Welcome to DK Preppers: A place to discuss practical ways to get through emergencies, both short term and long. Topics may include skills for growing, storing and sharing food, lost and historical skill sets, sustainability issues, living and leaving safely, and growing community. Everyone is welcome, and the comments are open. We have open threads weekly.
We at the bigjac house have been discussing money a lot lately.
My brother-in-law has been encouraging all of us to avoid any and all debt, as much as possible.
Pay off existing debt.
Avoid going back in debt.
He gets very emotional about it.
He is teaching his 16 year old son about this.
When I was young, no one ever talked to me about any of this.
It’s not very complicated, and it’s not hidden, but I simply never truly stopped to think much about it.
I always presumed that there was not any realistic way for me to avoid debt, and other financial problems in life, that have kept me at a low income lifestyle, living paycheck to paycheck.
But from thinking about all this, I formulated a simple plan.
I am not an expert of any kind,
and I have not put this plan into action,
so I cannot tell you that “it worked for me,
and you can do it, too.”
I cannot tell you that for a fact.
However, read my simple plan, and see what you think:
1. Avoid paying any rent.
2. Avoid paying any interest.
3. Buy insurance for everything.
4. Invest in various investments.
Details about the plan:
This whole plan, seems to me, would clearly work best, if a person would start on the plan very young, learning about it as a child of 8 or 9 years old, and starting work on it, on or about age 16.
If a teenager can stay with his or her parents, working as many hours as possible, starting at age 16, and saving $100 from each paycheck, if paid every two weeks, that should add up to $2,600 per year saved up. With that much money, or two years money, $5,200, that teenager could pay cash for a reliable car. The trick would be to ride a bicycle or take the bus or find rides, for that one or two years.
Now that this young adult has a car, paid for in full, no car payment, no threat of the car being repossessed, it’s time for insurance on the car.
I know, insurance is mandated by law.
But only liability insurance is mandated by law.
My plan would call for this young adult to buy full coverage,
liability and collision and comprehensive,
so that no matter what happens to the car, it is covered.
One more thing:
Car repair insurance.
www.carchex.com/…
With car repair insurance, this car owner will not have to dip into savings, except for the deductible, when the car breaks down. And cars always break down, right?
As you can see, there will never be a serious problem, a problem that would cost thousands of dollars, a problem that would tempt this young citizen to borrow money, to fix the car, or replace it.
That is my plan.
Now, for housing, without paying any rent,
without paying any interest:
This same young person, who has this paid for and fully insured car, if this same young person can go on living with his or her parents for just a few more years, still saving $100 every two weeks,
saving $2,600 per year, at the end of another 3 years, he or she will have $7,800.
Look at this:
bid.mccurdyauction.com
Motivated sellers, with many selling regardless of price!
I am not certain, but it seems that this young citizen, with $7,800 on hand, might be able to simply buy a house, paid in full, at such an auction.
I have been to open houses, and seen houses, that might sell for less than $5,000.
Small, cracker box houses,
good sized living room,
small kitchen,
small bathroom,
two small bedrooms, each one about 10 feet by 12 feet,
each one with a small closet.
No garage, no basement.
The lot is less than one tenth of an acre.
The house is more than 50 years old.
Hardwood floors.
Then, after buying the house, just like after buying the car, buy liability insurance, damage insurance, and home repair insurance.
lp.totalhomeprotection.com/…
Once again, this young person would never be tempted to borrow money, to replace the water heater, for example.
And, of course, this young home owner could save up more money, and fix the house up, and sell it, and buy a better house, some years later.
The last point, investing: I am not an expert, but it seems simple to me: look at the performance of any stock over some years, and buy the stock that keeps going up.
Buying one share at $80 now, might mean that one share can be sold for $100, in less than a year, and nearly $200, in just a few years.
I am not an expert, and the value may go down, but it still seems simple to me.
Let me summarize the financial position of this person I imagine:
1. No rent to pay.
2. No house payment to pay.
3. No car payment to pay.
4. No expensive repair bill for repairing either the car or the house.
5. At least a few thousand dollars, as a cushion, in some kind of investments.
Then, maybe this man or woman, or, by that time, this family, could buy some land in the country,
and raise chickens and goats,
and build a large greenhouse,
and become a serious prepper family.
What do you think?
Do any of you have any young folks in your circle of family or friends?
Do you think you might show this diary to them?
As I said, I cannot be certain that this plan will work.
But it seems very simple.
Thanks for reading.
Alright, after writing all this, I realized, I forgot about a health care plan.
If Medicare for all becomes the best thing to buy, then buy that.
But whether it’s through the health care exchange, or insurance through an employer, or medicare, seems to me everyone needs:
1. Medical
2. Prescription
3. Dental
4. Vision
As I said, buy insurance for everything.
And one more thing:
If possible, this family should have it’s own family owned and operated business.
Maybe they could use some of those investments, to buy what they need, to start a business.
What do you think?
Did I cover most of the topics that all the financial self help books cover?
Thanks for reading.