New Vehicle

We recently purchased a new (to us) vehicle. It is a few year old mid sized SUV. It has a small V6, 4wd, reasonable mileage and a few nice options (air, cruise, etc). We paid cash. It is real strait and should work very well for us. Also it will be convenient for inclimental weather. A decent amount of storage won't hurt either. We are working our way through this years financial goals pretty well.

I Get By With A Little Help

Having a solid network of people with somewhat varied skills is really helpful. Recently we purchased a vehicle. The way things went down Wifey's family friend ended up going to check out 2 vehicles. He made a deal and put money down on one. We got a great vehicle for a good price. It pays to have a good support network.

Life Update

Things are just kinda plodding along. It is going from warm to hot in a hurry. I seem to have found a workout and diet combination that is giving me gains on fitness/ strength and improved body composition/ weight loss. I am really enjoying the exercise part. Things are really starting to click and I am being intentional enough about my diet to adjust as necessary to get the desired results. In terms of meeting my New Years resolutions we have made some progress. We are debt free and have purchased a solidly decent used SUV. I am improving with excel and powerpoint which is good. Also getting into better all around shape. Probably approaching the all around best shape of my life. Don't get me wrong, I have been WAY stronger and WAY faster but not at the same time. In terms of other skills I am not doing much of anything I had planned on. I am learning a few new things but that could always be said of life. I haven't acquired any stuff that was on the list. That really isn't a big deal, I just haven't been messing with it. I need another thing to occupy my time like a fish needs a bicycle. Wifey and Walker are doing well. My time is a lot more limited than it has been in other places and other deployments so I am not getting some stuff done that I want to. I would like to be reading but when I get off work the last thing I want to do is think. I typically watch an hour and change of TV on my computer (saved on a HD) and then go to bed.  I have been trying to do some professional/ foreign affairs/ intelligency reading at least every couple days. I enjoy that stuff so it is cool. Life here is pretty boring but occasionally there are interesting events. Weeks are slipping by which is good. I am getting settled in and figuring out a fairly sustainable battle rhythm which is good.

Intentional Lifestyle

Today I heard a great phrase, intentional lifestyle. To me this is such a simple powerful phrase that formalizes a lot of things I think and do or at least try to do anyway. Simply this is choosing how you are going to live instead of stumbling through life willy nilly on random choice and base desires. For example if I let my worst traits run amuck I would be fat, drunk, isolated and paranoid. As a model of self control I am a bit heavier than I should be, drink recreationally, have an awesome wife and a few friends and am kinda paranoid. This sort of thinking applies to relationships, finances, eating, fitness and just about everything. If you aren't getting the results you want in any part of life then maybe you should act more intentionally. Just a thought.

Chinese Finger Cuffs

Remember those "Chinese finger cuffs" that are made of cheap dyed fiberous material? You stick your fingers in and pull and pull and pull but they just get tighter? Loosen up and they go back to their normal size and your fingers easily slip out. A lot of cultural norms, stereotypes and expectations are like that. I hear all sorts of things all the time "I have to drive X" or "everybody has got to get a car loan" or "nobody can afford to have their wife stay home" the list goes on. Even once you figure in some basic laws and a few regulations we have a huge amount of sway on our lives. I truly wish people could recognize this. After physical fitness and being fiscally sound this is probably the biggest thing I wish I could get through to people. So many well intentioned folks back themselves into a corner then gripe and complain about that corner. They can't even see it. Sort of like that comment about guilt from Atlas Shrugged these dysfunctional contemporary life patterns only hold sway over us if we let them. The good thing is that to be free all you have to do is realize you are in fact free. 

Random PDW Thoughts

PDW
I have been thinking a lot about an SBR/ PDW type weapon recently. No really great reason, just sorta daydreaming. I've been thinking that it would be way easier to carry around, both tactically and discretely than a normal (even defensive type) rifle. I have almost no use for carbines (defined for this purpose as a long gun that shoots a pistol bullet) but this could be handy. The criteria for me would be a round that can penetrate light armor, a stock, reasonable accuracy, affordability and commonality. Specifically I have been thinking about one of those short barreled AK's. It would fill a nice little niche. Convenient to carry around or put in a bag, ample for defensive purposes and good for CQB.  Taking one of those pistol AK's and putting a folding stock on it would be the easy and affordable route, alas ATF regulations make it much more complicated. I am thinking that when I eventually settle down if you can still, for a modest fee and some hassle build an SBR I might just bite the bullet and do it.

Times and Money

I have a friend who sends me a pretty neat newsletter about our economy, commodities, stocks, etc. I have also been doing some reading about things and while doing various boring tasks or sitting in meetings I have some time to think.

 

The situation of the average American working type middle class man is going down. There are numerous reasons for this but the endstate is that real wages are droping drastically at least if compared to post WWII standards. At best the dollar value of wages are staying the same and prices are drastically rising. It is hard to quantify but a buck doesn't get what it did just a few years ago.

 

I don't think anyone would dispute that this is a bad time to be heavily in debt (or in debt at all except maybe a modest mortgage). Also it is a good time to be holding cash. Cash is truly king right now. However at the same time we are feeling real inflation as unlike the CPI you and I have to buy food and fueland safe (maybe not FDIC insured but very minimal risk) investments are earning almost laughably low interest rates.

 

To me the point is that you want to get as unleveraged (it should say something about a business model that supposed genuises use which doesn't pass home finance common sense) and be in a position with some cash reserves. You need some cash set aside to keep your situation healthy and having some to take advantage of opportunities would sure be nice. It could be a huge dip in the price of a long term stable stock or precious metals or whatever. Also there are those occasional awesome deals on this or that (please buy weapons, gear, PM's etc not skidoo's and such) which come up when lots of folks are having hard times.

 

PM's have gone crazy recently. I don't know what is going to happen with that one. They have gone up on such a massive scale that I am unsure they will go far higher. Then again some weird economic stuff has been going on. Like most markets buying in big when it is high is a pretty solid way to not make a profit. However physical precious metals have some benefits of their own as a form of insurance and alternative currency. If you are buying as a hedge or insurance it makes some sense to buy but otherwise I am less sure. For people who own PM's past their core holding level the time for profit taking is probably soon. I guess you pays your money and takes your chances. I would be hesitant to go to big into PM's. Figure out a % of your liquid assets that can go there and stick with it.

 

Pay down and then off debt, save and invest, it isn't sexy but still works.

Guest Post- 2 Times to Stay Liquid and 2 Times to Pay Off Debt

BIO: This article was written by Anthony Benedict. Anthony Helps run CreditDonkey.com - which is a website that provides people with a http://www.creditdonkey.com/cash-back.html">list of cash back cards.
Inline Attachment Follows: 2 Times to Stay Liquid and 2 Times to Pay Off Debt.txt

2 Times to Stay Liquid and 2 Times to Pay Off Debt

Over the past five years millions of people have accumulated high levels of outstanding debt. While most financial experts would agree that paying down debt should be a person’s top financial priority, others may believe that there are situates when a person should actually avoid paying down debt and attempt to build their liquidity. Overall there are 2 times to stay liquid and 2 times to pay off debt.

Stay Liquid - Emergency Reserve
The first situation when you should attempt to stay liquid and delay paying off debt is when you are trying to build an emergency reserve. Prior to beginning to aggressively pay down their debt, all people should first establish a liquid emergency reserve which is equal to at least 9 months worth of living expenses. This reserve should only be used in the event that you lose your job or have some other form of an emergency which you cannot afford to  pay for out of your monthly paychecks. If you do not have a reserve established, you could find yourself in a difficult financial position if you have a sudden and unexpected loss of income or significant expense.

Stay Liquid - Save For Home
Another situation when you should stay liquid as opposed to aggressively paying down your debt is when you are looking to buy a home. With interest rates and housing prices so low, now is a great time to buy a home and take advantage of the situation. Unfortunately, it often now requires having at least a 10% down payment in order to qualify for most mortgages. Since now is such a great time to buy a home, it may be a better idea to focus more and building a sizable down payment as opposed to paying down your secured and low interest outstanding debt, such as car payments.

Pay Off Debt - Applying For Loan
While there are situations when you should focus on building liquidity, there are  situations when you should focus on paying down debt, the first of which is when you are applying for a loan. When applying for any form of loan your credit will be pulled by the bank. One of the biggest factors which influences your score is your debt utilization rate, which is calculated by dividing your credit card balance by your credit card limit. To appear that you are a better credit risk, you should pay off your credit card balances as aggressively as possible prior to applying for a loan.

Pay Off Debt - High Rates
When you have debt with high interest rates you should focus your personal finances on paying down your debt. While interest rates on mortgages and other loans are incredibly low, interest rates on credit cards are still incredibly high in some situations. If you have a credit card with a very high rate you could be wasting hundreds of dollars every month and if you only make the minimum payments, it will take decades to  fully repay the outstanding balance. To ensure you spend as little on interest as possible, you should set up a financial plan to pay off your debt as quickly as possible.

Stay At Home

The other day I ended up watching 20 minutes of a movie. According to the cover it was Needfull Things by Stephen King. A bunch of folks were going nuts or something and running around reaking havock on what by Stephen King's predictable pattern was almost surely a remote small town in Maine that the main character just recently moved to.

 

In any case something occured to me. The right answer is almost always to stay home. If you look at likely and realistic situations far more often than not the right answer is to stay home. Implied tasks of this is to A) getting home and B) having the capability to sustain yourself, C) being able to protect yourself comes up but nowhere near as often as the mall ninja's in various internet forum's would have you think.

 

Unless you live in a major urban center the odds of any kind of significant unrest are minimal. If there is a natural disaster it is prudent to leave but the majority of the time the right answer (which coencides with the boring answer) is to stay home, much on some preps and hang out.

 

You WILL need fcash, food, water, the means to cook, lighting, some sort of heating plans and a plan for sanitation. You probably won't need but would be well advised to have and be compitent with a couple of useful firearms as well as other security plans. A shotgun is aweful comforting during a black out.

 

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.

 

Random Thoughts on Insurgencies

1) Don't underestimate the need to sustain yourself. As we discussed before going to the woods to play Red Dawn is almost a sure way to a bad ending. We have groups of very well trained and experienced men who will find you, run you down and kill you. If attack aviation or dones don't get you first. Also in the real world there isn't a magical civil war/ guerilla action pause on mortgages/ rent, taxes, etc let alone food and fuel costs. The bottom line is that somehow you are going to need to keep some kind of shelter (or be well connected enough to be sheltered) and feed yourself. Also ammunition, explosives and bribes do not come cheap.

 

If you look at the kind of wars that some may think are applicable they are measured in years not months or weeks. A few dozen buckets of food are great but you can't rely on them for this long of a timeline. You will need a continual source of income. This also works well with appearing to be a normal person and blending in.

 

2) Along those same lines patience is a virtue for insurgents. Knowing when to lay low is probably more important then being able to pick targets effectively. Unless it is some sort of Dirty Dozen scenario the outcome of one single battle will not make or break anything. However much it may hurt the enemy if you are dead you can not continue to be an effective insurgent. Also if you are dead it is bad for your family. Insurgents can lose battles all the time as long as they do not get wiped out. While everything has risks smart insurgents pass over all kinds of targets because they can't get out, or they recruit some poor dumb jerk or guy with a terminal illness to blow theirself up but that is another discussion.

 

3) Insurgents need significant redundancy in lots of areas. The idea of you having one super fancy battle rifle and pistol with which you will fight until you are dead is noble but stopped being relevant around the Alamo. There are lots of situations, particularly in urban or suburban areas where having a weapon at the wrong time will be the difference between being detained (which given the tendency to bend rules and not respect 'human rights' in insurgencies is typically bad) and walking away. This also blends into the second point about picking target's but I would submit to you that having a few $500-700 rifles and pistols is smarter than a third as many 2k shooting iron's.

Homework Assignment of the Week

Get Ready For A Fight

How long does it take to get whatever you want for fight? It could be a home invasion or zombies or the Mongul Hordes. I am not asking what your go gear is and it doesn't really matter. It could be a pistol with a holster and a couple mags, a shotgun with a bandolleer or a plate carrier and a rifle. The question is how long does it take for you to get it all together and ready to go. If your rifle is in a safe, your mags are unloaded in an ammo can and the plate carrier is burried in a box in the garage it might be a half an hour. Obviously this is a rather extreme case of the WRONG ANSWER but don't be too hard on yourself if that is the case. The point of these assignments is to provoke thought and help you folks out.

 

Out of curiosity how long does it take and what is your setup?

 

Put Your Money Where Your Mouth Is

We have all heard someone say it to another person to get them to make a wager. I have heard this phrase before but am seeing it another way. I have long been interested in personal finance and economics. Seeing the different choices people make and all that.

 

I think I figured out the reason that is so interesting to me. The reason is that our mouths (and our minds) might say all kinds of things but if we look at where the money is going we see the truth. You can SAY that getting out of debt is important but if you don't DO IT then it really isn't very important to you. Ditto for getting prepared or anything else. I find it interesting because it represents what folks truly care about and consider important. The same could be said of time.

 

My question to you is if your mouth and your money are on the same page. If they aren't then you should consider aligning them.

 

Fitness Update

Crossfit and I are officially exclusive. We have always had a thing for eachother and were off and on for a long time. Now we are making some changes and giving it a solid go. Nothing is for certain yet but it is going well. The 3 on 1 off is the best schedule I have found yet. Also it is fast so it fits into my busy schedule.

One of the biggest things I have realized is that as with any exercise program you have to have some ownership. Sure well rounded fitness is a great goal but you know your situation, strengths and weaknesses best. If you need to work on strength do a bit more lifting and less running. If you are a bit too heavy do more running and callestenics/ gymnastics stuff. I also came to a realization that deals with one of my biggest reservations about crossfit. Simply if mismannaged it can be too random to the point where you fail to gain in measurable areas. For example if you only run or squat (or any other discrete exercise group) once a month you simply are not going to gain. It doesn't matter how hard the workout is the frequency is just not sufficient. I have taken to tracking when I do certain things in order to ensure things stay on track.

Anyway so far so good.

Positive Friends

Remember what your Grandma said? Something like "Show me your friends and I will show you yourself". Well it is a lot more true than most will admit. We are a lot like our friends and we tend to act like them at least when in their presence.

 

For example if I am watching my weight I won't go to Tim's house around dinner time or I will eat first. If I don't feel like going out and getting crazy on a work night I don't grab a beer after work with Bob. It isn't that Tim or Bob are bad guys, just that they have downsides. The same could be said about money, or a variety of destructive or otherwise negative things.

 

Just the same way that if you hang out with Bob you may end up acting way more like an alcoholic than is desirable you need to be mindful of keeping friends and family from derailing your efforts in terms of preparedness. If people are, even if by no malicious effort derailing your efforts then seek to counteract that influence or consider spending less time around them.

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?