Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Wednesday, June 27, 2012

Random Thoughts # Whatever

To rehash a valid topic. It is very difficult to substantially change your current spending patterns unless there is some sort of event forcing you to do so. Most folks like what they spend their money on. [Or if you are married at least one partner does; you might think it is fine to ditch the wife's pet cable tv and hobbies and she might think you could cut back on beer and smokes and preps but I digress] It really sucks to stop doing things you like to do and adjust your lifestyle downward so most folks won't do it if they have a choice, heck a lot of folks won't do it if they really don't have a choice.
The thing is that it is much easier to make intentional choices about new money because you are not used to having it. Money that has not been part of your operating budget, be it additional income or a windfall, is a great opportunity to make good choices. We have hit on this before talking about becoming debt free. The short rehashing is that I got promoted and started making significantly (for us anyway) more money. If memory serves me correctly we put about 85% of this new money toward becoming debt free. Between this and what we were paying before we were making adiditional payment of about 200% a month. We did this for right around a year and got it paid off, instead of making minimum payments for two extra years.

I was recently reminded that folks who choose to make stupid decisions, in this case financially, will do so even if their situation is improving. It is really hard to outearn stupid financial choices if you increase your poor decision making when more money comes in.
Awhile I saw a review on Survival blog of Grip Pods. They are a pretty cool piece of gear. Basically it is a forward vertical grip that, if you hit a button on the top, has a bipod that pops out. I have one of these things. Slaps right onto a standard rail. They are pretty darn tough. I have seen a few break but that doesn't mean anything. If you gave every enlisted Infantrymen (Not NCO's, or O's) each a brick and a bowling ball a bunch would get broken and it doesn't mean they are not sturdy objects, just that Infantrymen break things like nobody else. These things aren't beefy enough to use during buddy rushes and whatnot like the bipod on a machine gun, though I have seen those break too. It looks like they cost between $80-100ish. More than about $110ish would definitely be overpaying. If you like to run a strait vertical grip and think a bipod might be handy sometimes it is worth looking into. If they are worth it I would say maybe (didn't pay for mine;). A quick search of the web says vertical foregrips from names I recognized tend to be $50-80ish. Another 20-30 bucks for that foregrip to have a bipod isn't a bad deal really.

Over the past year I have been shocked and saddened by things public officials I grew up trusting have done. In any case the amount of times I have thought "I would do something terrible to that person" have been on the rise. Maybe it is a change in the news cycle or particularly the democratization of information via the web and particularly the drudge report, I don't know. I get that in any bunch there are always a few bad apples. If you have enough bad apples there is always something bad going on. (Example, an Infantry Battalion has somewhere around 700 soldiers, depending on its configuration, of that probably 450-500 are young men between 18 and 23ish. Prime age to drink way too much and do stupid things. On any given weekend at least one will get into a fight, another will use drugs, and another will commit some other crime. Almost always at least one of them will get caught. So saying that a Battalion has a problem because every weekend somebody gets in trouble is while accurate, misleading. Saying that 1 in 700 soldiers got arrested looks very different.] That being said it seems like these sort of events are on the rise.
This saddens me and means I need to relook how different groups may act in various circumstances. It is worth noting that local conditions matter the most. Look at your local laws, culture and recent events. These should tell the tale. I hate to rain on the tin foil hat folks conspiracy theories; however the odds of your local deputy sheriff/ policemen/ dog cater/ zoning inspector/ health department getting into your business are far higher than a SWAT team from a federal alphabet agency taking down the door at 3 am. The importance of living in a place that doesn't suck may not be possible to overrate.
Anyway that is about all I can think




Sunday, June 3, 2012

Azimuth Check

I have stolen this title from Lizard Farmer who runs an excellent newish blog that focuses on retreat/ farm/ ranch defense. His post was more a check on how folks thought his blog was doing. I will head in a different direction. My azimuth check is more about the direction from where my/ your overall situation was to where we want it to be. I will break it into a few categories.

Finances:
How is your debt situation? Do you have any debt with an adjustable or otherwise particularly high interest rate?

Do you have some savings for if something happens?

Do you have some money accessible to buy things if there is an event that interupts normal banking (this means cash on hand)?

If you can afford it have you considered putting some money into precious metals? There isn't a right or wrong answer to this one. Folks differ widely on this topic.

Health:
Are you and your family of a reasonably healthy body weight? If not are you making tangible progress towards getting there?

Do you have any health/ medical/ dental issues that could be improved but have not been? Maybe you need an elective surgery or have been putting off dental work or need to get into physical therapy to get something worked out. Bringing us back to the last question it is utterly amazing how many medical issues decrease or go away if you get to a reasonably healthy body weight.

If applicable do you keep a stash of essential perscription meds on hand? Keeping 30 days on hand is ok, 90 days is pretty decent and will cover a lot of issues but of course more is better. It may mean paying out of pocket but consider the alternative which is, to varying degrees, very ugly.

If applicable do you have at least a pair of spare glasses in your current perscription (two or three would be better)?


How are your chompers doing?

How are you doing at physical fitness? Can you walk long distances with a load? Run fast for short periods and slower for longer ones? Control your body weight through a variety of tasks and obstacles? Lift heavy things or carry another person?

Skills and Training:

Can you make a fire? At night? Can you do it when it has been raining for a week strait?

Can you find your way around with a compass and a map?

Can you make or improvise some sort of shelter to be as comfortable as possible in a variety of situations?

Can you turn basic staples like flour, rice or wheat into a decent or even tasty meal?

Can you grow or raise your own food?

Can you find or gather food from fishing, hunting, plant gathering or something else really cool I have never heard of?

Can you fix stuff? Mechanical things? Small arms? Brick and mortar? Wood? Plumbing? Electrical?

Can you engage targets with personal weapons in realistic circumstances?

Can you organize a defense be it at home or in some sort of hasty situation?

If the Chinese invade or whateveer can you plan and execute small unit Red Dawn/ partisan/ G style offensive operations?

Stockpile and Equipment:

How is your food storage doing?

Do you have personal weapons as well as the stuff needed to use them? Do you have some spare parts, cleaning stuff and ammunition to keep your guns running without a trip to Wally World or the local gun shop?

How are you doing at storing all of the other stuff like medical supplies, batteries, fuel, cleaning and hygiene stuff, spare parts, etc all to keep on keeping on as well as you can without outside assistance?

Is the stuff you have put together into kits or packages or systems that will meet your needs on short notice?

I am sure there are some good questions that I missed. This covers a ton of ground so do not be ashamed if there are some areas where you fall short. My goal is to give you some areas to think about and see where you are at. Every one of these questions is not equally applicable to all situations. Like many things you would be well advised look at these questions with brutal honesty, action what is applicable and disregard what is not.

Hope you all had a great weekend!










Monday, January 9, 2012

Angry

The concept of student loan repayment forgiveness as a public program fills me with rage. I have talked about this before so there is no need to rehash it in full. It doesn’t bother me that for a year we put a huge amount (something like 1/3rd) of my wages toward paying off my loan. We decided that instead of making normal payments forever we would knock it out and of course I borrowed it so paying it back is only fair. However that some folks should get a pass because they borrowed a lot will have a hard time and (probably in part due to degrees in underwater basket weaving and gay transgender Eskimo studies) paying it back seems insane to me. We could debate the politics and economics of higher education all day long but if you borrow money you should pay it back. A guy who makes $25k a year and was stupid enough to borrow 40k for a big shiny truck shouldn’t get a pass anymore than someone who goes to an expensive private school and gets a degree which tends to pay poorly. Hint; don’t borrow a ton of money to go to a private school and study communications or education or sociology. If you want to go into those fields I recommend a much more reasonably priced public school.

Also the topic of mortgage write downs came up again somewhere. That might fill me with even more rage. The reason why is simple. I haven’t bought a house yet, dun dun dun, because I couldn’t afford it. Sure I could make the mortgage but I didn’t have any savings, let alone a down payment. Idiots and hopeful fools who made bad choices I was smart enough to avoid should not be rewarded. However if it is any conciliation to me I don’t see this one happening. It is clear to me that the trend is to hook up the banks at the expense of the people, not the other way around.

It pisses me off when we bail out individuals or companies who make stupid choices. Here is an n unavoidable truth, people learn from stupid choices by suffering their consequences. A person who makes stupid choices and feels the consequences stands (assuming he doesn’t blame everybody else) a good chance of learning a thing or two and just maybe making better decisions in the future. If we bail these idiots out they will not learn how to make good choices. Also there is significant risk that we are telling a whole other group of up and coming idiots to go ahead and be idiots as the government has got their stupid back.
Both of these things make we want to start a fire bombing campaign to show my displeasure. I don’t even know who I want to firebomb, I am just really angry.

On the bright side I had a really good talk with Wifey today which as always, helped turn down the burner under the boiling pot that is my rage. She pointed out that we can take a good amount of pride in knowing that we are doing the right thing. Also that in years to come (these programs come and go, woe is a person or a business who is only viable because of a government subsidy or tax deduction) we will be fine and able to take care of ourselves because that is the sort of people we are.

Note, this article is about a month old. I am trying to clean out my writing folder a bit.

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.

Monday, November 21, 2011

Student Loan Repayment Forgiveness

Ever have one of those moments where you think “if this passes I may buy a hoodie and a bandana and  start a firebombing campaign?” Well I just had one. 

The topic of student loan repayment forgiveness came up on the TV. I was immediately filled with rage.  Why was I filled with rage you might ask? I was filled with rage because I busted my butt to pay off my student loan. I ended up borrowing about the average amount because, despite coming in with a wad of cash and producing some income while I was there the numbers didn’t work. I could have lived cheaper (I’m substantially better with money now) but didn’t do anything completely crazy. We made the normal payments for a couple years as we got our stuff together financially.

Establishing our emergency fund happened to occur roughly when I got a promotion. We started making big (like 1/3rd of my take home pay) payments and over about a year got it paid off. That really sucked. We lived really cheap and could not do some things we wanted to do. It was a big sacrifice for us to pay it off that fast but we wanted to be done, partially to save on interest but mostly so we could finally be debt free and able to aim a lot of money towards our next goal, home ownership.

Did getting student loans work out for me? Yes it did. I have a college degree and a good job. I could have borrowed a bit less and lived cheaper but there is nobody to blame but my own self for that one.
As for student loans on the whole; It is worth noting that my generation are receiving far fewer grants and costs are much higher than when previous generations pursued higher education. Forcing colleges to get their costs under control would be worthwhile though it might mean *gasp* cutting needless admin positions, making being a professor a bit less cushy, not constantly building new stuff to then tear down perfectly functional old stuff, etc. We are really getting a raw deal but I definitely do not let the 22-30 year old age group get off blame free.

Despite their intelligence and behavior on pretty much every front, legally speaking 18 year olds are adults.  That means they can make adult choices, almost always stupid ones. College is a great experience in a lot of ways but at the end you need to be able to get a job. Getting a degree in underwater basket weaving is stupid.  Going to an expensive private college to get a degree in education or communications or some social science is not necessary, and if you are financing it via student loans it is downright stupid. A beginning teacher making 32k a year or so can’t afford big student loan payments.

Student loan forgiveness is a big gripe of the “99%” crowd. I have absolutely no sympathy that the choices they made did not work out well. Mostly I think we will find the ones who are in real trouble made stupid choices. While I do think that structural changes (controlling costs mostly, along with schools helping kids not being pimps for the loan industry) should occur they do not absolve individuals of responsibility.

Saturday, November 5, 2011

Crazy Market and Appetite for Risk

I bought a little bit of silver about a week back. I was happy that spot was down a buck, since then spot is down another 9 dollars. I sure bet right on that one. It is probably a nice “dip” if you didn’t blow your wad a week ago like I did. Stocks are down significantly as well. I think it is pretty apparent that Europe is nowhere near done with its fiscal troubles and a Greek default is getting more and more likely.
I don’t know what will happen but we are probably in for a wild ride.

Interestingly I bought stocks awhile back. I do not regret that decision. On the long timeline I am looking at stocks are probably (more so in certain areas) a bargain. However in the short run I do not have a clue what is going to happen. Interestingly a co worker recently bought a bunch of stock on credit in the last couple of days. He figured they will bounce back and he will make some easy money. I wish the guy the best.
That got me to thinking about appetite for risk. There is of course a definite relationship between risk and reward or more accurately put potential for rewards. Also leverage (which we normal people call debt) lets you theoretically raise profits and when it works well it works very well indeed. However when it works badly things come crashing down like a house of cards. Instead of your plan going to heck, your plan goes to heck and now you have to service this debt.

I hesitate to say what is right or wrong for anybody. It depends almost entirely on what you are comfortable with.  I’ve heard it said that if something will leave you up worrying at night you should not put money into it and that makes sense. There is definitely a human component there. I have some appetite for risk as I invest in stocks and relatively more risky areas like energy and in developing markets. However I do it with cash, cash that while it would not be ideal I can afford to lose. Worst case if I take a big hit (especially now while we are relatively young) we call it an expensive lesson and move on.  Personally for me it is about a specific pool of money for a specific thing.  Also since we have some of our bases covered by putting some money away for emergencies and not having debt we have more options and can afford to put money toward something with an element of risk. The money we need to feed ourselves if my income is disrupted is not sitting in some stock that might be wildly down (or up) at any given time.

Friday, November 4, 2011

Picture of the Day


When the news guys talk about those big numbers it sounds made up to me. Sort of like a kid on the playground yelling "I hate you a gazillion" to another kid. Broken down into numbers that make sense and equate to a family budget it is quite scary.

Friday, October 14, 2011

Stabilize the Debt: An Online Exercise in Hard Choices

Play The Debt Reduction Game. I did it and found it pretty interesting. Well worth looking at. The rather obvious conclusion I came to is that there is not one silver bullet solution to this problem and that lots of painfull cuts are going to have to be spread around.

Saturday, September 3, 2011

Comment Reply- Security vs Profit


·         on priorities
Anonymous said...

If you have cash to pay for a new car, don't.
Take the loan for 0% or 1.9% etc. Let your cash stay in a high interest or dividend paying investment and earn more than you pay out.
Paying cash for large items is dumb when your money can work for you and not against you. ~~NGM~~
TOR here: I won’t say that I necessarily disagree with you but do have some reservations. Lets break it into cars and homes. Of course there are other things one might choose to finance (however you shouldn’t financing toys is not prudent) but they typically fall in the car price range. We will talk cars.
First of all you need to know yourself. Are you a person who has the self discipline to have a good chunk of money sitting allocated for one thing (the car, etc) earning interest and pay the loan from that account? Would it slip into the general fund or get siphoned off for other things? Some folks have that discipline and others don’t, it isn’t a mark against you if you don’t so long as you know it.
Secondly let’s get on the same page when it comes to the numbers we are talking about. Are we talking a high interest savings account, CD ladder or something else with a guaranteed payout and no (aside from massive inflation, end of the world, etc) risk of principal? A 5% savings account (a thing of the past) is very different from “on average the market earns 8%”.
For most people, most of the time the rate you will be charged for interest on a loan is greater than the amount you can get in a guaranteed, no risk of principle (aside from massive inflation, end of the world, etc) payout with the liquidity to make a monthly payment. Auto loans can be an exception when they do the .09% to 2% super cheap loans. However, even then, beating it by enough to cover the various fees involved in a guaranteed, no risk of principle investment.
Now if they offer you 0% then a very legit argument could be made to take it, even if you are just going to have the money sitting in a savings account available for other purposes. Some folks I know who have done very well with money (both in earning and managing) typically pay cash for cars. He needed a 3rd consecutive Toyota commuter car (he puts a lot of miles on them) and planned to pay cash which is what they do. When they offered 0% he decided to take it and hold the balance of the cash.
Homes are a bit of a different thing. It is a much bigger situation with bigger implications. If I finance a car in the above scenario and something goes sideways (bank fails and my money is tied up for months, etc) it would suck but I could adjust things around and make the payment. Homes are much larger and the implications of that getting messed up are equally large. Typically paying off your primary residence is a prerequisite for retirement. It is also a huge step towards financial independence. Also a home is where you live, not something you drive. Worst case if you can’t pay for a car and it gets repossessed that sucks. A bit hit to your credit and you’ve got to figure out another set of wheels. However in a month or two you will have gotten over the personal feelings and figured out another set of wheels, hopefully a reliable beater paid for with cash. A home is where you live and a huge part of your life, particularly if you have been there for awhile.
With this there is definitely a trade off of security vs. profit. One in the hand vs two in the bush as they say. Personally I will take my one and lock it up somewhere then post an armed sentry. I just plain do not like owing people money. I like to know that as much of my future wages as possible can be allocated to meet my basic needs (food, shelter, fuel, etc) or toward whatever goals or desires I have at the time. Having money in an account set to make scheduled payments is cool if it all falls together right but in general just paying cash for stuff works out best. As part of this I know what is mine will continue to be mine if my income (or what it will buy) changes drastically. Nobody is coming to take my car if I become broke.
Well I hope that lays out my thoughts. Thank you for the interesting discussion.

Sunday, May 15, 2011

But I don't make enough money to save

As I write this our government is looking like it may very well shut down. This would be an issue as the United States of America is ultimately, through the US Army my employer. I am not particularly (scratch that and insert at all) worried about it. Why am I not worried? The reason is that we save. We could live without any change for a pretty long time without me getting a paycheck. Certainly month not weeks. After that we have some metals and other stuff. Really if the government is shut down for long enough that it becomes an issue for me we would have far more serious problems.
 
However it has been interesting. Wifey is socially active via real life and internet forumns with a lot of military wives and some of them are completely freaking out. They will legitimately not be able to food on the table and gas in the car. Wifey noted interestingly that these are the same people who immediately spent their tax returns on computers and fancy cell phones and TV's. Also the same people who drive brand new cars they can't afford.
 
There turned into kinda a classist/ economic split which is what I am here to discuss. I think the idea that folks can't afford to save because they don't make enough money is really stupid. Do people making less money spend more by percentage on the basics of shelter, food and fuel, of course. However even the lowest paid American's have a reasonable amount of disposable income if you look at what they truly need.
 
The real issue is that the less you make the more important saving is. The reason is that while to a certain degree people who make more money can in theory have larger emergencies (home repair, more expensive vehicle repair, etc) most people seem to have the same kinds of relatively small (say under $500-$1,000 to have a number) emergencies.
Case in point. I make pretty average money (somewhere in the 50k ish range) and can absorb sporatic $400 (it just seems to be the number for us) out of the blue issues without raiding savings or putting it on credit. These somewhat normal emergencies and ones under that dollar amount can just be absorbed into the normal operating budget. A random $1,500 emergency would likely send us to savings while someone who makes 100k might be able to make it work by juggling things a bit in the normal operating budget. On the other side of the coin a student or single mom's 20k income might only be able to absorb $100 in a typical 2 week period.
 
The reason that saving is more important for that single mom then for me, and more important for me then somebody who makes twice as much, is because she can absorb fewer incidents then we can.
 
I think it is important to talk abotu savings as percentage of income then raw dollar amounts. For a single mom with a small income saving $50 a paycheck is a real accomplishment while for me it would be at best a very weak effort. That is why saving a month of cash expenses or 2-3 months of income is more meaningful then a grand and 10k or whatever.
 
I think that the cold hard truth is it is a lot easier to say you will save later when you make more money. It is easier to save later the same way that tomorrow you will go for a run and not eat fast food for lunch. It is easy because it is an excuse and you don't have to do anything today.
 

Sunday, May 1, 2011

Paying Off Debt or Holding Cash

This topic came up on a blog I really enjoy recently. Since I am having a rare chill day and hording posts it seems like something to write about. First I will tell you what I did and then we can have some discussion. Personally I stashed a pretty solid emergency fund (equivalent of around 4+ months expenses) before looking to make accelerated debt payments. I am not saying it is right for everyone but that is what I actually did. The other logical route would be going Dave Ramsey style ie stashing a small emergency fund of $1,000 (or a bit more or less say $500 if you make less than 20k a year or $2,000 if you make more than 80k) to catch small emergencies then attacking debt like crazy.
I think interest rates are a big factor. A moderate 5% student loan could get minimum payments while you horde some cash but AMEX or Visa at 18% would bury you. You would gain almost no ground making minimum payments. The next big factor would be the projected payoff date based upon what you could toss toward the debt every month. The longer the period of payoff the higher the chances of something happening where you would need more than $1,000. If you could be debt free in 4 months then maybe just go for that but if it will wake a year or two I would want more savings.
The thing is that (especially with unsecured debt) you can choose not to pay at any given time if things get real bad. Lets say I have been able to put away 5k over the last 6 months. Either I saved it towards an emergency fund or used to pay down debt which lets say averages 7% interest. BAM something bad happens; you lose your job, get put on half time, the transmission in the car goes out, you have medical expenses not covered by insurance or whatever. I would be inclined to say you are better off with the cash to put food on the table, gas in your car, keep the lights on and a roof over your head than a smaller balance or even lower debt payments. The thing is that you can keep food in your stomach's, fuel and energy going and a roof with cash while lower debts will not do that. Worst case you can put off (yeah it is bad but less so than starving or being homeless) paying back whomever till things improve but you can't take back that money to eat on.
I think that even if you exclude regional disasters and hyperinflation I am comfortable trading the security of having the means to independently afford to survive for awhile for paying a bit more interest.
One could split the difference. Save a little bit then pay off the credit cards. Save a bit more then attack the car loan, etc. That might be the most balanced idea. However I am paranoid and would rather hold the cash.
Thoughts?

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.

Monday, March 14, 2011

Debt Free

Today we became completely debt free.  The only debt that we had was Ryan's student loan and we made the final payment this morning.  We started a ridiculously aggressive payback plan almost a year ago.  There were lots of months when we were tempted to just make the minimum payment but we stuck to the plan completely and it has finally paid off.  It feels like a weight has been lifted, we're free!

Thursday, February 17, 2011

Entitlements and Gender Roles; Alternate Title How To Upset Every Reader In A Single Post

This morning I was able to watch the news while doing some cardio which is something I enjoy now and then. The topic of entitlements was big this morning on the news. It has become abundantly clear to me that, even in this typically open and rational venue entitlements are a topic on which a rational conversation cannot be had.

We are at or past the point where it is becoming abundantly clear to any rational person that the numbers do not work. Unfortunately we are long past the point where there are easy, gradual and relatively painless options to make them work. The window in which there are viable options with only moderately painful and economically damaging outcomes is probably closing fast. I fear that by the time we are willing to make genuine moves to deal with this problem things will be at the point where there are few, if any (likely just choosing who gets the shortest end) choices left. You would be well advised to think about how this could play out and prepare for what you see coming.

Patrice over at Rural Revolution has been talking about gender roles for awhile. It is my observation that pretty much everyone wants to pick and choose among different traits to get some sort of a hybrid that suits their desires. The normal life part of this is just finding a mate that suits us and figuring out a division of labor that suits both parties. However sometimes the hypocrisy is so problematic or blatant that it is worth talking about. It pretty much goes without saying that feminists think they should be able to do whatever they want but men should act in certain ceremonal ways. For example I would wager a hundred dollars that if I was in a car driving down the highway with four feminists on a cold stormy night and a tire blew out it's this guy that would change it. Furthermore if my feminist buddies and I got to our destination, went to sleep and woke up at 3am to a wierd loud noise in the living room I bet it would be me going to investigate. Now it is time to take a crack at us guys.

Many men want to have our cake and eat it too. We live a lifestyle (wives do of course have a role in this too) that requires most women to work full time outside of the home but still expect them to be homemakers. Somehow they are supposed to keep the house clean and tidy as well as cooking dinner and numerous other tasks. We wonder why the house is a bit messy, dinner is some pre packaged junk and kids are poorly behaved. The answer is that instead of taking care of that stuff, cooking a good meal and raising kids they are at work and kids are in daycare 50 hours a week.

If there is anybody I haven't upset just know your state smells bad and the local sports team is a bunch of whimps.

Have a good day

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.

Wednesday, January 5, 2011

New Years Resolutions 2011

I am doing things a bit differently this year. Breaking goals down Suze Orman style by people, money then things seems to be a good way of categorization. Some goals are going to be conducted consecutively. For things I took a stab at prioritization.

People:
1. Maximize family time. I think spending at least a hour of good undivided family time a day is doable on all but the longest work days. More on weekends.

2. Take better care of myself. I need to work on getting at least 6 hours of sleep even when I get off work late. Also I need to eat more regularly (I have started to get busy and just not eat) and like most people could also consume more green stuff. Find a suplimentary (to regular PT) exercise program that I can really stick with. I got busy and this goal sort of ebbed/ flowed and then just slipped away over the past year. I'm not in bad shape but could definitely be in better shape.

3. Better prioritize tasks and be more efficient.

Money:
4. Become debt free- Should be done in by the end of March

5. Fully fund ROTH IRA's for Wifey and I.

6. Add at least $500 (ideally $1,000) to our emergency fund.

7. Buy some silver. It is somewhat flexible but am leaning toward 90% coinage. I hesitate to say an exact amount because as I noted last year price swings change those goals from being realistic to unattainable.

8. Start funding Walkers college education.

Of course we will also continue to not make stupid choices.

Skills and Education

9. Study insurgent/ guerilla/ partisan tactics. This has the added benefit of being 'red hat' stuff for work.

10. Get better at first aid/ trauma stuff.

11. Shave with a straight razor. Sharpen it also. (implied task, get a straight razor)

12. Work on making antennas for world band radio’s and tuning into a variety of stations around the world.

13. Get better at using Excell. Particularly writing formulas to get the most out of what the program is capable of. This will help me with work, blog stuff, preps and life.

14. Learn more about IED construction, emplacement and use.

15. Read a couple of significant books. I wouldn't say classic but but old, noteable type stuff. In particular Edward Gibbon's The History of the Decline and Fall of the Roman Empire is on my list.

Alternates- Skills are an area where things seem more prone to changing due to factors beyond my control. I decided to come up with a few alternatives against that scenario.

Get better at making flat bread

Learn some HTLM

Get better with Powerpoint

Things:

Family/ Life:
16. Probably going to purchase another vehicle. A fairly low mile mid sized SUV with a decent sized 6 cylinder engine (3.5Lish or above) and 4WD. It goes without saying that we  will pay cash.

Prep Stuff:

I did a couple of things differently here. I broke stuff down by category. Also if you notice there are numbers after the goals. Those numbers are a tenative plan on what order I will acquire this stuff.

Force Protection Stuff-

17. 1x bullet proof vest. Probably class II or IIIA concealable type-2

18. 3x gas masks-9

Firearm Stuff-

19. Folding stock for my AK and a US palm grip-1

20. 500 rounds of .38 special-5.1

21. 500 rounds of 12 gauge buckshot-5.3

22. 1 case 7.62x39 hollow points-5.2

23. AK spare parts-11

24. Buy more mags. In particular a few more Glock happy sticks and a half dozen each for the AR and AK. I am not in a bad place but if I happen to have a couple extra C notes lying around in the late fall this is where they will go- 12

Food and Water-

25. 4x Berkley black filters-3

26. 1x Katadyn replacement filter-7

27. Nice solar oven-4

Energy and communication-

28. Bigger and better solar trickle charger (folding mat type)-10

29. Compact world band radio-6

Random

30. Get 2 spare Cold Steel folding knives (my EDC) and a leatherman for a rainy day-8

What are your thoughts about my goals? Do you have goals? If so would you like to share them in a comment or a guest post?

Sunday, December 12, 2010

"There are only two ways to destroy a nation one is with a sword, the second is with Debt."
-John Adams

Wednesday, November 24, 2010

Have a Wonderful Thanksgiving and a Reasonable Christmas

My sister has been able to come over here for awhile and will be here for Thanksgiving which is pretty cool. We are going to have a quiet hodge podge Thanksgiving tomorrow. I'm sure looking forward to a relaxing day full of laying around, good food and drink.

It is about the time that if you aren't a real early shopper you are getting into gear for Christmas. I urge you to only spend what you can honestly afford. People who are worth giving to wouldn't want you to spend money you can't afford on stuff for them. Here are some ways that have helped us to spend reasonably.

First is to crunch the numbers and figure out what you have to spend. This sounds so stupidly basic but it is impossible to spend within your means if you do not know what your means are. It could be $50 or $5,000, the number isn't so important as having accurately identified what you can afford.

Next is to stick to the number you have figured out. I find it best to separate this kind of pool of money lest it intermingles with normal operating funds. You might then find yourself with a lot of nice presents and short on rent or with some extra groceries or fun money and not much for presents. In any case either way it is not the desired result. Maybe use a spare bank account or something. If things are real tight it is hard to bust a budget if you have an envelope of cash.

To make that amount I find it very helpful to identify who you are buying for and come up with a pretty firm amount you can spend per person. I'm talking you are buying for X people and have Y dollars so assuming you want to spend the same amount on each person it would be Z a piece. Of course you do not have to spend the same amount of money on each person. If you want to spend half your budget on one person then divide the rest up that is cool so long as it all adds up. The reason you need to do this is so that you don't realize you've spent 3/4's of your money on 1/4 of the presents you need to buy and end up going over to close the difference. I personally suggest for those on a tight budget keeping a reserve of 10-20 percent. This is helpful first because especially in places with sales tax everything costs weird amounts. A thing that says $20 on the tag is $21 out the door which is problematic when your $200 budget needs to purchase 10 gifts. Also there is always that one time when you find a perfect gift for someone which is just a bit more then you planned.

Have a wonderful holiday season but don't go broke doing it.

Tuesday, November 16, 2010

The Debt That Binds

I work with a guy who doesn't like his job much. He would like to do something else with his life but he can't. The reason he can't is that he is in debt which combined with a relatively high lifestyle means they couldn't afford the drop in income. His debt is binding them to a job he doesn't want to do any more.

The thing is that debt is a promise against your future earnings. You are literally promising to pay someone money you have not earned yet. Of course there is the matter of interest. That there is a whole industry based around people borrowing money should indicate to you that it isn't a sound fiscal move. However we can almost think of that secondly.

Also as Mayberry noted there is a certain amount of gamble present in that you are betting you will still be in a situation where you can make X payment in a couple months/ years/ decades. Every unique situation is different so for some folks that gamble is almost a sure thing as your income is quite secure. However for others it is a real craps shoot.



An implied part of promising money you have not earned yet is that you will make choices that will continue to make that money available. This limits your options. You might want to quit doing what you do now and would face at least a short term income disruption. Maybe you want to get out of the rat race and into a slower paced job or a different area. Maybe you want to live in a van down by the river or join a cult. By taking on debt you drastically limit your future options. From a certain perspective a nice car (of course on a 90 month loan), in a nice house full of nice stuff is a fancy cage.

I am not saying that you should take a vow of poverty or simplicity or anything. I am a pretty hard core capitalist and truly believe that greed is good. I want you to have nice stuff and a wonderful life. It is just that I want you to know what the non economic cost of debt (doubly so to a high % of what you earn) will be so you can make an informed choice. You might offset doing it a bit slower and less fancy by being rewarded with a heck of a lot more freedom.
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