The current state of the United States' (and the world's) economy is all the talk right now. The forces acting right now are a bit troublesome to say the least. Moreover, they're down right confusing. It's interesting to see what is happening right now and compare it to what we learned in school or even what some of us have witnessed over history. I'm hardly an accomplished economist. As a regular guy looking and learning, two trends are confusing me right now. How are interest rates still low? How long will it be before mass inflation hits?
The only thing I can come up with is that the market forces are being artificially suppressed right now to keep those two killers from wreaking havoc. Just my thoughts, but what the hell do I know? I'm just a PR man.
So if inflation and rate spikes are inevitability headed our way, what can we do to guard against it? Furthermore, how can I do it with a "back 'er down" twist? Is it possible that it may actually aide my pursuit of living a more simple life? I think it can. Here's how:
Living a more simple life and guarding against interest rate hikes:
Don't borrow any money. Thanks for coming. Ya'll have a good night. :)
Ahh. That always sounds good, but it's not always practical for a lot of people. I try to write for myself and others, so let me expand a little. The biggest risks are variable rate notes and credit cards. We should get rid of those boogers as fast as we can! We should focus all of our efforts on freeing ourselves of these chains. Once those are gone we can look at paying off automobiles, and the like. My wife and I are so close to paying off everything (except the mortgage) that we can smell it! It's really exciting and empowering. As Dave Ramsey once put it: "The paid off car is the new American status symbol." It's really about keeping our wants and desires in check. Think about how our grandparents lived. If they really, really wanted something they saved for it. I bet it had a lot more meaning to them too. In my journey of "Backing 'er Down" I've realized that having wants and desires fulfilled immediately can spoil me......heck, they HAVE spoiled me!
Living a more simple life and guarding against inflation:
I'm not ready to stockpile three years worth of rice or anything, but I have been looking seriously at acquiring long term durable goods now instead of when I may need them years down the road. For example, most people will probably only need one really good shovel for their entire lives. Why not make it a point to go ahead and get it now for $25 instead of paying $75 for it 6 or 8 years down the road? I'm applying this methodology to a variety of items that will last for a long period of time. Tools, outdoor equipment, nuts, bolts, fasteners, rope, chain, batteries, oil filters, shoes and even certain types of clothing like socks and winter jackets. Things I am 100% sure that I will use and for which I have or will have a need.
There is an opportunity to do this over a shorter time frame as well. I'm still studying the potential pitfalls of storing tires, oil and over the counter medicines. If anyone has info on these I would appreciate you sharing.
When practicing this one must be careful though not to go overboard. I don't want to end up on one of those hoarding shows on TLC. Additionally, I am very mindful to not spend money that I don't have on these items. Gotta make sure the bills are paid and the kids and mama bear are taken care of first!
The manner by which I've approached it is really pretty simple. If I'm at a retailer and something on my "stockpile" list is on sale or clearance, I'll buy a few up. Oil filters for example: I'm going to use them anyway. Might as well get them now while they're cheap/on sale. That's pretty much a microcosm of the whole idea. What is an oil filter going to cost in 5 years?
Over the last few weeks I've seen that this will indeed help me in "Backing 'er Down" Instead of buying the latest Dukes of Hazzard dvd box set I decided to go with a new grubbing hoe. Trust me......it would be way more fun to sit down and watch Bo and Luke foil Boss Hogg's latest plan than to work sugar cane stubble. But hey.....that's why I'm doing this right?
Ya'll have a good day.
Later,
Alex
Often the simple answer is the best answer. Those are good rules to live by when economies are up and down. Great post!
ReplyDeleteGreat blog! Hope you have GREAT success!
ReplyDeleteI just discovered your latest blog, Alex, and I really like it. Hopefully, between your blog and the comments, we can all learn something.
ReplyDeleteIn my own life, my husband and I only owe on a mortgage. We have always tried to go a 15 year loan and good down payment because the payments are not that much higher than a 30 year one. Other than our first car, we have never financed a car and we keep our cars for at least ten years. Our newest current car is seven years old and we recently bought my parents' nine year old car when they purchased a new one.
It has been my observation that cars and credit card debt is where most people get into trouble. One other observation. Most the people I know who have money problems also eat out their lunch every day. I always took my lunch to work and that saved a minimum of at least $5 every day. I would venture that most people who eat out their lunches spend between $8 and $10 a day. That is at least $40 a week or over $150 per month spent on lunches out.