Showing posts with label emergency fund. Show all posts
Showing posts with label emergency fund. Show all posts

Friday, September 8, 2017

F You Money, or Maybe Just I Quit Money

I am going to curse in this post. If that offends you I am sorry.

Our buddy Commander Zero brought this phrase into my vocabulary. Today I got bored and googled it. Basically Fuck You money is an amount of cash where you would never have to work again. Not do anything you want forever but live at a certain income level without needing to work.

Obviously what constitutes fuck you money is based on a multiplication of your desired annual income so it depends on the lifestyle a person wants to keep.  Fuck you money for a guy who lives in a trailer in the desert on 20k a year would be a lot less than for me in a fairly average middle class income. What would be F U money for me would be a kind of bad weekend at the tables for Dan Blizerian.

We could calculate this a couple of ways. One would be strait years X dollars but realistically unless you are pretty old we are talking about living off of interest. So you need a chunk of cash sufficient to pay interest at the level you would be planning to live at. We could debate this realistic interest number on a balanced portfolio (I have seen 8% a lot) but lets say .05 so some rolls over for inflation protection. Say you want to make 50K a year and figure your money can make .05% so  you would need an even million dollars. A smart person would realize inflation exists so to keep the same relative lifestyle it will obviously cost more in the future. So say you keep some interest rolling into the principle.Or if we want it to be 100k annual income we are talking like 2 mil.

Now 1-2 million dollars is a lot of money. It is not like crazy Warren Buffet/ Bill Gates money though. Not unrealistic if you have an OK income and a good savings plan or the ability to get a couple of big, but not insane, pay days.

That got me to thinking.

In Dave Chapelles recent comedy special on netflix, which you should check out if you like that kind of thing, Dave describes Kevin Hart as having "Shut the Fuck Up Money." Like he could tell a partner to STFU an they would deal with it because he is ridiculously rich. Dave then says that "he has please be quiet money at best."

So in this spirit I got to thinking about what would be a short term goal on the way to FU money? I realized I already knew the answer.

I quit money. Not a place where you can burn every bridge an never work again but one where you can decide you do not want to take the transfer to Los Angeles or that you are tired of putting up with a terrible boss and want to just find another job. Or maybe there is a major life event going on and you are going to take a month off, whether the boss likes it or not.

Then I realized this is simply a good emergency fund. The smart money people say 3-6 months expenses is a good emergency fund. Some in this market where people, especially upper middle class older people say 50+ can be unemployed for a long time, say 6-9 months. Obviously your individual situation matters. How vulnerable you think your situation is, how much back up you have (does the Mrs have a great job or is she a stay at home mom) an how easy it is to replace a job where you are all matter.

I think a fully funded emergency fund in cash (bank or safe) or items that can be immediately converted to cash like silver and gold gives you a lot of options. Also it is a reasonably attainable goal for most people with some savings and maybe increased earnings.

Preparedness and normal life event benefits aside being able to politely tell your boss you quit or not take that new client/ contract an know you have some wiggle room to find something else sounds pretty darn nice. Also this seems like a good motivator to save and earn to stash that cash.

 Got emergency fund?

Wednesday, July 26, 2017

Realistic Emergencies- Money not Guns and Gear and Buckets O Food

Recently I had an emergency. I didn't need my pocket rocket .380 or my trusty AR. Did not need buckets of rice and beans or body armor or night vision. Know what I needed, MONEY!

Our friend commander zero talked about this recently, well more or less. 

From losing jobs to surprise car repairs or medical problems or legal issues that require a lawyer the common denominator is these problems cost money. The way to solve them is with cash. Yes a bunch of food stashed is a good thing and can displace some expenses but good luck sending your landlord or bank 200 pounds of rice as payment!

One of the blind failures in survivalism and its hipper more politically correct brother preparedness is focusing too much on unlikely or outright fantasy (the classic grid down collapse apocalypse porn stuff) at the expense of failing to adequately prepare for much more likely real life events. 

Got Emergency Fund?

Wednesday, September 14, 2016

Cash As A Survivalist Tool

I don't think we put enough emphasis on cash.

I carry a knife and a lighter and a gun pretty much all the time. I use the knife and lighter for everyday tasks but the gun just kinda sits around. Odds I need a couple hundred bucks cash all of a sudden are probably higher than needing the gun.

If we look at realistic emergencies that are likely to befall us most of them will go a whole lot better with cash. Are we more likely to need a few hundred bucks during a regional disaster or a dozen buckets of wheat? Sorry folks but it is the cash.

Of course everything needs to be in proportion to your life. For an average guy a couple hundred bucks in his wallet, a few hundred in his BOB/ GHB and several hundred or more (say a months cash expenses) in the safe at home is realistic and covers a lot of bases.

Those numbers were for an average type income. For a lower income person cut those amounts in half. For a person with higher income and expenses add more money accordingly.

In most realistic situations cash is the way you will buy the goods and services you need.

Someone is inevitably going to say "cash will be worthless in a hyperinflation scenario so I use precious metals/ beads/ etc all". This person is ignorant. First because you aren't going to be able to readily trade those things in MOST REALISTIC SCENARIOS. Second of all cash is essential in the beginning of that type of situation, read some FERFAL. You just spend it. Third we are talking about a relatively small amount of money. Say add it all up and maybe a months income. If you wanted to keep however much gold and silver put back with the cash I would say that is fine.

Got cash?

Tuesday, March 1, 2016

An Email on Troubling Financial Times To Come

I saw you were talking about financials. My Redacted is working on a consulting gig with a too big to fail financial firm and they are in full junk sell off mode getting ready for the bottom to drop out. By the end of the year it will be ugly. Blood bath ugly. Any capital not invested in an appreciating item will lose 30-40% of it's value to inflation. Choose wisely. 

-A regular Reader

In this type of circle emails like this come up. The reason I am sharing this one with you is because of who it came from. The person is one I have known as an invisible friend for awhile now. A smart prepared individual who is almost always right. I'm not saying they know EVERYTHING but they keep their mouth shut about stuff they don't know about. They are also not prone to hysterics in a screaming The Sky Is Falling Alex Jones sort of way. It is complicated that I won't say who it is but they are frequently a positive presence here and in the larger blogosphere. For their personal OPSEC I am not sharing any of their info.

What COULD you do? Well you could relook your overall financial position. Think about getting your money a bit more accessible. Since interest rates are so low you might just keep cash in the gun safe at home. Maybe you want to put some money into precious metals. Right now prices are pretty good. Think about putting some money into tangibles you could barter or sell as needed. Turning a new in box Glock 19 into cash is easy, ditto a case of 5.56 ammo.

So what should you do with this? I cannot answer that for you. I am obviously not a financial advisor or an accountant and I didn't stay at a Holiday Inn last night. Your own situation is unique and so are your tolerances for risk as well as your goals. The right answer for me might not be the right answer for you. If you start talking about 401k's and IRA's there could be significant tax implications. Of course the advice to keep a cool head and not make emotional decisions out of fear is always good.

Be sure to consider how a worst case scenario economically would affect you. Also be sure to consider what things, as they probably will, going on more or less normally would mean. Look at both of those for your current situation and the one you may decide to move to.

What am I going to do? I am still thinking about it. This is a situation where sleeping on it for a couple days is fine. I am moving money to a place it is easier to transfer/ spend. I am also thinking about putting a bit more money into precious metals, both silver/ gold and lead/ steel. Whether I do that by trading dollars for metals or just shift my ratio in time with new purchases remains to be seen. I need to think about it.

So those are my thoughts about that. What do you think?

Notes: Dry fire- FAL ready up's. Time stayed under 1 second for the most part. PT- Easy run then combatives tonight.

Monday, January 13, 2014

Crystal Ball 2014 Edition

This is the time of year where I talk about what I see coming down the pike. First I will say that I do not have a crystal ball, yadda yadda yadda; then I will immediately follow that with some predictions. Of course it is worth noting that I am not a doctor, lawyer or financial advisory and I didn't even stay at a Holiday Inn last night. Basically my thoughts are my own so if you choose to follow them all of the risk is on you; the only good part is that I don't take 5% off the top and a third of your growth plus monthly fees.

Indicators will be polarized as to whether our economy is recovering. Some indicators will keep growing because eventually folks will come out of their shells; ex people will buy homes, folks move and families reach the time where buying a house is right for them regardless of the market. The biggest single divide between them will be how easily a number can be inflated or manipulated. Example the stock market will probably do well but the number of people out of the work force will increase and the number in crap jobs (low wage, permanent part time, no bennies high turnover) will increase even more.

I fear that rule of law will continue to diminish on many fronts. Example if a young white thug punches an old black person for no reason it is a hate crime but if a poor disadvantaged urban youth does the exact same thing to a cracker it's somehow not a hate crime, barely a misdemeanor.

If a liberal breaks a firearms law it will not be prosecuted but if a conservative does they will be prosecuted to the fullest extent of the law.

Crime will generally rise but it will be kept quiet in the media and obscured in official reports. I see larger organized robberies including the home invasion type to increase as more people, some of whom have a military background, are unable to gain easy legitimate income and may even be pushed to desperate measures.

Increasingly economic winners and losers will not be decided by good business sense or keen competition but government connections deciding winners and losers.

Generally your job prospects are good in government and get better at higher levels (.gov, .state, .county, .city) with the exception of the military.

We are facing a downsizing not seen since the Clinton era. Lots of soldiers and NCO's as well as company and field grade officers, myself  and American Mercenary included, face the risk of being involuntarily separated. They may cut up to 20% of these officers, of that population probably 6% have derogatory stuff (disciplinary, really bad evaluations, etc) and will be easy pickings but the rest are going to be fully qualified Officers who are probably combat veterans. I'm not too worried largely because there isn't a huge point in worrying about it. I'll get my records strait and if they say I'm fired well I'll be sad then move along n do something else. It would be a weird/ rough/ poor year or so but we'll figure it out. It helps that we've made choices (college, saving, low debt load) that would help if need be.

I think inflation is going to keep eating away at our real purchasing power. Say we call real inflation 6% (to choose a number) well if you let that roll for 3-4 years it hurts a lot. Eventually in the next few years, or maybe sooner, it will reach a point that the government can't keep the proverbial car between the lines on the road. The best case I see is the late 70's and early 80's stagflation, the worst is pretty bad.

The whole health care mess is going to continue. I suspect the more we see of this law the worse it will be for average Americans. As it becomes clear the middle class, specifically it's younger members are subsidizing the working and not working poor to benefit the medical insurance industry many normal people are not going to be happy. This could be sadly entertaining to watch.

I don't think our "representatives" are going to get any better at working together to solve actual problems.

What could we pull from these predictions in terms of actionable ideas? (Again noting I'm just a guy with a blog, don't bet the farm on something I think.)

It would be prudent to get yourself medically squared away, especially if you currently have decent insurance. Get that surgery you've been putting off, get that knee fixed, fix that crown that is about to go, get lasic or family planning type surgeries if you want them. Simply put I do not think health care is going to get more accessible, cheaper or better in the near future so it would be prudent to catch up on whatever you need now.

Along those lines if you have been planning a major purchase such as a home or some land that will require credit I would look hard at getting that done. Rates are climbing and in the mid term (say 3-5 years) I can't see them getting better.

Replacing things large and small that are on the verge of going out while you still have an income so it is a minor inconvenience vs a major problem would be prudent. It could be the daily driver that you know is about to go out or a pair of boots from the 80's held together with shoe glue. Right now if these things break replacing them is unpleasant to some degree, on the high end you might have to put off a vacation. On the other hand if in 9 months you've been out of work for 6 months and are barely keeping a roof over your head replacement could be impossible.

Inflation both hidden (smaller servings, 10 cans in a case instead of 12, etc) and not so hidden will keep pushing food prices up. Stuff like coffee, rice and wheat , canned food or long term emergency kits are simply not going to get cheaper.You might want to reread or read The Alpha Strategy, the PDF is all over the net, for some ideas here.

If there is gun stuff on your annual list I would recommend pushing it towards the front. When we get close to the mid term elections the situation could get ugly. Maybe you want a new carry gun or Momma needs a 20 gauge, whatever. Ammo isn't exactly where I'd love it to be but with 7.62x39 in the $230/1k range and good 62 grain 5.56 in the low 40 (42) cent range it's probably time to weigh the chance of prices dropping another 5-10% with the risk of things going nuts. Personally I've been buying 7.62x39 for a couple months and am going to get some 5.56 soon. Prices on shotgun and hunting rifle (30-30, 30'06, etc ammo have stayed more or less flat so that is a no brainer to buy now. Anyway I would look to be done buying guns, ammo and mags for the year around the middle of summer at the latest.

What to do with money these days is a fun question. If you are smart you save, period. The old saying that if you always save 10% you'll never be broke has a lot of merit. Personally I think the stock market is inflated, dependent on continual federal government crap bond purchases and generally a bad place to put your money. Savings accounts are paying interest that is effectively (when you count inflation) negative. Sure you need at least some of the Emergency Fund in the bank in case you get munsoned in the Philadelphia Airport for 4 days or drop the transmission from the family hauler 2 states away but beyond that it's a bad place to park cash. So what to do with it. Here are a combination of my thoughts and things we are actually doing.

Pay down debt. The conventional wisdom is that paying down debt in an inflationary situation is foolish because you can pay it off later with cheaper dollars. The problems with that idea are 1) it presumes you are making more money to keep up with inflation. If paying off the debt is unpleasant now imagine when the grocery and fuel bills double but you make the same amount? Also 2) Looking at ways to make money or at least save money if you put cash towards a loan with a 5% interest rate you are saving and in effect making back 5%. Also 3) the pay it back in cheaper dollars plan presumes you keep your job/ income. High inflation makes for ruinous economic circumstances. Even if the $1,000 mortgage paying is worth $600 in real dollars it's hard to pay when you are unemployed.

For goodness sakes pay off any adjustable rate debts. Look, rates are going to rise, I cannot say when but they will. To people whose vehicles or homes are dependent on paying a loan whose interest rate will likely increase significantly it will be ruinous.  If you listen to nothing else I say get those debts paid off or turn them into fixed rate loans. The only exception I see is a loan/ card/ line of credit that is at an advantageous rate WHICH YOU CAN PAY OFF AT THE END OF THIS MONTH OR ANY GIVEN ONE IF NEEDED.

-Buy food and ammo. Get all you may possibly need (obviously considering the shelf life of food) and maybe some more. During firearmagedon a guy with a case of 5.56 and a case of 9mm set aside to sell could have done really well for himself. In coming potential events a guy with a couple hundred new in the package PMAGs could double, triple or even quadrupole his money.

-Put money into yourself. Take a class to learn to use a combat rifle by a pro like Max Velocity, get a certification to prove to a stranger you know how to do something like weld, work on engines or whatever. Get a degree or a second degree to improve your competitiveness at the current job or get a better one. Remember nobody can take away what is in your head.

-Put money into things that will let you earn money/ barter. If you are a welder get a genny and a setup to do small jobs on your own. If you are a mechanic buy tools and spare parts. If you are a carpenter buy tools, nails, hardware and lumber. If you can reload any type of ammo stock deep in powder, primers, lead and all manner of casings. If you can garden stock seeds deep for your own use and trade.

-If you have big money there are some bargains out there in real estate. A person could buy a couple duplexes or 3 small houses that are in reasonable shape in decent neighborhoods and get a modest reliable income out of them. When said person eventually sold those homes they would also benefit from appreciation of the property.

Along the big money lines I would look at relatively low upkeep businesses: trailer parks, storage facilities and stuff like that with a proven track record of earning money. In this situation do consider the necessity to have the time to do it yourself or cost to have a competent manager in place. If you don't have managerial desires consider the possibility of buying a share of an existing business. Say Bob's storage is a productive profit earning business but they can use a cash influx to buy 5 acres next door that are for sale and expand, you put up the cash and Bob gives you 25% of the business, win/ win.

-Put money into things that will improve your situation. Build a chicken coup and get chickens, put up a fence you need to use part of your land that has been fallow, buy a milk cow, build some raised beds to grow a bigger garden, put in a good road on the back 40, etc. You get the idea.

-Purchase bargains on useful items. If Joe 6 pack is going to sell Daddy's .357 mag, his mall ninja AR, a good generator or a toy 4 wheel drive truck that screams Bug Out Vehicle fast to make bills somebody is going to show up on short notice with cash offering 70 cents on the dollar, it might as well be you. Either you can flip the stuff to make a quick buck (since you can wait 30 days for a buyer willing to pay 95 cents on the dollar) or you use the stuff for awhile and keep it to sell on a rainy broke day.

-Put money into things you are going to need at some point. Maybe your kids will need AR's to go play with Dad on the weekends or sooner or later your farm/ business is going to grow and you will need a larger generator, another vehicle, a piece of equipment or something. Maybe you've been putting off buying a .338 Lapua for awhile. I don't know what applies to your situation. The point is to look towards future purchases and make them with today's available dollars ideally hiding them from inflation and thus saving money over the future cost of said item(s).

Anyway those are my thoughts on that. What do you think is coming in 2014?

Wednesday, October 30, 2013

Orange Jeep Dad's House Burned Down: A Sad Reminder

I don't really know this guy though we generally flow through similar circles. Only so many blogs one can follow I suppose. Anyway he finally made the big move to the country then his house burned down. There is an effort to gather donations for the family if you feel so inclined.

Thankfully no lives were lost but a whole bunch of their stuff is gone. That still sucks a lot. It really sucks for normal people but for survivalists, gun enthusiasts and "tangible investors" whose stuff is far less likely to be adequately covered by insurance it could be truly financially terrible. Additionally I would suspect wood homes that heat with wood and are far from the nearest fire station (which describes many survivalists) are more likely to have catastrophic fires than one in the burbs who heats with natural gas.

The same way that we learn from peoples mistakes  we can learn from bad things that happen to others towards the goal of mitigating that type of event's effects should it strike us. Note I am in no way faulting Orange Jeep Dad or his lifestyle here. Sometimes bad things just happen in life.

To be the guy who comes out, maybe a bit too early, and says it this is a harsh reminder about why you need caches and an emergency fund. I certainly hope OJD had these things in place. Lots of things can happen in life from theft to floods or other natural disasters, all the way through the various end of the world events plus well fires. Spread your stuff out and keep some cash put away just in case.

Got Cache?

Thursday, October 24, 2013

Glad To Hear Rourke Listened About Emergency Funds

John Rourke raided his Emergency Fund recently. I'm glad he listened and set some money aside. While that's never fun it is the reason we set aside emergency funds. My thoughts on how he could reestablish it are based on what we have done in the past.

"Glad to hear the savings helped out! As to (re) funding the emergency fund.

What we do is consistently (probably 9/10) save a given amount each payday. For the sake of simplicity lets say it's $500. Say a hundred and fifty goes to retirement strait off the top which leaves us with $350. Say we save another $50 for some mid term goal leaving $300. We save up $300 a month till we reach whatever we consider comfortable for the emergency fund. After the emergency fund is topped off we start making extra payments on something, save for a car as one of them is perpetually getting old, etc all.

Say the furnace goes out or there is a significant unforeseen medical bill/ whatever. It comes out of the emergency fund. Then you go from saving that $300 for extra principal payments/ a car back into refunding the emergency fund.

Well that's my .02 cents on that."

My only note after reading this again is that the savings comes out FIRST. Get paid and before you do anything else transfer that to another account, get it in cash and put it away separately or whatever. If you wait till the last 2 days of the pay period (or whatever cycle you get money on) to save THERE WILL NEVER BE ANY MONEY. On the other hand if you pull it out first, the money will be there to set aside, then you just live on whatever is left according to the budget you use. This is called Paying Yourself First and is a pretty important concept in functional personal finances.

This is also a reminder that you are far more likely to need money right now than big buckets of wheat, arctic sleeping bags or cases of ammo.

Got Emergency Fund?

Wednesday, August 21, 2013

Building a Financial Safety Net Part 1

TEOTWAWKI Blog talks this important topic

Short of physical fitness, financial health is probably the most under discussed topic in survivalism or it's better dressed cousin preparedness.  Everyone wants to be a cool guy and have guns, stash a bunch of food, etc but nobody pays attention to the novel concept of saving.

The brutal truth is that you are far more likely to need five hundred bucks right now than any preparedness item, certainly any preparedness item beyond your basic week long power outage type kit.  It could be many things from injuries, vehicle breakdowns, to job loss or whatever.

You need an emergency fund to prepare for all manner of potential financial emergencies. Amazingly once you have one emergencies seem to come less often. Maybe it's more accurate to say if you have the $500 to fix the family hauler it's an inconvenience, when you don't it is an emergency.

There are a ton of ways to establish an emergency fund but they all boil down to spending less than you make and saving the difference. As noted in the article I think it is very important to be smart with new money be it a raise, inheritance or whatever. We've gotten into a pretty decent financial spot largely because every time new money comes in we make intentional choices with it some to saving for this, some to saving for that, some to lifestyle, some to fun.

Sunday, March 24, 2013

Surviving Real Life

Commander Zero wrote a post that inspired this. A whole lot of real life happens between crazy regional events, let alone larger national and world ones. Folks get so caught up in stocking up on beans, bullets and band aids that they can forget about more practical things.

We have raided the emergency fund more times than I can recall. Car repairs are the usual culprit but unexpected bills, unforeseen expenses and the occasional sudden trip home have all had their turns. Conversely we have yet to NEED stored food. Sure it has been nice to have an extra bag/ box/ can of whatever to finish a recipe or for those times you decide to deviate from the weeks meal plan. However nothing has happened to us that the typical couple days worth of food in an average household would not cover.

We have had several times somebody ended up needing significant medical care. Without insurance we would have been financially ruined. Conversely while we can all agree guns are comforting the need to have them is rare. Those needs are amply covered by basic guns. One can forgo an expensive AR-15 or precision rifle with almost no risk of it coming back to bite them.

I'm not saying you should stop storing emergency food or sell those politically incorrect guns. What I am  saying is that in addition to those fun survivalist things you need to have an emergency fund and a realistic plan for inevitable medical problems. These are far more likely to save your behind than a pantry full of food and an AK-47.

Saturday, October 27, 2012

RE: Claire Wolfe's Preparedness Priorities 2

Claire Wolfe has continued her excellent Preparedness Priorities series.

In Part 3 Claire talks about how people need to prepare differently. To me this is pretty obvious but some folks miss it all the same. We could break these differences down into regional and personal. Regional differences are pretty obvious. Different areas have unique weather and disaster concerns. Folks who live in really cold places like Michigan need to worry a lot more about warm clothes and sleeping bags, etc than those in Arizona. Conversely people in Arizona should pay more attention to keeping plenty of water around and such. Preparing for a hurricane in Iowa or an ice storm in Florida would be foolish.

On the other hand personal factors vary well, person to person. Let's look at two potential examples, economic/ financial vulnerability and violent crime risk factors. We will meet Tim and Bob.

Tim is a hustler but not in the bad way. He has a pretty good full time job, always has a few side projects going and works with his Dad when the full time job is slow. Also his wife has a clerical job for the state. If Tim loses his full time job they would probably be down 40% income but he could make some of that up putting more effort into other areas. If Tim was seriously injured (he works with heavy machinery full time and does some logging so it could happen) they could eat and keep the lights on with his wife's income. The point is that their 3-4 income streams come from totally different places. It is very unlikely they would all fall apart at once.

Bob makes a very good living. He went to college and got a business degree and went to work in management at the local plant. His wife stays at home with the kids. If he loses favor at work or the plant closes or whatever they have absolutely no income. (I do not mean to say stay at home mom's are a bad thing. That is another discussion entirely.)

The point is that while Tim's income may vary a bit Bob is actually more vulnerable. If something happens they are hosed. Bob would have a heck of a time finding a similar job in the same area. They probably want more like a year worth of expenses put away because it will take awhile to figure things out. On the other hand Tim might be comfortable with 3-4 months to get them through winter until he is busy again.

Looking at violent crime risk factors for our two guys.

Tim does a lot of work for cash. He also pays helpers and subcontractors and suppliers in cash. He buys equipment with cash. Tim carrying around a couple thousand dollars in cash and having 10k at home is pretty common. More to the point due to all the people involved a pretty good amount of people know Tim deals in cash. In the nature of normal events and casual conversation lot's of folks know about this. Tim is often alone driving between job's or putting in bids or working in the middle of nowhere. Also let's be honest in and around his line of work there are some unsavory characters.

On the other hand Bob gets payed by direct deposit. He rarely makes large cash sales or purchases. They do not have any particularly unique or special valuables that would be easy to sell/ transfer. He keeps some cash at home and have some PM's but only Bob and his wife know about that stuff.

[Real world point. A buddy of mine had a SWAT team spend a week camped out in his living room once. There was a pretty nasty home invasion crew and intelligence said he was on their list. His work was very seasonal and a lot was in cash. In season he often had a lot of cash at home and the wrong people knew about it. Aside from random crackheads people usually get targeted because crooks know or think they know something particularly valuable is there.]

Tim has some risk factors. He would be prudent to do something to mitigate that risk.Maybe nothing will every come of them but then again it would only have to happen once. Bob on the other hand has considerably lower risk. Aside from general common sense stuff he probably doesn't need to go out of the way here.

The point I am getting at is that different people have different concerns based on their unique situation. Obviously there are a lot more variables like medical issues, family networks, etc.

Part IV has some really good points. Focusing on more likely scenarios (job loss, violent crime, inflation) over less likely (EMP, nuclear war, Zombies) ones just makes sense. Also when giving people advice I think it is important to tailor advice to their situation, finances and level of commitment. Giving unrealistic advice will leave them bummed if they want to do it but can't, turned off if they don't want to or dismissive of the whole thing.  The right advice for a family with a modest income and a lot of kids is different than for a working couple who make a lot of money.

I was talking about this with Wifey today. Often I find myself in the position of recommending things that I do not actually recommend if that makes any sense. The reason I do this is because it fit's their situation and makes them more prepared than they previously were. A few boxes of shells for the old .38 special and 12 gauge or a spam can for the Mosin Nagant you swapped for a case of beer, some batteries, a few gallons of water and some food in the pantry is a heck of a lot better than nothing.

Claire continues the series touching on risk assessments and water storage neither of which I feel like talking about. Anyway those are my thoughts on that.

Monday, June 4, 2012

A Week in Preps, Free Downloads, Kits and Other Stuff

I couldn't quite decide what to write today. I didn't want to skip a week in preps/ what did you do to prepare this week but there is other stuff floating around my head also. Anyway you are going to get all sorts of stuff today.

This week I finished up the kit/ bag that I have been working on. That meant buying the last few things like plastic bags and granola bars, digging around closets and storage to find things and just taking the time to get it all put together. We will revisit this later. Also we put some more money into our emergency fund. In the last couple months we have increased it by about 40%. Mostly this was needed for the fund to keep up with our family and life situation.

Today I noticed that John Galt's The Day The Dollar Died blovel is being offered as a free PDF download. I really enjoyed reading it the first time. Being able to read it at my own pace, not all broken up, will be nice. I strongly recommend it. Now onto kits.

So like I said I got done building the kit I have been working on. It started out to be a get home bag. I am not exactly sure what it turned into. Maybe there was a sort of mission creep but it definitely got bigger, heavier and more comprehensive than I planned. While it fit into my Tactical Tailor assault bag it was too heavy for such a bag and carried badly. I put the contents into one of the smallish packs I got from REI awhhile back. What I have is sort of straddling the fence between what I would consider a pretty comprehensive and relatively heavy get home bag and a slightly minimalist bug out bag. It has stuff to purify water, change clothes, sleep in reasonable (spring/summer, winter would need a different module) comfort, treat a variety of injuries and all of that good stuff.

I am not sure if I am thrilled with it or unhappy. In any case it definitely did not fit the intended purpose. If I commuted 50 miles one way to work every day it would probably live in my vehicle. However I do not do that. I do like the setup but am not entirely sure what I will do with it. Maybe it will stay the same or change or get parted out. For the time being it will be my bugout bag. Down the road I think it might get slightly tweeked and become Wifey's bag.

After putting that bag together and realizing the problem we just talked about I immediately set out to making the sort of get home bag that I actually need. So I put together a pretty light get home bag.  One that fits my life. I was determined not to let it suffer from any sort of creep. Basically I took my TT assault pack, tossed in a pair of boots, socks, some water and a bunch of various bars to munch on.  Of course the usual suspects like a knife, compass, fire making stuff, etc are present. Much more geared toward a 25 mile walk than a multi day treck.

Thoughts or ideas would be appreciated.

I may get around to doing posts on these. However I want to mull recent developments and maybe fill some gaps first. It might be awhile as I am lazy when it comes to that sort of posts.

Gas prices are down some here. About 30 cents from the high if memory serves me correctly. I noticed that gold shot up a bit recently but silver is still well under $30 which is a pretty good deal. It may stay there and may not, I can't say.

Anyway that is about all I have for now. Hope Monday wasn't too painful for anybody.

Sunday, April 22, 2012

What Did You Do To Prepare This Week?

This week we added more cash to our on hand emergency fund. A few weeks back we were trying to figure out what to do with some money, a rather decent problem to have I guess. Anyway we decided that where it would do the most good is at home with us.

Also I got some tuna pouches and granola bars for the get home bag I am working on. It is pretty much functional now though I do need to order a few things. Kinda holding off on buying anything until the Glock 19 mag deal is completed.
We organized and inventoried our medical and hygiene supplies. I am pretty happy with what we have got, especially considering most of it can't be shipped when we move back to the US. My one big take away is that we need to be more organized. I think there were 2 half empty bottle of cough syrup and 3 things of Ibuprophen that were being used. We shifted to one area for stuff we are using and another to store replacement's.

Also I tweeked my workout routine some. More on that once it is solidly underway.
Though not exactly traditional preparedness tasks we did get some good stuff done this week. What did you do to prepare this week?

Edited to include: This was supposed to post yesterday, I am not sure why it didn't.

Thursday, April 14, 2011

The Importance of Saving No Matter What

One thing about the military is that we get paid regularly. It doesn't get much more predictable. Though for reasons I cannot understand it always varies by a dollar or two we know 99.5% of what we will get paid and exactly when. Unfortunately this makes a lot of military families (we also have some weird excentricites but that is another discussion)
Given the whole mess about the budget there is talk that the government might shut down and we would not get paid. I believe this has actually happened twice, during the Revolutionary War and the Clinton era. Most likely they will do a series of short extensions and then figure it out however we might have a gap in pay.
Wifey is active, or at least a lurker, on a couple of those military wife type boards. There were women talking about how if this happened they could not feed their families, not dramatically but literally. Also I am not talking about after weeks or months of no paychecks but immediately. If that check didn't hit on the 1st and the 15th like clockwork they would be screwed. The point of this is that even the most secure jobs and income streams can have disruptions.
Also a bunch of Navy families got evacuated from Japan and the immediate surrounding area. These folks left, with little notice and I imagine very limited baggage. They got put on a plane and landed somewhere to stay for awhile. Maybe they will get some sort of lodging but there will certainly be expenses associated with living out of some sort of temporary lodging. Wives will need hygiene and beauty items, kids will need toys and kid stuff, over a long enough timeline everybody will need some more clothes and without access to a full kitchen it costs a lot more to eat. The point of this is that all sorts of emergencies may happen that, while they have nothing to do with your income stream, will go beyond it's ability to absorb.
Basically no matter what your situation is, or how secure your income stream you need to save.

Sunday, February 27, 2011

Random Observation: Got Cash?

Wifey buys and sells a lot of used stuff. It is my job to pick it up and or deliver it and give or receive payment. I am like a drug used stuff mule. (Having a vehicle big enough to deliver puts me in that role and it also helps her close a lot of deals) Seriously it is sort of weird. I am regularly going to some place with a piece of paper that has an address on it to pick up or drop off something and exchange cash.

Recently she has been selling off unneeded stuff. Twice in the last couple weeks I have gone to deliver something and needed to run them to the ATM to get cash to pay me. Not a big deal really. Lots of folks here don't have cars and we can all forget something. The more interesting part is that we aren't talking about a lot of money. One time it was $40 and another it was $60. One of the gal's had no cash and the other was $20 short. I sort of shrugged the first one off but the second showed it is a noteable trend.

This was a stark reminder that there are lots of folks out there who have what amounts to no cash (probably a few crumpled ones and a bit of change) on hand. Folks who would be unable to pay for gas or food (I'd bet a c note the cupboards are almost empty too) if the electricity and ATM/ computer networks were down. Part of a day would be an inconvenience but if there was a power outage/ regional disaster these folks would be screwed.

If you do not keep some cash on hand you are a fool. Despite what the 'tangible investment' and beans and bullets folks say in all of the more realistic and likely scenarios people still deal in cash. You don't see complex systems of barter appear overnight in anything but a total collapse. Maybe a good bargain can be made for gas, shotgun shells or canned food but folks will accept good old greenbacks. As for how much you should keep around I am a lot more flexible. Different people have different needs and concerns as well as incomes, assets and tolerances for specific types of risk. I think establishing the minimum is significantly more important than setting a maximum.

Chief Instructor says that a month's worth of cash expenses kept on hand is a good number. Cash expenses would be stuff you need that is not locked into a regular contract. They are also things that if, and I am just tossing some stuff out here, ATM's crashed or banks went on a holiday, there was a power outage or whatever you would still need to pay for regularly in cash on the barrelhead for. Food and fuel are primary considerations here with stuff like medication, smokes, booze, vehicle maintenance, etc in there also. If you have drank the coolaid and are following Dave Ramsays baby steps just keeping baby step 1 ($1,000 in savings, $500 if you are real low income or 2k if you have a high income) in mixed bills at home. However you choose to figure it the end result is pretty much the same. The point is to have enough cash to get yourself through some sort of emergency or otherwise sustain yourself for awhile.

These low numbers should be fairly easy to meet with a bit of planning assuming you live a sane financial lifestyle. They aren't enough money that inflation is a significant issue but are enough to deal with most of what could come up. Also these minumum amounts are low enough that if your stash happens to get found it shouldn't break you. Though as Commander Zero noted once it is far more likely that your stash will be frittered away by you on a pizza here and a $20 for a trip to the bar there then actually get stolen.

As for the maximum. It is really about what you are willing to risk being lost in a fire or by theft. I wouldn't want so much cash in my home that I couldn't afford to lose it should something happen. A certain percentage of your overall liquid assets is probably the way to figure it out. For me 10% seems reasonable and 20% doesn't seem nuts. That means if you have 10 grand in various stuff 1 or 2k in cash. If you have 100k it would be 10 to twenty. Unless you live a particularly high risk lifestyle where you might need running money I would not want to go much higher than that. Baring the potential sudden need to get out of town for a few months I would not want more than then at risk of theft and getting eaten away by inflation.

Monday, January 24, 2011

What Did You Do To Prepare This Week?

When I wasn't at work we've been trying to maximize family time. Not a lot happened here in terms of preps. We've been working our way through storage food and stuff. However since we ended up eating out more than usual (just kinda happened and at this point we are just focused on keeping things as easy as possible) we didn't go through that much stuff.

We have been selling some unnecessary stuff. The combination of Wifey relocating and me deploying comes with all kinds of $100ish expenses as well as a grand for Wifey's ticket home. No big worries as we've got the ticket paid for. This is just a bit of a gentle push to sell the stuff we have been meaning to sell for awhile now. We made $75 for stuff we spent $30 on so that was nice.

We did stash 15 Euro's but that was on accident as we had a 50 and dinner cost 35.

I did OK in terms of working out. Got 3 extra workouts which is under my goal of 4 but certainly better than 0 workouts.

What did you do to prepare this week?

Monday, December 20, 2010

Financial Preps for WTSHTF or Your Own Personal TEOTWAWKI

Preparing for the worst can be daunting. It is also easy to focus on putting back several rifles, cases of ammo and everything else that goes along with it (Now you need some optics, a safe, spare mags, lights, another safe, etc.), or other emergency gear that we could spend hours listing. Let’s face it – acquiring the cool gear is fun! It’s also one of the most often talked about topics in this community. People like their toys and that’s perfectly fine. But it’s only one leg on your stool. Food and medical preps are covered to a lesser extent but still fairly regularly. Something I feel that is of equal importance, though not near as fun to discuss, is financial security.
I think many people avoid the financial preparedness topic because it can bring you back to reality: sometimes it’s hard to find enough to go around. How can you pay the bills, buy your beans, bullets, band-aids and still find money to save when disaster seems to be looming over the horizon? You better make room for it. That EMP may happen tomorrow or your small town might look like “Jericho” (TV series) next week, but I guarantee you sometime this year your own personal TEOTWAWKI will happen if you don’t put some cash back now. It could be a transmission that starts slipping, a layoff, an ER visit – Murphy will throw something at you when you least expect it. So where do we start?

Rotate Your Stocks AND Your Priorities

Several thousand rounds of center-fire rifle ammo and several reliable battle rifles for you and the family is a noble effort, but not at the expense of everything else. Set up some sort of system where all of your goals are slowly being met. One example can be found below:

Discretionary Spending Schedule:
Week 1: Guns and Gear
Week 2: Medical Supplies
Week 3: Trip to the Local Sam’s or Costco for Food Stocks
Week 4: Cash, Savings or Silver/Gold

Rinse and Repeat Next Month

It doesn’t have to be as rigid as the above example. I grocery shop at Wal-Mart; I’ll throw a box of 9mm and something for the first aid kit in the buggy every week on the grocery trip. I also will put some money back every week to slowly build our reserve. There is no right way to do this, find something that works and stick to it.

So, you’ve got some money set aside for financial preps. What now?

Cash is (for now) Still King

The manager at your local grocer is going to be pretty darn reluctant to let you leave the store with a gallon of milk for a 1964 quarter. Sure he may exchange it for some cash in his pocket but I bet you’re not going to get the most recent spot price from this transaction. If the power is out from the ____ (insert your regional disaster of choice – hurricane, snow storm, earthquake, etc. - here), chances are that credit card is not going to cut it either. Cash still has its place in your safe. One week’s paycheck is probably a good start to get you through most bumps in the road, especially if you already have at least a few weeks of food and a good first aid kit (you do, right?). For larger bumps in the road…

Make a War chest

Not literally, but treat your savings account with the same passion as you would a chest full of sharp pointy battle implements. A lot of folks say aim for 2-3 months worth of expenditures (everything from the mortgage down to gas for you vehicle). My wife and I are taking it a step further and have set the bar at 3 months worth of income (big difference). This is going to take some people longer than others; that’s OK. As long as you are making progress then don’t get discouraged! If an emergency comes up one month and it cuts your war chest in half then look at it like this: Success! You took a hit on the chin and are still standing! Our strategy has another benefit; life is all about timing. Opportunities come and go; if a great deal comes your way on a piece of land or something else and you have the spare cash to jump on it, do it. Just don’t look for excuses to raid your war chest. Make sure it is a worthwhile investment. Then proceed to build your savings back up immediately. Get your savings built up and then start considering…

Silver and Gold

How much precious metal (PM) is enough? It all depends on whom you ask. Just remember, PMs aren’t an investment (well they can be, more in a minute), they are insurance. Investments grow your wealth. Over the long haul, PMs will simply store your wealth. Short-term plays on PMs can be done to turn a profit, but buying and selling coins is the least efficient way to do it. You might as well trade paper gold on the stock market, and that’s not why we’re here. I once read a very interesting article that stated that an ounce of silver today buys approximately what an ounce of silver bought 2,500 years ago (I believe their example was loaves of bread). Try that with any fiat currency in the world! (Well, you can’t – it never stays in circulation long enough) We want to hedge against inflation. PMs are our insurance against the failure of our currency. Whatever currency becomes the world reserve when ours fails, silver and gold will hold value in that denomination as well.

My personal goal would be to eventually (long term) have 1 year’s salary in PMs. I think an 80/20 gold/silver holdings ratio is reasonable, but do your own Due Diligence and find what is right for you. You will probably want to start with silver, but at some point you have to switch to gold because silver gets bulky quick. I’d recommend starting with Pre-64 junk silver and 5-10 oz. bars. If you run across a good deal on some silver eagles, buy them! I bought some silver eagles last week for under spot! How did I do it? I deal solely with a local merchant who I trust completely and him likewise. I can’t stress the importance of dealing locally. If I find a 1965 dime (no silver content) in my roll I bought from my local guy, he graciously exchanges for a silver dime. No questions asked. Try that on E-bay.

I won’t talk about gold much because if you invest in silver first, by the time you are ready to dive into it, you will be fairly savvy with PMs; you will have done extensive research, right?

Now that we’ve covered some financial ground, let’s see if we can change the way we look at our other areas of preparedness to save us some money.

Streamline Your Gear

I have approached my firearms purchases in a manner that reduces the amount of different ammo we have to purchase. We have multiple pistols and carbines serving multiples purposes chambered in 9mm. We have also chose to standardize 12 gauge and 7.62x39.

A case of ammo in any of the above 3 calibers has the immediate benefit of being utilized by multiple firearms. Stocking up is much easier and cheaper.

Of course we have other firearms that are not in our standard calibers, but we don’t stock ammo for them like we do for the standard calibers. In theory you would want not only the same caliber, but the same brand as well. I say “In theory” because this is a tough one. In practice everyone in the family will have different tastes so it may be hard to convince everyone that carrying Glock 19s is in their best interest when they cringe when they have to hold the ugly bugger. A good goal would be to aim for full uniformity, and settle for caliber uniformity.

Another cost saving measure is go out and buy a .22 rifle and pistol if you don’t already have one as soon as it is financially sound to do so. This will obviously save you countless money over the years.

This doesn’t simply go for firearms. Try to buy battery-operated equipment that takes the same size batteries. Once again, this makes stocking up much easier and cheaper.

Make a Budget

The word “budget” can strike so much fear in a man, you would swear Hessians had just breached the privacy fence and are now occupying the pool house. It doesn’t have to be so scary, however. Your budget can be as loose or strict as you like, as long as it serves its purpose. One of the main benefits of the budget is it forces you to think through your expenditures.

I create a simple budget on spreadsheet that first tallies our income for the month, and then deducts all of our estimated expenditures. This allows me to determine our surplus and project what our end of the month balance should be in our account. If we surpass our goal, I do a little dance and then try to determine where I’m overestimating. If we miss our goal, we take step back and determine what went wrong. I don’t subscribe to the Dave Ramsey School of budgeting (budget down to the very last penny) because to me it seems like a lot of effort for not much of an improvement over my simple system. It works for many people, so I’m not knocking it. Find something that works for YOU.

Trim the Fat

Often people tell themselves that they just don’t have the money to save (you may even hear them say this on their brand new iPhone). They’ll say maybe next year, or after the house/car/boat is paid off or the kids are older/grown/etc. – that’s procrastination. One day you may wake up retired and struggling to make it; let’s avoid that outcome.

Internet, home phone lines, cable TV, cell phones, new vehicles every five years, too much house, etc. are all traps people fall in. I won’t tell you to turn off all of your services and move to the hills, but do take a rational look at your expenses and determine what you can reasonably cut or downgrade to allow you to put back some money. One thing I do recommend that has saved me over the years is brown bagging your lunch. Learn to love it. In one year brown bagging can save you enough money to buy that AR you want (Or – several pounds of silver).

Prepare for TSDTWAWKI (The Slow Decline of the World as We Know It)

TEOTWAWKI has happened for thousands of years, but the sun still rises in the east and the birds still fly south for the winter. If you were born in 1910 in Germany and lived 70 years, I’d say you lived through several TEOTWAWKIs (Weimer Germany, WW2, a literal divided nation, etc.). Our grandfathers and great-grandfathers had it hard at times; but they raised families, grew old, and hopefully were able to enjoy some sort of retirement after decades of work. The world may not end tomorrow, but it may slowly change for the worse for the rest of your life. Don’t rely on entitlement programs in your retirement years. Stock up on beans, bullets, band-aids and bullion, but also contribute to your 401K (at least get your company match, if offered), sock away some cash, buy real estate – diversify. Do not over-leverage yourself in our economy, but at the same time don’t rely solely on tangibles as a store of your wealth.

A true survivor plans for all contingencies. His portfolio is as diverse as his options. He buys cases of ammo and rolls of old coins, but he also contributes to his 401K to at least get the match his company offers. He has several acres of land in God’s country somewhere far from the city lights, but he also strives to be debt free. He has the cash on hand to G.O.O.D. and the savings and insurance to come back and rebuild (and the larder to live on until then). He doesn’t know the future so he prepares for all outcomes; no matter what happens his family will have options. He also recalls that Rome wasn’t built in a day, and American affluence has been squandered slowly for a while now; there is trouble on the horizon, so he starts now.

Saturday, November 20, 2010

When Are You Done Preparing?

FerFAL was recently asked the interesting question "When Are You Done Preparing?". I found the question interesting and it sort of stuck in my head. I don't disagree with FerFAL's answer but I do see it from a different perspective. Here is how I see it.

It is worth discussing the difference between maintenance and growth (though not strictly money, also time, energy, etc) of your preps. Maintenance of your preps would be stuff like rotating foodstuffs, practicing to keep your skills fresh, etc. Growth would be stuff like increasing your food storage, learning a new skill, taking a class, buying guns, gear, etc.

I think a certain amount of maintenance is necessary lest your food goes bad, your equipment degrades and your skills atrophy. You've got to rotate food and clean weapons. Car kits and GHB's need to be periodically inventoried and have perishable contents rotated. Even the best shot will get rusty if he doesn't touch a handgun for a year. Personally I wouldn't classify this kind of maintenance as continual preparations. Now that we have that covered.

To the fundamental question "when are you done preparing?" I would reply "preparing for what?" Everyone has different concerns and worst case scenarios they are preparing for. If we imagine white being a very limited power outage and black being a full on genuine One Second After/ Mad Max/ Jericho TEOTWAWKI scenario there are almost infinite shades of grey in between. What you are preparing for has a lot to do with when/ if you can ever be done.

Lets say you are an average guy who lives on the Gulf or southern Atlantic coast. You are justifiably concerned about a hurricane. You know it can be difficult to get fuel in the run up to evacuation time so you keep a half dozen 5 gallon cans in the shed and make sure your vehicle is topped off during hurricane season. You know that the smart thing to do is to leave and you've got a plan with your Uncle who lives a few hundred miles inland to come crash there. You have maps and alternate routes planned out just in case.

Since Katrina showed you that it can be weeks before help can arrive and services are restored you keep 90 days of shelf stable, easy to cook foodstuffs around. A couple extra propane cans will let you cook just about forever on the Coleman stove you use for camping. Keeping a few extra big boxes of batteries will let you run the various flashlights in your house for some time. For water you picked up a filter at the local camping store. After seeing the madness of Katrina you ordered 500 rounds of buckshot for your 12 gauge in addition to whatever hunting loads you have lying around. You also purchased a handgun with a few spare mags and a couple extra 100 rd white boxes from Walmart. Last year you stashed a few hundred dollars in the gun cabinet just in case. Could this guy say that he is done preparing? I think so. Of course there might be a small hole here or there but the broad strokes are covered and he is in a decent spot for the scenario he is concerned with.

Someone worried about a genuine full on Jericho style collapse is probably never going to be done. They will just move from more likely and immediate concerns such as 'how will we eat next winter' to the more obscure and unlikely 'how will my grandchildren make metal tools to replace those which wear out'. A person worried about this kind of scenario is always going to be thinking of something new and trying to deal with progressively more unlikely scenarios.

Personally I do not think I am every going to be done preparing. I am going to have times where the growth slows or stops until I get to another stage (buying a home, having more space, getting some land, etc) over time. However in the big picture over time I am going to progressively work from likely situations to more unlikely ones. It is more likely that we will have to ride out a short to mid term disaster then that we will suffer an EMP or a super aids bird flu pandemic. Assuming the world doesn't end in a few more years I will likely be focused almost exclusively on relatively unlikely scenarios. It is just my nature to want to improve my situation.

It is the very last day to enter our Awesome Ammo Giveaway Contest. Hurry up and enter now so you can get a whole bunch of free ammo.

When are YOU going to be done preparing?

Friday, November 5, 2010

Reader Questions: Alternate Title Ethics and Pragmatic Thinking On Medical Debt

First off thanks for your blog. I read it regularly. I do have one question about living within ones means, as I have been doing by default(bad credit).

After many attempts to dig out of debt and be debt free minus the needed bills- car ins., utilities, etc. I have fallen into a somewhat unique scenario. I had an employer file bankruptcy and eliminate any chance of COBRA health ins. shortly after being unemployed, I had an emergency surgery to the tune of $70,000. Since that time I have been accumulating massive medical debt, despite currently having health ins. My question is how can I justify continuing to pay a mortgage payment of debt? After all the different payments to different doctors even at modest monthly payment are added up, I cannot manage a $700 monthly payment on my modest salary. Bankruptcy is not a word in my vocabulary, but is it something I should look into? I have been paying some of them regularly, but am only paying the interest at this point. 

As far as planning for any emergency, if I get $10 a week set aside, I am having a banner week, but some medical issue comes up my puny savings is wiped out again. I don't know if I am looking for insight or just venting so I do not shoot off all my bullets saved for a different day. 

Thanks, DS in NJ

DS, First of all I just want to convey my sympathy for the rough situation you are in. Life can sometimes bring bad things at the time we are least capable of dealing with them. Anyway here are the issues I see. First is ethics as they apply to debt. Maybe it is ridiculously antiquated but I believe when you borrow or are advanced goods or services you are giving your word to honor it and pay under the terms of the agreement. I believe that you should think about these choices and if you can't repay then don't borrow. However as we mentioned things can happen. People can make reasonable (maybe not text book perfect but certainly not bad) decisions and still end up in a rough spot. Particularly when we talk about medical problems or the current climate of seriously long term job loss bad things can happen to good people who made solidly normal choices. I believe that we have bankruptcy laws for a reason. Folks can through bad luck, bad choices or some combination thereon get into a situation where they are not going to be able to repay their debts. Instead of people just not paying debts they can't pay anyway we might as well make it legal and let them, in time, move on with their lives.

Ethically I believe if you can afford to pay back your debts you should do so. [I find the concept of "strategic bankruptcy" and its passive friend jingle mail, provided you can afford the mortgage) completely unethical.] This debt should come after the basics like shelter, food, utilities, fuel, etc. Being homeless and sleeping in national forests with an empty stomach so you can try to pay off debt, while a dramatic choice, is probably a bit extreme. This debt should however come before luxuries like expensive entertainment, electronic gadgets, cool new guns, new cars, travel, etc.

I do not think bankruptcy is something to be proud of. Personally if I had to declare bankruptcy because I made a whole bunch of stupid choices I would be really ashamed of myself. However if I found myself with huge medical bills which got racked up over an inopportune time; or faced for whatever reason a drastic and permanent drop in income I wouldn't feel super happy about my situation but wouldn't look at myself negatively. Sometimes stuff happens to you and you just move on.

Speaking to your situation pragmatically. Without knowing all of your information (savings, debts, income, interest rates, etc) it is hard to say anything specific. I do not have all the information. To be honest I am not a professional financial anything and beyond generic thoughts I can just suggest you consult a professional. I would certainly at least look into bankruptcy. Go see a professional and run the numbers. Take some time and think about the second and third order effects of both scenarios; paying these debts and potentially filing bankruptcy then make a decision. 

I wish you the best,

Friday, October 8, 2010

Putting My Money Where My Mouth Is: Personal Finance Ramblings

I was doing some math yesterday. It turns out that we live on right about 50% of my take home wages. The rest goes to accelerated debt repayment, retirement, PM's and a couple other odds and ends. That means our emergency fund is right about 5 months of normal life expenses without cutting anything. If we needed to raid the emergency fund we would obviously cut some stuff like discretionary travel, eating out and such.

How do we do this? Simply we don't buy all kinds of stuff we don't need and can't comfortably afford. It is my observation that people who are in debt up to their eyeballs are almost always in it for stuff they don't need. Instead of a new BMW or two we have older more modest cars. Almost everything we buy is used. We enjoy traveling very much but do it within our budget. Sort of like Dave Ramsey says it is simple but not easy. However I can say that it is very rewarding and I don't worry about money very often.

Somehow we got to talking with Miley about money. I started talking about the huge relationship benefits we have derived from having personal money. Basically the concept of personal money goes like this. Wifey and I each get some money every payday (it could be monthly or whatever) and it is entirely ours for discretionary purchases with no accountability. Save it, spend it, whatever. Wifey makes small purchases of candy and such then occasionally saves up for some clothes (that she doesn't need) or an expensive purse. I buy good liquor and preps. The real benefit is that it cuts out all those small little money arguments. The "why the hell did you spend 12 dollars on X" kind of stuff. For some folks they both just spend reasonable amounts on stuff that doesn't bother the other person. However my observation is that most people have their weird little quirky money habits that bother their spouse. This makes that a non issue. I simply cannot see us not doing personal money. If our financial situation changed we could and would adjust the dollar amount but I just can't see not doing it.

Lots of people talk about living below your means but don't do it. Are you one of them? If so what are you going to do to improve your situation? Pay down debt, decrease your lifestyle, earn more? I don't think there is a wrong answer here. If you are happy and comfortable spending everything that comes in then go for it. However if you are not happy with where you are then DO SOMETHING ABOUT IT.

Thursday, September 23, 2010

How Many Guns Are Too Many?

This blog post which is also titled How Many Guns Are Too Many? got me thinking. I believe I also talked about this in a post over at Commander Zero's place some time ago. However writing every day is hard and sometimes you go for the base hit. I think this is a lot easier question to answer than how many guns are too few/ how many guns you need for X.

I think that unless you live in an RV or on a small (like below 50 foot) boat the issue of space is largely mute.

If you like to collect firearms as a hobby or want to have additional weapons for redundancy then it is pretty easy to end up with a lot of guns. I used to be pretty gun centric but now, even though I am less gun centric my budget is a lot better so buying stayed somewhat steady. I seem to average about 2.5 guns a year over the years. Look at it this way. 3 guns in a year is .22 for plinking, a deal on a used 870 which is just too good to pass up a Glock for your birthday. If you have decent, let alone significant, resources and keep up the interest in acquiring guns over decades a huge collection of hundreds of weapons can be accumulated.

The big thing is about resources required to get said guns and then kept tied up in them. I don't think you can have too many guns but I do think that you can over allocate your limited resources towards guns at the detriment of an overall well rounded plan. Simply put five hundred dollars that goes to a Glock or an AK cannot by default go towards food storage or savings or paying down debt or infinite other places, think about balance.

It is great to have a nice well rounded collection of (just to toss out a number) say a dozen guns. However it is probably better to have half a dozen guns, a well stocked pantry and a few hundred dollars. You may need a spare semi automatic rifle to arm someone else but you WILL need food. You may need that super accurate sniper target rifle but you almost certainly will at some point need $1,500 for an unforeseen expense or emergency.

If you find yourself pawning guns when a car breaks down or a paycheck is late/ small or whatever then maybe it would be wise to shrink your collection and beef up your savings. If you are in a dumpy money situation then getting 5 high end battle rifles with great scopes doesn't make sense. You need to put resources towards getting to a sane and stable place, not an arsenal you can brag to your friends about.

Again balance is the key. Certainly once you meet a basic level of capability, say a basic 4 maybe plus one or two extras (like a semi auto rifle if your first is a bolt gun and a concealable pistol) with mags, ammo and all the other ancillary stuff to keep them going then it is worth at least considering if those dollars would be better spent elsewhere.

Personally over the next few years I plan to pick up up a couple Glocks, a couple rifles and a random gun or two. During that time I am also going to improve our situation in terms of defensive gear, food storage, some outdoor equipment, precious metals and of course savings. All of this stuff will increase more or less together. If our financial situation is such that we need to tighten up a bit or full on circle the wagons then all that stuff (except food storage because you can make real cheap progress there and it is well, important) would slow or stop more or less together.

Is there a point where I will decide I don't need any more guns? Probably. At the point where every member of the family has a rifle (potentially a defensive one and a hunting one), pistol and shotgun with us having some spares for each of us in the safe I would look at things. Most likely at that time I would start getting guns I want. Stuff for my collection which while functional (stainless Beretta 92, Walther P1, etc) aren't group standard or common tertiary type weapons (AK's, etc). Basically stuff I just want because it would be cool. 

Will I ever get to this point? Probably sooner or later. I'm in my late 20's and have a pretty good start already. If my average slips to 2 guns a year over a decade it would be 20 more guns. Figure if I am real good and focused that would be 15-17 group standard/ common tertiary weapons and 3-5 randoms.  So a few core weapons per individual. That would be a pretty solid situation. I imagine at most by my early 40's there won't be anything left which we need or much which I want.

Just remember that it is about keeping some balance and allocating your scarce resources in the best manner possible.
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