affected you fair enough. That isn't what I am talking about.] People who claim to be pro freedom but bitch about how someone else (legally) makes a lot of money are fucking posers at best. These folks want to have their cake and eat it too but do not have the guts to live in a truly free world where people are allowed to borrow and loan money at whatever terms both parties agree to. If you want to be a communist that is fine and good but at least be honest.

First of all class warfare has nothing to do with libertarianism or freedom. Don't begrudge anyone else the ability to (legally) earn a lot of money. I am sorry their skills are more valued than yours and their business sense is better but tough shit. If you want to make more money get better skills and make better decisions, nobody is holding you back but yourself.

If you don't like the terms a bank will offer you then don't borrow their money. As for bitching about how they just jacked up the rate on your credit cards I ask why are you carrying a credit card balance. If you don't want them to be able to change the interest rate on a loan then do not take a loan with an adjustable interest rate. This ain't fucking rocket science.

The bankers are not ruining your life, nobody forced you to take their money. I am honestly sorry if you got a [reasonably priced fixed rate] mortgage and now you can't pay it because of a job loss or whatever. That is a sad situation but it is not 'bankers' fault that you lost your job or whatever.

Running up a bunch of debt you can't service and then blaming bankers for your shitty financial situation is like eating 3 big mac's for lunch every day and complaining that 'donalds made you fat. YOU ARE AN ADULT WHO MADE CHOICES so fucking own up to your responsibility for those choices.

If you don't want bankers to be involved in your life then don't have any debt. Fuck don't even have a bank account, keep your earnings in a coffee can. Do like Dakin and Creekmore and get yourself a couple acres and a travel trailer (purchased with cash) and live off grid but stop fucking bitching.

Saturday, February 28, 2009

The Credit Card Post.

It is so interesting what can really get you guys and gals going in the comment section. There was so much commentary about what I thought to be a mundane post that I am going to address it here. Blogger
Dr. Dad said...

Glad to know I'm not the only person experiencing problems with USAA this morning...

February 26, 2009 9:44 AM

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Blogger Michael Hawkins said...

check fraud has gone up but I have nothing to back it

Having nothing to back it is exactly what constitutes fraud :p

February 26, 2009 11:21 AM

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Blogger Crucis said...

I don't use credit cards. All mine are debit/check cards. The principal, however, is the same.

My local credit union, just a few blocks away, is completely automated. There are two employees on site, a receptionist and a customer service rep. The tellers are all remote viewed by a small TV screen and a speaker/phone. Wonder what would happened if the cash becomes jammed in the machine?

February 26, 2009 12:52 PM

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Blogger Mandi said...

FWIW, sometimes when CC aren't working because the card isn't being read (usually from getting worn out) a trick that works alot of the time is to get a plastic grocery store bag (the ones that fall apart when you have a single gallon of milk in them) and wrap the plastic once or twice around the magnetic strip - then swipe it (with the bag around it).

Don't know why... it just seems to help.

February 26, 2009 1:10 PM

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Blogger Samuel Adams said...

The 2 girls I work with swear by their debit cards. Must be a chick thing. The guy I work with usually pays cash when all 4 of us go out to lunch on payday. My checking is for those bills that are not automatic payments or transfers like visits to the doc or dentist and the pharmacy or bills that vary wildly like electricity. I decide what gets paid now and what gets deferred. One is less likely to overspend when counting cash!

February 26, 2009 6:49 PM

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Anonymous The Un-prepared Friend said...

My USAA got declined this morning too, and ironically I had no cash so I used a check.

February 26, 2009 7:12 PM

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Blogger The Other Mike S. said...

I use my debit card for almost all purchases - makes me live within my means. I always carry at least $60 in cash on me, just in case.

My credit card is my last resort.

February 26, 2009 8:25 PM

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Blogger Brad K. said...

A debit card is supposed to differ from credit cards in two ways. First, the amount of a transaction or purchase is to be paid immediately from a drawing account, where a funds available balance exists at the time of purchase.

Second, when a merchant accepts a credit card, the credit card issuer deducts 2% to 4% plus of the transaction amount, and likely adds a fixed fee also. A debit transaction on the other hand is supposed to be processed like a check - the bank provides the entire transaction amount to the merchant.

My bank recently changed their debit card. That smugly smile and claim, "Yes, this is a debit card! Good anywhere!" only they are lying - their new card performs credit transactions against the merchant. Money for the bank, and additional cost of doing business for the merchant. Some stores here in Ponca City have stopped accepting debit cards.

Banks recently stopped processing checks. Instead, a scanned image of the check is emailed to your bank, and often the merchant hands your check back to you - which has already been paid from your bank account to the merchant. It wouldn't surprise me to find that MasterCard and Visa claim these are now "credit card" transactions, too.

Fannie Mae and Freddie Mac, move over for the true villains of the American economy - MasterCard and Visa.

February 26, 2009 11:46 PM

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Anonymous Anonymous said...

Possibly the USAA credit card system was hijacked and numbers stolen? This happened to me with a Discover card which was refused when I tried to buy in a Sam's club. Had to spend 20 minutes on the phone in a busy store to get things straightened out. Their system was hacked and CC numbers stolen. Lots of PO'ed people behind me in the checkout line.

Great thing about USAA is that I can check online to verify charges, which I do every time I use it. Have caught several charges that were wrong quickly and got them taken off. Only takes a few minutes at night to check,between checking the blogs and porn sites.:>)

It pays to check these days, lots of folks trying to steal/scam/ID theft etc.

February 27, 2009 5:16 AM

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Blogger Dr. Dad said...

USAA apparently had a system failure yesterday morning. It was straightened out around 10am.

February 27, 2009 8:33 AM

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Blogger The Hermit said...

USAA has some serious issues with their credit cards. My kids lived in Canada and essentially used my USAA card (they each had their own, with their name on it) to pay for things other than rent. I was constantly getting called by USAA wanting to know if the charges were "ok", at all hours of the night. Finally I told them to put a note in the system that charges in Canada were ok and the problem got better but never went completely away.

February 27, 2009 12:27 PM


Dr. Dad, USAA cards seem to be finicky.

Michael Hawkins, Good play on words.

Crucis, When I first started dealing with USAA they were like "do you want a credit card" and I said "sure". Figured it would be convenient from time to time and help build some credit.

Mandi, By and large my card works. I think it is a machine/ card combo because if the card works and every other place it is fine. Seen that trick before but I didn't want to keep waiting anymore so I whipped out 6 bucks and left.

Samuel Adams, I think it is a generational thing at least in part. Also some other group break down stuff probably applies.

The Unprepared Friend, This was an auto post but interesting all the same. USAA can be somewhat unreliable. Nice about the checkbook. Maybe women tend to carry them more because another thing in a purse isn't a big deal? Who knows.

TOM, I usually use a debit card but mine expired and between working insane hours and being a proocrastinator it took a little while to order a new one and I am still waiting for it. Usually I am all about the debit. My credit card is from the same company my banking is through. Since paying the card off it as simple as just transfering cash from checking or savings I use it as a second debit card most of the time. Almost always I pay it off before the "grace period" starts and absolutely pay if off in full when the first bill comes.

Brad K, Interesting info but I am not sure how it applies to me.
Anon, I doubt it. My card worked the next day at the gas station so I think that machine just didn't like it.
Dr. Dad, They have those a lot.

Hermit, I have had the same thing with being down here. I changed my address with them but you know how stovepipe structures work. I might have gotten it figured out by now
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Thursday, February 26, 2009

Another Reason To Carry Cash

This morning I after breakfast I ran into a conveniencish store on post to grab a couple quick things before going back to work. I gathered my purchases and got in line. The lady rung up my purchases and I went to pay with my card. I tried 3 times and my card didn't want to play nice. The lady got it to read and for some reason I can't fathom it was declined. I owe almost nothing on the card. The current balance is less then 10% of the cards limit and that is just because the payment I made (to take it back to 0) is heald up in their system. In any case the electronic money gods did not deem this purchase worthy. I reached into my pocket and took out the cash to pay for my purchases and was on my way, somewhat irritated but with the things I needed.

The point of this (aside that usaa cards can be tempermental) is that even if you aren't worried about our economic system collapsing, banking holidays or even the power going out sometimes you need to suddenly make purchases with cash. Checks aren't commonly accepted anymore (I have a personal theory that since the wide spread increase in debit card usage the rate of check fraud has gone up but I have nothing to back it) and Old Ladies at the grocery store aside almost checks are fairly uncommon. Cards might or might not work but people accept cash so carry some around.

Sunday, December 28, 2008

Three Easy Steps For Climbing Out Of Debt

Yesterday I read a weeks worth of all the blogs I follow and one spoke about debt, specifically credit card debt. Some people rack up tens of thousands of dollars worth of credit card debt which to me seems crazy. For others it may be unpleasant thousands or just a lingering few hundred. Those who have wisely dodged the credit card trap may still have mortgages, student loans car payments, etc. While debt can be used wisely with great results for an education that helps you get into a great career field, to purchase a reasonably priced home, or just a few acres to park your trailer owing folks money is a bad thing and we should all strive to be beholden to no man. 

Here are three simple steps to get out of debt.

1. DO NOT BORROW ANY MORE MONEY. This may be incredibly obvious but even if you owe 10k another couple hundred bucks is a month or two you will not be free to keep what you earn and start actually getting ahead.

2. Pay as much as you can towards your debts. Of course paying higher interest stuff off first makes sense but if you have a debt that is really bothering you (the grand you borrowed from family to get the furnace fixed last winter) then maybe start chipping away at it first. Sometimes honor is more important then a bit of money. Now that your debts are payed off and you've got at the most a fixed rate mortgage (because that isn't a quick couple year fix) proceed to the last step.

3. DON'T BORROW ANY MORE MONEY. After how hard you had to sacrifice to pay for stuff you charged/ borrowed in the past the last thing you want is to dig yourself into another financial hole. Aside from paying for an education or getting a reasonably priced home you do not need to borrow money again. Take the hundreds of dollars you have been sending to those folks who loaned you money and save it. That way next time you need 500 bucks all of a sudden it is waiting for you.

I have been thinking a lot about one particular kind of debt, the car loan. I have never had a car loan and if at all possible would like to keep that up. I would say car loans are not necessary like mortgages or school loans but are nowhere near as stupid as racking up tons of credit card debt. Cheaper cars are often far more trouble then they are worth but coming up with enough cash to get something that will be reliable in the long term can be difficult. 

Getting a loan to get a $8,000 car instead of driving around some $800 jalopy that will leave you stranded constantly late for work and runs up mechanic bills like crazy. One $8,000 car costs just as much as 10 $800 cars and will probably last just as long with far less headache. 

While Wifey and I seek to avoid ever having a car loan (time will tell on that one) the best I can say is that if you must get a loan get something reasonable that you can pay off in 2-3 years. Those 72 month loans that let idiots who make 9 bucks an hour buy $30k cars are the dumbest thing out there. I think the big thing to keep in mind is that if you can't afford to pay cash for a car you aren't in that great of a place money wise (I know that is hard to swallow but you know it's true) so get something gently used with few options instead of brand new and full of bells and whistles. 

Monday, December 8, 2008

Modern America, by Ayn Rand

Prior to starting my latest round of schooling, I was not really much of a reader. In fact, prior to grad school, I could count the number of book I had read on one hand. Since then, I have been doing... Well more of it. I spend around 60-70 hours a week doing school work, but I have been able to do some personal reading. Thanks to statements of students in my Constitutional Law and Criminal Law classes, I read 1984. My current book is one that I always wanted to read, but never did: Atlas Shrugged by Ayn Rand (I know, its strange to meet a libertarian who has never read anything by Ayn Rand). Right now I am about 500 pages in. Last night I was doing some reading, and I started thinking to myself, "This is insane. This book, while it started off as fairly realistic, it has moved on to paranoid fantasies."

Is it? I read this in the news today. I am ass deep in finals, so I haven't been keeping up on the news of the outside world. However, this is straight out of Atlas Shrugged. Bank of America cut off the companies credit. If I had to make a guess, it was because the company was not paying its bills. Apparently, under federal law, the company must give its workers 60 day notice, and failed to do it. Whose fault is that? Apparently BofA's. Now I am against the bank bailout (actually all bailouts, but that is not what I am talking about). However, the fact that BofA got some bailout money doesn't mean that it should be forced to extend credit to those who cant or wont pay their bills. Apparently the company, Republic, has placed the blame of the company laying off its workers on BofA.

So now the governor has ordered the state to stop doing any business with BofA. What will this do? I'm not sure, but I guess it is his way of extorting BofA to give the workers the money owed to them by Republic... How does this make sense? I can understand this if it was part of the credit contract between BofA and Republic, but short of that, it is the government saying, "Hey, this guy cant pay his debt, but you can, so its your duty now."

There are times where life sucks. However, banks making loans to people who couldn't pay them back is pretty much what got us into this mess. The solution is not to have the government force banks to do what fucked over everyone to begin with. This is so crazy, if it had been in Atlas Shrugged, I would have dismissed it as unrealistic paranoid rantings... Apparently Ayn Rand was right.

On a side note, it is very possible that I have missed some big fact. As I said, I haven't been following anything outside of school for about 2 weeks. This blog is my reaction based on, to make an understatement, incomplete facts. If I missed something, let me know.
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