"It’s better to have what you don’t need
than to need what you don’t have." ~ Numerous

Let's not forget ...

The same people and institutions now claiming that the 'recession is over', are the very same people and institutions who told us just a year ago that there was “nothing to worry about" because "the fundamentals are strong,” and that there was “no danger” of an economic crisis.

And the “solutions” chosen for us by our wise Washington Overlords (and championed by the institutions) to save us mere peasants from the economic crisis that wasn't going to happen?

They don't even amount to putting a band-aid on your leg ... After it's been blown off!

Seriously. Why do we continue to believe the same people that have in both word and deed, been totally, utterly, wrong about everything?

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Get out of debt, stay out of debt

Decades ago it was advised of young high school graduates to deposit a set amount of money into the bank each month, and when they retired they would be millionaires. Unfortunately, that philosophy fell by the wayside after World War II. Today it is not unusual for young graduates to receive credit card applications by mail starting them on the road to indebtedness, not the road to wealth.

If you are in debt now, you should be working to clear all indebtedness during the next year. We did it, and you can, too. We paid off credit card debt and doctor bills. We paid off the car and made double payments on the mortgage principle of our home with the intent of paying that off, too. But as the future began to look uncertain, we changed plans and sold our mortgaged home and obtained enough money from the equity to pay cash for a smaller home. Both my husband and I have even quit our jobs since having no debt means we need less income. We are not old enough for retirement and do not collect disability, retirement income, or welfare. Instead we have simply freed ourselves of debt and can now pursue other interests and earn sufficient money doing practically nothing.

We have enough money to eat, pay utilities, and put gas in two vehicles. I freeze a lot of food, and what we do not grow we purchase on sale. Most of our income comes from selling at flea markets and over the Internet.

Knowing how much you owe and how much you earn is not going to get you out of debt. You must learn to do with less, stop buying on credit, downsize what you already own, and eventually you will be debt free. Sounds easy enough, but most people find this is the most difficult part of getting out of debt. They don’t want to stop spending. Most people struggle to have more, not less.

Where do you spend?

It is necessary to organize your financial records, then develop a plan for paying off creditors. Gather the following records: your most recent pay stub, most recent bank statement, your checkbook, and all current credit card bills, medical bills, utility bills, insurance premiums, children’s allowance, pet care, installment loans, newspaper subscription, cable TV, transportation, etc.

With these items in front of you, enter your income on the top line of a sheet of paper. This is your worksheet. List every known monthly expense, from the kids’ allowance to the mortgage payment, and add it up with a calculator. When you finish you will see how much you earn and where the bulk of your money is spent. On the same worksheet, list out-of-pocket or miscellaneous expenses – all those little expenses down to the smallest item such as a coffee break, hamburger, purchase of a key ring, or cigarette lighter. Pay close attention to these small expenditures because they add up to a significant sum on a monthly basis, and are almost always wasteful.

Get out of debt, stay out of debt »»

The Misconception of Financial Preparedness

For starters there’s the misconception that being out of debt has “everything” to do with being better prepared. And yet there are countless aspects to preparedness that don’t require ANY money for success. Instead, they require an appropriate amount of willingness, a constant quest for knowledge, and a positive attitude. You can’t buy any of those things with money. In fact, I can’t think of a single time I’ve had to pay to go to the library and get books that educate me. I’ve also never had to pay for a CPR class or perusing the internet for additional information. Neither have I had to shell out a dime to a shrink to be better mentally prepared for a “what if” scenario.

The other misconception about financial preparedness is that it’s a “top priority.” It isn’t. In fact, out of the 10 Keys to Preparedness, in order of priority, financial preparedness comes in at number 9. That’s right. There are 8 other more important aspects for you that will aid you in being better prepared for a disaster than having your mortgage and credit cards paid off. That’s not to say that getting out of debt isn’t important. But it’s not as important, for example, as making sure that you have food, water, shelter, and medical supplies in the event of a disaster. I assure you, your mortgage payment is the last thing on your mind if your child comes down with cholera, or the ground opens up all the way down your street due to an earthquake.

The Misconception of Financial Preparedness »»

 

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Ten Ways to Survive the Depression

The economic downturn continues to dominate the news as we enter the new year. And, since the new year is also bringing a new president, worries about the economy are compounded by worries over whether Obama will prove to be even more statist than Bush, and whether he will continue – or even accelerate – the current course to repeat the disastrous policies of Hoover and FDR.

The horrifying tragedy at a Long Island Wal-Mart on Black Friday, in which a 34-year-old employee of Wal-Mart was trampled to death by 2,000 people pouring into the store when it opened at 5 a.m. to take advantage of sales, offers a glimpse of what could be coming if the depression turns out to be worse than most expect; if some people will act like savages in response to sales on non-essentials, how might such people act if they were literally starving?

Living in an uncertain world

[T]wo rules-of-thumb about life which are always wise to remember, but especially at a time like this, if you’re finding yourself greatly upset about any predictions you’re seeing:

1. Anything can happen.
2. Nothing has to happen.

No one is perfect; no matter how educated someone is, no matter how convincing his arguments, and no matter what his track record, anyone can be wrong. Neither is anyone omniscient; it’s not possible to see all of the factors that could affect one’s predictions, especially about something as complex as the economy ... Several of the people predicting an imminent second Great Depression have made the same, equally-convincing predictions in previous decades – and have been wrong. Things may not turn out as bad as some are predicting.

Then again, they may turn out worse, which brings us to our second point: if you’re worried, don’t live with a vague sense of dread; identify specifically what you’re afraid of happening to you and your loved ones if things totally collapse. Are you afraid of not being able to pay your mortgage, car payment, etc? Your life savings being destroyed by runaway inflation? Stores running out of food? Riots? Next, identify the specific reasons for your fears. Where are you vulnerable? Finally, identify specifically what you can reasonably do to remove your vulnerabilities to the greatest possible extent.

1. Read Fail-Safe Investing.
2. Have enough cash in your home, or somewhere else outside the banking system, to pay all of your expenses – including pocket money – for at least one month.
3. Have enough silver and/or gold coins to pay your bills for at least one year.
4. Don’t assume that supermarket shelves will always be full.
5. Have enough firearms to protect yourself, your family and your property – and know how to use them competently and confidently.
6. Secure your home to whatever extent you feel is necessary to give you peace of mind.
7. Consider getting a rural retreat, or at least have a getaway plan.
8. Learn how to hunt, fish, or garden.
9. Open a foreign bank account.
10. Get a passport.

Anything can happen; nothing has to happen

Ten Ways to Survive the Depression »»

Be prepared. That's all. Just be prepared.

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  • http://conservativehideout.com/wordpress/ Matt

    Very informative, CL. I see you're still on your quest for a freakton of hits. Good luck!

    • theCL

      Thanks!

      And of course I want a "freakton" of hits! But I also try to cover topics that don't get much attention in the political blogosphere. I've been in finance my entire professional career, and I'm just trying to help people out. Things are going to get much worse.