What is $100 worth?

This may be one of the most important posts I will write to influence or change the way we think.  The concept is so simple but one that we don't often contemplate.  We have become so accustomed to being led by common thinking and financial "experts" that we often do not consider the math. 

Here is the question:  What is $100 worth?  The answer of course would seem to be $100 but when the subject of savings or investment comes up maximizing our spending habits we realize that the purchasing power can be radically different based on whose hands the $100 is in.  For one person it could be a night on the town and another food for 2 weeks.

When it comes to investing it is even more tricky.  Savings accounts currently pay almost no interest so are not beneficial except as a security and mental motivator for when just starting out keeping the money in a secret spot makes just as much sense.  For other investments few profits are guaranteed and even some with mutual funds took a beating during the ups and downs on Wall Street.

Another alternative is available that most of us skip over feeling we are using a teaspoon to move a mountain so give up before we start.  Today I will throw out the idea and may come back to it in the future.  Yes, at first glance it seems so boring that you might groan but before you do just take a look at the bottom line. 

Years ago when I did residential property management I was introduced to a website called BANKRATE.com I spent hours running numbers and developing scenarios using their mortgage calculator.  It is an invaluable tool that can save you thousands of dollars and will tell you what most lenders will not.  After all, they do make their money off interest payments.

This is very personal in that as I mentioned I now find myself with a mortgage payment in excess of the position I was once in and have contemplated much where to go from here especially in today's economy.  My goal is debt free and as the years to retirement lessen and the desire to do my own thing increases lately my musings have been almost daily.  Some of the things I had hoped to accomplish by this time was having the house paid off and placed in trust. 

What is $100 worth?

The chart below shows what the monthly payments on a $100,000 loan for 30 years at 6% interest would be.  We will use this as our baseline for comparison purposes only.  To customize this to your own unique situation go to the BANKRATE site and play with it.

Now, what if you could spare or reallocate $100 a month to an extra principle payment?  What would that look like?

The thing most important to notice here is the bottom line.  What is the new pay off date?  9 years have been cut from the payoff date.  So a little more math here:  9 years times 12 months = 108 months.  108 months x $599.55 which was the monthly base payment is a whopping $64,751.40.  Subtract from that our $100 per month that we have now paid for 252 months totaling $25,200 and our saving is $39,551.40.

So we can either say that our $100 a month payment is now worth $64,751.40 or we have made a profit of $39,551.40.  What better or more sure investment is available?  What better reason to make the adjustments needed to get it done.  Yes, it may require some juggling to accomplish it but 9 years less on a mortgage is certainly a noticeable improvement.

So what if after all the number crunching you (I) can't come up with $100?  How would $25 extra a month look? 

The payoff is 3 years earlier.  Again the math: 3 x 12= 36 months.  36 months times $599.55 = $21,583.80.  Subtract from that the 324 months the amount was  paid each month totalling $8,100 and the profit is $13,483.80.

The calculator also offers other options such as annual payments (tax return?) or one time payments.  The site itself has additional calculators that are easy to use and can help with many financial decisions as the computer has done the work for us.

Sometimes the simplest answers are in fact the right answers.  Just like compounded interest can work in the banks favor so can compounded payments work in the favor of the one with the loan.  Although I am not attempting to provide nor should this be construed as professional advice I hope that this tool will assist in your own decision making processes and lead you to seek the advice of your own tax accountant or whatever resource you choose.

 What is $100 worth?  A whole lot more than I thought.
 

What is your house worth? When?

Last week I had the opportunity to reflect on one of the most interesting financial cycles.  In Seattle there is a neighborhood called Leshi.  It was developed in around 1900 by the very wealthy of the city.  The huge Victorian homes have been standing for more than 100 years.  They are three and even four stories high with all the scrolled detailing both inside and out that marked the era.  Clearly the homes of the wealthy.

Time passed and the neighborhood went into disrepair.  The aged homes were vacated for newer more modern homes outside the central area of the city.  They were purchased at lower prices and as the times changed they were often divided into multiple units and rented as apartments.  The neighborhood continued to decline and crime continued to rise making the area not only undesirable but even unsafe to live in.  Those who stayed were limited in funds so the houses stood unchanged except for a coat of paint or a maintained lawn.  Some were even boarded up and left in their standing condition.

The city continued to grow and sprawl for miles while the rhododendrons and roses continued to grow and bloom in Leshi.  Families moved in and families moved out and blocks away gunfire often sounded striking down the lives of those who lived there.

Then a turning point came and the old grand houses became noticed again.  The proximity to the city business was just a short drive or bus ride away.  The homes began to be purchased and restored and renovated to their original grandeur.

The view of Lake Washington and the Bellevue skyline which did not even exist now graced the view from the balconies.  I was told that even a home that had not been renovated except for a coat of paint was now $800,000 and the prices only went up from there.

I had the opportunity to stay at one and I could not help but run my hands down the original 5 panel doors with their crystal doorknobs and walk across the original hardwood floors.  Beautiful!

The American Dream or an Image?

"Wow! Look at that hot car!" 

We can't help but notice when they pass us on the street.  The Corvette might not push your buttons, it may be a top of the line truck, Hummer, Mercedes, Jag, or any one of a number of new shiny vehicles.  They catch our attention.  We cannot help but notice and if by chance we don't the driver often turns up the radio just so we do.  And, when summer comes the top comes down and often the driver will use the opportunity at every stop light to smile and wink at the cuties in the next car.  Don't get me wrong I like a nice car as well as the next person but I have also seen the vampire effect it can have on a person.  I once knew a person that was pretty nice until he got behind the wheel of his dream car.  The change in his personality was dramatic and not good. 

Not everyone is thus affected but what we easily forget is that the person has not just bought a car but a long huge debt to be paid with interest.  Even our terminology is deceptive.  Recently someone told me they just "bought a new car".  "Wow", I responded. "How did you save that much money?" She demurely responded that it was a loan.  Isn't that usually what it is?  So when we see the car it really translates to this:

In order to achieve a higher level of financial freedom we need to start thinking differently.  We cannot only experience things with our five senses for advertisers are trained to appeal to these.  We need to go beyond and let our minds calculate the real picture and not solely rely on the image we see.  To practice doing this one can begin a routine of adding to our mental dialogue to add "Wow, that is a hot car, that person must REALLY be in big debt"  See how it just sounds different?  In most cases you will be correct.

So what is the #1 selling car in America at this time?  The winner is the Toyota Camry.  The cost? Between $22,000 and $25,000.  And look what this owner has to say:  "To date, my Camry has been the best investment I have EVER made. With more than 130K miles, my Camry has given me no major problems."

So what happens three years later?  The Camry Kelly Blue book value with almost 65,000 miles is $15,944.   When four more years pass and twice the amount of miles the value is closer to $8,000 if you sell it yourself or $6,000 if you trade it in.

So in 8 years what one considers "the best investment I have EVER made" we can anticipate the value going from $25,000 to $8,000.  Only a loss of $13,000 not including any interest that was paid on a loan.  Of course this is not taking into consideration the fact that the person was able to drive the car this entire time and thank God they did not wreck it.

One then must wonder what the definition of investment really is.  I thought it was hopefully something that went up in value not something guaranteed to go down in value.  Most of us need a car so some money does need to be spent for transportation but unless my accounting class was wrong a vehicle was considered a depreciating asset.

Funny how definitions and usage of words can mislead us.  Taking this one step further it is easy to see how advertising double speak can lead us in the exact opposite direction we hope to go.  If we are not making a conscious effort we have signed on the dotted line without even thinking about it.  We are especially vulnerable when we are in need of the product or service we are considering and do not have the cash available.  In our need our minds are fertile ground for what sounds good.  On this same subject I wanted to share a post that was published a couple years ago:

The essence of the American Dream is that if a person works hard they will be able to better themselves and achieve their dreams, goals, and ambitions. It is the foundation of our country's success and why immigrants continue to pour into the country. It truly is a great place to be!

Recently though there has been a blurring of the lines between the dream and the reality and what has passed as the fulfillment of the American Dream has actually been just an image.

Free flowing credit has created an image of success and now all that is left for many people is the bills. Homes have been foreclosed, cars repossessed, and credit reports ruined. It is my opinion that this was a systematic attempt by the banks to promote big spending by us to to make big short term profits for them. The financial institutions have enticed us into thinking that spending more than we make is the quickest and best way to fulfill our dreams. Yes, there is much fault on the economy, the banks, and other forces that have brought many families to a downturn but much of where we are at now may be a direct result of our own choices. I know that either one of these positions - corporate greed and manipulation, or personal responsibility can both be touchy subjects but unless it is said we will not have the will or the courage we need to deal with the tasks that need to be accomplished.



Where to start? In The Trenches has charts to help you set up your own personal budget. And here we will talk about one of the first steps to determine whether you have been living the dream or the image. Create a balance sheet. Don't groan. We work too hard to not take a look. If you have never done one there is a sample in the book or you can go to your bank and they can assist you.

The balance sheet is a tremendously helpful tool. It compares your assets to your debts and the difference is your net worth. This is the value of what you have accumulated for all your hard work. If this is your first time to make one it can be a starting point. Save it on the computer or print it and keep it in a three ring binder. At the end of the year do another one and compare. Are you moving forward, running in place, or losing ground? Are you creating wealth or creating debt? These questions cannot be answered by looking at your new t.v. or new car, or even your paycheck. All these things can mislead you into thinking that your situation is improving. Most of us are In The Trenches.

Are you living the American Dream or just an image?

American Food Crisis - The Emperor's New Clothes

My uncle George was a meat and potatoes man.  Every night on the dinner table was basically the same.  It was almost a joke to the family because any variation to the theme was met with a reminder of what an appropriate dinner was. 

Each day at the England house there was a piece of steak, potatoes, a vegetable, and bread with honey.  The bread was not the standard Wonderbread but was usually homemade brown bread.  The honey was in a little bear dispenser.   Desert was rare in the household.

This meal seemed odd to me because at our home casseroles reigned but in retrospect the same principles applied. We referred to it as the four basic food groups. I understood this not because the adults in my life explained it but because the schools showed a chart.



Michelle Obama has taken steps to remind us of the importance of healthy eating.  For this she has received both praise and criticism.  I for one am happy that she is using the platform she has to promote such a basic and yet neglected topic. 

Bad eating habits like anything else do not happen overnight - they happen one meal at a time. I have to continually remind myself that carrots are better than cookies when I grab a snack. I continually have to make a conscious effort to not have that extra cup of coffee that I love so much.  More importantly than my own personal choices is the children and the parents who are responsible for providing and building habits that will last a lifetime.

Rumors abound and are becoming reality regarding the possibility of rising costs of food and even possibilities of scarcity in America.  The recent Texas drought has indeed had a major impact on our food supply.  If we believe we can live a healthy life on potato chips and pop we are delusional.  Recently my own health has required me to cut back on salt.  What?  I don't even use a salt shaker so where is it coming from?

As we rush through our busy schedules we tend to just grab what is easily available and put it in our mouths and keep going.  Or, many now who are more conscientious have taken the opposite direction of believing that radical diets or vegetarianism is the answer.  As we continue to move in either of these extremes we are missing the basic, healthy lifestyle available to all of us.

There are many things I don't like about getting older.  But there is one thing I am wholly beginning to appreciate:  the longer I live, the more I see that the media and social waves are a bunch of b.s.  Coming from my farming experience I can use this phrase and know that the literal definition really does fit the situation.  It's just a mess that needs to be shoveled up and disposed of.

The idea of a food crisis in America, if one should occur, is a subject that increasingly strikes me as utterly ridiculous, contrived, and diabolical.  Why?  Do I think it could not happen?  Yes, I do think it could happen.  BUT,  an American food crisis would be like a man starving with a cupboard full of food that he will not eat.  I struggle to know the words of how to present this in such a way to make the point that to me is so obvious yet never mentioned.  It is almost like the story of the emperor's new clothes in the old folk tale.  If you are not familiar with the story here is a cute little 3 minute video.

To illustrate what I'm referring to let's look at the history of American Agriculture for a minute:

The following is excerpted from About.com

A History of American Agriculture 1776-1990

1850	1850 Total population: 23,191,786 Farm population: 11,680,000 (estimated) Farmers made up 64% of labor force Number of farms: 1,449,000 Average acres: 203 1850's Successful farming on the prairies began 1850 With the California gold rush, the frontier bypassed the Great Plains and the Rockies and moved to the Pacific coast 1850-62 Free land was a vital rural issue 1854 Graduation Act reduced price of unsold public lands 1859-75 The miners' frontier moved eastward from California toward the westward-moving farmers' and ranchers frontier
1860	1860 Total population: 31,443,321 Farm population: 15,141,000 (estimated) Farmers made up 58% of labor force Number of farms: 2,044,000 Average acres: 199 1862 Homestead Act granted 160 acres to settlers who had worked the land 5 years 1865-70 The sharecropping system in the South replaced the old slave plantation system 1865-90 Influx of Scandinavian immigrants 1866-77 Cattle boom accelerated settlement of Great Plains; range wars developed between farmers and ranchers
1870	1870 Total population: 38,558,371 Farm population: 18,373,000 (estimated) Farmers made up 53% of labor force Number of farms: 2,660,000 Average acres: 153
1880	1880 Total population: 50,155,783 Farm population: 22,981,000 (estimated) Farmers made up 49% of labor force Number of farms: 4,009,000 Average acres: 134 1880's Heavy agricultural settlement on the Great Plains began 1880 Most humid land already settled 1880-1914 Most immigrants were from southeastern Europe 1887-97 Drought reduced settlement on the Great Plains
1890	1890 Total population: 62,941,714 Farm population: 29,414,000 (estimated) Farmers made up 43% of labor force Number of farms: 4,565,000 Average acres: 136 1890's Increases in land under cultivation and number of immigrants becoming farmers caused great rise in agricultural output 1890 Census showed that the frontier settlement era was over
1900	1900 Total population: 75,994,266 Farm population: 29,414,000 (estimated) Farmers made up 38% of labor force Number of farms: 5,740,000 Average acres: 147 1900-20 Continued agricultural settlement on the Great Plains 1902 Reclamation Act 1905-07 Policy of reserving timberlands inaugurated on a large scale
1910	1910 Total population: 91,972,266 Farm population: 32,077,00 (estimated) Farmers made up 31% of labor force Number of farms: 6,366,000 Average acres: 138 1909-20 Dryland farming boom on the Great Plains 1911-17 Immigration of agricultural workers from Mexico 1916 Stock Raising Homestead Act
1920	1920 Total population: 105,710,620 Farm population: 31,614,269 (estimated) Farmers made up 27% of labor force Number of farms: 6,454,000 Average acres: 148 1924 Immigration Act greatly reduced number of new immigrants
1930	1930 Total population: 122,775,046 Farm population: 30,455,350 (estimated) Farmers made up 21% of labor force Number of farms: 6,295,000 Average acres: 157 Irrigated acres: 14,633,252 1932-36 Drought and dust-bowl conditions developed 1934 Executive orders withdrew public lands from settlement, location, sale, or entry 1934 Taylor Grazing Act
1940	1940 Total population: 131,820.000 Farm population: 30,840,000 (estimated) Farmers made up 18% of labor force Number of farms: 6,102,000 Average acres: 175 Irrigated acres: 17,942,968 1940's Many former southern sharecroppers migrated to war-related jobs in cities
1950	1950 Total population: 151,132,000 Farm population: 25,058,000 (estimated) Farmers made up 12.2% of labor force Number of farms: 5,388,000 Average acres: 216 Irrigated acres: 25,634,869 1956 Legislation passed providing for Great Plains Conservation Program
1960	1960 Total population: 180,007,000 Farm population: 15,635,000 (estimated) Farmers made up 8.3% of labor force Number of farms: 3,711,000 Average acres: 303 Irrigated acres: 33,829,000 1960's State legislation increased to keep land in farming 1964 Wilderness Act 1965 Farmers made up 6.4% of labor force
1970	1970 Total population: 204,335,000 Farm population: 9,712,000 (estimated) Farmers made up 4.6% of labor force Number of farms: 2,780,000 Average acres: 390
1980-90	1980, 1990 Total population: 227,020,000 and 246,081,000 Farm population: 6,051,00 and 4,591,000 Farmers made up 3.4% and 2.6% of labor force Number of farms: 2,439,510 and 2,143,150 Average acres: 426 and 461 Irrigated acres: 50,350,000 (1978) and 46,386,000 (1987)

If you don't look at anything else check out the first and last blocks and compare the percentage of the population compared to the farm population. In 1850 64% of the American laborforce was in the agricultural business or farmers.  In 1990 the percentage was 3%.  The population for the same periods went from 23,191,786 to 246,081,000. 

The question immediately jumps to my mind: Where is our food coming from?

With the growing population, logic would seem to indicate that there would be more involved in the production of our milk, vegetables, grains, and meat that sustain our lives but instead there is less. We know that much of this comes from the highly industrialized processes now employed for which there are benefits and disadvantages.  The ultimate reason we may have rising prices in food is not that we do not have the capability to have more food but rather we do not have enough farmers.

As I continued to explore this I found two interesting topics to google:  Agricultural Land In U.S and Government Owned Land in the U.S. When you click on the images button the actual maps are shown.  The results may surprise and shock you.  I may address this in a later post but not today.  While it is true that we are using more of our agricultural land than in 1850 this and the maps do not take into consideration just how much food Americans can grow in their own back yards if they choose to do so. 

Most surburban homes have space in the backyard for a few fruit trees, a vegetable garden, and some berries.  While your family may not be able to use an entire tree full of apples if all your neighbors planted also neighborhood trades or farmers markets could be made allowing an exchange and adding to the variety.   Sure we would still need to rely on our country neighbors to supply meat and dairy or those unemployed may consider this a good time to head to the hills.  That was how my own rural lifestyle began years ago.

Just as an experiment ask a 5 year old and a 15 year old "Where does our food come from?"  If their answer is "the grocery store"  then they too are already admiring The Emperor's New Clothes.

Billy

I made reference in a recent post to the fact that I had never paid more than $5,000 for a car.  This seems to have been my successful number for finding a good used car that maximized the balance between expense and usefulness.

Billy Black Shoes.  A beautiful semi-retired stallion who has had over 200 registered foals in Paint and Pinto breeds.  Billy is as gentle as Mr. Ed which is unusual in a stallion. He can also talk just as well, at least he was a master of communication even if he doesn't speak English.  Billy is definitely on my list of BFF.  We spent many hours together talking things over.

Billy once took second place in a reining competition and loves to spin, slide, and perform the other reining maneauvers.  For those not familiar with a spin here is a short video.

Billy showing off

Imagine my family's surprise when I  told them that I had spent $6,000 for the privilege of bringing Billy home to live with me.  (I'm not sure that any of us really own horses, we just get to share their lives and make some of their major decisions.)  My family was shocked that their conservative, frugal mother would spend so much on a horse!  It was almost unfathomable to their minds. 

To me the rational was plain and simple:  both are forms of transportation and one reproduces and the other doesn't. From a financial standpoint one would give me a return on my investment and the other would not, a car is strictly a depreciating asset. There are some noteable exceptions, of course, for Mustangs (named after horses), Corvettes, and other models that draw attention 20 years later and better hold their value but they still cannot reproduce.

When I moved from the ranch Billy has made a new home in the area and enjoys the vast pastures of his well earned retirement and has been able to take a trip to the beach to run on the sand.

This is one of Billy's progeny who also was used as a breeding stallion for a time and now is Angie's BFF. 

Wiley Coyote and Angie

This is the mystery and amazing thing about creation.  Trees, plants, and animals all are able to produce after their kind.  When we choose to invest our skills and time as managers of most agricultural pursuits most of what we invest can double in one years time with little help from us.  Far above the monetary considerations is the JOY, BEAUTY, and WONDER that they add to our lives.

Back yard investment.

What do blueberries, rhubarb, and strawberries all have in common?

• Easy to grow in small areas
• Easy to prepare or freeze
• All provide an excellent return on investment.
• Great pies!

Living in the suburbs is not a reason for not having homegrown fruits and vegetables.  In fact, one of the biggest benefits to a small yard is the ability to putter out and pick yourself some fresh rhubarb for a pie or blueberries for your pancakes. 

Rhubarb.  Have you ever seen rhubarb growing?  It's pretty awesome stuff.  The leaves are huge and the bright red stocks are eye catching.  To harvest a stock you grab and pull.  I have landed on my behind many times pulling rhubarb but that's why you send the kids to do it as they will just laugh.  I have seen someone actually cut a piece off which I guess you can do but I think it's against the code.  The reason being that when you pull it out another stock can grow.  It is similar to pulling celery from the outside. 

Strawberries.  This year I have eaten more strawberries than I can remember.  The crop was amazing.  A plain strawberry is one of natures best treats.  Strawberries are prolific and send out runners so starting with a small number of plants can multiply in to a patch.


Blueberries.  Four bushes should be enough to eat all you want fresh and freeze some for pies, pancakes, and muffins.  They need plenty of water to produce those big luscious berries. Mom and I used to go out picking every evening and ate so many that we were lucky to get any into the house.


Each of these selections come back every year, need little pruning, and are extremely easy to grow.  Having nice fruit bearing shrubs was is an attractive selling feature of a home.  If you don't want a yard that looks like a berry patch you can intermix the plants with your other shrubbery for added color and texture.   Large pots or whiskey barrels can also provide a decorative piece.  Consult your local nursery for the best variety for your area and soil type.

PIES

Now for the real reason for the post. Pies. The selling of pies has become big business with prices ranging from $6 up to $15 or more.  Did you know that if you have your own fruit you can make a pie for about $2?  It's fun.  When my son was about 9 years old we started making pies.  It was part of his home school fractions instruction.  Once we were hooked we kept baking and started giving pies away. The next step was a farmers market and sold them one day.  He was even taking orders for them.  We had flour all over the kitchen.  If you have never tried either rhubarb or strawberry rhubarb pies they are available at most pie shops. If you would like some homework for this post you can drive down and have a piece just to see if you like it.

So there you have it.  In this post we have covered saving money, taking up gardening, baking, and a new family hobby.  Frugal living is not just about saving money, it is a lifestyle.

Related links:
Great pictures on rhubarb and growing other home vegetables. 
http://doorgarden.com/01/how-to-grow-forced-rhubarb
People interested in green living are going to be excited about Mother Earth News!
http://www.motherearthnews.com/Real-Food/Growing-Blueberries.aspx
 
I no longer have my old lifetime recipe box but I'll tell you my best kept never revealed secret.  Right before the pie is ready to go in the oven sprinkle about a teaspoon of sugar on the top of the crust.  It will give the pie a golden brown color and a tad of that sugar sparkle.
Here are links to strawberry rhubarb pie recipes:
http://www.foodnetwork.com/recipes/food-network-challenge/grandmas-strawberry-rhubarb-pie-recipe/index.html
http://angelinkitchen.blogspot.com/2009/05/strawberry-rhubarb-pie.html

Originally posted Aug 17, 2010

Investments

Not long ago someone asked me what would be my top desired investments based on my In The Trenches experiences?  This list is provided for discussion purposes only as I do not consider or purport myself near the level I could be and have had so many ups and downs that might lead some to coronary problems. I am often more of an observer and reader and am happy to pass on the observations I have made when my opinion has been asked. Opinions are free, everybody has one.

Here they are in order, but, I'm saving #1 until last.

2.  Pay off debt.  What?  Why would I put that as an investment?  Because of the interest that will ultimately be paid and a step to financial freedom.  The quickest way to keep money and be able to invest in something is to be free of debt.  Not only does it put more money in your pocket each month but the freedom allows one to come and go, change jobs, and make other financial decisions and risks without the overhead to consider.

3.  Food storage plan.  Whether this involves shelves in the garage, planting a garden or vegetables, or raising ones own meat all can save money, provide flexibility, and make one less dependant on the fluctuating grocery store prices.  It is also a good way for those to begin saving who have had difficulty in the past.  It's so easy to spend that $5 bill you have set aside but not as easy to trade a case of refried beans even though the value of the second may be more than the first.

4.  Real Estate.  This was the top investment of everyone I have known who has done well over the long term.  Now with prices down there are plenty of good deals to choose from and investing in real estate now may save someone else from going through foreclosure while still increasing ones own balance sheet.  A win/win deal can double the benefit.  Most people think of residential property when the words real estate are mentioned and that is included but also there is timberland, agricultural land, and rental properties.

5.  Agriculture and livestock.  This is the only investment that reproduces on it's own sometimes 10 to 20 fold in a year.  Some projects can be done in as small a space as your own backyard.  Start small and reasonably so you can learn everything there is to know.  Because these are living creatures they deserve all the love and care we can give them.  Our efforts therefore need to be made with that as our top goal, not greed and potential profit. I have raised cows, birds, goats, and horses.  A friend of mine had a very successful income from a pair of dogs. Another has raised many varieties of tomato plants and still another sells flowers and dahlia bulbs. My biggest mistakes came from not knowing or trying to move ahead too quickly.

6.  Precious metals.  The easiest way to start is with one ounce silver rounds available at any coin shop.  I began buying in the depth of our hardship with 1 per month.  It was a small goal but one I was able to keep.  If absolutely necessary I could cash it in but because of the hassle of a trip to the city the temptation was not as great as keeping cash around the house.  BUT, now is NOT the time.  Prices are high.  Let the speculators take whatever hit that may occur.

I have written blog posts on each of these topics so check the side bar if any have peaked your interest.  There are heading under investments, food storage, real estate, etc.

And, now the most important and #1 investment:

1. Yourself, your family, and the causes you believe in.  In the end, when all is said and done this will really be all that matters.  Even if you are never able to achieve many financial goals it is your friends, family, and community who will remember the investments you made in them. This is the fullness of wisdom.  In this I speak not of buying any pleasure or gift that one may desire at the moment or indulging every fleeting whim.

If a person loves music support it with an instrument or lessons.  My friend loves quilting so she invests in fabric and makes beautiful items for her home and family.  For some it will be books, education, sports, or other activities to use their talents or advance their skills.  Even showing up to a teenagers football game and giving them a pat on the back is an investment in their future and well being.  As I reflect on my childhood I remember those who always gave me a smile, made the best pies, and the lady who took the time to teach me to knit.

Another variation of this is to use money saved to start ones own business venture.  Rather than taking on a big debt for an untried idea when starting small and learning along the way you won't be as apt to get in over your head.

Many contribute to churches, the needy, animal shelters, or other causes close to their heart.  These things are what ultimately give a sense of purpose and fulfillment.

Life is short.  Live it the best we can and invest wisely with both time and money.  When we do this we cannot lose on our investment.

what-you-should-expect-from-social-security: Personal Finance News from Yahoo! Finance

what-you-should-expect-from-social-security: Personal Finance News from Yahoo! Finance

There is nothing new about this news but it will take a while for the information to travel around the block. These predictions based on mathematical calculations have been around at least for the last 20 years but are getting more attention as the time draws closer.

I don't know about you but I don't want to work until I'm 70 or 68. That being the case, retirement needs to be of important consideration and planning. Sounds like the perfect opportunity to remind everyone again about the book just released by Jacob Fisker called Early Retirement Extreme. Hot off the presses and available through Amazon.com or his web site. Jacob will tell you what adjustments can be made now to prepare to retire early.  He should know because by implementing his plan he has already become semi-retired at age 34.  Read his story here on his site and get an idea of the flavor of his unique but very practical approach to finances.  To get a brief overview of what a transition toward early retirement may mean to you take a look at his 21 day makeover listed in the left sidebar.

While others are worried about the inevitable, by taking some positive and specific steps retirement may not be as far away as you think.

Another article you may find helpful from The Simple Dollar.

Success Stories Round-up 2

It's been a busy week of  new challenges, learning, and schedules.  Ever notice that it is sometimes the littlest things that throw us off?  Things like the shower order changing or running out of coffee can throw the whole day out of whack!  But then we are able to say TGIF!  The weekend is almost here and it's a good time for another success story roundup.  Hope you are all working and moving toward your goals and soon we can add your story to the list of those who have been successful in reaching the finish line of your race.   Just remember life is not always a sprint,  sometimes it's a cross country marathon. 

These inspirational and educational stories are featured from some blogs I have not yet put up so I hope you will look around and say hi to the writers.  I'm sure they will be very happy for the visit.

http://www.quizzle.com/blog/2010/09/8-laws-of-investing-from-the-millionaire-next-door/

http://onemoneydesign.com/blog/2010/09/30/how-the-recession-has-affected-my-family/

http://barbarafriedbergpersonalfinance.com/my-story/

Residential Real Estate Inventing - Part 3

This home was purchased with the idea that it was going to be our first flip.  The home had originally been used as a small home church so the living room was exceptionally large with beautiful hardwood floors.  When the owner moved she took what she wanted and left the rest.  The inside was filled with stuff accumulated for years.  There was no telling what was underneath but also no indication that the owner had abused the home in any way.

From the time the offer had been made on the home the market was showing noticeable signs of slowing.  We decided that we would benefit from having a renter in the home in case it took longer than expected to sell.  It turned out to be an excellent decision as the home was not sold for almost two years.  

Residential Real Estate Investing - Part 2

My top keys for successful real estate investment in 2011.

1. Learn all you can.  The library is the best source for this information.  Yes, the Internet has good information but much of that is geared toward making money for the one providing the information and they often just tell you the good parts.  The time and money involved in real estate investment is enough to warrant extensive investigation and research.  In one year the value increase can be as much as any job so corresponding time should be allocated.
2. Pick houses you would be comfortable living in.  If you don't like the neighborhood, the schools in the area, or think the house is too dumpy than pass on it.  You want to attract quality tenants and in the future a good sale price so if you would not be willing to live in the place yourself many other people also would not.

Residential Real Estate Investing - Part 1

If you have thought about real estate investing now may be the time to do your home work and be ready.  Prices have continued to drop and interest rates are low.  We are just about to the bottom (hopefully) as the second dip hits (yes, it was coming).  There is an old axiom "Buy Low, Sell High".  If that is your goal then this is your time.

Rich Dad Poor Dad - Free Seminar Review

This week I had the opportunity to attend a two-hour free seminar sponsored by Rich Dad Poor Dad. I love financial seminars. It’s probably crazy but seminars have always been my #1 choice for learning something new. Books can get long and even the best books can be set aside in a busy schedule, classes require a big commitment, and infomercials seem contrived. Seminars can provide information, interaction with others with similar interests, and are usually just long enough to fill your brain without shifting it to autopilot or sleep mode. This two-hour seminar was no exception. The speakers gave just enough taste to spark the thoughts and the free gifts had people jumping out of their seats to get them.

An Investment with Abundant Return - Fruit Trees

Most of us think of the stock market or real estate when we think of investing but there are many other ways of investing that can provide a return that can be fun and a new hobby. Fruit trees, berries, and even rhubarb can fall into this category.

Just to get your imagination going here are a few:                               
Apple
Peach
Plums
Blueberries
Oranges
Lemons
Pears
Grapes

I guess for those who feel more comfortable with the stock labels we can call them APP, PEA, PLU, BLU, etc.  A fruit tree normally takes about three years to begin bearing well which is faster than a savings bond.

The difference between saving and investing by Personal Fianance by the Book

Personal Finance by the Book has a very good dialog going on regarding the difference between saving and investing.  Joe Plemon has written a post that removes the gray from the subject and his readers are hashing out the pros and cons. Here's the link so you can join them in progress and put in your ideas.


http://personalfinancebythebook.com/what-is-the-difference-between-saving-and-investing/


Joe and his wife are also working on a home redo investment.  Watching the progress is interesting.  Joe's blog is written from a Christian perspective and covers Bible topics as they relate to managing finances. 

Book Review - The Ultimate Depression Survival Guide by Martin D. Weiss

There is more that I don't know about the stock market and common forms of investments than I do know so it is not a subject that I plan to write much about on this blog.  I prefer my investments to be something I can feel, see, and touch such as small business, real estate, or metals.  And, I certainly would not turn over all my money to someone else to manage.  If someone were to lose my hard earned money it would be me.  However there are those out there who are experts in investing and I would certainly put Martin D Weiss in this catagory.  Between he and his father there are almost eighty years of professional and personal experience through the the first and second great depressions and everywhere in between.  Martin D Wiess has spoken before congressional leaders and provided answers to their own questions about the where and hows of the current economic crisis.

This book and the cd may be more detailed than many In The Trenches readers may want to pursue but for those who do it will be a tremendous learning experience.  By understanding the basic concepts he presents it will help you to have a much greater knowledge of the big picture of what's going on so that you can make sound decisions about what you should do in your current situations.  I think this is especially true if you are nearing retirement and have lost your first investments.  Don't be convinced that the crisis was just a fluke and it will all get better.  This book does not promise miracles but it does outline a basic strategy that can help you be years ahead of the pack in the recovery process.

I believe that the information in this book is important enough that I may write more in the future or do a series on it. And, I hope and plan to implement some of the strategies myself.  In the meantime, I recommend that you get the book or cd's at the library and familiarize yourself at your earliest convenience.  There is a lot to chew on in these ideas. 

The author has written a number of other books as well as his website.  Would love to hear any comments you have on any of them.  To some, his writings may even seem somewhat controversial.  Being right often is.

Money and Markets Website:  http://www.moneyandmarkets.com/

Amazon book link  :http://www.amazon.com/Ultimate-Depression-Survival-Guide-Protect/dp/0470393777/ref=sr_1_1?ie=UTF8&s=books&qid=1273448094&sr=8-1-spell

Real Estate Investment - Land

 When most people think about real estate investing they think of residential real estate, vacation property, or, if they want to make a business out of it rentals in single family residences or multiple unit complexes. These can all be very good investments if you research and plan carefully. All of them to some degree or another require money, time, and work.

On of the least discussed real estate investments is land. Just land. Generally land would be a long-term investment and therefore a possible option for retirement savings and investment. The value of land generally would not go up and down as radically with the market conditions, as would residential property. In addition, taxes would be much lower.