Tag Archives: money

Money v. goods

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I ran out of dish detergent yesterday night an thought “No big deal, I’ll trot downstairs and grab another jug of the stuff.” To my chagrin, that was the last one. Bad survivalist! Sure, the end of the world is not going to be made worse by a lack of dish soap, but it’s the principle of the thing: shoulda had it, didnt.

So, that got me to thinking that January (or, really, late December) should be my evaluation period for purchasing “a years supply” for the coming year. I’ve made a list of a few things I’m just going to go ‘heavy’ on and see if they do indeed last me the year. This should make for some interesting looks from the guys running the registers at CostCo when I pick up a dozen drums of detergent.

And as I said, the end of the world experience will not be greatly affected by a lack of dish soap. But a ‘localized’ end of the world..such as a job loss or similar, ‘personal’, disaster will be somewhat eased if I can reduce the number of things I have to buy until I”m back on my feet.

Think about it. Pretend you lost your job and its going to take you three months to get another paycheck coming into the household. Every dollar is going to count, right? So the less money you’re spending on toilet paper, paper towels, soap, food, clothes, etc, is more money you have to stretch for other necessities. This is why I try to keep as much long-term-storage-friendly consumables on hand as possible.

I have the storage space (mostly) to go deep on stuff like that, and even if the world doesn’t come to an end I’m still ahead, inflationwise. There is an opportunity cost, I suppose, to tying up that money when it could be doing other things. That brings up a much bigger quandary: cash or goods?

Let’s say I spend $100 on toilet paper to store for the year. Assuming inflation runs around 4%, that means it would take $104 to buy that same toilet paper at the end of the year. By buying it upfront, I ‘made’ 4% on my money. But what if I simply took the $100 and put it in an envelope in my desk? At the end of the year it only buys me $96 worth of toilet paper. BUT…it can also buy me a host of other goods, whereas if I had spent the $100 on TP all I’d have is TP. In other words, $100 worth of TP vs. $100 cash. $100 of TP is just TP…but $100 cash can become $100 of TP, food, fuel, ammo, shoes, etc. So, it might make more sense to store the cash, rather than the TP.

As I said, my buying power is reduced by inflation…Assume TP was $1 a roll, just for round numbers. $100 gets me 100 rolls in January, but in December it gets me 96. But if I invested that $100 at something that made more than 4%, that would mean I could buy at least 100 rolls in December. The stock market, yearly, returns upwards of 10% on average, right? So, in theory, I park $100 in January and in December I buy 110 rolls of TP.

But…risk, scarcity, and self-discipline come into play. The investments may go down and my $100 may get cut to $75. So..75 rolls of TP in December. Or scarcity may come into play..the TP crop could get TP weevils and the price shoots up. Now my $100 can only buy 50 rolls in December as the price doubled. Or inflation may go past 4%. And, finally, self-discipline – can I stare at $100 sitting on my desk for a year and not touch it? Mmmm…

And often the bird in the hand is worth the two in the bush, y’know?

So…goods. This isn’t to say I don’t keep money stored away. I just keep it where I can’t see it or get to it without a conscious, purposeful effort.

All this to say that next payday I’m going to pick one item off my list of ‘Go Heavy’ and stock up for the year. At the end of the year I’ll review if the amount purchased was indeed a years supply. That’ll give me a good metric of what a years supply constitutes around this house.

This mental exercise in frugality, preparedness, and cost/benefit has been brought to you buy writers block, an empty soap container, and un upcoming sense of dread.

Direction

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I was having a little exchange in email with someone and was describing how the direction of my own prepping (and I really hate that word..it sounds so cutesy and trendy) has changed as of late and why. Maybe it’s worth a post or two.

I’m fairly satisfied with where I’m sitting in terms of food, fuel, materiel, etc, etc. It’s not necessarily gilding the lily to continue on the current path, but this current economic clime is one that makes me think now is the optimal time to shift directions for me.

As I mentioned earlier, we’re in a somewhat better-than-usual economic period. Jobs and markets are at record numbers. I’m not going to say that money is out there falling from the sky, but for someone with a brain, work ethic, and ambition, now might be a good time to work on getting the financial side of preparedness buffed up…take the extra job, invest the extra cash, sell the unused items, etc.

What does the financial side of preparedness look like?  For the ‘casuals’ that may look like the classic six-month-emergency fund in the bank, pay off the credit cards, and beef up the Roth. For us lifestylers it may look like that plus cash in the safe, cash equivalents like gold and silver, trade goods, and other assets (like land).

I’m pretty sure I will be just fine if I don’t buy another gun, freezedried, or backpack for the next five years. And, as I’ve said over and over, the times in my life where I urgently needed money far outnumber the times in my life where I urgently needed a Barrett 82A1. Doesn’t mean that moment won’t happen, just saying that so far I’ve need $50 bills more than I’ve need .50 API.

Trying to avoid this

So, for the last few months I’ve cut back on my spending on things like storage food, ammo, guns (sorta), and the like, and have instead been moving more resources into savings, investments, cash, hard currency, and that sort of thing.

The economy is doing well at the moment but nothing lasts forever. If this good economy affords me the opportunity to get my ducks in a row for when it inevitably starts to decline…well, wouldn’t that be the smart thing to do?

So..for now, my focus is mostly on getting the money stuff squared away. If the zombies/war/Depression/invasion/flu/volcano/collapse occurs tomorrow I think I’ll be just fine with what I have on hand…but I don’t share that same level of confidence if some of the more mundane life disasters (transmission, broken leg, water heater, job loss, unexpected critical expense, etc.) occur. This change in direction will hopefully change that.

As I read that last paragraph it seem that could be interpreted as the direction of the blog changing, rather than personal direction. Nope…the blog will continue to strive to mediocrity with no change in its usual aimless topical wanderings. But personally, yeah, I think I’m going to be working on the really, really unsexy parts of preparedness. But…it’s gotta be done.

Piggy Goals.

By the case? Buy the case….Pt IV

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About 18 months ago my local Albertsons had a good sale on pasta and I took advantage of it like Bill Clinton takes advantage of interns. Well, that sale came back and I decided i could use a few(!) cases of rigatoni.

Shopping carts are for amateurs. When the Zero stocks up, he goes deep.

Savings? Well, according to my receipt, what normally would have cost 238.80 came out to sixty bucks. (Got careless, forgot to ask for the 10% case discount.)

The apocalypse will be a fairly carbohydrate-heavy experience what with all the rice and pasta in storage, it seems.

In actuality, this is mostly my desire to have a large amount of day-to-day use items on hand in case some sort of financial donkey punch occurs. When you show up at work one day and your boss says “We’re being bought out by another company. This office will close in three weeks. Good luck.”, you really want to have some of the expensive niggling details (like food) locked down. Also, I just feel calmer and more at peace when I look at the shelves and see boxes and cans of food, racks of toiletries, paper towels, soap, detergent, and all the other consumables that keep my quality of life above that of some Third Worlder.

Wouldn’t it make more sense to stockpile the cash instead of the food if I am worried about such things? Well, yes…except for that part about the fabulous sale. Lets put it this way: You have $60 cash in hand..save it or buy food? If you’re worried about a job loss, for example, and you’ve tied that $60 in food, then you only have that one thing (food) covered. But if you keep the $60 in cash, you can use it to buy food..or fuel..or electricity. So does that mean it makes more sense to stick that $60 in the bank? Nope.. heres why: I didn’t buy $60 worth of food. I bought $240 worth of food and paid $60. Or, put another way, if I stuck that $60 in the bank, when I used it in the future I’d get only $60 worth of food. In this particular case, my purchase power today was 4x what my purchase power would be with that same $60 later.  (Disregarding inflation, which would actually make todays purchase more than 4x the purchasing power.) The more clinically minded of you will say “Wait, we’re drifting into Time Value Of Money country..” Yes. Yes we kinda are.)This doesn’t mean you shouldn’t put money away as part of your preps…it just means that you need to think about things past the obvious. Maybe you already do that..I didn’t used to. Preparedness is really about resource management in regards to risk reduction – we try to get the most for our money when we take steps to protect ourselves from future problems.

Regardless, I’m pleased with todays purchase. It’s more food on the shelf and one less thing I have to worry about acquiring when/if I hit an economic rough patch.

Article – 40% of Americans can’t cover a $400 emergency expense

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Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.

The bright side? That’s an improvement from half of adults being unable to cover such an expense in 2013. The number has been ticking down each year since.

Speaking as someone who just had an unexpected vehicle expense pop up, I can tell you that I ain’t in that 40%. Are you?

It’s not nearly as sexy, but it is true: you are far more likely to experience an emergency calling for your stash of US greenbacks than you are for an emergency that requires your plate carrier and NVD’s.

Part of preparedness is being prepared for the unsexy stuff: water heater failures, alternators, dead refrigerators, broken pipes, exploding appendixes, and other sundry crises.

It’s no secret that I try to follow the Dave Ramsey stuff….and I’ll be accused of drinking his particular Kool-Aid but..it’s worked well for me. The alternator died and what might have otherwise been an emergency was downgraded to an inconvenience. I just took the money from the emergency fund and threw it at the mechanic. Next day…functioning vehicle. No muss, no fuss.

Now I drop everything and work on topping off my emergency fund back to its normal level.

If you set back food, ammo, fuel, and meds ‘just in case’ then you really shouldn’t have trouble understanding that adding ‘money’ to that list is just as good an idea as the other items. The trick is having the discipline to do it and then forget that the money is there.

My financial goal, in case anyone is interested, is a years worth of money to cover my basic expenses – food, utilities, taxes, etc. It won’t be a huge amount since I can live without luxuries, but having a years worth of expenses tucked away gives me options I might not otherwise have in case theres a job failure or other ‘personal’ end of the world.

No lie, man…get a couple grand tucked away as soon as possible and forget that it’s there. It’s the best thing you can do to give yourself some peace of mind that allows you to worry and work against bigger things.

Remaindered meat

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I’ve mentioned before that my local Albertson’s has what I have come to call “remaindered meat”. It’s when the meat is on its last day of “Use By” and the store has to sell it or dumpster it. Since half a (meat)loaf is better than none, they mark it down to either 30% or 50% off to try and blow it out the door. I’ve mentioned this before here , here, and here.

You have to remember, these little sales are, for the most part, completely unpredictable. I could go a week or two without finding something worth buying or I may wind up picking up forty pounds of meat in one week. It’s unpredictable. As a result, when the end of the month rolls around the freezer in my refrigerator might be more than a little full.

A few months back I instituted a policy where all the remaindered meat I pick up goes into the freezer in the refrigerator. At the end of the month, whatever meat is left in the freezer, half of it goes into the big freezer as ‘food insurance’. I’m finding that this little program is working very well for me. When the new month starts I usually have a huge amount of meat still left in the freezer, and my ‘just in case’ supply in the deep freezer keeps improving. As the month progresses, a few more remaindered meat sales wind up in the fridge freezer and at the end of the month half of whats left gets put back.

Today’s score? Bacon wrapped seasoned boneless pork chops, two per tray, in oven-safe foil trays….just remove the plastic and slide ’em into the oven…$5 each marked down 50%, so $2.50. Bought ’em all.

20170821_104729The nice thing is that since it’s all ‘remaindered’ meat, I’m not paying full price for anything. Even if there are no interesting sales for a week or two, there’s still at least that much worth of ‘remaindered’ meat in fridge freezer. As a result, I never have to pay $4.99/# for beef. This frees up money for other stuff, which is part of what survivalism is all about: efficient resource management. I know what you’re thinking “There’s nothing survival related about this! This is a post more fit for a mommy blog about coupon clipping!” No, not really. My point is that you have to eat. Now, you can eat as cheaply as possible by living on a diet of, literally, beans and rice which is exactly what many Third World denizens do. But you are not a Third Worlder. We are meat-eating, gun-toting, flag-waving, moon-landing, Japan-nuking, culture-dominating citizens of the premier First World country. Why live like a Third Worlder if you don’t have to? If you can procure $500 a month worth of food for $250, that frees up $250 to spend on ammo, gear, guns, books, radios, fuel, storage food, knives, gold, silver, etc. And that is most definitely survival-related.

Prices

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After a little bit of a spike, silver has dropped back into the low $16 range. While I think the odds of things ever hitting the stage of bartering for your life with a couple Silver Eagles is pretty slim, I still like having a little box full of tubes of them on hand. It’s some sort of primitive lizard-brain thing, but I just like the feeling of having them even if, from a pencil-and-calculator standpoint, it doesn’t make sense.

Speaking of prices going down, it’s been a long time since I saw gasoline for less than $2. I’m no economic expert but, to my uneducated eye, it appears this is a simple price manipulation by the oil producing nations to make domestic oil production economically unfeasible. If they make oil cheap enough, folks will just by it from them rather than dig up North Dakota and Canada. Simple business economics….undercut the other guy. An unfortunate side effect is that all those guys that were making bank out there in NoDak are now fearing for their jobs. A good reason to always tuck a little something aside when youre doing well…you never know how and when the fat times are gonna come to a screeching halt.

One thing prices have not been going down on is food. Meats are pretty high these days. Even buying in bulk it can add up quickly. We’re buying half a beef from a somewhat-local ranch next month and thats been, in our experience, the way to go. It’s the same price per pound regardless of cut…ground beef or t-bone…its all the same. It’s been a good way for us to buy meat but, obviously, you have to have the freezer space to pull it off. My experience, which you can read about if you search through the blog, has been that you can stuff a properly packaged piece of meat into a deep freeze and have it be just fine five years later.

On paper, its tough being a survivalist…you sink a lot of money into things that, arguably, you might never need. I’ve seen guys die with thousands of dollars tied up in things they owned ‘just in case’. The outside observer might think its a waste of money or ‘misallocation of resources’ but there’s a non-tangible benefit. It’s very much the same benefit you achieve from that other ‘waste of money’ – insurance. It buys me peace of mind and a general feeling of security which, in my opinion, does have a financial value. Still, it’s a hard thing, sometimes, to spend money on ‘just in case’ stuff when what you really want is a WarCraft subscription or a new iPad.

Of course, once the zombies rise it’ll be a whole different story and that money will look like a brilliant allocation.

Article – Lawmaker asks to be paid in gold

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Originally published at Notes From The Bunker. You can comment here or there.

And in local news……

A Montana state lawmaker is asking that he be paid in gold coins because of his lack of faith in the U.S. dollar amid a rising deficit.

Jerry O’Neil, a Republican just reelected in his northern Montana district, says his constituents told him he was not honoring his duty to uphold the U.S. Constitution, which O’Neil and Gold Standard supporters say requires the government to print money backed by gold

Well, if nothing else, at least it’s an indication that he may have actually read the Constitution which put’s him a few steps ahead of some other folks.

 

Spot the OPSEC fail

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Originally published at Notes From The Bunker. You can comment here or there.

Sold a pistol to a fella today. He counted out a buncha ten dollar bills to pay for it. Take a look at this picture and tell me where (or if) you see an OPSEC fail:

Notice anything, oh, I dunno….unusual….about this pile of currency? Anyone? Bueller? Bueller?

The obvious answer is that the gentleman apparently paid for his new acquisition using ‘old style’ currency. One or two bills wouldn’t have been suspicious but the entire stack was all old currency. This, of course, would make any reasonable person raise an eyebrow and wonder “Did he have all this stuffed into a mattress somewhere?”. This is an excellent example of something simple that draws attention you really don’t need.

Sure, we all stockpile a certain amount of cash to keep on hand. And, once that’s done, it’s entirely possible that as the years go by the currency will change and you’ll be sitting on a safe full of money that, while still accepted and honored, is going to raise some questions from certain corners. Banks already are told to consider cash deposits or transactions involving large amounts of old,dirty or soiled bills as suspicious. I wish I could find it, but a year or two back there was a news article about a fella who would, periodically, go to his local banks and exchange old money that was sometimes dirty, musty or smelled funny, for new currency. The fact that he was doing this fairly often and in large amounts raised suspicions and the cops were called in to investigate. Maybe he found the skeletal remains of a drug courier in the desert..or maybe his grandmother kept all her cash in the basement since her bad experiences in the First Great Depression…regardless, although no apparent crime had been committed, handing over large amounts of old-style money tripped some flags.

On a more local level, paying a bill with several hundred dollars worth of old currency is going to do nothing but make someone ask “Hey, cool! Where’d you get all the old money?” And that’s really attention that you don’t need…especially when buying guns and ammo. Not only that, the blatantly obvious assumption someone might make is “This guy is hoarding cash at home somewhere” and the next thing you know you come home to a kicked in door and ripped up floorboards. So..if you’ve got a stockpile of cash it might be a good idea to ‘keep it current’ in terms of what the current currency is. Now, having said that, I will admit that I’m going to keep some of these bills just for nostalgia’s sake…but if I ever use them to pay for something I’m not going to use them exclusively.

A month of living on a zero-based budget – Pt II

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Originally published at Notes From The Bunker. You can comment here or there.

So this is kind of interesting and something of a surprise to me. As you know, I’ve been using Google Analytics since July to keep track of blog stats. Usually I’m just curious about the basics…how many visitors, what countries, that sort of thing. But, you can get much more in depth if you want to…one of the things I was curious about was what were the pages/posts that got the most viewing. This actually surprised me. The post that was read most, of everything on the website, was this post: A month of living on a zero-based budget. This post was the #1 viewed post for August. In fact it was read over twice as much as the next most popular post. Musta struck a chord with folks. So, let’s do a followup.

When we last left our intrepid heroes, they had spent a month living on a zero-based budget. Every purchase for the month, when added up, had to equal total income for month..not more, not less. In short, every dollar was spoken for. Succinctly…”x” dollars came inot the household, and “x” dollars went out. So, first month had a few hiccups but worked out well. How did the second month go?

Well, the second month worked out better than the first. In fact, because such a large amount of money was able to be put away into savings right off the top (“Pay yourself first”) we were able to pick up a few expensive things in August that normally cause folks grief when it comes time to purchase them. Like what? Well, new tires for the truck, for example. Budgeted for it, shopped around, bought ‘em. No muss, no fuss, and no “Dammit, now I gotta eat dog food and popcorn till the end of the month”.

Another tremendous boon was that we were in a position to take advantage of some things. For example, a coworker of my wife’s was unable to pick up a quarter of beef she had arranged to buy. Would we be interested in getting it? Hmmm…well, we were planning on buying a big buncha beef anyway and, more importantly, we had the resources available to say ‘sure!’. When we went to pick it up, cash in hand, it turned out to be a half, not a quarter, of a beef. Double the beef, double the money. Fortunately, we had the resources to say “Well, we may as well get it and cross beef off the shopping list for the next six months”. And that’s what we did. We had the money in savings to take advantage of the opportunity. So we got a whole bunch quality locally-grown beef at a good price in a tremendous quantity. And we’d have been unable to do that if we hadn’t been tracking our spending and (somewhat) rigidly sticking to the budget.

The other nice thing is that by sticking to our budget, we’re making tremendous progress in having an emergency fund put together of several months expenses. I’m the first to admit that there are going to be times when cash is worthless, but until that point comes…the plumber still wants greenbacks and most auto mechanics don’t take Silver Eagles. (Yes, yes..I know your guy takes them but I’m talking about in general.)

Dave Ramsey says that if you make a budget, and stick to it, you’ll feel like you got a raise. This is absolutely true. A big part of that is because you’re thinking about money in a way that you may not be used to thinking of it – as a resource to be used carefully and strategically, making the most of it. And, indeed, when we have all the groceries for the month purchased, money allocated into savings, and all of that taken care of…we can look at the budget and say “Hey, you know we still have ‘x’ dollars in the entertainment budget. Wanna get a pizza and a movie?”

To tie this into preparedness, one of the nice things about this way of doing things is that it’s allowing a more consistent approach to preparing. Food is a good example. Right now, we’re tracking every item purchased for our grocery budget. We spent ‘x’ on groceries last month and I can pull up a spreadsheet showing every item that was purchased, where from, and how much. After a couple months it becomes easy to see that some items are purchased inthe same (or similar) quantity every month. Like, right now it’s a given we’re gonna go through a couple cases of coke, about 10# of chicken, Italian sausage, etc, etc. So these things become staples and are automatically added to the grocery list every month. (By the way, for groceries we use Grocery IQ on our iPhones. It updates live, so if I’m at WalMart and she’s at CostCo and one of us gets, say, four cans of soup off the grocery list it immediately updates that list on both our phones so the other person doesn’t wind up buying the same thing. It also keeps price information so we can compare prices from previous trips and other locations…which makes shopping around much easier.) Since we’re tracking the groceries so closely, and keeping track of where the best prices are, we’re able to meet our monthly need for groceries and buy extra to sock away.

So, there you go…month #2 of living on the zero based budget. No sense of deprivation, no annoying moments of self-denial…I hate to use the word ‘empowering’ but there it is. When we shop we feel very in control of what we’re doing because we know exactly what sort of conditions we’re going to operate under – we’ll spend this amount and no more. And we’re confident enough in what we’re doing that delaying a purchase until the following month (or later) in order to make it fit within the budget doesn’t seem like a hardship.

So, all in all…so far so good. If you think you’ve got the self-discipline for this sort of thing, I highly recommend it.

Note: the original post has more links to related materials if youre interested.

 

Why it pays to compare prices

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Originally published at Notes From The Bunker. You can comment here or there.

The local K-mart is going out of business. For the last couple weeks everything has been marked down further and further. I’ve been stopping by once a week to see if theres anything I need that has got a ‘must buy’ price. So, I go in there today and trot over to the first aid aisle. Can never have too much gauze, Neosporin, band aids and rolled gauze. I’m something of a snob, so I priced out the Johnson and Johnson stuff. Everything was 20% off the lowest marked price…okay, thats a fair discount but nothing to jump up and down about. I noted down the prices and figured I’d check and see what the other places in town were getting…so I could see if I was getting 20% off of an already good price or if I was getting 20% off of an overly expensive price. Headed over to Walgreen’s to compare prices and found that with the 20% discount from K-Mart the prices were pretty good….except that, as it turns out, this week Walgreens has buy-one-get-one-free on J&J first aid stuff….which essentially comes out to a 50% discount. So, even with the original price at Walgreens being slightly higher than K-Mart’s base price, it still comes out to a better deal going with the BOGO instead of K-Marts 20% off lowest price.

Which means that if I had given into my impulses and bought the stuff at K-Mart rather than check prices elsewhere, I’d’ve gotten less value for my scarce greenbacks.

Moral of the story: shop around, it pays.

Now….off to an ATM, and then to Walgreens to stock my lovely Hardigg Medical Chest.