Archive for the ‘Risk/Return’ Category

Eminent Domain

September 30, 2009

The Fifth Amendment to the United States Constitution states, “…nor shall private property be taken for public use, without just compensation.” This clause of the Fifth Amendment is known as the takings clause.  It empowers the government to take private property for public use.  Maybe you know someone who had a few feet taken from their front lawn to widen a road or build a sidewalk.   The Fifth Amendment also requires that when governments exercise their right of eminent domain that “just compensation” is given to the owners of the property.   It allows governments to take private property for “public use” as long as just compensation is paid.

So the natural outcome is that we are all left deciding and defining what is “private property,” what is “public use” and what is “just compensation.”

Well a few years ago there was a big eminent domain case out of Connecticut, Kelo v. New London, 545 U.S. 469 (2005). The long and short of it, the way I understand it, is that Big Pharma Giant Pfizer wanted to build a plant in New London.  The city established a private corporation to oversee development in the area.  The problem was that a bunch of people still owned homes and lived in the area.  The question became whether government can while exercising its power of eminent domain take private property from some people (the homeowners) and give it to other private parties (the New London Redevelopment Corp. that was representing private interests).  The big question became what was public use and whether generalized promises of future jobs and future tax revenues could qualify as “public use.”  The Court has slowly allowed “public use” to be redefined as public purpose.    If the effervescent promise of future tax revenues qualifies as a great enough benefit, just about any government taking of private property can somehow be rationalized as public purpose.

Or as Justice Thomas wrote in his dissent, “Once one permits takings for public purposes in addition to public uses, no coherent principle limits what could constitute a valid public use…”  Why not take any house or business if some developer or business is able to somehow show that by razing the existing home/business and replacing it with a new business that government may get sometime down the road the possibility of additional taxes?

I would ask, where is the public use?  How is the public able to use the plant that Pfizer wanted to build?  We can’t so there is no public use to my non-black robed eyes. The public has no beneficial interest in a privately owned plant.  To me it appeared that this was a land grab by government to further the interests of private industry.

Do you think that private entities offering the possibility of future jobs and taxes is enough of a public use to justify government taking private property? I don’t.

The City of New London won and the homeowners lost their homes.  End of story?  Not quite.

The case was decided in 2005 so what happened to all of the new jobs, new development and new taxes.  I want to know.

As Jeff Benedict wrote in the Hartford Courant,

A few weeks ago I visited the neighborhood, ground zero in the famous battle between the city and homeowners. Here’s what I saw: a sea of brown dirt littered with old rusty nails, broken bricks and slivers of glass — the only signs that people once lived there. Every home has vanished. Nothing has been built in their place. The neighborhood is a ghost town, a scarlet letter on the city’s forehead.

No new tax revenues have come.  No new jobs have come.  No new “public use” has come.

And in another follow-up story, AP writer Katie Nelson notes, “But what of the promised building boom that was supposed to bring up to 3,169 jobs and $1.2 million a year in tax revenues?”  There are no new jobs.  There are no new taxes.  There is no public use.  They took the land, kicked the people out of their homes and gave nothing back.  Government is controlled by monied vested interests.

Like I always say, if it can happen to them, it can happen to you.  On notice is on guard.

GET OUTSIDE EVERYDAY!! ©

p1010025Just a pretty summer pond.  In a couple more weeks these trees will be ablaze with color.  I was walking about and I saw some scraping at the base of a tree from where a woodpecker had gone to town.

p1010024So I thought to myself that these scrapings would be great tinder for a firesteel.  I didn’t get a fire going, but I guess the point is to always be aware and on the look out for what you may be able to use.

Now that summer is winding down I hope to get back a bit more to blogging.

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What would you want to do without?

September 18, 2009

What would you want to do without: electricity, plumbing, sewer/toilet, hot water, refrigeration or heat?  Think about it.   These are the things that I consider modern conveniences.  Oh, sure you can boil water over a fire or warm your home with a woodstove, but it’s not the same as turning a up thermostat.  I like to read in bed because it helps put me to sleep.  Have you ever tried to read by candlelight or even a flashlight?  It’s tough.  Then when we redid the bathroom we were without a shower or toilet for almost two weeks.  I had to shower at other places and also used buckets and bags to dispose of, uhhm, solid waste.  It’s different than just flushing a toilet and saying bye bye.   Burning candles or kerosene in of doors is pretty sooty.  Heck, running a woodstove is dirty.  How about doing without watertight housing?

I guess the point is that one way you could look at things is to figure out what would be the hardest thing for you to go without and set your priorities based upon that ordering.   If you live in a dry, arid area like parts of the southwest than you probably would move water to the top of your list.  Someplace else like Maine or Minnesota well there is copious amounts of water, but planning to stay warm in the winter would have to move pretty near the top of your list.   If you live in the North Country and plan to burn wood to stay warm you best be chopping wood ten hours a week for every week during the summer. Believe me planning to stay in a tent for an extended period during the winter isn’t really a plan.

So have a plan to stay warm, stay dry, light your place, dispose of waste, boil water, do your laundry, stay cool and have potable water.  Think about what you may miss the most and apply a solution to that contingency.   Imagine if the power goes out for a week or the municipal water treatment plant goes down.  Consider having redundant systems in place for vital resources such as potable water.

GET OUTSIDE EVERYDAY!! ©

I saw a dragonfly on a tree so I took a picture of it.  I like the yellow on its wings.

p1010021These things are like the jet fighters of the insect kingdom.

p1010022If you don’t spend any time outside then you may not know that this is a blaze.  This is how trails are marked.  This is the blue dot trail.  As you’re walking along a trail like the blue dot trail you keep looking for blue dots on trees or rocks and that’s how you plot your way.  Blazes come in all different colors and shapes.  There can be the red dash, yellow dot or the blue dot dash trail.

Oral surgeon and health insurance

August 12, 2009

So I had a root canal done a couple of months ago.  It really sucked.  I had some issue in my mouth so I go to the dentist.  They tried to cap one tooth on the top.  That didn’t work, but I still had to pay for it.  The cap wasn’t done right so it was banging into a tooth on the bottom of my mouth.  Each time the teeth clanged together it hurt like an SOB.  So I had to go back to the dentist again who now told me that the tooth on the bottom, the one below the new cap that she just put in, needed a root canal.  She sent me off to an oral surgeon.  BTW if you ever get a root canal done when you leave the surgeon’s office you’ll be feeling fine because of the Novocaine.  When that Novocaine wears off though you’ll be writhing in pain in the dark on your bed.  So on your way home from the surgeon, get your pain script filled and take the Vicodin or Percocet right away even though you feel fine.  Don’t wait for the pain before taking the Vicodin.

Off to the oral surgeon I go.  I had an initial consultation that cost $100.  Then two additional treatment visits were needed.  The first treatment visit they drill it out and put in a temp filling.  Then you come back a week later, and if everything looks ok, they take out the temp filling put in something more permanent and off you go.

So because I have dental insurance I had to pay something like $750 and the rest would be covered by the dental insurance. That is what I was told by the surgeon’s billing office.  As far I was concerned that was the deal I accepted.

The numbers: $100 for the initial consultation, then I paid $375 after I left the first treatment visit with the deal being I’d pay the second half, $375, after the final treatment visit.  The insurance company pays the balance of like $750, so the total surgeon’s charge is around $1,500.

About a month after I was treated I got a check in the mail from the surgeon’s office for $68.  It represented a refund of some overpayment.  That was more than two months ago.

Yesterday I get a call from the billing folks in the surgeon’s office, the dental insurance decided not to pay something and they want me to pay back the $68 that shouldn’t have been remitted to me.  They’re waiting to hear back from the insurance company about the rest of the money.  The billing person told me that the insurance payment can be yanked back and I may end up owing more money.

I told her that’s not the way it works.  I never agreed to an open ended contract and that I can’t agree to something if I don’t know what it is.  The most basic rule of contract formation is mutual assent.

So the billing lady tries to explain to me that if they hear back from the insurance that some of the root canal isn’t covered that I will be billed.  I told her again that’s not the way it works.  I paid my bill in full as required by their office policy at the time that the services are rendered.   I told her it’s not right that three months later they can bill me $100, $500 or $1,000.  I never agreed to that.

Imagine bringing your car to your mechanic or having a plumber out to your house.  They give you and estimate.  You look the estimate over and based upon their assurance say, ‘fine, complete the job.’ Then three months later you get a bill from your mechanic or plumber looking for an additional $500 or $1,000.  That’s not the way it works.  The only contract I know of that can be changed at the whim of one party are credit card contracts, but that’s because they are credit card bastards.

And that is why we need healthcare reform.  Has anyone else ever been given the run around by a health insurance company?

You know who is most against healthcare reform, health insurance and pharmaceutical companies. Don’t be a tool of their vested interests.

GET OUTSIDE EVERYDAY!!! ©

I look out of a window at home to the backyard where the pool is and I see something or someone floating in it so I go to investigate.  I pull a lot of froggies out of the pool because we need to be careful with our amphibian friends.  Turns out it wasn’t a frog at all, but a….snapping turtle.  He must have made is way into the pool during the rain the night before.  Turtles can’t use pool ladders.  Eventually he would have tired out and drowned so I rescued him.

y6Here Mr. or Mrs. Turtle is in the recycle bin from the town.  The recycle bin is maybe two feet long so you can see that this was a good sized creature.  He was not too happy about being caught.  So I stuck a knife into his brain cavity, boiled him up and made some terrapin stew.  NO I DIDN’T.  JUST KIDDING.  Actually I dropped him off at the Terrapin Station to catch a lift home.  No, just kidding again.

I actually ran him up behind the house to a large vernal pool where he probably came from in the first place.  Here he is getting dumped on the ground, making one final hiss at me and slithering back into the water from whence he came.

y5You can see his open mouth hissing at me.  I think he was pretty old because his shell was covered in algae.  It felt good to save some little creature’s life.

Protect your stuff

July 20, 2009

This is a $20 solution to saving you a whole lot of grief.  If there is only one thing you should accomplish in the next week this should be it.

First, scan your important documents like: birth certificates, marriage license, divorce decrees, adoption papers, wills, power of attorneys, health care proxies, deeds, titles to cars, insurance policies, DD214’s, and at least the first page of the bank statement from each of your bank or investment accounts.

Next, empty everything out of your wallet – credit cards, debit card, driver’s license, VA card, gun license, professional license, health insurance cards – and scan them.

Then purchase a large jumpdrive.  I think that I got a 16MB one for about 20 bucks.  Back all of your documents and pictures from your PC or Apple to the jumpdrive.  Make sure you also copy over everything you scanned.

Finally, buy a waterproof match container from WalMart.  I paid 99 cents for this one.

q

Stick the jumpdrive into the waterproof match container, seal it and find someplace safe to put it.  You may want to store it someplace different than your home, maybe at your office, locker, in your car or with your BOB.

q1

Be disciplined about it and do a backup of your data at least once or twice a year going forwards.  Protect your stuff.

GET OUTSIDE EVERYDAY!! ©

This is crown vetch growing in a nice summer field.  This is what I will dream about during the cold, dark days of our New England winter.

P1010001I think it may be called crown vetch because each little group of flowers looks like a purple crown.  Vetch is a legume, which means, like peas and beans, it puts nitrogen into the soil.  That’s right legumes convert nitrogen from the ear and leave it around their roots.   Legumes improve your soil.  Also, because most legumes have good roots they help to keep soild friable.  If you plant legumes in your garden at the end of the season don’t pull the plants up by their roots.  Cut them at soil level so that the part of the root where the nitrogen is fixed remains in the soil.  Livestock can also graze crown vetch.  I know those pretty purple flowers look tasty to me and I only have one stomach.  Ahhh, the smell of summer.

City or country?

February 7, 2009

Bits n’ pieces –

Good piece on the Preparing for Tyranny blog about universal health coverage or single payer health care.  I am in favor of a single payer system.  Insurance companies are leeches standing between providers and consumers of services, sucking off resources that should be going to health care.  Anyways, read his thoughtful entry.  Here in the northeast we take freedom and liberty seriously.

Also, interesting article on the death/murder of 84 infants due to poisonous teething formula.  Imagine losing a baby because the teething formula was poisoned.

Okay then City or Country?

There was a letter on the Rawles’ website the other day from the owner of the the blog Surviving the Day After that basically chastised people for living in urban or suburban areas.  In other words if you didn’t live in the middle of nowhere than you were doomed. And if you didn’t head for the hills, leave the cities was the cry, then you’d be swept up in disaster and death.

Now seeing how this blog is Suburban Survival for the Simple I figured that I’d try to engage in some analysis.  Maybe we can look at some weaknesses and strengths of both.

I figure there’s maybe a handful of things that can happen that will cause total breakdown of society.  You got ya nuclear, biologic and chemical attacks.   I figure this would be over a limited area.  One, two, three cities?  Then you got ya plagues and flu epidemics, maybe throw in the Black Plague because those naughty boys have been playing with it.  Maybe fly in 5, 10 or 15 infected terrorists on different planes.  I guess that could spread and cause widespread panic, maybe martial law too. Than you got your EMP attacks.

All in all though I don’t see a complete breakdown.  Stores will be open, maybe with less selection, and definitely fewer stores.   I think mail will still be delivered.  Banks will still process payments.  The police, courts and jails will all be functioning.  Gas stations will be pumping gas.  What we do to put food on the table may change, but life will go on.  The medium of exchange we use may change, but the result will be the same.  Lawyers will definitely still be billing.  Carpenters building and teachers teaching.  World Keep On Turning.

Work > Earn > Build/Make > Buy/Barter

Most likely outcome is a continued slow economic slide lasting for years.  Maybe a decade before everything shakes out into our New Grand Economy.  More people living together.  More people working in agriculture and food production.  More local manufacturing.  Less driving and deliveries.  That’s all a different post though.

Like I said though if the mushroom cloud goes up, who knows.   Or if some pandemic spreads you wouldn’t want to be in population centers.  You can’t live your life in fear though.  Be prudent at all times, but we can’t make decisions based on fear.  Otherwise, if you jump in over your head too soon you could end up like those two in Montana.  They ran out of food.  She froze to death.  He was rescued by the sheriff.  He had lots of guns, but no food!!

Rule: if a nuclear bomb goes off in your city, town or village you don’t want to be there.

Rule: if there is a pandemic you want to avoid other people.

If you already live in the city or the burbs you already have a circle of friends and maybe family.  Having a support system is critical.  No way would you want to leave your friends and family during a time of crisis unless that location was dangerous.  In the city/burbs you have many more neighbors than you would in the country.   So you know your neighbors.  Hopefully they’re friends of yours.  Maybe you borrow tools from each other or can look out for each others stuff.   I think you’re better off staying where you know folks than running to a place full of untrusting strangers that probably won’t be too happy to see another refugee arrive to town.  No matter where you are knowing your neighbors is critical.  I know when I see strangers on my street I pay attention and am watching out for my neighbors’ houses, kids, cars and stuff.  I saw a neighbor’s car get hit and then the driver drove away.  I got the license plate and gave it to my neighbor who then called the cops.

Rule: It’s good to be where you know people.

Ditto for the neighborhood.  I’ve lived in this town for the better part of 45 years.   I know the streets, roads, sidewalks and deadends.  I know the hills and hollows.  I know the rivers and streams.  I could bug out of town and know how to avoid roads.  I know what rivers to float down  and where the falls are.

Rule: It’s good to know the terrain and geography.

I know the parks, libraries, hospitals, schools, stores and mechanics.  Better yet I know what merchants/doctors/restaurants/mechanics/stores/gas stations are good to go to and who to avoid.   You wanna run somewhere strange and not know where to get stitches, the best burger and beer, find town hall and police or get ripped off by some strange mechanic/dentist/lawyer/tradesperson that you don’t know?  Called the mechanic today, ‘you’ve been here before right?’ ‘yup, like 20 years.’

Rule: It’s good to know the people that you do business with.

Rule: It’s good to know where critical services are located.

Now let’s figure that you live in the middle of nowhere.  I’m not sure that the libraries will stay open.  How about that fire department, cops and schools.  Sure in the cities and burbs we’ll see a reduction in municipal services, but we won’t see the total disappearance of services.   The trash will still get picked up, maybe not as often, but it will get picked up.  How about snow plowing city v. country.   Then you got your medical services.  In the burbs and cities there is a large choice of providers.  Chances are they all aren’t going to fold up and close.  Out in the hinterlands if you only have one MD for 40 square miles then you ain’t too well diversified.  You don’t want your healthcare to get Madoff’ed.  The hospital here is close by and will stay open.

If the power lines go down, the telephone lines fall, the gas main break, the water pipes break which area will be fixed first?  I think you know the answer.

I can also see the delivery of food and other products breaking down the farther you move away from population centers.  I’m not sure if the tractor trailers are going to keep rolling quite as often anywhere.  So how often is that little country store that only 10 miles up from you going to get restocked, or the tanker trucks coming.  You can be certain the the majority of goods will be delivered to the more populated places more consistently.  It makes good economic sense doesn’t it?  That’s what I would do if I was in charge of logistics.

Rule: centers of population will get restocked more frequently, more resources will be allocated to them and municipal services may be more dependable than in rural areas

Boy if the price of gas ever goes up again… and I’d say the chance of that is a near perfect 100%, the further away that you live from where you need to go whether it’s the grocer, banker, USPS or your jay-oh-bee then the more the price of gas hurts.  When the cost of transportation is high then it’s good to live in close proximity to what you need.   Think where you’d rather live when gas hits $4, $5, $8 a gallon.  And it will.

I can walk to a hardware store, big grocery, church, a few small convenient stores, drug store, liquor store, sporting good store, USPS and so on.  I can ride my bike to just about anything you can imagine.

Rule: oil still has a world of upward potential as oil becomes more scarce driving may become a luxury for only the very rich.  Driving 30, 40 or 50 miles to the store, the job or the movies will be a rare event indeed.  I agree with Kunstler that the days of happy motoring are approaching an end.

If you don’t read Kunstler he is a must read.

My little town has its own bus that runs around.  Many urban/sub-urban places have buses, trains and subways that you can get around on.  Maybe even a cab service.  In the Hinterlands?  Not so much.

Then I imagine for the few jobs that do remain most of them will still be where most of the people are.  Lose you job out in the wild blue yonder and it make take a while longer to find a new one than in a more populated area.

Rule: the availability of public transportation is a large consideration.

Rule: the majority of jobs will continue to be where the majority of people are

Rule: if you want to develop your own business showing folks how to tie flies, plant gardens, repair bikes, watch/teach their kids or handy man business you will have a greater chance of success with a larger available market.

If you’re familiar with Ferfal’s blog then you know he writes with a first hand experience of what the decade long economic collapse of Argentina has been like.  A point he always makes is that there are home invasions in the city and in the country.  The difference is that in the country no one hears your yells so the criminals have more time to do the worst things imaginable to your family and you.  The city and country both have their advantages and disadvantages.

Rule: learn from the experiences of those who went before you and follow in their footsteps.  Learn from their mistakes.

Rule: the actual collapse of an advanced economy like Iceland or Argentina haven’t yet digressed in a Rabid Biker Zombie shoot em up.  Who knows about the future though.

Rule: due to concealability handguns seem much more useful during an economic collapse than rifles

It takes quite a few people to set up 24/7 guards and/or patrols.   The more you have and the more it’s spread out the tougher it is to protect.  If you own a large ranch or farm with equipment spread out over a wide area you may have a tough time protecting your crops, livestock, equipment and even metal pipes and fences from looters and thieves.

Rule: the more spread out you are the more difficult to defend

Rule: to defend a large homestead you would need a large number of people.

Rule: one or two families in a cabin in the woods can be waited out or burned out

Now ideally I think you’d have a number of places that you could bug out to if need be.  I live in the suburbs, but maybe it would be good to have some land, friends or family in a more rural area.  Ideally a few locations to run to in different parts of the country.  Be even better if you know some people in a foreign country that you could run to if need be.  That’s why I tell folks to Get Your Passport even if you don’t plan on going anywhere.  Better to have it and not use it then not being able to leave as quick as possible if the gates start slamming down.  You know how slow the folks at the USPS can move so get that paperwork moving along.  The regulations are changing in four months so get your passport now.

Rule: wherever you live be prepared to run to a few other locations

I don’t mean to rag on country places.  Having some land in the country and building a cabin is the dream of just about everyone isn’t it?  Although I have access to a trailer and some land in the North Country.  It’s not just to bug out too.  It’s a vacation place too.  I would like to buy some acreage and build my own low impact woodland home on it.  Check out the link there are plans.

Here is a pic of the front and the inside of what I’d like to eventually build.

front

wide2
I just want to point out that one setting may not be right for everyone.

Rule: And it doesn’t matter where you live as long as you Get Outside Everyday.

Play the odds…

January 17, 2009

The leading cause of death for folks between one year old and 44 years old is unintentional death.  2,836 people 65 and older died of nutritional deficiencies in the US in 2005.  Between the ages of 10 and 34 suicide is a leading cause of death.  Anemia is the 13th leading cause of death for kids from 1-14.

Anyways, I was out skiing and got to thinking.  We live in a risky world and living is a terminal disease.

All good preppers worry about stuff and try to prepare for the unknown, but just like going to the casino, we need to work the odds in our favor.

The numbers say that most people die of heart disease and cancer.  Nuff said.  I’ll cover three things here: unintentional deaths (boohoo), homicides (Boo!) and suicides (bahbah).

Now let’s look at unintentional deaths.  Here we see that motor vehicle accidents are the leading cause of death.  Your greatest chance of dying early is due to MV accidents.  Personally, I don’t see the point in bullets, beans and bandaids if you don’t wear your seatbelt.  BTW I am against seatbelt and helmet laws.  Freedom lets each of us choose to be as stupid as we want.  When I was doing motor vehicle and personal injury work I saw people get thrown from motorcycles and have limbs amputated by traffic signs.  At 30 or 40 mph a traffic sign is a razor blade.  Saw someone get ejected from a car and be decapitated.  (That left a mark.)  Your car is a piece of crap.  The seats are barely attached and if you get hit hard enough from behind will be ripped right out at which point your body and the seat become bullets looking for a backstop.

brokerexeThe next leading cause of early death is poisoning.  Almost 24,000 people a year meet their maker due to poisoning deaths!! Wow!  Lesson here is to make sure that stuff is labeled correctly.  If you are 35-54 you have a greater likelihood of dying from poison than in a car accident.  Surprising.  Poisoning is then followed up by falls, suffocation, drowning and fires.  Lesson here is to be careful with ladders, roofs, trees, climbing anything and on stairs.  Suffocation I have to believe is mostly work related, maybe people cleaning out tanks, furnaces and coolers. Maybe choking on prime rib is in this category.  Do you know the Heimlich? Most drowning deaths are related to booze so don’t drink and swim.  (That’s a tough one.) Wear a lifejacket or have one within reach for everyone on the vessel.  Fires?  Like I always say no bullets, bandaids or beans until you get smoke and CO detectors and a fire extinguisher for your lily pad.

Next up is homicides.  You have a greater chance of falling to your death or dying of unintentional poisoning than you do of being murdered.

homicide

Most murders are committed with firearms. Over 600 people were murdered by being suffocated – ewwww.  One hundred and fifty seven people were burned to death, 89 were poisoned, 49 had their head held under water, 38 people were run over and 18 people were pushed off of a building or cliff.  Wow.

You’re more likely to be murdered by someone you know than a stranger.  Men are more likely to be murdered than women.  Women are more likely to me murdered by a partner.  Booze is usually involved.

We also tend to kill our own kind so if you are white don’t worry about the young black kid with baggy jeans killing you, worry more about your own brother in law or ex-whatever.  Most murders are in the 15-24 age group.  It’s the second leading cause of death for this age group.  The younger you are the more likely you are to meet an early death due to murder.

Lesson here – be careful who you invite into your house, be weary of drunks, avoid the streets after midnight and watch your kids.

Next up Suicide.  Almost as many people commit suicide with a firearm (17,002) than are murdered by all means (18,124).

suicide

Over 7,000 people commit suicide by suffocation, 700 people leap to their deaths, 375 people drown themselves, 160 commit self immolation and 113 people drive their cars into a tractor trailer, stonewall or big ol’ tree.  Strange.  Lesson here, reach out to someone and keep your firearms and ammo locked up.  BTW I’m pro freedom of suicide (?).  Hey, I figure if we can’t choose when to check out what do we really control.  If you want to talk life insurance or what not post a comment and I’ll rebut.

Remember when you add up all the unintentional deaths, suicides and homicides it’s much less than all the other causes such as heart disease, cancer and diabetes.  So those of you……..well……you know what you need to do.

I used to be an accountant.  I like numbers and statistics.  Terrorism didn’t make the top 20 in the US.  It probably wouldn’t even make the top 100.

If you want to run your own report here’s the link, http://webappa.cdc.gov/sasweb/ncip/leadcaus10.html.  Before you go off half scattered though – when you get to the drop down menu change “number of causes” from the top 10 causes to top 20.  Then when the data table comes up check out the colored blocks by various type it makes it easy to look at how different causes of death change by age group.  At the top of the table you can click on the age groups to see what your age group is most at risk of dying early from.

ws5Just a nice picture.

q2This is Queen Anne’s Lace aka wild carrot.  You gotta be careful, careful here though because it looks very much like poison hemlock.  Queen Anne’s Lace is hairy and hemlock is not.  The clusters of Queen Anne’s Lace also bundle up more than poison hemlock.  Poison hemlock stinks and Queen Anne’s Lace doesn’t.  Don’t become a statistic you need to get at least two or three field guides to cross reference.

Amortization

December 24, 2008

Not very exciting stuff, but you need to grasp the concept.  Stick with me.  Tough it out.

Forget about TEOTWAWKI and concentrate on your financial survival.  It’s good to pay attention to all the macroeconomic news out there, but if you don’t already know what I’m going to explain to you, what you are about to read could save you hundreds of thousands of $’s.

Don’t listen to the mortgage people.  You gotta run the numbers yourself.

Rates are falling to hysterical lows so many folks may be thinking of refinancing.  (If you still gots a job to go to that is.)

If you understand amortization then there is no need to read any further.  If you don’t then I’ve tried to put together a primer for you.

First some background.  I apologize if this is too elemental for you, but some people may not understand so we need to start at the beginning.  Let’s imagine that Billie Borrower borrows $10,000 from Libbie Lender.  Libbie is going to want to make some money on the deal so Libbie charges interest.  To keep things simple, if Libbie charges 5% interest then you’ll end up paying the original $10,000 back to Libbie, plus an additional $500 in interest.  All together you pay Libbie back $10,000 in principal and $500 in interest for a total of $10,500.  That $500 is an expense to you, a direct cost for borrowing money.

Principal is the amount you originally borrowed.  Borrowers want to pay this back as soon as possible.

Interest is the income that the lender demands for lending you funds.  Borrowers want to limit interest as much as possible.

Got that so far?  If not then Google principal and interest till you understand the difference then read on.

Imagine you get a loan from a lender and your monthly payment is $1,000.  Ever wonder what the bank does with that $1,000?  Ever wonder how much of the $1,000 is applied to interest and how much is applied to principal? Lenders want their interest as soon as possible.

The method that banks/lenders use is something called amortization.

The monthly loan payment never changes.  it will remain $1,000 for the duration of your loan.  What fluctuates is how much of the $1,000 is applied to interest and how much is applied to principal.

Banks got it sewed up tight so what do they want?  Lenders want their interest as soon as possible.

To illustrate, let’s say that you get a 30 year loan from a bank and your monthly payment is $1,000.  The very first payment may be $999 in interest and $1 in principal.  The last payment, number 360 (30 years times 12 months/payments a year = 360), may be $1 in interest and $999 in principal.  Why?  Because the lender/bank wants their money/interest as soon as possible. Wouldn’t you if you were lending?

I’ve pasted in a table so you can see what I mean.  Notice the monthly payment stays the same.  Notice that the amount allocated to principal increases and the amount allocated to interest decreases over the life of the loan.

#

Payment

Principal

Interest

Loan Balance

1

$2,649

$983

$1,667

$99,017

2

$2,649

$999

$1,650

$98,018

3

$2,649

$1,016

$1,634

$97,002

4

$2,649

$1,033

$1,617

$95,970

5

$2,649

$1,050

$1,599

$94,920

6

$2,649

$1,067

$1,582

$93,852

7

$2,649

$1,085

$1,564

$92,767

8

$2,649

$1,103

$1,546

$91,664

9

$2,649

$1,122

$1,528

$90,542

10

$2,649

$1,140

$1,509

$89,402

When you are considering refinancing or getting a new loan you can’t just look at the interest rate or your monthly payment.  You need to look at total interest paid going forwards.  The going forwards is key; that’s why I redded it.

Total interest paid going fowards. That’s what counts.

Now you understand that most of the interest that you pay to a lender you pay early in the life of the loan and as the loan matures you pay down more of your principal and less interest.Why? Lenders want their interest as soon as possible.

How can we put this fact to work for us?

A quick explanation will help to understand.   At some point during the life of a loan you “flip” and each of your payments is applied more towards principal and less towards interest.  When this happens varies depending on the term(length of loan) and interest rate.

I just ran the numbers for a $100,000 30 year loan (360 payments) at 6%.  This loan doesn’t “flip” until payment #222.  So for the first 221 payments each payment goes more towards interest than principal.  That’s right you are 18 1/2 years into a 30 year mortgage before most of you monthly payments are applied towards principal and not to line the lender’s pocket.

Example – Billie Borrower is now 10 years into his 30 year loan with Libbie Lender.  Because so much interest is paid in the early stages of a loan, that although Billie is only 1/3 of the way into his loan, Libbie has already probably received 80% of all the interest she will receive over the entire 30 years.  Billie’s current monthly payment may now be going 60% interest and 40% to principal.  Remember at the beginning the payment is 99% interest and 1% principal and at the end of the loan it’s reversed to 1% interest and 99% principal.  Why? Lenders want their interest as soon as possible.

The crux…….If Billie were to refinance now she would be right back to DAY ONE!!! Now Billie is back to paying 99% interest and 1% principal.  Why? The chorus please – Lenders want their interest as soon as possible.

As long as you keep refinancing you are stuck paying interest and never paying down the principal (amount you borrowed).

So how do we analyze whether it makes economic sense to refinance or get a loan?  We use something called an amortization schedule (“AS”).  A good AS will tell you how much of each payment goes to interest and how much goes to principal.

Rule #1 -as I elucidated above is don’t listen to the mortgage people.  Run the numbers yourself.

Rule #2 – you can’t pay attention to what happened in the past.  What you care about is how much interest you will be paying going forwards.

So if you have a loan at 6% it may seem like a good idea to refi and move your rate down to 5%, right?  Not so fast because if you are already 3, 5 or 10 years into your current loan you may be paying more principal than interest and do you really want to go back to payment #1 where you are paying 99% interest and 1% principal?  Of course not.

So the only way to figure it out is to run the numbers.  Here is one amortization tool that I found on the Internet, http://www.financialpowertools.com/amortization_calculator/index.html.  (There may be better ones, but this one gits r done.) After you click “Calculate” then click on “View Report.”  The report will tell you how much each of your payments is allocated to principal and how much to interest.

You’re going to have to run the numbers twice.  Run them once with your current loan and then add up how much interest you still will be paying from this day forwards.  For example, if you are five years into a 15 year mortgage all you want to add up is how much interest still needs to be paid, i.e. add up the total interest for all payments for the final ten years of the loan.  This is the toughest part because it’s tedious.  Once again, if there are total of 60 payments on a loan and you are 23 payments into it, all you would want to add the interest for are payments 24 through 60.  What already took place Mr. Fancy Pants would call, “sunk costs.”  They don’t matter so much when you analyze things going forwards because it’s cash taht already flowed under the bridge.

So you got that?  You have to figure out the total interest that you still will be paying over the remaining life of your current loan.  We can call this “Total Interest Remaining.” Write the number down.

Now run the numbers using the AS that I linked to using the new loan that you are considering.   After you click “Calculate” you can just look at the open window where it says, “Total Interest.”

Finally compare Total Interest Remaining (interest still left to be paid on your current loan) to Total Interest (total interest to be paid on your new loan).

If the Total Interest on your new loan is more than the Total Interest Remaining on your current loan you may want to think twice about getting the new loan.

Of course there are all kinds of other reasons to get a new loan, but at least now you are equipped to make an intelligent decision because you can compare the Total Interest Remaining to be paid on your current loan with the Total Interest that you would pay under the new loan you are considering.

I know this is confusing.  If you have questions, post a comment or email me.

Old chimney

Old chimney

Just an old chimeny of a cabin since disappeared.  About 10-15 years ago we were skiing during a real bad storm and we had to seek shelter in the cabin that stood here at that time.  It was good to get out of the elements for a little while, warm up, have a nibble of cheese, meat, fruit or chocolate and take a shot or two of the schnapps that we had.

p1010085Nice trail.  It’s steeper than it looks.

What’s missing….

October 29, 2008

It’s easy to think about what we should prepare for. As I wrote in a previous post we need to prepare for those things most likely to occur and those things that are easy to prepare for. To that end I’d like to recommend a list of stuff of some people don’t think of. Mind you I don’t expect to be running through the streets slinging an AK over my shoulder like Mosul or Lebanon. I just don’t see that happening in the US, at least not in the near future. Holed up in my house shooting at the Zombie Golden Horde through gunslits in my walls, not likely.

Do you have:

Water purification or filter. You need this. This has to be number one on your list. You also need redundancy here. Have a minimum of 2-3 filters of the same type and five replacement filters. I would not want to trust just one filter no matter what.  Without water you are a worm on the hot summer pavement.

Toilet paper. How much do you use every week? Do you have enough for six months. You need this stuff.

Batteries. One of the first things to disappear and easy to trade. Get alkaline, rechargeables and lithium. Brand names don’t matter. They’re all made in the same factories and labeled later. Avoid heavy duty. Get alkaline.

Ammunition. Personally I think it’s better to have fewer guns and a better understanding of the ones do you have with ample, more than enough in your wildest dreams, ammunition. Or reloading supplies.

Firearms. No need to mention, but don’t go all gun nutty on me at the expense of not having a way to get or clean potable water and enough food. You can’t eat a gun. Also, make sure you have enough Hoppe’s No. 9, oil and patches. Maybe some replacement parts.

HBA. Health and beauty aids. You need this stuff. I mean toothpaste, tooth brushes, lots of soap, hand sanitizer, shampoo, razor blades, feminine products, and so on. Baby wipes are great. Go look at your medicine cabinet and under your bathroom sink. You need more of this stuff. If it really goes to Hell in a hand basket staying clean and tidy means that you have a better chance to stay healthy. Nothing will make you sicker quicker than having dirty hands. Sheets, pillowcases, towels and blankets, blankets, blankets.

Kitchen knives. I know we all like knives, but make sure you have a bunch of good ones that hold a good edge and are easy to sharpen. You should be able to get good kitchen knives for $5-$20 each. I think $20 is a lot for one knife. Avoid wooden handles and look for a full tang. NEVER leave you kitchen knives to sit in a wet sink over night. Clean your knives as soon as possible and dry them off.

Sharpening stones, irons, diamond stones. A dull knife is a danger to the user. You gotta keep your knives sharp. I sharpen mine just about every time I use them.

Paper towels, napkins, paper plates, plastic cutlery. It may be tough to run a dishwasher or heat water to wash dishes. Disposable is good. Tin foil, plastic wrap, wax paper, bags, bags, bags, zip lock, foldable, kitchen bags, big trash bags. Dishwashing detergent, SOS pads, sponges. Look around your house. This is what you’ll need.

Solar battery chargers. I like these. You can get good ones for $20-$30. Get a few extra for trading just in case.

Lots of food. I liked canned. Some people like storing grain. I like to store what I eat every day. I don’t grind grain so I hope I don’t have to start now. Oils. Store vegetable and olive oils. You need fats. Another great think to store is seeds for sprouting. Here in the cold north I can’t grow greens in the winter, but I can sprout seeds in a cold dark closet and make a mini salad. Sprouts are great, offer a lot of protein, roughage and micronutrients. Vinegar is great stuff to store – white, red wine and cider.

First aid supplies. You need to have a super kit. You need antibiotics and pain relievers in it, sutures, scalpels, razors, all kinds of gauze and bandaids and so on. Aspirin, Ibuprofen. You can go through this stuff quickly so make sure you have much more then you ever anticipate needing.

Spices. I like black pepper so I store a lot of it. Also, store other herbs and spices. Lots of salt. Get a few one pound containers just for trading. Ketchup, mustard, mayo, bbq sauce, teriyaki, etc. All of this stuff makes food more palatable.

Bleach. This stuff is great for cleaning and purifying. You can mix it with water and sterilize surfaces.

Books. Have all kinds of books for entertainment but also how to books: how to can, how to set a broken limb, how to fix a toothache, nature guides for edible plants, trees and wildlife in your neck of the woods.

Maps. You can’t have too many maps for you area and where you could possibly have to travel to. Get as detailed as possible including USGS topo maps. Learn how to read em too.

Passport. Just get it. Get it now. You never know. Millions of people never thought they would have to flee where they live. Go ask the Georgians, the Rwandans, the Cambodians and so on. If it happens there it can happen here. Wildflower is right on here. Prepare.

Get copies of all your “stuff” on a memory stick/jump drive. Scan all of your credit cards, driver’s license, debit card, birth certificate, vaccination certificates, marriage license, divorce decree, health insurance cards, insurance policies, the deed to your house, titles to your cars, anything in your wallet or file cabinet that may be important. Scan them onto a memory stick and keep that stick handy.

Ammunition. I know I mentioned ammunition above, but it’s a big one. Great investment. Better then the stock market.

Lanterns, candles, flashlights. You need light. Nothing will make you. Depressed faster than sitting around in the dark. Get a variety of them. Get the grind up kind, the shake kind, LEDs last a long time, get regular bulbed lights. Coleman lanterns, oil lamps and candles. You can’t have enough ways to shed light on your life.

A way to stay warm. What are you gonna do if the oil truck don’t come around, electricity goes out or the natural gas lines stop? You need a way to stay warm. The temperature of a house starts to drop right away. Being cold hour upon hour and day upon day will beat you down. Have you ever had cold feet for 12 hours? It grinds you down. Woodstove, inserts, propane heaters, etc.

Miscellaneous hardware supplies. Kits to fix your toilet, nails, screws, wire of assorted sizes, rope of assorted sizes, glues, epoxies, extra roof shingles, roofing cement. Is there anything in your house that you fix every month or every six months? Get more of it. I like to have some plywood and other assorted lumber just in case. Do you have a tarp large enough to cover your roof if it springs a leak?

Ask yourself what you get that’s imported from overseas. Sneakers, shoes, rubber boots, hunting boots and other footwear. Most of our clothing is now imported. Get long underwear, a few more pairs of jeans, bras and panties, rain gear, winter jackets, hats n’ gloves. Any special foods you like that are imported? Get em now. If it can happen in Iceland it can happen here.

Vitamins. If your nutrition goes to Hell at least you can supplement it with vitamins. I also like to have fish oil capsules.

A way to cook. If you have an electric stove get a small propane stove or white gas or both. If you have a gas stove get an electric hot plate, propane or white gas or all of the above. A hot meal does wonders for morale. If things really go south, cooking a hot meal for your neighbors will make you king of the neighborhood.

Stuff to bug out with if you need to. Tents, sleeping bags, sleeping pads and other camping gear.

Cutting boards.

Light bulbs.

Extension cords.

Vegetable and herb seeds. Soil amendments. Lime is great it sweetens your soil and is good for a latrine should you have to dig one.

Canning supplies. Do you like pickles? Food dehydrator.

Fire extinguishers and CO detectors, smoke alarms (battery powered). When I travel I bring a smoke alarm with me. You have a much greater chance of dying in a house fire then shooting it out with someone. Prepare appropriately. No more guns for you until you get detectors all over your house.

Fuel. A variety of fuels. If you store gas use a stabilizer. Store some propane tanks large and small (for trading). Store cans of white gas, which has gotten really expensive. Kerosene?

Heavy duty cooking gear. I love cast iron. Are you prepared to cook over a fire? Get a Dutch Oven and some cast iron skillets.

Cash. You gotta keep some cash in your place in case there is a bank holiday or the power goes out.

Ways to carry stuff. Buckets, barrels, wheel barrels, wagons, bags, packs, suitcases. I love the heavy canvas bags with handles on them. When I was growing tomatoes commercially I used to say that a farmer’s best friend was a five gallon bucket.

Hand tools. Saws, axes, screwdrivers, mauls, hand drills, shovels, rakes, spades.

Masks.  Get some masks to wear in the event of a flu pandemic, bird flu or some other crisis.  Remember the pictures of the people running down from the towers on 9/11 with soot all over their faces?  I like the N100’s.  Be careful if you buy surplus gas masks.  They need to fit correctly and the canisters need to still be good.

Forgot: wine, beer, liquor or whatever else soothes your mind and eases your body.

Look around your house. What you see is what you need. What you use every day is what you need to store. I know that guns and dehydrated foods are sexy, but store the stuff that you use. So you may have ten years worth of dried beef stroganoff stored, but can you shave your face, wash your dishes or wipe your butt?

Take it easy.

Prepared for what?

October 26, 2008

How do we prepare? What do we prepare for?

I think the probability of a shoot em out, shoot em up, kind of SHTF scenario unlikely to occur. That doesn’t mean that it won’t. It just means that I don’t see the need to have three AR platforms or a .50 BMG. For most of us the firearms that we already have will be adequate.

Firearms are fun. Hell, I love them and spending an hour or two at the range is a great way to spend some time. But really, what do we need – a 22 rifle, a shotgun, a center fire rifle and maybe one or two handguns. I leave the house with a handgun just about every day. When I think of all the events that would have to occur to make it SOP for me to leave the house with a rifle every day, that I don’t see happening. Am I worried about hordes of zombies running loose on the streets? Not really. Do I anticipate having to shoot someone from 200 or 300 yards? Probably not. I mean what kind of self-defense do you have to extract from 250 yards away. Shooting someone at 200 yards sounds more like murder then self defense. Could I be wrong? I am more frequently than I like to admit.

Keeping all of the above in mind then the question is how to prepare. I like to think of various events that may occur and assign probabilities to each. Based upon the risk of occurrence, the danger from the event, the difficulty/expense in preparing and the risk of being unprepared, one can come up with a system to prepare. For ease of explanation let’s look at a simple matrix.

Likelihood of event occurring

Highly unlikely

Unlikely

Possible

Likely

Highly likely

Easy to prepare

More difficult

Neutral

Difficult to prepare

Very difficult

So we have to be prepared for the things that are easy to prepare for if they may occur. On the other hand we have to prepare for events that are likely to occur even if they are difficult to prepare for. If something is unlikely to occur and is difficult to prepare for then don’t waste your time. What’s in between is left to the discretion of each of us and each of our relative resources.

Suffice to say I place a lot more importance on food and water than I do firearms.

More particulars to follow.