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Wednesday, August 31, 2016

economics and finances 1 of 3


ECONONOMICS AND FINANCES

Today, let’s talk about your finances as if economic collapse matters.  It would seem that all of us think economic collapse is already here ( and we are just waiting for the water to overlap the deck of the Titanic ) or it will be here any time ( as in, months to single digit years rather than decades ).  Yet, how many of you conduct your financial affairs as if this is the case?  I can hear you all mumbling now, “well, I’ll just enjoy the good life until I can’t”, or “I can’t disrupt my life too much or the Old Lady will kick my ass”.  And that is pretty much the standard attitude.  Hell, those are MY attitudes.  But if the ass falls out of the economy tomorrow ( as opposed to civilization collapse-the difference is that with an economic collapse you can still buy food if possible even if there are no jobs and with a civilization collapse you can’t get food shipped to you no matter what.  They will merge one into the other but here we speak of the initial pre-die off phase ) I have all my ducks in a row.  Do you?  Or are you still encumbered with debt and an untenable location? 

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We’ve talked about this many times before, as I imagine we’ll discuss it a few more times ( perhaps-I really do think we are mere months away.  Although, truthfully, this is based on little more than a fear factor inspired on increased instances of remembering cataclysmic dreams whereas prior I haven’t recalled ANY types upon wakening for many years ).  You can’t be living the American Dreamscape of all encompassing debt if you really believe economic collapse is nigh.  You don’t just wake up one day and all the banks are closed and the angels dart from behind clouds and a beautiful chorus is bellowed out about the Jubilee arriving.  No, reality is that you lose your job first, there are no others,  the banks and creditors strip you of your ability to live beyond a bare ass savage existence, THEN and only then do the banks close up and the ghettos vomit forth their brand of savage who are a lot more scarier than your unshaven unkempt malnourished tent under an overpass living sad sack-ness. 

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How shackled are you to your obligations?  You can leave tomorrow if you wish?  I’m not talking about emotional entanglements, but legal ones.  You may love the pay or security of the job you hold now ( I can’t imagine very many like the work itself or the layers of idiots you answer to ) but could you leave it tomorrow if you changed your mind?  More importantly, if THEY changed their minds and laid you off.  Or are you stuck in a mortgage with two vehicle payments and college loan obligations?  If your job disappeared tomorrow and you could get no other, could you escape your current location?  This isn’t just an amusing wargame you play as a prepper.  Not anymore.  To my mind this is the reality right around the corner.  Of course, yes, I could be wrong and the can is kicked down the road some more.  I don’t see that myself-the Fracking Industry which was responsible for most of the last eight years of reprieve is imploding now.  We might very well be at the cusp of the EROI energy critical threshold ( some calculate the global average is under 10:1 which in anyone‘s book is bad ), whereas before things barely worked with almost enough energy inputs and suddenly there isn’t quite enough even for that.

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I don’t think the Dow Jones or the bond market or waiting for a critical signal in the demise of the petrodollar or any other “flashing light indicator” is going to warn you in time.  I think that one day the system is smoking and clanging and noisily crawling along and the next it just all goes to crap.  You didn’t get to time the housing bubble popping ( whether you were aware of the danger or not ), so what makes you think you can time this collapse?  If you don’t act prior, you won’t be able to act after.  Not this time ( if you disagree with this, I can’t change your mind.  I’m acting pessimistically and you are optimistic.  The twain shan’t ever meet ).  You really should be “three days early rather than three seconds late”.  And it isn’t difficult at all.  It might be uncomfortable, but it isn’t hard.  Living without food is hard.  Living without a McMansion or a SUV is merely uncomfortable.

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Anyone can find cheap shelter.  You don’t even have to leave your present job.  You just need to decide to downsize.  If your mortgage is $1500 a month, giving that up and moving into a travel trailer in a park is one third the cost, with a storage space included ( sell all your expensive house crap to buy the used trailer for cash ).  If you locate that trailer in a park close enough to work you can bike and give up a car payment.  Suddenly, you are saving half your income whereas before you were in the red every month.  Then, when your junk land payment is complete you can move the trailer out to it while you build a better shelter.  Then you can survive on a casual income.  See what no rent/mortgage, no car payment and no debt can do for you?  There is no need to get into debt to live free in the country ( and “living free in debt” is an oxymoron ), all you need is to downsize.  And, no, a trailer isn’t mandatory.  When I was in Florida renting out my mobile home rooms ( which almost paid the payment and lot rent ) we had a married couple as renters.  They were the best we ever had, single men being a whiny worthless lot.  For one third the cost of most other types of rent, they lived in town on grid near jobs.  They just had a much smaller space.

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They just had to decide to make a short term sacrifice.  You think it is too hard to give up a car?  For the cost of insurance alone I could have had a unlimited bus pass ( I didn’t want it because it was faster to bike-and this was in Florida with heat, humidity and always getting rained on ).  Now, why would I want to go back to a motor vehicle?  A bike is how I get my cardio and it costs me under $100 a year in replacement parts.  Why do you have a gym membership when you could save money by NOT having one, and NOT having a car, but by having a bike.  Yes, of course, some areas are dangerous on a bike.  Not for long, as an economic collapse will do wonders for road congestion.  But I’m not saying YOU must have a bike.  It certainly works for me.  You can bus or walk-believe it or not there are plenty of fully functional people who don’t own a car.  And they can afford to live on half hours. 

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This stuff isn’t rocket surgery people.  It is called living below your means.  Now add to that living below your perceived future means.  Done.  Simple.

END

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23 comments:

  1. What ever happened to Chuck Findlay? He used to post here daily, and you don't see him anymore. I guess there was a disconnect between your two different philosophies, so perhaps he moved on.

    Wanting to head out to the Elko land pretty bad these days. I'm currently parked on my mothers rural place with my RV, but her and her many animals are driving me nuts, so I gotta escape. The other problem is that I have limited storage here, and would have no where to store most of my preps. And even if I did start to stock supplies here (mostly wheat) it would all have to be moved to Nevada at some point eventually, creating even more hassle in moving.

    My biggest dilemma is shelter (The RV is not coming with me). I hate trailers and they're terrible to live in, in extremes, yet I'm also not Joe builder. Had an idea a while back on converting a wooden shipping crate into a shelter, but that might be over simplifying things a bit too much.

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    1. Should you move here and sell the trailer? Or are you selling it for moving money? Just a thought as the ass hasn't fallen out of the local economy-yet-and you might get a good price on it. Might. Ominous signs of doom everywhere here-or is it wishful thinking?

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    2. Don't need to sell it to move, but it's an old RV James, a 1984. I'd have to put some serious work into it to get it to be able to make the 7 hour drive to Elko. Not to mention that after the work, the cost of the gas (8 mpg) would probably finish me off financially, so to me it's not worth it. I did learn a valuable lesson though, and that's never to buy an motor coach. You still have to deal with smog (buying and selling here in the PRK) unless it's really old or a diesel, and any engine work is a nightmare in such a confined quarters. Far easier to get a trailer and avoid all that, and just rent a truck when you need to move the trailer. But as you already know, unless you live in a very temperate climate, trailers are not much fun to live in.

      Seriously thinking about getting rid of both of my cars and getting a motorcycle. I'm just going scrap my old dead van, and maybe donate or sell my old Jeep. If I ever need a car I'll rent one, but I'm not ready to give up auto ownership all together, nor do I think it's practical for me to do so at this point in time. My land is 15 miles outside of Elko (you know where) and there are no preps in place out there yet. But after it's fully stocked, then auto ownership could become optional. Personally though, I think I'll just keep a motor bike as long as our petrol society holds out.

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    3. As I can attest, living in the boonies without a motor vehicle is doable. But like the Rv, not very much fun at all. Can you sell the coach in CA and just get it towed? As in, it is just going to be lived in rather than driven? If you pull the engine, then sell, does that protect you legally and give you a buyer? Someone who wants a cheap home? Could you pull the van engine and tow it and use it as a tent until you build? If you're going to move soon, it seems to be now or wait until spring.

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    4. Might want to look into one of those sheds you see pre built all over the place. A bit pricey, but you can make payments and finish it out. Good luck in Elko, wintertime can get intense, it is why I am not there.

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    5. Don't know off the top of my head James, but I'm guessing no on pulling the RV motor and just selling it as a trailer, which I think is what you're getting at? The reason is that it's in the system with the DMV as a motor coach. I could sell it of course in non-running condition, but it could never really be moved without a one day pass from the DMV, nor could it be fully registered.

      I'm guessing the tow fees would be outrageous to tow either vehicle 7 hours away. I think it would be easier to just get a small trailer once I'm there, or camp in a tent while I build. Yes, I planned on waiting until spring at this point, since it's too late in the year now. Still have a few loose ends to tie up around here anyways. It will be very liberating to get away from mother's constant nagging, and the animals that have really made a mess of things. Of course, I'm probably going to be lonely as hell, since it's just going to be me. That's why the plan as long as my mother is still around is to travel back and forth between Elko and CA (most of my relatives live within 5 miles of the small town where I currently live) when the loneliness starts to get to me.

      Thanks for the input Wrenchr2. Yes, I've actually given that option some consideration as well. I'd like to have an earth sheltered dwelling, as well as an above ground. But if I only had to choose one, earth sheltered would be a priority.

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    6. The tow fees might not be as bad as you think. There companies that specialize in hauling rv's cross country etc. Almost paid to have an rv of a dead relative shipped back to the East Coast from Oregon. The prices quoted were under 2K if I remember correctly. Your jeep would certainly be cheaper. Ebay has auto auctions...you could look there and see if you could get your jeep shipped on a flat bed for a reasonable price. Just a suggestion

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    7. Thanks Sir Lord Baltimore. The Jeep runs but isn't registered. The van doesn't run, but when you take the rear seats out it's plenty roomy to sleep in. Paid $3400 for the RV, so probably not worth it to move it. Will probably sell the Jeep, scrap the van, and the RV; well, I'm not sure yet?

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    8. If the engine runs, it may be cheaper to have someone drive it there, then sell the engine, trans and RV as seperate units. Lots of people will buy a shell there, I did

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    9. If the RV cost you $3k, you bought it cheap. Good luck finding one here at that price. Don't bring it if you aren't going to use it, but don't get here expecting to replace it for a reasonable price. I've never seen a worse climate for RV's, nor seen them sold so dear. Or even mobiles. Combo of a-for now-good economy and low population.

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    10. Thanks for the helpful replies gents. I actually paid $3500 for the RV James, and it's 30' long, but as expected, has some problems that 32 year old RV's are prone to have. I foolishly failed to end up having the guy I bought it from smog it when I first got it, so it's not even fully registered in my name, and now I have to do deal with that hassle at some point, unless I scrap it. Perhaps it's just lack of incentive on my part, but I'm not real keen on hauling any of the vehicles I own to Nevada, I'd rather just get rid of them here.

      Not planning on living in an RV ever again James. When I get to Elko, I was thinking a camper or a small crappy old trailer, just as a temporary shelter until I can figure out what to do about my permanent housing. Can I get something smaller like that there at a reasonable price? If not, I'll get one here and haul it there.

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  2. Yes downsize now. Not exactly what I'm doing but sort of. I ended up buying three adjoining lots of land. Bought the first 9 acres for $37k. Yes but that was average and financed through a friend. Realtor called me and offered 13 more for $29k. Was married and we had good incomes. Then the realtor offered me 10 more acres with well, septic, and an older trailer that was solid but but needed flooring and a kitchen. $28k. So 32 acres for about $94k. What? That's not Jim's plan.

    No its not. I had plans for the 10 acres/trailer. I put about $10k into a huge kitchen, flooring, appliances, miscellaneous, ending up with @ $37k into it. Sold it to a good friend for $45k and financed him for 5 years at 5% so i made about $8k plus about $5k interest. Yes he got a hell of a deal. So in the long run I will pay off the $28k plus make about $13k profit. So my $66k two parcels at 22 acres will cost me $53k. Not bad. Plus I made $10k off some timber I sold. $43K. Less than $2k per acre. I could sell the 13 acres and almost pay off the rest of the land but by maintaining 20 plus acres I keep my ag tax rate of about $3 per acre. I have wild life, firewood, 2 springs, and plenty of room for a select few who may come this way if/when things go south.

    No I can't give up my vehicle but even with a note, insurance, maintenance and fuel it only costs less than a third of my employment income. Its a long commute. I could give it back and get something cheaper but it works for now. And it was not extravagant. A fairly basic 4 cylinder Tacoma. I still want a small motorcycle. Insurance $180 a year versus $1000 and much better mileage. We rarely get ice and snow here and it would suck riding in bad weather but I could cut gas use by 2/3 if needed. Plus, the type bike I would get is only $5-7K new.

    As Jim was saddled with child support at one time, as am I. Thus I continue to work. One ex will be paid off by the end of the year so big savings there. May even have to make a contribution to the fair haired one then.

    I guess the point of my rambling about my debts/finances is that Jim is right. I'm doing it different and betting on at least one year of my employment to get to where I could pay-off most of my debt and live on my pension. That wouldn't build my house but if things do continue for me about 3 years I will. If not I'm in a good condition singlewide, newer, that is pretty efficient. All electric and averages $120 for everything. If I get stuck in it the woodstove is going in to lower that to about $80 if I'm still on grid.

    Save and pay off debt. My trailer is paid for. I owe on my land but it is to a friend, not a bank.

    Have a place to go. Hopefully without restrictive codes. Build a big shed on it and store a few items to make it a livable simple cabin. You don't need all the crap in a modern house. Think off grid style. Insulate, basic grey water drains, a bit of solar for a small fridge, lights, maybe a pump to pressurize your rain catchment. Propane stove with as big of a tank as you can afford, some passive solar gain and a woodstove. Either a homemade composting toilet (AKA bucket) or a small home built septic system. You will be living pretty good by everyone elses standards when the time comes and better than the pioneers. Not hating on the B-POD but your wives have a better chance of supporting a rustic cabin than a hole in the ground approach.

    I threw a bunch out there. If it gives you one good idea or helps give you a clearer picture than great. Like I said I spent alot at the beginning but I'm fixing it.

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    1. I don't think your plan has too many downsides. A pension and super low property tax is sweet indeed. And yes, a hole in the ground is definitely a romance killer. If I had a mobile home she would have moved out there long ago.

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    2. Just say you will keep it for storage and storm shelter, and built a tiny cabin for two above but near it.
      A 16x16 2by6 'vacation cabin'(for the ol'lady) / storage shed' (for the tax assessor) can be constructed by a near complete novice, gives @256 sq feet, store the stuff that doesn't need to be kept warm/cool in sheds, outbuildings, or just outside if it can handle the weather. Built piece meal as you can afford it, and DON'T go more than 12 foot up- the risks and difficulties of working that high aren't worth it, I had to spend hundreds on scaffolding so I could build my 20 foot tall garage, and up that high the work just crawls along even with scaffolding and a safety harness (and don't get me started on the time I fell only about 8 foot and broke some bones!)

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    3. I already have 200+ sq ft with the trailer above ground. Much cheaper to gut that and have a nice cabin in that. And no taxes. Alas, we already talked over all the possibilities and she wants to stay on grid until no longer possible.

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  3. When planning to get SS in any form (retirement or disability) consider where the value of the money is coming from. Will kids need to be mercenaries for our overseas masters to get money with value?

    http://web.archive.org/web/20111227170308/http://www.eternityroad.info/index.php/weblog/single/lets_you_and_him_fight_social_security/

    pdxr13

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    1. That argument assumes those buying our debt own us. Nonsense-I've discussed this before. Treasuries were used to buy oil, not to "invest in our debt".

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    2. It assumes the the promises of the central .gov are good enough to import fuels. Who cares about debt until the recipient of that debt loses faith and stops sending real stuff? Chinese know the difference between paper and gold, even when the paper says "gold!". Then faith in paper fraud fails, the Just-In-Time system locks up, all the way down to food production (except for Dirty Hippie Organic Farmers/Amish who never could afford fancy fertilizer/'cides or GMO seeds, and diddn't qualify for financing/subsidizing a big John Deere tractor or a Congressman).

      "owned" has a requirement to defend/keep. That's why Irish are hired to do jobs too dangerous for slaves.

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  4. If you can get neighborless land crammed into a patchwork of Federal or State land (5 Acres?), is that better than owning 100 acres that you pay taxes on? Always have your own easement from a road to your plot, or else they may try to trap you in-place or keep you off of your land without a helicopter. Land without legal access is way cheaper, but almost useless!

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    1. If you buy in Texas, by law you must have access to that land by easement. Protects the buyer.

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    2. Jim that law doesn't apply to federal or BLM they can landlock you out.

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    3. Does Texas even have Fed land? Of course you are correct-Obammy's Boys can do as they desire, to include popping a cap in your head, burying you in a shallow grave and telling your family you are being held without charges indefinitely.

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  5. "Obammy's Boys can do as they desire..." which is a continuation of Arkancide, learned from 1950's cold warriors, who (for American purposes) got it from the stone killers in the OSS , who learned it from British Empire enforcers, and so on. The current batch of assassins and handlers are political hacks without discretion who think that eventually they will be honored as heroes/patriots (as Irgun bombers/snipers/assassins of 1930's-1940's become Prime Ministers of Israel) rather than disposed of by the next regime (or a training-confirmation hit for the next batch of killers). The most they should dream of is being on the run forever, with a bounty in gold provided for capture and thanks for DOA.

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I must moderate-trust me. You don't want to see what happens otherwise. Sometimes it takes awhile to respond as I only check two or three times a day. No N-Bombs, nothing to get me libeled. Otherwise, have at it. If you criticize me, make sure to praise my hair first.