Homestead Journal

Do-Able Resilience:Are You Part Of The 40% ?

 A survey by CreditDonkey http://www.creditdonkey.com reports that forty-percent of American households have less than $500 in savings...Sweet Jesus...If this is you, your personal financial Panic Meter needs to be set at something like 7.5. Start saving money, right now. Pack your lunch.Cut your utility bills with conservation tactics. Dump the club membership.Look hard at unnecessary insurance coverages(are you paying for full coverage on a ten-year-old car?) Cut the cable and expensive cell phone. Cut your land line service to naked DSL. With a $40-a-month prepaid phone from Wally World and naked DSL, you'll be fine (Just remember to give your address first thing if you have to dial 911.). Use wifi instead of data on a phone(Hint:one is free, the other is costing you big bucks.). Sell some stuff...have a yard sale. Take a second job. Start a little side business. You want six thousand dollars saved and you want it quick. There is no more time, guys.

For those of you with more in savings: Wouldn't it be nice to have a spare six grand? Look around you. See the junk? Sell it. Save the cash, or buy some preps. It's that simple...not easy, but simple..

From a Resilience perspective, people with no resources have great difficulty recovering from adversity. Six grand means that you eat and keep the lights on for three months. Or, you use a little of the money to start a micro-enterprise, or pool some money with others to build something a little larger. Six grand gives you a tiny bit of breathing room (way better than the zero-savings alternative). But let's face it, the Homestead Journal goal of an immediately accessible six thousand dollars (basic eats and lights for three months) is just a bare-bones beginning to what needs to be healthier financial behavior on everyone's part, starting at the point that we all control, our household economy.

Proper preps, a network of friends and family and a little cash will go a long way toward keeping panic at bay

 

Peace

The Middle-Class Answer to Middle East Turmoil...Part II

Let's be honest. When it comes to economics, there is not a lot of local turmoil left. 'Ole Tip O'neill quipped that, "all politics is local", and that may be true. But these days, all turmoil is global, especially turmoil that happens in the oil patch of the mid-east and Africa. Of course, monetary policy decisions made here, in the financial capitol of the US, New York City, have global ramifications as well: like the decision to use "quantitative easing" (creating new money) to preserve the status quo and put off economic accountability for a little while longer. The result of all that new (digital) money was a rise in commodity prices, that raised food (and oil) prices, that caused riots and unrest and the fall of a couple of governments and civil war and death in a couple more countries and raised the spectre of unrest and civil war in half a dozen more mid-east and North African countries, which, of course, raised oil prices some more. All of this is not to take anything away from the Tunisian vegetable merchant, who, after being slapped in the face for not having a vendor's license and laughed at by local bureaucrats when he complained, set himself on fire on the steps of a Tunisian City Hall. He was the initiator. Piles of leaked documents showing the extreme malfeasance, cynicism, and cronyism of the world's governments (It appears that many governments NEVER tell the truth about ANYTHING, actually preferring perpetual lying, with all it's intricasies, to the simple truth: making them PATHOLOGICAL liars.) formed the booster. As always, years of corruption, tyranny, arrogance and incompetence served as fuel, slow to ignite, but burning furiously once enough energy and oxygen were applied . Half the world set alight, just to have one more bonus season, one more good summer of yachting off Rhode Island...

What does all this mean to us working stiffs, other than the fact that mid-east terrorists now have ANOTHER reason to justify killing us and, soon, politicians may have ANOTHER reason to send our kids off to war? Well, it means all that. But the other implication is that the quantitaive easing failed. It wasn't meant to raise commodity prices, food prices and gas prices, cause civil war and death and falling governments (though all of that was predictable). It was meant to "stimulate the economy" into something called "economic recovery". Of course, all that money was created and put out there without answering the question, "Recovery to what?" That is why quantitative easing was doomed to fail before the digital cash was stroked in to existence. The broader implication is that the Fed failed and accountability (the noun) is approaching faster than the Fourth of July. You see, the Fed can only do a few things. They can print money, or not print money. They can raise or lower interest rates. That used to be all that they could do. Lately, they get to decide who gets the money that they create. This is a new power, and, of course, anybody outside Original Banksta status is excluded from this exclusive Club of Armani-clad Beggars. And that's one reason (among hundreds of reasons) that QE failed...Bankstas took the money and began playing the markets with it, running the price of a loaf of bread up nearly 25% at the local grocery store and gas prices up 50% in just a few weeks. Apparently somebody neglected to tell them to "get out there and stimulate" the economy. They probably would have asked, "stimulate the economy to what?"...causing an awkward moment.

So, the QE approach failed. What does that mean? It means that there will be another round of quantiative easing aimed at controlling the deficit by printing money, causing blistering inflation...that's bad. Or, it means that the Fed will raise interest rates to attract money to pay the deficit. Rising interest rates will kill the housing market even deader (timeless prose, I would'nt change a word) killing the demand side of the housing market and make doing business and creating jobs more expensive (causing deflation)...equally bad.

So, what are we gonna do? Well, we are gonna be ready to hear the news that everything that we ever worked for; pension and retirement, house (value) and savings has all gone up in a puff of digital economic smoke. The more ready that you are to hear the news, the easier it will be. Let me ask you, how much of your pension has ACTUALLY BEEN SAVED? That's how much there is NOW (everything else is make-believe). In a few weeks, or a few months, that will be gone, if you leave it in the care of a banker/broker. If, in 1979, I promised to pay you twenty gazillion dollars in the year 2014, and in the year 2011 I haven't saved a penny, you can pretty much bet that I'm not gonna have the dough in 2014, and neither will the government and neither will your pension fund. The government has one option, and that's to print the money, causing blistering inflation. They can BS about "selling the bonds that they saved", but nobody is gonna buy those bonds. The government will have to buy them and print the money.

So let it go. Like a friend too long on a ventilator, it's time to pull the plug and start rebuilding our lives without our friend. Remember who we are and who you are. Remember where we came from. Set your eyes on a better horizon and start moving forward in the company of family and good friends and a community of decent people that you may have to create from scratch. Time is a precious resource, use it wisely.

 

Peace

 

Financial Survival:The Only Financial Advice That Most People Need

I am not in the business of rendering financial advice, the following is for informational purposes only...I have to say that, otherwise, my lawyer's hair will burst into flames. And that is a shame because all I'm gonna say is, "Save some cash." Basically, that's it. Save some money. Don't wait, start today. First, head down to the credit union of your choice and open a savings account. Have an allotment of ten percent of your paycheck sent to the savings account every payday. Make up the shortage in your check by packing your lunch, and bringing drinks from home.

  The fact is, most of us have NO savings and that's a situation that has to change. Let's set a goal of having three months expenses saved and lets raise that cash quickly as if we were facing a finacial emergency, like a depression...HELLO!!

Have a yard sale and convert some extraneous stuff to cash. Look around the house and dump the "collectibles". Pick up a second job. Drive a taxi, or be a server at a restraunt. Start a small business. Mow some lawns. Forget the stigma. Think of the financial security and peace of mind. Imagine having the cash to cover three months expenses saved. What would THAT feel like? Three months' worth of cash doesn't make you a member of the sophisticated investor class, but it does give you a bit of a cushion and some options other than starving to death a few weeks after losing your job.

  A guy who IS in the business of dispensing financial advice once told me that a person should have one thousand dollars for every year of his life in savings. That's about eighty-four bucks a month, though most of us are way behind the savings curve and need to save more to catch up. For a married couple who's combined age adds up to eighty, that's eighty thousand dollars. Once a couple reaches THAT savings goal, they are ready to begin "investing". Another advisor stated that a couple should have one year's salary--from each of them--saved before they begin "investing". Again, we're not in the "sophisticated investor" category, but either goal would put you in the responsible adult category.

So, save some cash. Start now and don't stop until you've got a thosand dollars for every year of your life saved. Then, start looking for (more) competent finacial advice.