Y2K Compliant Financial Advice

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Dear Reader,

I have read several responses to posts claiming the "purpose" of this board is "preparation." I am reluctant to risk my reputation with the angry horde; however, lest you think I have not heard the cries...

Avoiding Poverty 101 (Y2K Compliant)

1. Get out of debt. Cut up all the credit cards but one. Only borrow to make a wise investment (home, college or business). Smart investment do not include new cars, vacations or toys. Wait until you can pay cash... then you'll know if you really want it.

2. Downsize. The size of the average American house has doubled since the 1950s while family size has decreased. Find a house just large enough to live in... and save the extra income. Sell the stuff you used to think you couldn't live without.

3. Save. Before you pay the bills, pay yourself. Live on the rest. Have six months of living expenses in savings.

4. Work as hard spending your money as you do earning it. Shop smart. Buy in bulk. A membership in a Costco (or a clone) will save you money on items across the board. Many items, like cleaning supplies and #10 cans of beans, last a long, long time.

5. Invest, but the watchwords for the next few years are defense and diversity. The market is overvalued. The worst offenders are the Internet and tech stocks. You can find value a la Ben Graham, but it takes careful research. It doesn't make sense to abandon stocks completely, but you might think about taking some profits and keeping a large portion of your portfolio in a money market fund. There are some good international stocks available for bargain prices for the gutsy investor. You can buy into U.S. market after the inevitable correction. Remember, profits are just paper until you sell.

6. If you must have a vice, pick an inexpensive one... and just one.

7. Learn the difference between wanting and having. And please teach your children.

8. Invest in yourself. Improving your skills, developing alternative career options and just getting smarter will always be your best investment. Your education is portable, always available and will last as long as you do. Read.

9. Do it yourself. Even if you pay to have someone fix your car, you're less likely to be cheated if you know the difference between the head gasket and tail pipe.

10. Give something to the church or charity of your choice. It makes one feel a little richer... and feeling a little richer goes a long way to avoiding poverty.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), April 08, 1999

Answers

Really?

Depends on if you think it's gonna be a 3 or 4 , or a 9 or 10 surely...

"Dear Reader, "I have read several responses to posts claiming the "purpose" of this board is "preparation." I am reluctant to risk my reputation with the angry horde; however, lest you think I have not heard the cries... "

Avoiding Poverty 101 (Y2K Compliant)

1. Get out of debt. Cut up all the credit cards but one. Only borrow to make a wise investment (home, college or business). Smart investment do not include new cars, vacations or toys. Wait until you can pay cash... then you'll know if you really want it.

####### There is an alternative view that it would be wise to max out one's credit, to leverage what you have now to good effect, that leverage will not be available in a year's time. If things do go down the tubes, ces't la vie. You will be that much better prepared. If life continues as normal, repay your borrowings plus interest - regard the interest as an "insurance" policy premium. #######

2. Downsize. The size of the average American house has doubled since the 1950s while family size has decreased. Find a house just large enough to live in... and save the extra income. Sell the stuff you used to think you couldn't live without.

Agree.

3. Save. Before you pay the bills, pay yourself. Live on the rest. Have six months of living expenses in savings.

A little late to begin saving but agree.

4. Work as hard spending your money as you do earning it. Shop smart. Buy in bulk. A membership in a Costco (or a clone) will save you money on items across the board. Many items, like cleaning supplies and #10 cans of beans, last a long, long time.

Agree.

5. Invest, but the watchwords for the next few years are defense and diversity. The market is overvalued. The worst offenders are the Internet and tech stocks. You can find value a la Ben Graham, but it takes careful research. It doesn't make sense to abandon stocks completely, but you might think about taking some profits and keeping a large portion of your portfolio in a money market fund. There are some good international stocks available for bargain prices for the gutsy investor. You can buy into U.S. market after the inevitable correction. Remember, profits are just paper until you sell.

Agree - sorta. Bear funds. The rest is up to your stomach.

6. If you must have a vice, pick an inexpensive one... and just one.

!!!!!!!

7. Learn the difference between wanting and having. And please teach your children.

Pass.

8. Invest in yourself. Improving your skills, developing alternative career options and just getting smarter will always be your best investment. Your education is portable, always available and will last as long as you do. Read.

Agree.

9. Do it yourself. Even if you pay to have someone fix your car, you're less likely to be cheated if you know the difference between the head gasket and tail pipe.

Agree - to a point. 10. Give something to the church or charity of your choice. It makes one feel a little richer... and feeling a little richer goes a long way to avoiding poverty.

Agree. However, judicious preparations will pay off in the long run when it comes time to help people in the real world.

-- Andy (2000EOD@prodigy.net), April 08, 1999.


Mr. Decker:

I agree with all of your points except the paying off of all credit card debt with excess cash. I must say I half way agree with the idea that using credit might be necessary to purchase some items to prepare for Y2K, but if you can use cash, that's what I would do.

Cash right now is best used to purchase items needed for next year, not to pay down your Visa. Make your payment, just don't dump a huge amount into a credit card if you haven't supplied your home and family with the basics.

As far as downsizing your home. I'm glad I have a mere 1800 sq. feet. Gonna need it when the man's mother, brother and sister show up for a vacation out here in the country to weather out Y2K. Lessee, that's 2 dogs, four children and ummmm...5 adults. (groan) Great post and great ideas.

pamela ;)

oh and btw...if you have children, start picking up text books and curriculm for the month of January and possibly longer. If SHTF, you aren't gonna want your children one place while you're somewhere else. If anyone needs resources for curriculm, email me.

-- pamela (pamela4@hotmail.com), April 09, 1999.


Mr. Decker,this to me sounds an awful lot like the advice my granny used to give,seems to be grounded in commom sense,no matter what the year. Mr Capnfun.

-- capnfun (capnfun@notfunatall.com), April 09, 1999.

I agree with this writing 100%. It should be a way of life, y2k or not! I understand, but still dislike the idea of people loading up on their credit cards with the idea that everything is going tits up and they won't have to repay it. And some of these same people whine about the fact that "it used to be a hand shake was a contract".Ya can't have it both ways.!!

Got integrity??

-- Taz (Tassie@aol.com), April 09, 1999.


Exactly Taz,

And I'm sure the banks will be more than "understanding" when they foreclose on your property after you lose your job because of events outside of your control - "But I've known old John the bank manager all my life, he wouldn't do this..."

Tell that to the farmers across the USA. Get real Taz, this is not a game. Protect yourself and family. THAT is your number one consideration.

Oh yes - integrity and Bankers go so well together...

-- Andy (2000EOD@prodigy.net), April 09, 1999.



MR. DECKER YOU RECOMMEND GETTING OUT OF DEBT. THAT IS SIMPLY IMPOSSIBLE FOR THE MAJORITY OF PEOPLE IN THE COUNTRY WHO HAVE SOLD THEMSELVES AS DEBT SLAVES. I'M ONE OF THEM AND NOT PROUD OF IT. I SNAPPED OUT OF IT AND PAY MY DEBT DOWN MONTHLY BUT NO WAY WILL I BE DEBT FREE BY Y2K. I AM PREPARING AS BEST I CAN WITH THE CASH I HAVE AND IF NEED BE I WILL LEVERAGE MY CREDIT AGAIN. IT IS A SURVIVAL CHOICE I WILL MAKE AND STAND RESPONSIBLE FOR THE FINANCIAL CONSEQUENCES WHEN WE ALL GET THROUGH THIS "YEAR OF LIVING DANGEROUSLY".

-- GYAN BOHANNON (110002.350@COMPUSERVE.COM), April 09, 1999.

I agree totally with Mr. Decker here.

Keep in mind, if you use credit for leverage, and things do get as bad as many of you expect, it will become even harder to pay down that credit.

-- Doomslayer (1@2.3), April 09, 1999.


Always question things and think for yourself, especially when your hard-earned money could be at risk. Consider taking a look at the following thread, called Unconventional Wisdom.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000M t0

-- Rob Michaels (sonofdust@com.net), April 09, 1999.


I've been heeding this advice and simplifying my life over the past eight months. Believe me, it's an exhilarating feeling when you pay off all of your debts. After that, with some fiscal restraint, the money that used to go to pay off the interest now goes in to your pocket...and it's amazing how quickly it ACCUMULATES :-D

Whenever I talked to my mother in the past, her favorite question was, "So, have you gone bankrupt yet?" Now, it's : "GAWD, YOU'RE SO FRICKIN' TIGHT!"

I will say one thing. It wasn't easy changing my spending habits. I told my girlfriend what I was doing, and that scared me because I was spoiling her with material things, trips, etc... . Once that stopped, I realized that we didn't know each other that well...we were too busy doing things! Instead of spending weekends at the mall, we started just hanging out and communicated with each other. Instead of blowing seventy bucks for dinner, we started haunting diners where I swear we got the same quality of food for ten. Granted, the waitresses weren't as slick and the atmosphere wasn't as polished, but we still enjoyed the meal.

Now that everything's caught up, I can pay cash up front for a lot of things vs. throwing it on the plastic. I can throw it on the card, and pay it off within thirty days. If I can't pay it off within thirty days should I decide to throw it on the plastic, I ponder over the purchase and determine if it's really necessary or something that I really wanted/needed in the first place.

In essence, I have more options, more control over my life. I don't have to resort to just "throwing it on the plastic" and having that worry of paying it off, or hearing that the purchase was denied because I've reached my limit, which makes me reach for the next card, hoping that there's something left on it...

In a way, I believe that Y2k awareness has made me a better person. At least that's what my girlfriend sez. Now she's playing frugal, and we kid each other about it. How bad is it? Whenever "marriage" is mentioned, she sez "NO WAY...do you know how much more I would pay in taxes? Besides...I still need to know more about you..."

-- Tim (pixmo@pixelquest.com), April 09, 1999.


Ah, but Andy.....I have ALWAYS lived on a cash basis. I don't owe one dime. I have two bills a month. Electricity and telephone. My farm is paid for, and I am all prepared for at least a year. Plus I have a nice lump of cash. And I didn't do this on credit, but on saving as I grew up and out into the world. I am sorry but I don't feel sorry that everyone of the young people don't have their 3 bdrm homes with two car garage, RV, motorcycle, boat, pick up truck and new car paid for. My generation had to work for it and if you really wanted it you saved for it. Yes, I have all the nice things in life now.....but I didn't have them when I was in my 20 or 30s. And a lot of things I didn't get until I was in my 60s, ie a computer. So don't expect me to shed any tears for you. Most of you haven't a clue as to what reality is or how the rest of the world manages to live, or how those that came before you lived. You don't NEED 90% of the things you have. And yes, a banker is right up there with loan sharks and used car salesmen. YOU have allowed his death grip upon your own neck. I think for a few of you, y2k is finally going to pound some sense and reality into your heads. I am not directing this especially to you Andy, so don't flame me too bad. And I can almost name the regulars on this forum who will agree with me. And Old Git will be at the top of the list!

Got two hands and a strong back and a hoe? Your'e going to need them!!

-- Taz (Tassie@aol.com), April 09, 1999.



Mr. "Taz,"

I am interested in how you make a living farming. American farmers are often heavily subsidized by the taxpayer. In fact, most farming is now done by large corporate farmers, rather than the "family farm." Small operations often cannot maintain the necessary profit margins to stay in business.

Mr. Decker

-- Mr. Decker (kcdecker@worldnet.att.net), April 09, 1999.


We don't make a living off the farm. It but supplements us in that we raise food for ourselves. We used to raise cattle but no longer do that since we moved to Florida 3 years ago. But I still have chickens, and I have a garden all year 'round and we have some fruit trees. And I can, dry or freeze alot of stuff. However, not as much as I used to as I have stuff coming all year. Tomorrow I will harvest about 300 Vidalia onions, and some turnips and beets. We are also eating lettuce everyday from the garden. Hubby works at a job just like everyone else. I used to milk 6 goats every day too. Made cheese, yogurt and cottage cheese for us, cats and chickens. I learned over the years how to do things and I am now doing them again. And we had all the equipment to do it with and we didn't get rid of it when we moved to Florida. We have always paid cash, be it a new tractor, truck or home. But you have to work and save until you get yourself high enuff up the ladder to be able to do that. You can't start out life with a new car, new house, new boat, and bills over your head. I know I sound like a smug or grouchy old lady and the young ones will just not pay any heed. Both hubby and I worked all of our lives and he still works.

-- Taz (Tassie@aol.com), April 09, 1999.

Taz,

No flames required :) ...I relayed on another thread what I am doing personally - basically simplifying my life, getting rid of all but one credit card, sold my car and other unecessary luxuries - cycling to work, getting in shape - I was simply stating an alternative, not all of us are at the top of the food chain with good jobs or businesses. There ARE alternatives if you think out of the box.

-- Andrei-hung-lo (2000EOD@prodigy.net), April 09, 1999.


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