Alright, alright – I’ll wrap this up and move on to something more uplifting… I’ve told you and told you, I spend a lot of time thinking about stuff and now I get to subject you to all of these ponderings! It really is my hope that something might click with a reader that hasn’t already put 2 and 2 together or seen a subject from my particular perspective. I know we have at least a few young people that are readers here and the earlier you catch on to what is happening around you the better off you’ll be at controlling your own future!

Let me pick up where I left off yesterday. We were going to discuss what we can all start doing to prepare for the future and our “Retirement” years.

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Part 3 – Conclusion

   Any steps that we can take right now, I mean actually beginning to implement, will multiply our success in the years to come. The land that our home sits on should be utilized to help feed us, now and in the future. Cost cutting measures that can be put in place to reduce our energy or water usage requirements will save us money, now and in the future.

   A few months ago I told you all about my “Poor Aunt Jane” and the lifestyle that she’s living. She is still having to actively make energy (her labor) and economic contributions to her own lifestyle and will probably have to for as long as she is physically able. If you go back and read her story, you will see that the inputs she makes are just part of the greater lifestyle she has put together for herself. Doing things each day and or each season to provide for herself and achieve a better life than most of us will have in retirement, if we don’t make the necessary changes now. Changes in our expectations and also in where we put our investment dollars.

   Just for clarification sake, I am not advocating that we discontinue funding all of the traditional investment vehicles. I propose that we all make additional alternative, can’t lose, investments! We will be able to reap the benefits of these additional investments both now and in the future. Let’s look at a couple of simple examples of a non-traditional investments that will pay a higher return than most any safe financial instrument.

“Invest” in a tree and save hundreds of dollars - all while making ourselves less dependant on outside Food Systems… You can probably already see where I’m going, right. How much do fruit trees cost? Anyone, anyone? That’s right, not much – probably in the neighborhood of $5-15 bucks a piece for a 1-2 year old specimen. How long do fruit trees live? This is subject to certain specifics but lets just agree that its a long time! It will also take a few more years growth before we will see any significant level of production out of our “freedom” fruit trees.

Once this tree starts to produce, it will give you a crop most every year for decades. So, for a $15 dollar investment and a 3 year waiting period. Our return the first year of good production will probably be in the 300+ percent range. If we were to get 50 pounds of good organic apples off of just one tree and apples were valued at even a low $1 per pound. We would have a return of $50 bucks or 3.25 times our initial investment. Not to bad and we get to eat all those small delicious apples during the first 3 years as an added bonus.

This is just one way to look at this investment. Dollar for dollar, we have done exceptionally well but what else is there to consider? In addition to the money we save buy not buying the apples or whatever, we didn’t have to go earn the money to buy them with… As we have discussed recently the effective cost of earning money and then spending it can easily steal 40-50 percent of our purchasing power through various taxes, before we’re done.

Creating a system like this is a real investment and as you can see the returns are as real as anything you will get from any retirement account. All this is accomplished while making us more self reliant to boot! Multiply this strategy times dozens of food producing trees, bushes, vines or whatever you care to grow.

“Invest” in a skill and save thousands of dollars - If you are anything like me, there will be at least a few things that we regularly pay others to do for us. This is often out of convenience or just a small lacking in our own confidence to complete the job. Each of our lists of potential things will be different but I bet we could all make one…

What about changing the oil or brakes on the car?  I used to do some of this work on my old cars when I was young and needed to because I lacked the  money to pay a shops labor rate. It has been many years since I have taken an active role in my auto maintenance. It is so much cleaner and often easier to just pay the shop to do these items.

I have a very good and trustworthy auto mechanic but like everything else in life the cost is only going up! The labor rates are in the neighborhood of $75-85 an hour, at least in my area. Are we capable of doing all the things that a shop is? Of course not but what if we just started to do some of the basic maintenance items? An oil change and quick look at the fluids, usually runs me $35-60 bucks, depending on which vehicle goes in… I know, Minute Lube will do this for cheaper but I also know Minute Lube has left out the drain plug on more than a few cars over the years as well. Your choice but I trust myself more than the discount shops…

The cost of materials – oil, filter, etc still have to be purchased but we the consumer can often shop around or buy on a sale, where the shop is certainly making at least a slight mark-up, if not a significant one on the parts alone.

This is just one area of life to consider – automotive maintenance. There are others that come to mind though… Home maintenance? I recently had a copper plumbing pipe develop a slow leak at one of the joints. I discovered this purely by chance, I was under the house digging out the Christmas decorations and heard the dripping? I was fortunate as this could have been running for weeks or even months before I would have been under there for anything. It appeared to have started very recently but still needed to be addressed immediately.

I’m no plumber and have no experience with sweat joints, flux and the other details of dealing with copper pipe. I did have the belief that if I called the plumber at 7pm on a Saturday evening, I would be charged several hundred dollars for the repair. I don’t know for sure that it would be hundreds but I didn’t want to take the chance, so I headed over to Home Depot and talked to the plumbing aisle kid. In a matter of minutes I was leaving the store with under $20 dollars worth of materials and a reasonable expectation that I could repair this myself. Now, I am fairly handy and have most of my own tools for whatever project is at hand but again, I’m not a plumber in ANY respect.

I went home and shut the water off, made four cuts with a pipe cutter and installed 3 new pieces of material, turned the water back on and it hasn’t dripped a drop… I feel confident that my savings are in excess of $100.

There is no end to the savings of doing things for ourselves. In our area, we have several community colleges, trade schools and workshop type arrangements that could all be utilized to learn new skills. Whether we might choose to use these skills for profit or not is a personal choice but the saving alone are worth our time to learn something new.

“Invest” in a debt free shelter - Yes, this is basically the advice to get your home paid off. I personally think that this is GREAT advice but I hear from people all the time that they never want to pay their place off? It is a popular perception that they will lose money because they won’t have the tax deduction for mortgage interest anymore.

While technically true, we will all lose the tax deduction for mortgage interest, when we are no longer paying any… What have we gained though? How about the ability to NOT PAY MORTGAGE INTEREST! That’s a big one for me, if I don’t have to pay a mortgage company, than I don’t have to earn the money anymore either! Therefore I can choose to lower my tax bracket by working less hours, if that was important to me…

One thing that I always hear in my real estate business is that most people intend to make additional payments each year to pay down their mortgages. In practice however, I seldom see this happen! Don’t get me wrong, it does happen but just very rarely. On a 30 year mortgage, making only 1 additional principal and interest (PI) payment per year will cut roughly 5 years off the term of the loan.

If we were to look at this strategy in its most basic form, we would be getting a return on investment of whatever our mortgage interest rate currently is… Since I am working in this business, I know the current going rates are at least 4.5 – 5.5%. Many folks are still paying a rate higher than this which should make this an even better investment. I doubt that many retirement funds are doing this well over the last couple of years and they carry a lot more downside risk than paying the old mortgage note down!

This particular strategy will take years to complete but will be one of the single biggest steps that we can all take to assuring ourselves a successful retirement lifestyle.

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There are many investments that I feel fit this category but we will cover them at a later date. I hope this, like everything I write about will get your mind turning on the possibilities. Some times we all need to face the realities of what we’re up against here. We can count on no man to help us achieve our goals, we need to be self sufficient and our retirement planning is no different. Obviously the younger we are the more years we will have to implement a successful plan but even those of us that are closer or even close enough to dream of retirement, can take action now and see results that will make a difference!

Here’s to our success in accomplishing what so few will in today’s economic environment!

Prepper

Welcome back, thanks for tuning back in to see what Part 2 of this semi-depressing topic might hold for you! I said yesterday that I spend a lot of time pondering this subject and I do. However, as the reader you are probably thinking that I’m just going to talk about the downside and continue to be defeated. There is a little more downside stuff but I do think that there are some obvious ways that we can strategizes a successful retirement. As with just about everything we as “preppers” do, it will have to include a lot of out-of-the-box thinking. Keep your mind open to what you might be able to apply to your personal situation. We are all at different points in our life and working careers but at some point we all are going to want to stop the wheel and make a graceful exit… Let’s see what we can come up with?

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Part 2 -

  I digress, the point I’m trying to make here is that the “Retirement” game is stacked in favor of the system! They, government and/or large corporations, count on us being to broke or stupid to invest our money and then they can also opt out or we have to stay in the game so long that we are in poor health or possibly even dead before we become eligible for benefits. Those benefits being to low to actually live on if they indeed do come through at all!

   What is there left for us to do? We can wait for the lottery Gods to shower favor on us? Bank on social security and a substandard government old age home. Wait, we can count on our children to come through for us! I forgot, many of us do have children that won’t want to see us struggle in old age. The problem with this scenario is that to many of us weren’t there for our kids when they were young because we had to work constantly to keep the bills paid, that included Mom in many families too! I’m not knocking this, it’s what has to be done but it does comes at a cost!

   Did our kids see us taking care of our parents in their old age? Maybe, but probably not, many of the old ways of multigenerational co-operation have gone by the wayside. So, why would our children feel obligated to help us pay for our retirement years, even if they were in a position to do so? I don’t hold out alot of hope that our children will be making the same wages that we have enjoyed and currently the job market doesn’t even look real optimistic that there will even be retail jobs for our children to look forward to after their socially expected “College Experience”. The bottom line on the children helping us out issue is that it would be a bad bet to expect much from them in the way of financial assistance. Not because they hate us and want to see us in a bad way, they just won’t be in a position to help if their own expenses aren’t covered!

   Folks, with just a few exceptions, most of us will be on our own. We need to make choices now that will pay actual dividends in the future, that’s coming whether we’re ready for it or not. Investments that not only will reduce our tax burden but also reduce our dependence on the systems that keep us all working sun up to sun down!

  What am I talking about? Investments like ”LAND” that can be put to use for us now and continue working for us far into the future. Dependancy “SYSTEMS” that are under our control – food, water and even power systems. These are the things that will reduce our need for cash-money today and later in life.

  Whenever we have the extra money to put aside in a government blessed retirement fund, of any flavor, we need to remember that we are giving up it’s use for a very long time and making a bet that it will grow in value over that course of time. I advocate taking at least a part of our retirement  investment dollars and putting them to use in a way that is beneficial today and will make our retirement years financially easier. It will require both money and cost cutting measures to achieve a sustainable lifestyle.

  I challenge each of you to look around your circle of friends and family. Who do you know that’s retired? How did they pull it off? Are they happily spending those pension checks and walking hand in hand with their spouse down some tropical beach. It is possible that many people will live that dream and if that’s a realistic goal for you, go for it! I mean that, who wouldn’t want to have all of the things the financial advisors have promised? Without a doubt, more of us have earned them than will ever get to enjoy them! 

   I suspect that you will find the same thing that I have. Elderly relatives that are making due and pulling together with their children to make life possible. Secretly praying that they die in their sleep before they become a burden on their loved ones… Think I’m being a little over the top? I wish I were but we all know I’m not! I also am not trying to be pessimistic, just realistic! We need to face a hard reality, even if our country pulls out of this economic funk that it’s currently mired in, we will only have what we have when retirement age comes… Taking steps now to ensure a quality of life is very important.

   Having an inquisitive personality, I ask those around me what they are doing and not doing for all types of things… I have yet to find a person that has a realistic plan for their retirement. Many people do have the 401K answer down real good and a few are even putting a percentage of their pay in their account. Good for them, they will be money ahead one day! Most though have hopes of the company or government pension. When I ask how much of a pay cut they could take right now and still keep their bills paid, they stumble a bit and most say they really couldn’t take a cut? They always ask me why I asked that question but everyone of them already knew what I was driving at.

   The reality is folks that we all will need as much money as possible both now and in the future. If we continue to lie to ourselves about that magic time in life we call retirement, we are setting ourselves up for disappointment. Some will achieve this storybook goal but most of us will need to make other arrangements. The sooner we come to grips with this, the more years we will have to put the systems in place that will take care of us when the time comes. It is usually an emergency scenario that we feel compelled to prep for but I offer you all the idea, it is really LIFE we need to prepare for!

   Tomorrow I’ll wrap this up with some examples of non-traditional investments that we can all make today. Investments that will pay us back a higher return than any financial instrument being offered by any of the “safe” financial institutions. Maybe some of you have your money with some guru like Bernie Madoff and your hopes are higher than mine for your returns but then again, you roll the dice and you take your chances… I say we take the reasonable steps to assure our success! See you tomorrow!

Prepper