Monthly Archives: November 2014
By: Tom Chatham
What do you do when you don’t know what to do? This question may seen simple but many people have a hard time answering it when critical decisions are needed. We make critical decisions every day and most of them are in the normal course of daily life so we don’t think much about the process we utilized to make those decisions.
Every decision you make boils down to two things. Where you are and where you want to go. This may be defined and enacted in a physical, mental or emotional state. What store to shop at, what clothes to buy, what show to watch or how to respond to something that has happened.
Basically, you are here and you need to get over there. The problem many people face during times of stress is they suddenly find themselves lost and don’t know where they are now and where they need to go. This is the factor that can cause people to freeze up or run in the wrong direction.
When faced with the decision of what to do in a stressful situation the first thing you need to do is take a deep breath and calm down. When you are stressed your mind operates like a person in a flock of chickens trying to grab one. You find yourself going in all directions at once to no avail.
To make a rational decision you need to be calm and determine exactly where you are so to speak. Once you have identified your position you need to determine where you need or want to go from there. Your final destination is what you are trying to determine at this point. Everything in between is about how to get there. This is much like planning a trip across the country. You identify your destination and plan your route to get there with the fewest problems.
If you are in bed and suddenly hear someone breaking into your home the process begins to work. You identify where you are, in this case in a vulnerable position. You determine where you want to end up, in this case standing with the intruder lying on the floor with a gun pointed at him, either dead or alive does not matter. The rest of your thoughts are about how to get from here to there with the fewest problems.
If you decide to prep for some type of disaster, you will need to identify where you stand right now then decide what your ideal position would be going into the crisis. Having determined those two points, you develop a plan to get from here to there or at least as close as possible.
In many dangerous situations this process is a matter of seconds from start to finish. In some cases you will have plenty of time to think things through to determine the best course to take.
If you are in bed and you hear someone breaking into your home and realize it is a large number of DHS agents with the intent to harm you, you may decide your destination is anywhere but here and seek an immediate exit. In this case, hopefully you already have an escape plan.
In the military, soldiers do battle drills to practice their response to dangerous situations they may find themselves in to speed up their response time to insure a positive end result. You can do this too with many of the situations you may find yourself in. Having a plan to deal with situations you may find yourself in will help prevent a delay that may cost you your life.
By doing these battle drills you provide yourself with a lot of maps to get from here to there depending on the situation and can immediately pull up one of these maps and follow it without having to analyze too much at the time.
When you are worried about some type of disaster or crisis that may take place and you don’t know what to do first, just take a deep breath and draw yourself a map. Determine where you are starting from, where you want to go and how to get there. You can then decide what you need to take with you. Even if you are not physically going anywhere, you can still plan it just like a trip. Your final destination will be an image of what you want things to look like or function like once you get there.
Indecision can kill in a crisis and you don’t want to ever be left wondering what to do once in that situation so now is the time to think about these things while you have the time. When confronted with something new and unknown, use the same process to think things through to find a quick solution to your situation. When everything else fails, you need to rely on your brain so exercise it accordingly.
By: Tom Chatham
In these days of declining paychecks and rising prices, people are hard pressed to get the most for their money. With every new dollar that is printed the value of your hard earned savings decreases and much buying power is lost. The conventional way to offset this decrease is to invest your money where it can earn interest and increase your holdings in real terms or at least keep up with inflation.
If you put your savings in the bank you might get .25% these days if you are lucky. This is at a time when real inflation is running close to 9% annually. In order to earn a better return on your funds you must put them in increasingly risky investments that have counter party risk that many may not fully appreciate until something happens. Just ask those fleeced by the MF Global bankruptcy.
There are few things one can place their money in these days that will maintain value or even grow. The normal safe haven in times like this are usually precious metals or investment grade collectables but those things must be sold in the marketplace in order to utilize the value of those items. What the average person needs is a safe haven they can hold and use at will and still reap the full value of those items.
When you earn interest on investments, your Uncle Sam will be standing there with his hand out when you liquidate that item so he can get his share. This just adds insult to injury when you loose buying power through inflation. There must be a better way to store wealth on a small scale that average people need and can use. That way is through commodities that you use every day.
When you buy a can of soup for .50 cents and put it on the shelf for several months and finally use it after the price has increased to .65 cents, you have effectively earned 30% interest on that can of soup. Where can you earn 30% interest these days with no counter party risk?
What makes this even better is that you pay no tax on that 30% interest. Can it get any better than that? This type of investment plan will work for anyone because everyone buys food on a regular basis. Not only that but the other things you use at home such as hygiene supplies, paper products, cleaning products, and hardware supplies will likely go up in price as time goes on and offer you the opportunity to save on your future needs. This also applies to things such as ammo, clothing, auto parts and energy supplies.
Some may say this is a waste of time because many of these things will have to be used within some time limit, but you will need to buy these things anyway at some point so why not increase your buying power by making purchases in a different manner than you normally do.
If you store a years supply of food at home and the real inflation rate is 8% annually, when you replace those goods that you use you may pay more but you will essentially be eating at last years prices. If inflation gets even worse in the future you will have more available purchasing power than others because you will not have to buy necessities every week like everyone else. You can wait for specials, deals on bulk purchases or seasonal fluctuations.
In a serious situation you would be able to stop purchases for up to a year and use that money for other things such as equipment to grow and can your own food. In the event of unemployment, it is also one less expense you will need to worry about. While food is a natural for this type of savings plan other household products may work even better due to longer shelf life.
Just imagine if you had everything you would need for the next ten years stored in your basement. How much would you save in inflated prices over that time period? With a real inflation rate of 8% prices would almost double every ten years. It is unlikely that your paycheck would increase at a similar rate. This type of savings plan is better than putting money in the bank because a bank can go out of business or outright steal your funds because of new laws that are now in place. The amount of money you spend on everyday necessities over several years can run into the thousands of dollars and that is sufficient to preserve a lot of money.
It is important for each person to analyze their financial position at regular intervals and you must be aware of the real inflation rate in order to devise a plan to get the most from every dollar you spend. This will become ever more important as the economy becomes more unstable as time goes on. In the end it is up to you to protect your hard earned money from loss due to economic conditions that are controlled by those that wish to destroy it.