Y2k is very upsetting and unsettling because no one knows exactly what will happen. The only thing I know is that this is normal in life. No one really knows what will happen from one moment to the next, but we live by what we expect. Y2k is such a great unknown in a time of global economic over-extension, that I dont know what to expect and therefore I prepare as best as I am able without endangering my economic future. Its sort of like walking a razor-thin path

But now I have several large financial decisions to make soon that depending on what may happen. I am already enough of a believer to have cashed in my stocks at the beginning of the year, bought and moved to country property, and etc. But know I am faced with two decisions that seem harder for me to make. I suppose they are harder because at this point I had believed major problems would have already cropped up. I am still a firm believer that the ramifications of this problem are unknown and potentially very nasty, but I am more perplexed then ever, especially in the face of such unilateral disinterest and simple ignorance that I daily experience.

1. Should I sell or not sell the home where I grew up in a neighborhood in a top 10 city that is hot, hot, hot in terms of real estate values.

2. Should I sell or not sell the decent amount of valuable hardwood timber that I have on my country property.

I can always use the money (who cant), but do I need it fast to get a better price and have on hand assuming things go bad or would it be better to hold on to them. I think I understand the real estate problem better than the timber problem. I am assuming if there is even a simple recession real estate prices will drop or there wont be any buyers. So I think I should sell the home no matter the emotional attachments, but I am reluctant. I would hate to lose it if Y2k is a BITR. Anybody have any advise?

The timber perplexing me. Timber prices arent super high right now, from what I have been told, but they arent bad. I could be receiving a nice check each week for the next several months. However, I am wondering what timber prices will do if Y2k is a BITR, causes a recession or depression. How much hardwood does this country import from other countries? If a depression or utter chaos ensues would the wood better serve me then in the future or now as money? Help.

Thanks, Tom

-- Tom (timbereyes@usa.net), October 12, 1999

Answers

Trust your feelings Luke...

1. Sell the house.

2. Keep the timber.

You will always have the memories, you may not always have heat and a safe place to sleep.

-- nothere nothere (notherethere@hotmail.com), October 12, 1999.

>> I am assuming if there is even a simple recession real estate prices will drop or there won?t be any buyers. So I think I should sell the home no matter the emotional attachments, but I am reluctant. I would hate to lose it if Y2k is a BITR. <<

Such decisions can only be made by the person most affected: you. But sometimes a disinterested outsider can help you clarify your own situation by asking questions. As you answer them, your course may become clearer.

Is the attachment you have to the childhood home purely sentimental, or does your hanging onto it provide you with identifiable, tangible benefits? Could you quickly name one good use you plan on making of that property? How much do you value that use?

Do you ever plan on living there again? What future needs could your owning that property meet?

Are you fairly certain you could continue to meet your tax obligation on the property, or is there a chance you might lose it for back taxes in a depression?

Are you keeping it simply to avoid the pain of making a decision about it?

>> If a depression or utter chaos ensues would the wood better serve me then in the future or now as money? <<

If a depression ensues, prices will move sharply up or down. They won't stay near current prices in a depression. The rest depends on deflation or inflation. I see deflation as more likely, if there is a depression, but no one can guarantee that outcome. In chaos, all bets are off.

Perhaps a better question is, if you had more cash, would it be put toward current needs, such as debt reduction or needed purchases, or would it be reinvested for future needs? If it will be reinvested, do you have an investment plan that you are confident in? What is your greatest financial weakness at present? Would your financial position be strengthened by selling your timber and allocating the money to that purpose? If you can't think of where the money is needed, you don't need the money.

I hope this helps.

-- Brian McLaughlin (brianm@ims.com), October 12, 1999.

Sell the top 10 house; apply immediately for a bulding permit on your timberland, if appopriate for your set-up. Strategeically select a few acres of your timberland fo cutting: Any surface freshwater? Any likely sites for a well? If so, begin cutting in those areas, to cheive not only some quick returns on sales, but a potentially buildable site. Begin cutting timber tomorow - at least a few acres - why not? This will add quickly to income flow and allow you to initiate whatever Y2K preps you may have been delaying. An action like this may break the logjam of indecision. My first move would be onto the acreage cleared, if appropriate. If not, sell the house and use proceeds to get prepped. Guess what? If after staring Y2K in the face, you are still mtoviated by sentiment, you can always buy the house back again -- perhaps afater city real estate prices have collapsed.

-- Roch Steinbach (rochsteinbach@excite.com), October 12, 1999.

Sell the house.

Keep the timber.

If y2k is a bitr, sell the timberland and re-buy the house. Otherwise, use the timber to build with or burn for heat or sell for cash or whatever.

George

-- George Valentine (georgevalentine@usa.net), October 12, 1999.

Tom - I think this is an example of how Y2K presents such a different approach to diversification than we are used to. It strikes me that the timber is more likely to retain its monetary and utilitarian value no matter what happens, and if so represents a good gamble diversification-wise.

As far as the home, seems like the point would be to complete the sale this year. There isn't much time left. You could always put it on the market at a high list price, see if anything happens, and take it off the market if you don't like the response. Either way, I don't see how the housing market bubble can continue. Do you have other significant reasons for unloading or not, like how vulnerable that particular city might be to Y2K disruptions?

Either sale would result in substantial money - are you sufficiently comfortable with where you would put it?

-- Brooks (brooksbie@hotmail.com), October 12, 1999.

>> Trust your feelings Luke... <<

Er. Ahem. Feelings only give you information about how you feel. You can feel happy, sad, afraid or angry. Although such feelings may prompt you to an action, they are *not* capable of directing you to a decision. In fact, if you act on feelings alone, it is certain that you will never act intelligently.

Perhaps you meant "intuition" rather than "feelings". Intuition takes place at a much higher level than feelings, and it includes them. Intuition includes more or less all the information you currently have in your possesion, such as feelings, memories, facts and logic. While intuition itself is perfectly fallable when it comes to making decisions, it usually represents the best synthesis we can develop at the time. If your intuition leads you to a decision and the decision fails to deliver the desired outcome, at least that failure becomes information you can use in the future. It will inform your next intuition about the next similar circumstance you face. That's about the best you can ask for.

-- Brian McLaughlin (brianm@ims.com), October 12, 1999.

I represent agriculturalists. Most are ranchers and farmers, but these often have forested timberland. I also just logged my own property. I would suggest that you might want to discuss the timber matter with a registered professional forester.

I live in California in a watershed where there are "threatened" salmon, where the water is "listed" as impaired for sediment, low dissolved oxygen and temperature because of the salmon. My trees are mixed conifer (pine, fir, cedar) and hardwood (oak.) Some of my trees had bark beetle cancres and some had the new pine misteltoe infestation. Removal of infested trees is called salvage logging. If you don't, the disease spreads through the forest, as it has mine.

My parcel is small and has an emphemeral stream. Generally, the cost of a registered professional forester to do a timber harvest plan (THP) would be more than one would get from a small harvest. Theoretically, the small landowner is supposed to be able to do the paperwork and contracting of the broker, fallers and loggers without a forester. However, local fallers won't touch it without a THP done by a forrester, (particularly near a stream,) for fear they will get cited by the state. My forester did it gratis out of longtime friendship, otherwise, it would have cost me several thousands of dollars.

Currently, the state of California is passing even more stringent rules that would prohibit harvest in salmon watersheds and place even greater restrictions on so-called "impaired" watersheds. It is obvious that none but the larger commercial landowners will be able to afford the studies and paperwork to log in California.

I also logged a few healthy trees in a "timber conversion" to clear a pasture area and to pay for mitigation on another expensive environmental regulation that was required of me. I do wish that I had been able to manage my forest by selective harvest. (Harvesting old and infested, only, a bit each year.) Unfortunately, the paperwork process is so expensive and the rules tightening so quickly, I had no other option but to cut it all at once.

Oh - and don't forget the taxes. Our state charges a timber yield tax and the local assessor has been able to sustain his policy of no reduction of property tax after a cut. You also have to pay capital gains on your income taxes. Fun, eh?

If your area/state is more reasonable, a Forester will help you plan - thin stands so that they are healthier, manage selective harvest for regeneration, landscape for other uses, etc. If allowed, you can have a long term plan for managing your timberlands to remain healthy, productive and encourage species by creating habitat.

-- marsh (siskfarm@snowcrest.net), October 12, 1999.