Sri Lanka, A Glimpse At The Future?

Increases in the cost of food, fuel and medicine kicked off protests that turned into riots and is now bordering on civil war. Over 200 people have been killed and hundreds more injured in fighting between opposing political factions. Government and private property, including busses, homes, shops, and buildings have been burned. The homes of politicians have also been torched. The police and military are trying to restore order and have been given orders to shoot rioters and protesters.

The parliament of the country has resigned and to make matters worse the country is bankrupt and unable to pay its international loans.

Medications are rapidly running out and since the country is in default on its debts they cannot be resupplied. Fuel is in critically short supply with only one full days worth of fuel left to generate electricity. To conserve fuel the island nation of 22 million people will only have electricity 9 hours per day until more fuel can be purchased. Again, they are bankrupt so no one will sell them fuel and they have no money to pay for it if they would.

To pay police, military and other government employees they are printing money. Which increases inflation, making food, fuel and medicines even more expensive.

No one can really say what the future holds for this country. Other countries that defaulted on their debts (or came close) like Greece, Cypress, and Argentina were able to get bail outs from International sources to restore a functioning economy. With the current state of the world economy and the focus on the Russo-Ukrainian war there doesn’t seem to be much help on the way…

With the current direction of the US economy as well as the other major world economies, could this be a glimpse into our own future? I pray it is not.

If you are not already, Pray up, Stock up, Train up, Team up. You’ll have a much better chance of surviving what’s on the way.

God bless.

Preparedness Basics: Finances

Almost every one of us will experience some sort of disaster in out lives that is either financial in nature or has a financial impact. A disaster that is financial in nature would include things like loss of income (job loss), reduced income (pay or hour reductions), or unexpected expenditures. A disaster that has a financial impact would include things like storm or flood damage to your residence. Since starting this blog our family has experienced each one of these and some more than once.

Financial disasters included both of us (at separate times, thankfully) being laid off. Both of my sons in law and my son have all experienced this as well. My daughter lost her job about a year ago. At the beginning of COVID my company cut salaries across the board for all employees. Wonderful Wife found a new job six months after being laid off but at a 15% decrease in salary. We have had unexpected major expenses including having to replace both central air conditioning units for the house at five to seven thousand dollars each.

After Hurricane Harvey our house was flooded. It cost nearly $50,000 for repairs (and a few upgrades). A disaster relief loan through FEMA helped with those costs but over half came out of pocket.

The recurring theme in all of these is that a little monetary preparation before the disaster helped make them a lot less disastrous.

Getting prepared for these types of disasters is really pretty straightforward and (for most folks) is more a matter of discipline than anything else and I covered it in detail several years ago in a post titled Thoughts On Financial Preparedness but here are the basics in a nutshell:

• • Get out of debt – especially unsecured credit card debt where the interest rates are ridiculous, 25% or more. Not being weighed down by debt payments makes the rest of these recommendations easier to attain and allows more flexibility when times get tough.
  • Build a cash buffer – save some money. We, currently,  keep 35-40% of my salary in savings and are building our investments for retirement as well as any unforeseen disasters. By cutting expenses we would live on that for almost a year with no other income source. Most statistics I have seen show that most Americans have less than $1000 in the bank…
  • Invest – Once your debt is payed down and you have some cash in the bank start investing. I suggest a mixed approach of hard assets like gold, silver, or land along with traditional stock/mutual fund accounts. Diversification of your investment help protect against catastrophic downfalls in any one area.
  • Skills – invest you time in learning useful skills that can help you earn income in a catastrophic economic crash.

Being more prepared financially is one of the most basic and most effective things you can do to protect yourself and your loved ones from disaster.

Yet Another Debt Warning…

The US Government is broke. No, sorry, the US Government has spent itself into near bankruptcy. There is no way, let me repeat that, NO WAY, the US Government can pay back the current debt much less the Trillions we continue to add to it. Trumpet can’t growth the economy enough to do anything more than postpone the inevitable. Immigration Reform, just a slippery way to, in the short term, shore up Social Security only kicks the can a little further down the road and make the cliff at the end of the road that much higher.

Now, I don’t just blame the slimy, spinless politicians. I blame the voters of the United States. We elected those idiots politicians and we are the ones who will promptly vote out of office any politician who talks fiscal sense. Any real action to reduce the national debt is literally political suicide because none of us are willing to face the tough choices we need to make.

Since the cliff is far enough down the road; after the retirement of almost all current politicians they can safely ignore it and pass the buck to our kids and grand kids. Many of whom are blindly voting for more spending by any politician who promises “free.” If we don’t elect a Socialist in the next presidential election, we will in the one following that.

Socialism will kick the debt can a little further down the as they nationalize industries and confiscate private wealth (including retirement savings). This is why we are trying so hard to leave our grand kids some hard assets to help them through the coming collapse (precious metals, cash, land, firearms, ammo, etc.). Some see that as silly but I want to do everything I possibly can to set them up for success in an increasingly dangerous world.

Anyway, that’s enough soap-boxing. Here’s the video that triggered this little rant:

Take care and God bless.

“So Called” Social Security

The trustees of the Social Security trust fund released their annual report in April. The good news is that due to the strong economy costs will not exceed income for another year or so ( Fiscal Year 2020).

Unfortunately, they are still predicting that once that happens the fund will be depleted by 2035. At that point the fund to pay benefits will have to come from General Federal Revenues (Link). Considering the fact that the US Federal Government is already $22.3 Trillion in the hole and digging about $1.1 Trillion deeper into that hole every year, how long will they be able to pay up?

Are you counting on Social Security for retirement? If so, you might want to start working on a “Plan B.”

What Did You Prep This Month?

It has been a busy month and somewhat productive…

Walk With God

Completed two more rounds of praying for our 100 closest neighbors. Church, Sunday School, and Bible Study all attended regularly.

Self Defense/Hunting

We bought 100 rounds of .308 hunting ammunition. I am now just above my minimum inventory levels on all the calibers I maintain. I also bought a box of 50 .357 Magnum soft points for woods carry during our hunting trip and a box of .44 Magnum hunting rounds.

I reloaded 100 rounds of .38 Special and purchased bullets to start reloading .327 Magnum and to load up some .45 ACP.

I traded a .308 hunting rifle I was not using for a Smith & Wesson Model 64 that will definitely be used (has already been to the range). I bought a second Ruger LCR in .38 Special. I always like to have a backup of my primary carry gun. It was on my list and I came across a really good deal on a pre-owned (but likely never shot or if so less than a few dozen rounds) model at a local gun shop.

Supplies/Gear

Still making progress on stocking up our primary pantry and our emergency pantry. The primary pantry is about where I want it to be:

Primary Pantry

I was able to get the emergency pantry just about finished up as well. I have an inventory of what we have and a list of the last few things we need to fill the gaps. I will buy a little at a time over the next few months or as I find things on sale until the emergency pantry is back to where it needs to be.

At some point we need to replace the freezer that was ruined in the flood. I would prefer a stand up freezer this time around. Chest freezers tend to become “shelf space” especially when they are in a utility room or laundry room. Things tend to get buried at the bottom not rotated properly. Chest freezers are more efficient and a good bit cheaper though.

Security

No changes or upgrades here.

Finances

Trying to get some debts paid down including the SBA loan to repair the house and I would really like to get the house paid off as quickly as I can. The mortgage is the only “secured” loan we have and costs the most in interest every month. This has been a long term goal and we are making progress. It just takes a while.

Fitness/Health

Really need to get focused on this…

That’s it for me. That’s what I prepped this week. How about you? What did you Prep this week?

Take care and God Bless

A Million Dollars A Minute

That is not what the US government spends, no they spend more that that, that is what they borrow…everyday, all day long. The current total for the US Federal debt is about $20.7 trillion dollars and as Judge Andrew P. Napolitano observed in his post A Million Dollars A Minute “that is a debt bomb that is waiting to explode.”

He goes on to explain:

Every year, the federal government collects about $2.5 trillion in revenue and spends it all. It borrows another $1.5 trillion to $2 trillion and spends it all…the federal government will need to spend about $1 trillion a year in interest payments.

That $1 trillion is 40 percent of the revenue collected by the federal government; that’s 40 cents on every dollar in tax revenue going to interest on old debts — interest payments that are legally unavoidable by taxpayers and voters.

The US National Debt Visualized (image courtesy of Demonocracy)

The government (unlike the rest of us) can use some pretty shady accounting practices to maintain this level of debt creation. For example, the can print money to use to buy their own debt (don’t try that at home); they can manipulate the economy to increase inflation making the debt worth less and they can even manipulate the interest rates so they can borrow more at less cost. There are a lot of other tricks they can use but this cannot go on indefinitely. Eventually, they (meaning we the people) will have to pay the piper.

Think this is not a serious threat? Think that there are more serious threats out there like the Russians? Here is what the Judge had to say about that:

President Obama’s and President Trump’s own military and intelligence chiefs have argued that the national debt — not the Russians or the Islamic State group or the North Koreans — is the greatest threat to freedom and security that we face today.

And before anyone jumps up and starts blaming either side of the political aisle, both parties are guilty of digging us into this hole:

…after eight years of publicly complaining that then-President Barack Obama was borrowing more than $1 trillion a year to fund the government — borrowing that the Republicans silently consented to — congressional Republicans, now in control of Congress and with a friend in the Oval Office, voted to spend and hence borrow between $5 trillion and $6 trillion more than tax revenue will produce in the next three years; that’s a few trillion more than they complained about in the Obama years.

While I am concerned about war with North Korea and terror attacks this is what really keeps me up at night. Keep in mind, that the last time the world faced a financial crisis of this magnitude we ended up in this little conflict called World War II. People in desperate economic times with clutch at any promise of prosperity even if it is made be madmen like Hitler.

How many are actively preparing for this disaster? How many people around the world even realize the magnitude of the risk we are facing?

Think, plan, prepare…and God bless.

In name only my backside

I may not agree 100% with everything in the post but I think it does a very good job of capturing what so many of us are feeling…

willisbryanblog

I’m thinking over the course of the next few weeks and months the republicans in Congress are going to reveal something or possibly many things about themselves to the Peoples of this Republic. Now that the “fix” for Obamacare has been pulled of the table, and the spending bill continues the government pretty much as it was, still funding the things that the so-called republican conservatives promised they would fight. By the way still no Wall.

Concerning Obamacare, now I understand that some republican congress critters all of a sudden love it. They have been referred to as “moderate republicans”, last I heard it was 18 of them. They do not want to change a thing. This has led to the term RINO’s(Republican In Name Only)being bandied about. I have no idea when or where the term RINO’s came about, and I really do not care. I had even referred…

View original post 1,015 more words

Cost Of Intervention

Just in case anyone was wondering or counting, the attack on Syria last night cost the US taxpayer at least $50,000,000.00…

…that we don’t have.

 

What The Heck Am I Preparing For? (Part 1: The Background)

Warning: This is neither an upbeat nor positive post. Wonderful Wife says it is downright depressing.

Over the last several decades I have become ever more concerned about the state of our nation and the state of our world. Maybe it is fear related to age or maybe it is wisdom related to age but sure seems like the world has become a far more dangerous place. I grew up with the threat of nuclear annihilation as something very real and tangible. There were regular drills in school for what to do in case of fire, tornado or nuclear strike.  The riots and unrest that accompanied the Vietnam war, the forced integration of schools, race riots and Watergate were more common fare on the one TV set in our house than cartoons but as a TV junky even back then I watched it all. Still, today seems worse. Like I said maybe it is an age thing or maybe it has to do with being responsible for a family, I don’t know.

Concern over the direction things were headed (thankfully) forced a very rude financial awakening in 2007 or so. We began trying to dig ourselves out of the mountain of debt we had piled up. Debt seemed to be of little concern when you work in an industry that at any given time you could jump ship at just about any time for a 20-30% bump in pay but those days were over and it was time to live like all the other grown ups and by 2010 we had made some pretty good progress…financially.

Hurricane Katrina hit just a few hundred miles down I-10 from us. We watched the devastation and the ensuing breakdown in societal structures on the news and, to some degree, in person as we volunteered locally to help those streaming in from New Orleans. Then came Ike and, while were were spared the worst, it made it very clear that we were not properly prepared. It wasn’t until 2010 that we finally decided to do something about it and made a conscious decision to be more prepared.

At that point we began researching and studying. To be honest, we felt pretty silly and embarrassed at first. We thought we were the only ones around here thinking along these lines. We worried that we had become one of those crazy couples the media loves to ridicule. As time went by we found that we were not as far out or as alone out in left field as we thought. In fact, just this weekend we found three members of our Sunday school class were actively involved in some degree of preparedness or another. Counting us, that’s about 50%.

Our first priorities were pretty simple and basic and revolved around being prepared for another hurricane or a similar natural disaster. Food, water, supplies, and fuel for 3 days was our first goal. Later we expanded that to seven days and then fourteen. Reaching those goals were fairly easily accomplished and , with a few exceptions like a generator that took some time save for, fairly quickly achieved as well.

Over the last eight years we became increasingly worried about a different set of disasters. As the national debt soared and the economy slumped the government seemed intent on fanning the flames of division within the US. They also seemed fairly hellbent on taking away the right and the tools required to defend ourselves. Being prepared for financial and societal upheaval became almost as important as being ready for the next hurricane. Making sure we had the firearms and ammunition on hand should become unavailable was a pretty high priority especially as runs on guns and ammo have been pretty much the norm for the last eight years.

Back in November something changed. The expected election result did not happen. The Whitehouse would not be occupied by someone who seemed intent of driving the nation to civil war. Although I was fully expecting some sort of last minute trickery, the inauguration also happened. For a few weeks I have felt that things might be OK; that maybe we could change the trajectory we have been on.

Sadly, I think I was just on a brief, mental vacation.

Hurricanes will still hit the coast. Several more major cities around the nation, including the one I live closest to are heading for bankruptcy. There is no easy or short term fix for the US national debt or the Social Security shortfall. The external threats to the US are not going away anytime soon. Most concerning, the division within the nation is not getting better, if anything it is worsening. As the previous administration marginalized and angered those who hold traditional American values the current administration seems to be doing exactly the same to those who don’t. While physical infrastructure may be built, bridges between the various groups within the US will not. We’re still headed down the same path. The timeline might change a little (one direction or another) but we’re still headed towards a dark time in this country.

That is what I am preparing for.

I don’t claim to know exactly how dark that time will be; Great Depression dark, Civil War dark, Balkan wars dark, Mad Max dark (not sure if that is actually much different), or full on post apocalyptic mutant zombie biker dark.

That’s a bit of a problem when it comes to planning and preparedness.

Without the gift of prophesy, I’ll just have to make some assumptions and plan for those as best I can. Over the next few weeks I plan to spend some time thinking about those assumptions and making plans based on them. My goal is to share that process here. I want to do that for three reasons. First, to get feedback on what I might be missing or if I am way off base on anything. Second, to share what I am doing so that it might help others determine their own set of assumptions and plans.

 

Thoughts On Financial Preparedness

In addition to writing many of my favorite fiction novels Peter Grant also publishes on of my favorite blogs, Bayou Renaissance Man. Peter is a really interesting guy with some fairly extraordinary life experiences and I have been reading his blog for years which is pretty amazing for someone with my attention span. Last week he posted some investment advice (link) and I would like to share it and see what you think about it.

The source is a CNBC article quoting advice from a self-made millionaire to never invest in retirement saving accounts. His recommendation is to make sure you have at least $100,000 in a regular old savings account and then invest everything else into profit making ventures because “you can’t save your way to millionaire status.”

First, I am no millionaire and never will be. I am just an ordinary working guy who started saving for retirement (way too lat)e so I am no expert and don’t claim to be one.

Second, retirement is not the only financial concern I have. It is, perhaps, my biggest but I am also concerned about other things too like the mounting global debt crisis. I also want to be able to leave something behind to help my kids and grand kids have a leg up in an increasingly tough world.

With those caveats, here is is the plan I have been following:

Step 1: Get out of (unsecured) debt

Credit card interest was eating us alive. At 25%+ most credit cards will eat just about anyone alive so we worked very hard to pay off all unsecured credit cards debt. To be honest, we do still have some. If I come across a zero interest deal I take it. If Lowe’s or Best Buy or whoever want to loan me money for free I will take it but we have to have the money in the bank to cover the amount of the loan.

I don’t mind going into debt for a car either as long as I get a good interest rate. The combined monthly interest charge for both of the auto loans I have is less than $10 a month. The rates on both are at or below the interest rate on a savings account o I’ll keep the cash.

Our home loan is well under 4% but we are still trying really hard to pay that down as quickly as possible because 4% of a lot of money is a lot of money. In the last two years since we paid off the credit card debt we have paid down the principle on our mortgage by almost $28,000 despite being laid of for several months of that time. If we are going to be able to retire within the next fifteen years the house payment will need to be gone. The drive to pay off the house is not only driven by dollars and cents. There is also a security aspect to it. Our house is big enough for the whole family including grand kids and mothers in law. Should something happen we are their backstop. It will be tight and it may not be a lot of fun but we could do it. So, making sure that everyone’s “backup plan” is safe factors into this as well.

Step 2: Build a cash buffer (savings)

Our initial goal after paying off our debt a couple of years ago was to have enough in savings to pay the bills for a month. We (slowly) met that goal and reset it to add another month each time. Right now we have the equivalent of four months of my salary in savings which will pay the bills (if we conserve) for at least six months. I wish that was a year’s worth of bills and maybe we’ll get there at some point.

Some of this is in a traditional savings account. Some may be stashed someplace safe (not in my home) in cash. Based on the current inflation rates (real and what the government reports), this is losing us money because its worth is decreasing at a higher rate than the interest we earn. That’s OK. It is a price I am willing to pay to have it readily accessible in an emergency.

Step 3: Invest in hard assets

We have been investing about 3% of our income in hard assets such as precious metals. Ammo is another hard asset. I watch and buy ammo at a cost that, if I needed to, I could resell it for about the same price I paid for it. It lasts for years or even decades when properly stored and as the price of ammunition generally increases over time…

We also buy and store food and some critical goods. While the return on investment is minimal at best, food purchased today will be eaten at some point and I can pretty well guarantee that it will be more expensive than it is today. Like having cash in savings, this is a buffer that is worth more to my sense of security than any return on investment.

Within the last month, we have decided that we are going to invest in some land. After the first of the year we will start looking for a piece of property large enough that we could raise, grow or hunt our own food. I’m hoping to buy at least 15 acres (more if I can swing it) and equip it with a well, electricity and a septic system. It would be nice if we could include a windmill and some solar panels for power or to pump water from the well and a small cabin or camp house but those will likely have to wait. With an agriculture exemption the taxes should be pretty low and if the bottom falls out of the economy we should be able to be pretty self-sufficient. My grandparents and Wonderful Wide’s parents survived and raised families on less.

Step 4: Traditional investments

All the companies I have worked for have offered some sort of 401K plan and all matched, to some degree, the first 6% that I contribute. Currently, that is about a 66% return on investment just from what they match. Most of the plans I have enrolled in generated a long term yield that was at least on par with inflation even after the fees (if any) associated with the plans.

I have no illusions that this money is completely safe and have taken several pretty bad hits over the years but on average these investments offer my best shot at a comfortable retirement. Even with those hits the return has been positive.

I also have a few stocks, mostly from employee stock purchase programs or bonus programs. I am not a stock trader, I don’t have the time or the inclination. So, I view these as long term investments. It is either “free money” in the case of the bonus programs or “discounted money” in the case of the stock purchase programs.

By the way, just because each of these is listed in a step by step order that does not mean they have to be sequential. Once my unsecured, high interest debt was paid off I started focusing, to some degree, on each of these steps. That is the only one that I would recommend tackling in sequence. It’s tough to earn better than the 25% (or higher) interest rates on such debt.

Step 5: Useful skills

I have been trying to learn and develop skills that would prove useful not only in an emergency but also in an economic downturn. Hunting, fishing, trapping, gardening, reloading, foraging and even first aid are skills that could help supplement our income or save us money in some way. They are important skills that would likely be in demand in any number of situations.

What have I missed?

OK, that’s been my basic strategy for the last three or four years. What do you think? What am I missing or what have I overlooked?

God bless.