Modern Survival Tenant #2: Debt is Financial Cancer – Kill It.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but DEBT IS THE MONEY OF SLAVES.” -- Norm Franz

I have covered this topic of considering Debt as Cancer in previous posts and I have adopted this tenant of Modern Survival into my life even before I ever heard of other folks that were planning for having a positive financial future.  Most of my readers know that I have been a fan of Dave Ramsey and his down to earth methods of getting out of debt and living a better life.  He developed the Snowball method of debt reduction.  I may not agree eye to eye with Dave on everything but I can personally endorse his Snowball Method as I see my snowball growing and gaining speed every month that goes by.

In my last blog post I wrote of those that only prepare for failure are just as foolish as those that do not even plan for success.  The financial portion of our lives is but one area where we can measure success or failure.  Finances are easier to quantify because we are dealing with numbers.  One of the first steps to planning our financial lives to determine how much we should save in case of failure and how much we should spend in reaching for our successes is to have at least a simple budget.  The world is made up of both successes and failures, we should plan for both.  Often time’s people see a budget as some elusive mathematical computation that only a CPA can understand.  In reality a budget is just a simple list of how much we expect to earn based on our current paychecks and how much we plan on spending.  It may not be as fun as just sliding the plastic card through the checkout reader and not being concerned when “Later” actually comes, but having at least a simple budget goes a long way towards taking personal responsibility with our money.  How can you plan for the future if you don’t even know how much you have, or how much you can save, or even how much you can spend today without going further in debt.

Debt is a cancer that can eat away at your life.  You have to kill it.  The bottom line is that if you are in debt, or you are getting deeper in debt you are doing yourself and your family a disservice.  STOP IT NOW!  You are just screwing yourself and your family over if you do not dig yourself out of this toxic hole.  By reducing your debt today you can have financial independence and a better life tomorrow.  You are the only one in charge of your life including the financial portion of your life.  No one will do this for you.  The revolution is you.  Now is the time for you to start building a better, more secure, self sufficient life.

Make your own way, others will follow.  Everything you do today to prepare for tomorrow should improve your life today.   

Modern Survival Tenant #1: Don’t bet on failure.

Prepare for Everything Including Nothing Going Wrong

“Yet although history never quite repeats itself, and just because no development is inevitable, we can in a measure learn from the past to avoid a repetition of the same process.  One need not be a prophet to be aware of impending dangers.  An accidental combination of experience and interest will often reveal events to one man under aspects which few yet see.”  (Friedrich Hayek – “Road to Serfdom”)

Looking back at history as I know it and seeing how some people responded to potential crisis I have seen people move into panic mode as they prepared for a disaster that never materialized.  During the Cuban Missile Crisis a lot of people dug out root cellars and installed personal bomb shelters.  While they might have survived a nuclear blast they were probably not really prepared to survive the long term after effects of that type of disaster.  I imagine most of those shelters have either been removed, or maybe dug out to be used as a pool.  What about those folks that stocked up on pallets of military MRE rations prior to Y2K?   Did anyone really eat all of that food or did it most of it all go to waste?  If you ever tried one of those MRE meals you can probably take a good guess at what happened to them and realize a lot of those cardboard meals went in the city dump sometime around 2002 after they all went bad.

The main commonality and point of failure that most people encounter when they jump on the old school survival bandwagon is that they are BETTING ON FAILURE.  They are betting on getting bombed.  They are betting the world will fall apart when (not if) the U.S. Dollar fails.  They are betting that society will collapse when…(fill in the blank).  By betting on failure and preparing for it, they lose sight of being prepared for realistic problems such as temporary water shut offs to the neighborhood, kids needing to have a college fund, the transmission failing on their car, losing their job, etc.  

When we prepare for smaller more realistic failure events, we are actually much better prepared to handle those major disasters and maybe being able to ride out the aftermath of a larger situation without a tremendous amount of discomfort.  That’s right, we prepare for problems in a way that makes our life better TODAY!  Modern Survivalists are folks that are betting on a positive outcome in the face of problems while they are preparing themselves and their families for a better life even if things fall apart.  Having less debt means having more money to spend on things they want.  Growing some their own food means they are eating healthier and spending less.  Storing some food means that they will spend less now on food they would have to buy later and they will have something to eat if their world does fall apart for a while.

Being a Modern Survivalist does not mean hunkering down in a bunker full of guns, ammo, rice, and beans waiting for the Big One to hit.  It just means that we are getting prepared to live a better, more self sufficient and more secure life than those around us who are just not paying attention.  Don't bet on failure, just prepare for success whether failures happen or not.

The Twelve Tenants of Survival in the Modern World.

It seems that when a group of people that are like minded get together they form a list of their core beliefs or philosophies.  Christians will immediately refer to the Ten Commandments as their guidance or list of the way they should live their lives and how they should treat others.  We the People of the United States of America look towards our Constitution as the guiding principle in how we allow our elected leaders run our government, even if it seems none of them have read it lately or follow it as they should.  What about a list of tenants or guiding principles for Modern Survivalists or Preppers.  No, not a checklist of what to buy, what to store away, or which skill-sets to learn, but a foundation of how and why we prepare for life’s emergencies as a foundational guide to fall back on as we attempt to do the right things for the right reasons.

Several folks have put together a list of these core beliefs or tenants that describe the philosophy of Modern Survivalists.  The best one that I have found lately is from Jack Spirko the host of "The Survival Podcast".

• Prepare for Everything Including Nothing Going Wrong
• Debt Is Cancer Kill It
• Grow and Produce Some of Your Own Food
• Tax Is Theft Pay Only What You Must
• Stored Food is a Safe Investment
• Understand Disaster Probability and Commonality
• Green Energy Is For Independence Not Saving Polar Bears
• Own Land and Make It Produce
• Utilize Pragmatic Preparations
• Have a Means of Defense
• Have Full Documentation for Any Disaster Need
• Develop Your Own Plan

I am planning on looking into each of these concepts in my next few posts to share some of this philosophy with you.  I would like to encourage you to start taking control of your life and start preparing yourself and your family to enjoy life in a way that is happier, more self sufficient, and more secure than ever before.

Getting Back to the Basics

I haven't written down any thoughts about Preparedness for the last few months.  It seems that life gets in the way sometimes and you need to focus your efforts towards other goals that are the most prevalent in your life at any given moment.  But in a nutshell that is what being prepared is all about.  Being prepared means being able to face life's curve balls when they are thrown at you, and living a better life if things are going good. 

Our family faced an emergency six months ago with my wife having another brain surgery that she has valiantly recovered from.  In looking back over the last several months and remembering that she was out of work for three months we relied on some of our preparations such as food storage to get us through.  In fact I didn't really realize how much those preparations helped us until I took a look at our food storage the other day and realized that we had used about thirty percent of it and needed to get back on track with restocking.  I guess we were supported by those preparations and because of them we didn't have to struggle to make ends meet quite as much as we would have if we hadn't prepared.

With that little wake up call for me, I thought it might be important for me to share more information with my friends and family so that they might take a step back and look at where they are in their preparations to be able to live a better, more secure, and more self sufficient life.  We all need to "Get back to the basics" once in a while to make sure our lives have a solid foundation.  I would encourage all of my readers to take a look at their ability to face life's challenges within their ability to do so.  Have you stored a couple of days/weeks/months worth of food?  Have you put away a little extra cash in a safe spot in case you can't get to the bank or your Debit card gets lost or stolen?  Have you taken steps to reduce your Debt to cut that cancer out of your financial life?  Are you planning on planting a small garden to raise some of your own food to eat healthier and spend less?  Being prepared is not a new concept nor is it hard to do.  It just takes a single step to get started and it is never too late.

Taking some of my own advice and IT WORKS!

I missed my weekly Thursday blog post but I wanted to share with you an example of how I am taking some of my own advice and hopefully encourage you to do the same. This afternoon I was able to save quite a bit of money on groceries, and I wanted to share with you not only how I did it, but also show you how easy it was. At the end of March we went to our local Lowes hardware store and bought a mid sized chest freezer for a little under $300.00. Thats a lot of money on a tight budget, but we have already recouped almost half of that cost with BOGO (Buy-One-Get-One-Free) deals.

This afternoon my wife spent about five minutes online looking at the Harris-Teeter weekly ads and gave me a list of things that we use that were on sale. She checks the Harris-Teeter, Lowe's Foods, Food Lion, and Bi-Lo online ads each week to see what deals they offer that we use. Keep in mind a great deal on something that you don't use is not such a good deal after all. If you save the weekly coupons in the newspaper and a few from the daily junk mail, you can save quite a lot of money in addition to the BOGO deals. Most of the things we buy that are on sale are the staple items that we would buy at full cost anyway. Many times we can get higher quality name brand items such as cereal and lunch box stuffers with BOGO deals at half the cost of the store brands. The same goes for a lot of items that we buy using coupons.

Today for example, the grocery list that my wife gave me totaled $122.44 and I spent $67.19 saving $55.25. The way I look at it is that I just saved one sixth of the total cost of our new freezer. Since I have had at least three other BOGO trips since March, we have saved about half of the cost of the freezer. She gave me another list for tomorrow afternoon for Bi-Lo. Just with the BOGO items we will get $72.00 worth of food for $36.00 and that does not include using any coupons that she is still looking through. As far as I'm concerned $91.25 of free food in one week is not a bad return for investing only ten minutes of her time. If you are keeping tally, that's saving one third the cost of the freezer in only one week.

Now keep in mind its not all about just saving money. Remember my catch phrase about building happier, more secure, and more self sufficient lives for our families? Often times when we prepare for even minor emergences we are actually prepared for larger emergences. My wife is going to have surgery sometime in the next month or so. We bought the freezer to save money but we are going to reap larger benefits in the near future by having that larger frozen storage capacity that we did not have with our refrigerator freezer. We are planning to prepare several meals and casseroles in advance and freeze them. Some of our friends and family are planning to bring us some meals during my wife's recovery period. If several people bring food at one time we can freeze some of it and have no waste.

If you guys are using some of my ideas and techniques to build happier, more secure, and more self sufficient lives for your families let me know and don't forget to share those successes with others. By sharing our successes we all grow stronger. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions.

Two more High Yield Low Risk Investments - Part Two

We all work hard for the money we earn. Most people understand that due to inflation (or more accurately the devaluation of the dollar) we can not just stuff our savings in the mattress and expect to see it grow. In fact for the last few years we have seen three to four percent inflation which means that for every dollar we earn, we can buy three to four percent less than we could the year before. In order to either keep up with inflation or hopefully see our savings grow we turn to investment vehicles. There are several traditional investments available from your bank or stock broker. Most traditional investments earn between 3 – 15% during good years. Lately with our economy where it is, we are seeing 0.5 – 2% growth from traditional investments. Remember that the old adage still applies, “The higher the yield the higher the risk”.

I mentioned two other non-traditional investment ideas in my last blog post and this time I would like to show you two others that can yield fairly high returns with very little risk. Other than paying off your debt which yields the highest return for your investment dollars, the second highest yielding investment that I have found anywhere will probably surprise you as well unless you have been reading my blog for a while. It is one that most people would never consider to be an investment because it is so easily overlooked. How many traditional investments do you know of that will give you an 18% return on your money, and even if they don’t they are guaranteed to give you back 100% of your initial investment? Not many, I believe. There is one non-traditional investment that does provide that security, here it is: Food. Everyone is complaining about high food prices, but were you aware that food prices rose 18% from 2008 to 2009? I have mentioned that storing extra food today will provide your family the ability to eat if you have some sort of local emergency. I usually think of it as food insurance. It also makes a lot of economic sense to store some canned goods and long term store-able items such as rice, beans, and pasta. There are a lot of other food available in your local supermarket that store well. Don't forget to use your coupons and try for those buy-one-get-one-free items to save money. There you have it, you can have your investments and eat them too.

The other non-tradition investment vehicle that is becoming more mainstream lately is investing in Precious Metals. I have mentioned in previous blog posts about how precious metals hold their value. An ounce of silver purchased just two years ago would have cost you $5.00 and today that same ounce is selling for a little over $18.00. There are a few tin foil hat wearing folks on the Internet that claim that the days are numbered for our current fiat based money system, and we should all go out and convert all of our savings to gold. Again there is probably some truth in their ramblings but when you take just about anything to the extreme you tend to lose. I personally think that the proper level of investing in precious metals lies in the range of 5% to 15% of your total investment portfolio. This is where you must use your own common sense and invest at a level that you feel comfortable. You might limit yourself to just 1% or you might feel comfortable at 20% or higher. While there are several methods of purchasing precious metals via COMEX and ETF vehicles, I tend to stay away from them at this time. When it comes to precious metals I think there are some good investment opportunities in the paper investments through brokers, but again the higher the return the higher the risk. For now there is an old rule that I follow because I think is very wise, “If you can't touch it, you don't own it”. Physical gold and physical silver are tangible assets. If the stock market crashes or the brokerage firm that holds your gold/silver goes bankrupt your metal investments can vanish overnight. One other nice feature of investing in physical precious metals is you can start with very small amounts of money. Purchase just one, one ounce silver round at your local coin dealer and you are in the market. If any of you are interested in purchasing silver or gold I have a couple of suggestions that I will share with you via email if you ask.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.

Four non-traditional financial investments - Part One

Another day, another dollar, makes you wonder where your money went. You can scream, you can holler, it really doesn't matter because it all gets spent. (Jack Spirko - TheSurvivalPodcast.com)

While I don’t even pretend to be a financial adviser, I do but a lot of weight behind the old saying of; "Don’t put all of your eggs in one basket". I know that everyone looks at investments differently, but I would like to share some not-so-common financial philosophies with you. I believe that it is important to understand that the information given to you by a financial adviser is just simply that. It is just information and advice. You do not have to follow everything your financial adviser tells you to do. You need to make sure you are comfortable placing YOUR money in a place that makes YOU feel comfortable. It is also important to remember that most financial advisers are getting paid to sell a product. Most advisers only make a profit when you buy their investment products, and it is not in their best interest to advise you to diversify your investments outside the portfolios that they offer to sell you.

I feel that it is important that we diversify our investments. Most of the advice I have been given follows along the lines of putting all of my savings into stocks, bonds, and mutual funds. I'm just not comfortable with that advise any more. Even after the wake up call we all had when the stock market crashed and about a third of my retirement money fell to the ground like the ashes of a cheap cigar, I still believe that there is a place in most folk’s portfolios for those traditional investments. After all, the money that flows through the stock market is the fuel that keeps the engine of our capitalist economy moving forward. The ability to sell stock is what keeps entrepreneurs and inventors of new technology in business to make our lives better and our country stronger.

I have found that there are four separate non-traditional financial tools that are important to me. The first is Cash. It is important to have some cash on hand for small immediate purchases so that I am not tempted to use a credit card for little things. Those little things can add up quick even if you are trying to pay attention. It is also important to have an emergency fund such as a savings account where you can readily get to the money to cover other minor emergencies. Several advisers have recommended a $1000 emergency fund as that amount can cover most of the problems we encounter.

The second financial tool is the highest yielding financial investment that I have seen anywhere. It is one that almost no investment counselor will share with you and it is simply: Get out of Debt. The best way to think about debt is to consider it the same way you look at cancer. In reality it is financial cancer. For every dollar you put on your credit card you will wind up paying the Credit Card Company $1.25 after you add in fees and interest charges. If you just pay the minimum amount due each month on even a relatively small balance it could take up to 36 years to pay off some cards. You wind up paying more in interest to the Credit Card Company than you initially put on the card. The money that you are paying as interest is money that you cannot use for things that you want or need. Interest money given to a Credit Card Company is gone forever and can not be used for increasing your personal wealth.

In my next post I will share with you two more non-traditional investment tools. One of them gained 18% last year with a 100% guarantee on the initial investment. The other has gained 200% over the past four years.

Your feedback is important to me. Let me know what you think of my blog. You can email me at larrygriffin@carolina.rr.com or drop in for a visit on Facebook. I am always happy to share ideas with others and hopefully answer some of your questions. By working together we can build happier, more secure, and more self sufficient lives for our families.