What can families do now to protect themselves?

[ainsleyclare]

Hi everyone,
I want to open a discussion of what families (and individuals) can do NOW to protect themselves from what is going to happen in the next few years. Lets not condemn anyone for the decisions they made to get themselves into the situations they are in- that is irrelevant for the discussion I'm proposing.
We don't know for sure what will happen in the next few years, but we know it is going to be painful. Deflationary spiral or hyperinflation- we don't know for sure, although we may have very strong expectations. Is there anything a family or individual can do to protect themselves against both possibilities?
Let's assume for the sake of this discussion that the family or individual has some credit cart debt, has one or more adults working full time, and is one of the five-out-of-every-six that does NOT owe more than their home is worth. And that the only crisis they will face in the next few years is financial- no bird flu or alien landings.
Some things to discuss:
How does the presence or absence of dependants (especially children) affect the best decision?
Credit scores: are they going to continue to matter?
Existing debt: how should it be managed?
Essentials (non-perishable, ie rice, TP)- should they be hoarded, or should cash be hoarded instead? Both?
What else can we do NOW, to protect ourselves from the more difficult future we face?

I can't wait to see your ideas!

[jusme]

Thank you John for this site.

I would suggest that you do all of the above and then some.What if you had a serious illness,that is a leading cause of familes going bankrupt.As for the children.If there grown with children they may be back? If you have small children I will share with you John's answere to me. There will be "survivors". Ask youself how much surviving you can handle if it gets really bad.It is Biblically stated to"get ones house in order".I have read and heard that those with credit scores of 750 plus are being considered for loans.But on the flip side of that McDonalds is cutting back.I have also read that maybe one day your "food will be your gold ! " I have been preparing for this for 3 years. I found this site a year or so ago.This is a Tsanomi economic crisis.There has never in recorded history been a financial crisis that you can compare this to or predict squat as to where this is going to go( or) just how bad it's going to be. Hence it's people reaction to it all that will be the signals. Every thing you do or don't do is relevent to your survival. It has been stated that it is uncountable,unfixable and has a life of it's own.Two of my favorite sayings are."Money's only important when you haven't got any" and "the more we learn the dumber we get".If you are asking and reading this site that say's your smarter than the average sheepeople.Use good common sense and follow your gut instinks.When you see the 7-11 closing you know were in big trouble! That's where it started.
Sincerely,jusme

[Higgenbotham]

Hi everyone,
I want to open a discussion of what families (and individuals) can do NOW to protect themselves from what is going to happen in the next few years. Lets not condemn anyone for the decisions they made to get themselves into the situations they are in- that is irrelevant for the discussion I'm proposing.
We don't know for sure what will happen in the next few years, but we know it is going to be painful. Deflationary spiral or hyperinflation- we don't know for sure, although we may have very strong expectations. Is there anything a family or individual can do to protect themselves against both possibilities?

These are really good questions. What most people on the board seem to be doing is trying to figure out exactly what will happen when. That's too difficult for the average working family.

I'll start with just the first question. To protect yourself against deflation, go to treasurydirect.gov and open an account. An individual can open an account with as little as $1,000, if I remember right. After you do that, decide how to divide your cash up between treasury bills in the treasury direct account and cash on hand. That is strictly a personal decision based on your family's situation. To protect against hyperinflation, you would want to buy hard assets like gold, silver, or gemstones. Most people recommend gold or silver coins. I just read a book called Execution by Hunger which described the Ukrainian collectivization and famine of the 1930s. The author of the book described how 2 gold coins helped his family survive the famine because they were able to buy food with them. I can't remember if the money became worthless or what the particular reason was, but the Soviets set up shops during the famine and they only accepted gold in payment for the food.

If you have any questions about how to do any the above or the reasons for any of it, I would be happy to answer. I'm just trying to give practical, concise advice at this point.

[chickenlittle]

I will share what little I have been able to do...

First of all, I have three children under 7 years old. If you don't have any children, I would hold off on having any for 3-5 years... this is what scares me the most.

My philosophy has been to protect my family in different stages: basic physical needs, physical protection, and financially.

What I have done (my wife thinks I'm crazy and I hope she's right) is I have purchased two guns (shotgun and handgun) and plenty of ammo (nothing insane but a gun is worthless without ammo!). I also have stopped waiting until we are out of food to go to the store. I now keep us mostly stocked on non-perishables all the time (and bottled water!) in case something bad happens suddenly. My brother and his family live in Houston and the day before Hurricane Ike hit he went to the store and told me that EVERYTHING was gone; the shelves were bare. I refuse to be in this situation. I feel that I can hole up in my house for a good long time but eventually you will have to leave to get food and that is when things can get dangerous... I want to be able to stay put as long as I can. I also have a propane stove (for camping) and a few extra propane bottles. I also ordered a few survival books on amazon that I think would be invaluable in a societal-breakdown-worst-case-scenario. Also, I try and fill up my gas tank when I am half-full instead of waiting until I am empty.

Okay, so the above is to prepare for the worst case scenario (which I consider to be <5% chance of happening, a scenario which I must point out was about a 0.0001% chance two+ years ago).

Now for more probable scenarios: In January I adjusted my 401k contributions from 10% down to what my company matches (3%). I spent the next few months using that extra money (and additional belt-tightening) to pay off all credit-cards and car loans. I surmised (correctly) that anything I put in the market would be losing money anyway so I might as well get the interest savings from paying stuff off. Throwing $2000 a month at debt kicks its butt much faster that I realized (use the snowball method). So, I now only owe my student loan and mortgage. I planned on paying these off too but I decided instead to start hoarding cash until the storm passes (if it does). I did some work on the side and have managed to save up about $15k for an emergency and I keep increasing this each month as much as possible. I figure if I am over-reacting I can just pay off my student loan in a couple of years all at once. In hard times though, cash is king so I would rather pay minimums on everything now and save as much as I can while I still have a job. I also try to keep $1000 in cash at home so that if ATMs are not accessible then I can have some liquidity for a short period. Gold would probably be good too but I haven't felt the need yet...

Last, I have turned a small part of my retirement savings into an "insurance" account. I have used about 25% of my (rollover) IRA (the rest is in short term treasuries) to short the stock market (with leverage, e.g. SSO, SRS, SKF, SCC, SZK, QID). I figure that all of the economic catastrophes will start in the stock market so if something really bad happens in the market then I can make some big gains that I can use to survive the ensuing mess. So far I am up 20% on the year with this strategy so I am feeling a little good about this. Worst case is I lose a large percentage of my 25% stake but that means the economy has taken off so I still have a job. This, to me, is a win-win situation.

Lastly, I have been praying for our country.

Hope this helps...

[ainsleyclare]

I've been doing some research on both hyperinflation and deflation, and the one thing that stands out to me that they have in common is that food and other consumables become harder to get- for differant reasons, but the end result is the same. I'm thinking of stepping up my food-hoarding (which I do anyway, simply because it saves me time).

[Higgenbotham]

Besides the usual ways to stock up, I went to the local Whole Foods early this year and got a 50 pound bag of hard red wheat for $27. You can get it cheaper at a feed store but it's not cleaned. I bagged it up and put it in the freezer so the bugs wouldn't hatch. In an emergency, wheat can be sprouted and it can also be grown as wheatgrass in about 7 days if vegetables aren't available, both of which are very nutritious. Long term food storage can also be done cheaply by storing grains, rice, beans, and so on in 5 gallon pails. To do that, drop dry ice or use a nitrogen cylinder to get the air out before you seal the container so the bugs don't hatch. Last summer, I opened some pails that were stored 15 years ago and they were still good.

[ohmeohmy]

Here is a pdf link to an LDS preparedness manual. I am not a member of the LDS and therefore do not advocate any of the religious content. It does includes some useful information starting on page 15.

http://www.abysmal.com/LDS/Preparedness ... edness.pdf

[John]

A suggestion from a web site reader:

http://www.costco.com/Browse/Product.as ... ng=en-US&s

Emergency Food Kit
275 Servings
Weather Proof Bucket
Item # 104893
$84.99
Shipping & Handling included *



John

[drsteph]

I don't agree with absolute apocalyptic scenarios that some of us are talking about, where it is an all or nothing disaster.
While such things are certainly possible, in such a catastrophic scenario the inciting cause would likely be some sort of war,
massive famine, or plague, and to a certain extent whether you survived would be luck. Hard to plan for that.

What I think is more possible is a 'long emergency' scenario where there are progressive disruptions that cause economic
dislocations and breakdown in normal society. Much like what happened with Katrina, but successive & resulting in disruption
of the supply chain. The supply chain will be restored for a while, until the next disruption. If things are really going to hell in
a handbasket, then those disruptions will become more frequent and frequent. That will be the signal that its time to hunker down.

So, here's the approach I am taking. I think much of it is unnecessary, and that's fine. I do know that if things happen, it will probably be
too late to plan.

Pre-initial disruption:
1. Purchase long term goods that you will need for the next 10 years (cutlery,tools, good vehicle, motorcycle, etc...)
2. Reinforce dwelling's security (alarms, locks)
3. Obtain reference materials on self sufficient lifestyles
4. Purchase long life food to wait out a short term disruption
5. Emergency supplies ready: Water filters & purification, rain barrel,basic medical supplies
6. Consider alternative power
7. Debt reduction/Treasury direct / foreign currencies/ commodities / hards

Post-disruption
1. Consider emigration
2. If #1 not appropriate, possible, legally permissible or feasible, move to rural area and hunker down.

[The Grey Badger]

A suggestion from a web site reader:

http://www.costco.com/Browse/Product.as ... ng=en-US&s

Emergency Food Kit
275 Servings
Weather Proof Bucket
Item # 104893
$84.99
Shipping & Handling included *



John

They almost had me until I read "100% vegetarian." If we'd been intended to be vegetarian, we'd have the teeth and digestive systems of cattle. Mooo!

Plus I probably couldn't haul the thing out of the car or onto my shelf.

Pat the Silent Carnivore