This and That

The Governor of Maine says the court decision [on the new health care law] has "made America less free." "We the people have been told there is no choice," he said. "You must buy health insurance or pay the new Gestapo -- the IRS." I really think he should stop holding back and tell us what is really on his mind.

The Patient Option Act, a practical alternative to the current mess we are getting into.

Will your internet connection go black tomorrow?

Instead of bothering to link to all of them just go to Claire Wolfe's tab clearing page.

The Sovereign Man: Offshore Business, Global Opportunities, Freedom and Expat News.

If you are looking for a used vehicle I strongly suggest consulting The best used vehicles for under $20,000 by consumer reports. We are probably going to be in the market for either Hyundai Accent with 50-60k miles or a Toyota Corolla with 70-90k on it once we get to the states. Hyunai's were a great deal 8-10 years ago but their prices have gone up a lot which ironically raised the price of the older used ones also. The Toyota is a lot more money but they last forever. Then again for 50% more money you can usually get a lot more car. We have some thinking to do on this one.

If you haven't seen it yet I recommend Western Rifle Shooters Backgrounder on First Aid Kits and Blow-Out Kits. It is complete with links and you could use it as a shopping list if so desired.

I got an email from the folks at Full Spectrum Dominance saying they are linking to us. They are a News Aggregator who pull in some really obscure stuff. Pretty cool if you've got the time. I will probably add it to my weekly news rotation.

I stumbled onto a topic floating around that concerns me called The Orkin Man. I wish people could finally realize that this plan doesn't work. It has repeated and failed way more times than Communism. Here is what happens: A bloodbath ensues, killing a bunch of elite's as well as a whole lot more of the wrong folks and just plain folks caught in the crossfire. This bloodbath is almost immediately followed by the people who did the killing becoming the new elite's. [Hint: the folks you want as leaders aren't the ones running around executing people wholesale or leading the mass murdering bloodbath executions.] With boring repetitiveness those new elite's are even worse than the old elite's. Those first folks may or may not not hold power but the ones who come next aren't much better. Reference the French Revolution, the Russian Revolution, Mao's disaster in China, The Khimer Rouge and pretty much every revolution I can recall except the American one.

To end on a lighter note I stumbled into a site for Infantrymen called 11series.com. Got some half funny half motivational quotes off their FB page:

"Not saying your a whore, but baby if you were a range target you would be the 25m one."

"It's too hot to train said no taliban fighter ever in the history of the world."

"How many vets does it take to screw in a light bulb? You don't know man, you weren't there."

Memorial Day Weekend

I guess the standard thing to do is to write some post about sacrifice and duty and all of that stuff. I  don't have any desire to do that. My life has enough of that stuff that on the other 360 some odd days of the year. Quite frankly I find the whole thing depressing. I have lost people and don't feel like dwelling on it over a nice sunny long weekend.

We would have gone someplace this weekend but with my lingering illness it didn't seem smart. I am feeling decent and all but things can happen and I don't want to go to the hospital in some random country. It turns out to be for the best I think. It has been a very quiet weekend which is a good thing.

I don't know exactly why but I have been a crazy machine of productivity this weekend. Like the 1950's stay at home mom who had 5 cups of coffee and a handfull of uppers that cleans the whole house, organizes the garage, weeds the garden, makes a beautiful dinner for the family and does 57 projects before hubby comes home. Well except it is not the 50's, I am not a woman or on drugs. Anyway my point is that I have been really productive.

I cleaned the floors and reorganized the kitchen. A bunch of stuff that should have been in storage got moved there and junk got tossed. More cleaning occured in closets and other storage places. This included the kitchen closet which has been a black hole of chaos and unhappiness in our home. Our vehicle got cleaned out, vaccumed and organized.

We went shopping for some odds and ends. I didn't plan to get anything else but went through the usual aisles (outdoor, tools, etc) anyway. Inventory changes sporatically and sometimes sales come up. I saw 3 D cell Mag Lights for $13 and picked up a few.

Over the weekend I found a slightly used (marker and a bit of paint on it but totally functional) generic rubbermaid type tub. These bins are one of those weird things for me. I have it in my head that they are really expensive when they aren't. Well some of them aren't anyway. The one I got costs about $8 new. A half dozen tubs worth $60 would probably fix a lot of problems and maybe even change my life as I know it. It is pretty dumb I guess.

We keep the usual sort of stuff in our vehicle: kid things, a first aid kit, warning triangles, jumper cables, some tools, jackets, socks and boots for me (I habitually wear comfortable/ nonpractical footwear and am not changing), a blanket, etc. Anyway since I got the junk out I wanted to get everything organized. Prior to now everything has been just floating around. I cleaned out the tub and got it ready to use. Since our sweet free tub is kind of big I added some more tools, a bag with some spare batteries, one of the new mag lights and some other things. Anyway now everything is nicely organized and neat which is pretty nice.

No big plans for tomorrow. Another quiet day and probably some stuff with the kid. Going to try and tie up some loose ends around the house before going back to work. If I feel motivated there are a couple closets that it would be nice to get taken care of.

Anyway I am happy with the progress this weekend. Getting things done that have been bothering me is a good feeling. We have also had some pretty nice family time. It has been really nice.

I hope you have a great weekend. Relax and enjoy some time with friends and family. If you are so inclined try to get some productive things done.

Quote of the Day

This makes me want to drive around in an ’86 Camarro with a girl from reform school”
Me on hearing “Paradise City”

Comment Reply- Security vs Profit

·         on priorities
Anonymous said...

If you have cash to pay for a new car, don't.
Take the loan for 0% or 1.9% etc. Let your cash stay in a high interest or dividend paying investment and earn more than you pay out.
Paying cash for large items is dumb when your money can work for you and not against you. ~~NGM~~

TOR here: I won’t say that I necessarily disagree with you but do have some reservations. Lets break it into cars and homes. Of course there are other things one might choose to finance (however you shouldn’t financing toys is not prudent) but they typically fall in the car price range. We will talk cars.

First of all you need to know yourself. Are you a person who has the self discipline to have a good chunk of money sitting allocated for one thing (the car, etc) earning interest and pay the loan from that account? Would it slip into the general fund or get siphoned off for other things? Some folks have that discipline and others don’t, it isn’t a mark against you if you don’t so long as you know it.

Secondly let’s get on the same page when it comes to the numbers we are talking about. Are we talking a high interest savings account, CD ladder or something else with a guaranteed payout and no (aside from massive inflation, end of the world, etc) risk of principal? A 5% savings account (a thing of the past) is very different from “on average the market earns 8%”.

For most people, most of the time the rate you will be charged for interest on a loan is greater than the amount you can get in a guaranteed, no risk of principle (aside from massive inflation, end of the world, etc) payout with the liquidity to make a monthly payment. Auto loans can be an exception when they do the .09% to 2% super cheap loans. However, even then, beating it by enough to cover the various fees involved in a guaranteed, no risk of principle investment.

Now if they offer you 0% then a very legit argument could be made to take it, even if you are just going to have the money sitting in a savings account available for other purposes. Some folks I know who have done very well with money (both in earning and managing) typically pay cash for cars. He needed a 3^rd consecutive Toyota commuter car (he puts a lot of miles on them) and planned to pay cash which is what they do. When they offered 0% he decided to take it and hold the balance of the cash.

Homes are a bit of a different thing. It is a much bigger situation with bigger implications. If I finance a car in the above scenario and something goes sideways (bank fails and my money is tied up for months, etc) it would suck but I could adjust things around and make the payment. Homes are much larger and the implications of that getting messed up are equally large. Typically paying off your primary residence is a prerequisite for retirement. It is also a huge step towards financial independence. Also a home is where you live, not something you drive. Worst case if you can’t pay for a car and it gets repossessed that sucks. A bit hit to your credit and you’ve got to figure out another set of wheels. However in a month or two you will have gotten over the personal feelings and figured out another set of wheels, hopefully a reliable beater paid for with cash. A home is where you live and a huge part of your life, particularly if you have been there for awhile.

With this there is definitely a trade off of security vs. profit. One in the hand vs two in the bush as they say. Personally I will take my one and lock it up somewhere then post an armed sentry. I just plain do not like owing people money. I like to know that as much of my future wages as possible can be allocated to meet my basic needs (food, shelter, fuel, etc) or toward whatever goals or desires I have at the time. Having money in an account set to make scheduled payments is cool if it all falls together right but in general just paying cash for stuff works out best. As part of this I know what is mine will continue to be mine if my income (or what it will buy) changes drastically. Nobody is coming to take my car if I become broke.

Well I hope that lays out my thoughts. Thank you for the interesting discussion.

Failure To Adapt

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

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

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

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

RIP My Car

I got my car in 2003. It was a 2002 model of one of the cheapest cars to come out of South Korea. It was in good condition and had a shade under 20k on it. Not fancy or particularly fast or cool looking but it sure stood up well to the test of time. Got a great deal when I paid $4,600 in cash. Interestingly after I made the deal I went inside to do all the paperwork. I had to practically yell at them that I didn't want financing and was going to pay cash.


I drove it with very minimal issues until its demise. It isn't even so much that it was a total loss but that it isn't worth fixing. It was a really good car for a long time and was totally reliable until very recently. To be honest I can't complain as I got what I paid out of it long ago. Recently it has just driven me to work and around town. We use the SUV for other stuff.
 
We are going to be a one vehicle family for awhile. We live fairly close to where I work so we could juggle who has the SUV if need be. Also Wifey is a stay at home wife so we don't really need a second vehicle at least right away. This spring/ summer we will get a new small-medium SUV, probably a Hyundai Santa Fe. Something small enough to not kill us on fuel but still big enough to hold a reasonable amount of stuff.
 
In the time I have had this car lots of friends have had two or three different vehicles. Some folks just don't seem content unless they have a (relative to their income) fancy car with the inevitable loan to match. Buying a boring plain car that has low miles and is in good condition is a pretty decent way to go. It frees up money to do all kinds of other things such as prepping and saving. These are good things to do.
 
 Remember you don't have much time left to enter our Awesome Ammo Giveaway Contest. Just wanted to make sure you are aware of it. Enter now so you can get a whole bunch of free ammo.

Biting My Tongue

Sometimes I kind of forget that I am crazy. However at some time when the conventional thing would be to congratulate people I just want to scream at them. I want to tie them to a chair and read some kind of a sane (Dave Ramsey, Suze Orman, etc all) personal finance book to them until it sinks in. For example awhile back some folks we know moved into a new (rental) house. They were super happy about it and I just wanted to scream. First of all they were flushing at least a couple hundred bucks a month down the drain (versus renting a modest place) and second they didn't really have that couple hundred dollars in the first place. Another time a gal we know was trying to get a new car. They had some problems with the loan (this should be a sign people;) and then there was something about them getting it ready, I really don't remember. However when everybody was saying how nice it was and how happy they are for her I just wanted to scream. They don't need it, can't afford it and disturbingly think that is just fine.

A guy who works for me was supposed to finally get his car today (shipping and licensing vehicles is a huge pain here). When I asked if he was able to get it done he pointed it out in the lot. It's a very nice car and I told him that. However I wanted to scream at him because it costs about twice his yearly income. He could get out of the Army and go to college on what that shiny fast car costs. Then after a few years of working he might actually be able to afford the darn thing.

I don't have anything against nice shiny things. I don't just see a nice shiny thing. I see something a person can't afford that is putting them under financial strain and preventing them from getting ahead. If somebody earns a good living and saves then buys an expensive car I wish them the best.

Then I realize that in some ways more normal people have to do the same thing with folks like me. If Wifey mentions that I got gun #37 (not the real number) some folks have to do the same smile with slightly gritted teeth and say "that's nice". Maybe at the end of the day we are just saying "that's nice" because we know it is something important to the person even if we think it's dumb and I am over thinking things.

New Years Resolutions IPR #3

 Lined through are completed.

My goals for this year.

Personal:
1. Pay more attention to my wife. This one is continual but I can reasonably say it is going well.
2. Travel a lot.  We went to Croatia, Italy, Spain, Luxembourg and the Czech Republic. May make it to Paris just before years end.

Personal Stuff:
3. We can use a few smaller things like a new TV and another laptop. The main push however is to get a reliable second car which we pay cash for. The first car is still plugging along but I think when we get a better second one and it is relegated exclusively taking me to work and back its life would be greatly extended.

Financial:
4. Stash some more Euro's. Say E400 or so. A good chunk into this one. Will probably just finish it off in one shot at some point.
5. Contribute 10% of our total take home to retirement.
6. Stash at least a half an ounce of gold  and 40 ounces of silver. Just started on the silver. Don't think we will make 40 ounces but oh well.
7. Continue to not make stupid choices.

Skills:
8. Take an automotive class.  They offer them on base and I need to know more about car repair. 
This one got replaced by brewing some beer which I did.
9. Be able to setup and trouble shoot a small solar setup.    Sorta mute since I went with a solar charger and a bunch of eneloop batteries.

Preparedness Stuff :
10. A good radio that can pick up everything. Probably a Grundig.
11. Maybe a Berkey water filter and maybe some spare elements for it and the portable filter.
12. A basic solar setup. 

Gun Stuff:
12. Buy a full case of .223
13. Buy a full case of 9mm. (I am going to call this complete because it is funded)
14. Glock 9mm mags. At least 10 and ideally closer to 20.
15. Some M1a mags. At least 10 and ideally closer to 20.
16. A few more spare parts and at least one AR15 full bolt carrier group.

Food Rotation:
17. Get a pressure canning setup and can something.

This one just isn't going to happen. We can't get any of the stuff locally and paying shipping negates any financial benefits. I am willing to do it just for the sake of the skill but not with that hassle.

18. Get a dehydrator and dehydrate something. Jerky is good and so are banana slices.

And Just To Get To An Even 20......
19. Get a subscription to Backwoods Home Magazine and otherwise work on my self sufficiency/ preparedness library.
20. Join a gun rights organization.

Time for discussion. Things are going pretty well. All the more expensive goals have been met.

Oh yeah and click on my advertisers links and  buy lots of their stuff.


Thoughts?

Sunday Ramblings: What Have You Been Thinking About This Week?

It has been an interesting weekend. We're all pretty thrown off staying up at all hours and sleep randomly. Going to bed when the sun is coming up and drinking coffee in the early afternoon or in the middle of the night. Sometimes the meals I eat match up with my schedule and other times they match up with the time of day. The combination makes me feel kinda out of it and like I'm slightly drunk all the time. Yesterday I woke up and immediately had dinner. This morning at 6am Miley was having a beer. Half the time I can't tell you what day it is let alone if it is AM or PM.

Talked with Stephen for awhile yesterday.  He is doing a lot better which makes me really happy. Had some interesting conversation about life, guns and the economy. He sends me lots of interesting emails and I do my best to read them. We talked about precious metals some. Concluded that it might not be a bad time to sell gold if you plan to anywhere in the near future. However if you are still buying PM's silver still shows some opportunity. Personally I am staying away from gold and instead buying silver.

One interesting thing about interacting with people who come to something from a different angle is that sometimes they can expose you to a cool new piece of gear or way of doing things. For example after handling my Glock 19 when I was down there he really wanted one and recently got it. If there has been a person who wasn't happy with the Glock 19 I haven't met them.

Also I got to talk to my friend Ryan (lawyer type) which was cool. He is well. Getting ready to do all kinds of huge things. We had an interesting conversation about politics and such. It might be interesting how this upcoming election goes. During it and beyond we are both cautiously optimistic that the Tea Party will do some good stuff. He is excited that they may well win some stuff in this election. I think it is good that if nothing else they are shaking up the GOP and conservative base in general which is good.

Ryan (lawyer type) said something that really resonated with me. He said more or less that he was seriously concerned about the state of our nation and was just going to stop stressing it and just get his stuff in order. I had a similar realization some time ago and it has brought me a lot of peace.  I can watch the news now and usually not freak out. My stress level and probably blood pressure are at much more reasonable levels. Instead of worrying about this or that which may be or is happening I am putting mental time and energy into preparing my family. Instead of stressing this bill or that amendment I think about how to meet this goal or increase that capability. I suggest this sort of perspective to everyone.

Personally I am really tired of this whole crony capitalism thing. It breeds corruption, kickbacks and nepotism by rewarding connections far more than sound business practices. After some reflection I think I prefer welfare type socialism though it should go without saying that I dislike both. At least somebody can (incorrectly) think they are actually helping PEOPLE. Ya know the kind of people with connections who often move seamlessly between slightly above mid level political appointments and cushy advising/ consulting/ VP of nothing type jobs in business. Hook up GE or some hedge fund while you are working for .gov then get a highly paid job not doing much of anything for them afterwords. I don't like the idea of forcibly taking hard earned money from people and giving it to nonproductive members of society; however giving somebody welfare (social security, "disability insurance", mortgage interest deductions, "earned" income credit, etc) just makes me shake my head. Conversely rewarding a group of businesses who screwed our entire economy makes me want to throw up.

We got a bunch of formula today even though Wifey is breast feeding. It is good to have options and a backup plan. Other than that I did a lot of reading on various preparedness and financial stuff. It doesn't really seem worthwhile to do "What did you do to prepare this week" but I figured I'd mention what has been going on. Life is kinda busy for me but I hope you are still doing good stuff. If you want to tell me what you've been up to I would love to hear it.

Now that Walker has been born Wifey is officially a stay a home mom. We don't plan for her to go back to work (though if a good part time work from home opportunity arose...) until our last kid, we're planning on two, goes to Kindergarten. For us this is a very put your money where your mouth is kind of thing. We believe and research agrees that young children do better if Momma is at home with them.

Having a stay at home parent  is one of those things that is simple if not easy. To do it you just need to live on what one of the parents makes. This may well mean decreasing your lifestyle and probably means you've got to give up on keeping up with the neighbors. We would rather have Wifey taking care of our kid then a brand new BMW. Her being able to hang out with, take care of and teach Walker is more important then brand new furniture, expensive electronics and a closet full of designer clothes.

I've got a couple interesting posts coming up for next week. Hopefully you folks will enjoy them.

Interesting news article: Oregon Faces Cold Hard Reality.  Here is a teaser "Borrowing money to cover operating expenses is just plain stupid."

What have you been thinking about this week?

Reading And Life

The day kinda got away from me. I guess over a couple weeks I got out of the habit of writing and am just getting back to it. I had my first workout since the whole pneumonia thing today. It was pretty low key but I didn't cough up a lung so that was good. Had a buddy help me fix the clunker today. Learned a way to deal with at least one old car problem which was good.

Spent some time today catching up on the news. We are still spending more than we bring in. Unemployment is still high and confidence is low. Those evil banks and businesses are still greedily holding lots of cash.  There are some elections going on but until they are over I'm not going to get emotionally involved or think about the implications.

We were going to go to a thing tonight but it didn't work out. After that I had some quiet time with a glass of Glenfiddich and The Witch of Hebron. I am about halfway done with it and while not revolutionary it is certainly enjoyable. I am pretty tired today. The girls are on swing shift waking up well after noon and staying up till 2 or 3. I got close to their schedule over the weekend which made for a really unpleasant 5:40 Monday morning wake up. Think I am going to bed pretty soon.

Time and Money

Long ago when I was a kid somebody said you can have either time or money but not both. There is a lot of truth to that one. You can work a whole bunch and make a lot of money or you can have lots of time to do whatever pleases you. In my life I have seen that by and large this is true.

Short of living like some sort of hobo or mountain man on public land you need some sort of income to live. Keeping a roof over your head, clothes on your back and some food in the pantry costs something. However above and beyond that you can look at what kind of life you want and make choices.

I tend not to fault people for their decisions. If you want to work just enough to get by and spend ample free time fishing or reading or gardening or even smoking dope in front of the TV then go for it. Conversely if somebody wants to work 80 hours a week to drive a new Mercedes and live in a McMansion who am I to look down on them.

It is just about what makes you happy. However I cannot help but observe that few people who are close to death wish they had worked more.

Not Good, Just Less Bad

I saw something interesting on the yahoo main page today. It is an article called The Myth of Good Debt. Certainly it is good for a coffee break or a few minutes of internet time wasting.

The whole subject of "good debt" vs bad debt has always kind of bothered me. Plain and simple debt is bad. You are promising future earnings for something now. You are almost surely paying interest for this service.

To be honest I think it is more like kind of bad debt and really bad debt. I would characterize home mortgages and education is kind of bad and consumer debt, credit cards, car loans and the like and really bad debt. The label good implies that it is smart to have this debt and it does great things for you. Sometimes that is right. In particular getting a college degree greatly increases (on average) your earning power. If you could figure a way to get through school with no debt or low debt that is ideal. However since educational costs have increased greatly beyond inflation or typical low level (working your way through school type job) wages that isn't always realistic.

Tangent begins- Also I would submit to some people that working your way through school at a low paying job and taking classes part time isn't the best route anyway. I have known a lot of people who had significant life problems as well as academic difficulties that lead to them not finishing school. They take a class here and another there and periodically have to drop out due to life reasons or even fail classes. Screwing up and not getting to a place where they can earn a comfortably livable wage and then continuing to earn 7-12 bucks an hour is pretty common. These folks then whine about how life is so hard and it isn't fair and generally have a long term pity party. What would often be a better course of action is to decrease their lifestyle if applicable, work less and borrow just enough to make up the difference. The difference between going to school and working 12-20 hours a week or 30-40 is huge. At minimum wage or close the amount of money we are talking about isn't that big. They could focus on school more and get it done at a decent pace. It probably will not be too hard to pay back said money with their increased future earnings. This is basically what I did and while I should have borrowed a bit less lived a bit cheaper it has worked out pretty well for us so far. End tangent.

With educational expenses should come degrees or certifications that significantly boost your earning power. I have got news for everybody. The days when a guy could graduate high school and  fall into a comfortably paying job doing work trained monkeys could do are over. We could talk about why this has happened but it doesn't change that it has. Especially with today's economy and jobs being scare you need to be marketable.

Mortgages are slightly worse than educational expenses IMO. I say this is because they do not have the same kind of exponential payoff as education (if properly targeted and used). Also the returns are generally less of a sure thing. House prices have a great long term track record but the short-mid term can be wild.

It would take a really long time for most people to save the cash to buy a traditional home outright. There are certainly some benefits to alternative housing but if you don't want to go that way the options are saving a lot of money for a very long time or getting a mortgage. Certainly paying the landlords mortgage for decades instead of your own and not getting the tax benefits or the appreciation in value doesn't make any sort of sense.

Getting a decent fixed mortgage you can actually afford on a home makes good sense for somebody in a stable financial place with some savings. As you noticed that sentence was kind of complicated. Maybe adjustable rate type mortgages or other exotic options make sense for some smart people in some situations. However for most people they are a horrible decision. If you can't afford a fixed rate it means you can't afford the home. Stability is very important as even short mortgages last many years and you need to be able to make that payment every month. Personally I have seen a lot of people get into trouble when they happen to get a job that pays somewhat better than they can expect elsewhere, 10 dollar an hour type guy earning 13 or a job that pays 70k instead of 55. The issue comes when they get a loan they can afford at their current higher wages and for whatever reason (laid off, fired, decide to change fields, etc) they end up changing jobs. Think about how much you could make at another job. Also having a safety net in the form of an emergency fund is essential. You've got to be able to deal with that month the car breaks or being out of work for awhile. I think Chief Instructor said once that a month of looking for every ten thousand dollars in salary is a guideline.

Part of my concern is that the concept of "good debt" leads to an attitude that having this debt is normal and even smart. Yeah it smart to increase your earning power with a degree and eventually purchase a home. However it is really smart to pay off that student loan as fast as possible and in time the home too. Having a mortgage (for the right person) beats the heck out of renting but owning a home free and clear beats the heck out of having a mortgage. I think it is also worth noting that if you buy a modest home you can actually afford paying it off at an accelerated rate is probably realistic. If you get absolutely as much home as you can make the payments on of course it isn't realistic to pay 10, 20, 50 or even 100% extra principle payments.

Cars I would classify as the best or most understandable of the "bad debt". Buying cars with cash is ideal. However "clunkers" can have some real problems. Some folks are good at fixing cars or just lucky and others have horrible luck. Often clunkers are unreliable and just $400 the heck out of you until they die. Basically if you aren't able to save a decent bit of cash and need a car for transportation you're pretty much stuck getting a loan. The real problem is how expensive of a car you get. For example awhile back my little sister found herself needing a decent reliable car. She went and got a loan to pay for a few year old basic car. Not a junker but also not new or fancy or anything like that. She paid it off faster than the loans planned life and still drives it. You need reliable transportation, not a new Mercedes. Look at it this way. If you can't afford to pay cash it means you aren't in a great spot for getting this car so be reasonable.

Consumer loans and credit card debt and such are just bad. The best case is that you use these as a sort of emergency fund because you haven't saved a couple months worth of expenses. This is bad because if you can't afford this stuff now why would you think it will be easier to afford later. I am a realist and I know things happen. I can also note that for some strange reason things seem to happen a lot more to folks who do not have emergency funds. Some unforeseen stuff comes up that has to happen right away. Replacing a key household appliance is a good example. Lets say your washer goes out. You get a new one from Sears and finance it then pay it off over a couple paychecks. Not insane. [However what if something bigger happens. Putting a months worth of living expenses from some down time at work on a credit card could take forever to dig out of. ] However using consumer loans to get all new appliances you don't really need for the whole house is insane.

My observation is that people rarely get into consumer or credit card debt trouble because of using them to ride out an emergency. People get into trouble here by using credit to live beyond their means buying this and that and the other thing which they can't afford and almost certainly don't need.

Sometimes debt makes sense. It can be understandable and even a good decision. However do not forget that at the end of the day no matter how "good" debt is it's still a promise of money you haven't even earned yet. Use it responsibly and try to get out of it as quickly as possible.

6 Extreme Ways To Go Frugal

Number 1 is to get rid of your car. Read the rest here.

Real World Effects of EMP on Motor Vehicles

You must read this. I am going to dig into the stuff on the website next week.

The economy is so bad that:

I got a pre-declined credit card in the mail.

I ordered a burger at McDonald's and the kid behind the counter asked,  "Can you afford fries with that?"

CEO's are now playing miniature golf.

If the bank returns your check marked  "Insufficient Funds," you call them and ask if they meant you or them.

Hot Wheels and Matchbox stocks are trading higher than GM.

McDonald's is selling the 1/4 ouncer.

Parents in  Beverly Hills fired their nannies and learned their children's names.

A truckload of Americans was caught sneaking into  Mexico  .

Dick Cheney took his stockbroker hunting.

Motel Six won't leave the light on anymore.

The Mafia is laying off judges.

Exxon-Mobil laid off 25 Congressmen.
 
Congress says they are looking into this Bernard Madoff scandal. Oh Great!!   The guy who made $50 Billion disappear is being investigated by the people who made $1.5 Trillion disappear!

And, finally... 

I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, etc.,  I called the Suicide Lifeline. I got a call center in  Pakistan , and when I told them I was suicidal, they got all excited, and asked if I could drive a truck.

New Vehicle, Goals and Compound Awesomeness or Failure

We can cross another one off the list. We got a few year old midsized Japanese SUV. It is several years old but with just over 60K on the odometer it should serve us well for years to come. We now have a big, heavy vehicle with a lot of cargo room which is pretty awesome. It is real strait except a bit of crunch on the front bumper. Best of all we paid CASH. Well actually we paid with a check but you get the idea.

That was our big push for the year so now we can get going on moving from an OK money place to a good money place. Now we are going to push hard at paying off my student loan (the interest rate is low enough that it hasn't been a huge concern) and be entirely debt free. After that we can start saving for a down payment on a house.

I realized something over the last few days. When it comes to money decisions tend to compound upon themselves. I am not talking in a formal sense of either earning or paying compound interest though that happens also. For some reason or another it just seems to work out that good brings better and bad brings worse.

For example lets look at a good money situation. Jim lives below his means. Since he lives below his means it is easy to slowly accumulate various preps and still save money. Jim eventually puts away a nice emergency fund. Since Jim has money he can plan in advance to shop good deals in the off season and buy in bulk. Now those things like sudden car repairs aren't an issue. He can usually just do it out of the normal surplus but if need be takes the money from the emergency fund then puts it back promptly. Since Jim is getting good deals on stuff and buying in bulk he is saving even more money. When his job slows down he is able to have the emergency fund supplement unemployment and thus be OK. Jim is able to buy a nice little piece of land with some of this money he is saving. Things just keep getting better.

Bob lives right up to the very limit of his means. Since he spends almost every dime that comes in it is very difficult to do more than pick up a couple cans of food or a box of shells for his deer rifle now and then. Bob is so worried about how to pay for a gallon of milk on the 29th of the month that buying things in advance of genuine need is almost a laughable concept. When Bob sees a good deal he is rarely able to take advantage of it due to lack of funds anyway. The closest thing to a savings plan Bob has is the change jar on the dresser. When the car breaks he has to make payments to the shop or put it on a credit card which makes his tight paycheck to paycheck lifestyle even tighter. When work slows down things become downright ugly. Unemployment doesn't come close to paying the bills and the change jar was good for about a tank of gas. Bob sells a couple things he really likes as well as getting behind on some bills and running up debt till normal checks start coming again. Things just kept getting worse for Bob. Every little thing that happens puts him another step backwards. In the best of times he is just treading water. Bob gets stuff on credit because there is no way he could pay cash. Those purchases are a mortgage on his future work so now he is left with even less money and the same needs.

You might be thinking that Bob's story hits a bit close to home. I urge you to not despair or give up or fall into the "everyone lives like this" trap. Personally I drank the Dave Ramsey cool aid . It may not work for everyone but it seems to be working well for us. Feel free to get a big plastic cup of the stuff or not.

Are you compounding awesomeness or failure?

The Good Part of Saving

Living below your means is not fun. It means that you have less money to spend on general lifestyle and discretionary expenses. It does however occasionally have good parts.

Last year into the very beginning of this one our big push was setting up the emergency fund. While it didn't give us anything quantifiable, peace of mind is darn hard to beat. We have been planning to get a TV for awhile. Actually ordered one online and after we paid for it they decided not to ship it. Eventually we will get that cash back but the whole thing turned into a real big pain. In any case today we went out and got a new 40" Sony Bravia TV. We took it home at a steep discount for a bit over $800 which considering the lack of options here is great. It is really darn nice. Also it has a remote control that works which gives me more joy than you could imagine.

This year we have been primarily pushing to get a decent second vehicle.This mission is now funded. We have a line on a low mile SUV which, assuming it passes muster with our stern and reliable German mechanic could work out well. Regardless sooner or later something will come along that fits our fairly loose criteria.

When you live below your means you can save money and use it to accomplish goals. Living below your means sucks but accomplishing goals is pretty awesome so it equals out. Maybe you want to set some money aside or buy a neato rifle or a piece of junk land or a camper or whatever. This is how you get there in a realistic and affordable way. Seriously today I got a nice TV with cash and we are about to buy a car. There is nothing magical about it. We have a pretty average income and choose to live well below it. Like many things in life it is simple but not easy.

On the bright side we are going through our New Years Resolutions like a bag of cocaine at an early 90's SNL party. Going to try and finish up our current goals and then do some more financial stuff. 

Please excuse me while I watch my sweet huge TV.

Tires, Junkyards, Beer Brewing and Mags

Today I went to get a leaky tire fixed. I went to the automotive place and; skipping the details lets just say it significant will power to not go Patrick Bateman on them. Anyway it all turned out OK when I went to the junk yard. For a couple minutes of looking and a few more wrenching some lug nuts I got a new tire with a rim for $17. Really psyched about that.

I have been saving up my pennies and ad money so it was time to buy some stuff. Decided to just go ahead and get mags. I am not exactly sure what type of 9mm ammo I want to get and well who knows what could happen with mags. Anyway I ordered 10 Glock 9mm mags from CDNN investments. Depending on how I want to look at it they are either going to be mags for my next Glock,  to stash somewhere or just put away for a rainy day. Lately I have been feeling like my happy number of 10 pistol mags is a bit low. The idea of having a few more to stash here or there has been appealing to me.

I went ahead and got 10 US GI M1A mags also. While certainly not the cheapest .308 semi auto I do really covet the M1A and intend to get one. Ever since I saw a blurb about these mags at a sane price on Survival Blog I have been wanting to pick some up. I was going to get more like 8 but there was free shipping on purchases over $200 so it was an easy decision to get 10.  In any situation (massive gun control/ AWB) where I would be unable to eventually get a rifle to go with them the mags would increase significantly in value so I don't see a downside.

Maybe if  the rest of the year goes rather well I will make those same orders again. 

Also ordered World Made By Hand and FerFal's book. I wanted to get his book when it came out but if I recall the cost was like $35 or even $40. Too much for me to justify anyway. However at $25 it is something I can justify. Really looking forward to reading it.

Was all set to order a beer brewing kit but they wanted almost double the price to ship the darn thing. That was pretty disappointing. When companies ship to an APO they only pay shipping costs to New York State but it is used as an excuse to really stick it to us. I will do some more looking and if need be pursue buying one locally. Worst case there is a store like an hour away and that city has some nice restaurants to boot.

I am going to cruise the blogosphere a bit then pick Wifey up from work. 

Later

Atlas Shrugged IPR#1

So I am about halfway through Atlas Shrugged. The review portion is going to be a bit shorter than normal because I do not want to spoil anything for those who haven't read it. Basically it follows a series of people. The people fall into 3 groups: producers, moochers and looters. About as simple as it sounds with producers producing stuff (they are big industrial types), moochers thinking they deserve something for just being themselves and looters taking by force. It is interesting. Onto the review.

The good: It has made me think a lot about all sorts of stuff. There have been (without ruining it for you) 2 points that really stuck out to me. First is that even a theoretically well intentioned highly centralized planning committee can not manage an economy in a decent fashion for very long. Not a big surprise there, Russia pretty much proved that one. Also the reminder of how well things are going in North Korea helps. Even if Thomas Sowell ran things along with Milton Friedman and Adam Smith who were brought back to life for the occasion it wouldn't work. Markets work because of dozens of decisions made daily by every person involved. They produce and thus earn and consume by turning the fruits of their labor (or ill gotten gains) into things they desire. A particular product like a new type of soda doesn't succeed or fail because of a report by experts that report to a committee. It does because people choose to try it or not and then whether to drink it in the future.

The problem I see with centralized planning is that markets are complex and unpredictable and thus impossible to plan. It is nice to think of them like making a sandwich, want some more lettuce so you just add a bit more, ditto for tomato, cheese, etc. However markets are a lot more like baking with yeast. They are their own weird creature and when you start tweaking things (heck even if they stay the same) then who knows what will come out of the oven. One discrete (and lets just say, well intentioned) move made by a central committee can have all sorts of crazy and entirely unanticipated effects. Think of the movie Butterfly Effect but with the economy.

Secondly I think it is important to remember that in an environment where the granting of favors to preferential groups is customary, even if it works out well for you once, it will probably not always go that way. For example Middle class home owners deserve the massive tax breaks they get but corporate tax cuts are unacceptable and earned income credit is welfare. Just about everyone would like to keep whatever breaks fit their situation and get rid of ones that benefit other groups as those are wrong.

Taking it to a corporate level General Motors has been helped in incalculable ways by the federal government. Without pet legislation (buy American, tariffs, bail outs, etc) they would likely not exist. However a big part of why GM is stuck with its very powerful union labor force. If tomorrow the president of GM (whoever he is) was able to fire his entire workforce and go non union it could be a very different ball game.

In a climate where preferential treatment is given in order to garner influence just don't be surprised if sooner or later politicians want to buy some other groups vote. Also revisiting our first theme central planning, which includes pet legislation often has unintended consequences.

The bad: Ayn Rand is long winded. The book is good but it could easily be 25% shorter.

The ugly; Ayn Rand is really long winded. The ideas which are part of the actual plot of the book are good. However frequent random paragraphs about the way a characters clothes fit their certain type of body and the expression of their face when they sat with their leg sprawled onto a table smoking a cigarette in a certain way is a bit much. It is really lame when those paragraphs don't matter at all or relate to anything. Saying that the character sat in a chair and smoked a cigarette would suffice and skipping it all together might even have been better.

I am enjoying it and hopefully will finish it in the next month or so. 

Risk Assessment

Discussion on my post a couple days ago made me feel like expounding on something. At work we do risk assessments. [To be honest they are almost always a bunch of BS. For example lots of people die in vehicle accidents, mostly because they are tired and have been driving for too long. Instead we create "controls" like radio checks and assistant drivers instead of actually making sure the drivers get a good nights sleep and have them switch out or split real long non mission essential (say 3rd ID's march to Baghdad) drives into more realistic and manageable sections. Anyway tangent finished.] Anyway what is important is to consider not just how severe the impact of a certain scenario would be, but HOW LIKELY IT IS. The chart below is a good visual for this.

The values for likelihood are pretty easy to conceptualize. You could define the values for severity/ impact in pretty much any logical way. In terms of physical injuries I would say minimal would be something that could be fully treated by a normal person with a modest first aid kit. Minor might be something requiring medical attention, say a few stitches or a sprained ankle. Major could be needing hospitalization. Serious might be limb or eyesight and catastrophic would be death. Follow where I am going.

So lets get back to that hurricane. If you live in the coastal south east a hurricane is a highly likely scenario. If you live in Colorado a hurricane is extremely improbable.

A flat tire is probably a minimal impact (unless you are ill equipped and on a lonely road during a blizzard) but it is a near certainty. I imagine over the course of most peoples lives they will have at least a few flat tires. Thus to that guy living in Colorado it makes sense to prepare more for a flat tire than a hurricane even though the impact of a hurricane would be major (of course it would vary by hurricane and how those individuals fare in it but just go with me) and the impact of the flat tire would be minimal.

Getting struck by lightning would really suck. Unless you make a habit of standing on top of really tall stuff or waving around metal poles in open fields during lightning storms the likelihood of getting struck by lightning is extremely improbable. Thus there isn't much reason to worry about getting struck by lightning.

To me it makes sense to look at how likely a situation is and how severe the impact would be when figuring out what scenarios to allocate our time and resources towards preparing for. This is why I see something like say, a financial emergency or a robbery/ home invasion as more pressing than Zimbabwe style hyperinflation or those Russian troops the UN has secretly been sneaking into the US coming to your neighborhood to enforce the edicts of the UN/ Trilateral Commission/ Illuminati/ Bildenberg's.

Thoughts?