Wednesday, December 31, 2008

Value vs. Price - wise shopping

We live in a price conscious world. Advertising is filled with claims to low price, sale, save money and other catch phrases aimed at getting our attention. In every shopping situation, whether you are purchasing fast food or a new home, there needs to be a balance between price and value. Sometimes the lowest price give no value. Part of being prepared for hard financial times is recognizing the difference between the price of object and its value.

On the first level, price is based on the marketplace. Price is what you will pay or what someone else will charge for a specific product or service. Price comparisons have become ubiquitous in our Internet society. You can search for an item in Google and almost instantly have a price comparison from up to hundreds of vendors. However, the key here is that you have to be aware that this price comparison system exists. If you haven't even done so, trying putting a product into Google Product Search (or any of many other similar online services). The range in price can be surprising. For example a Canon Digital EOS 40D Camera has a $600 spread in prices. Finding the best price is no longer an issue in our computer driven world.

Price can be a trap however. Many times variations in price reflect actual variations in the quality of the product, it availability, or accessories. Also, price comparisons only work with mass produced products. It is very hard to compare the price of two unique hand woven rugs, for example.

In all your searching for the best price, do not forget value. Considering value, the first question to ask yourself is this, what value has this product to me or my family? Can I really use the product? Do I need the product? Can I purchase something else that will work just as well and cost less? What would happen to me or my family if I did not buy the product at all? How long will the product last and will I have to purchase a replacement? Is this something I want to store or fix? None of these, or many other questions are answered by focusing on price.

I often reflect on these questions when I remember gifts given and received for holidays and birthdays. Truly, I can think of few things that had any lasting value, particularly with toys some of which were discarded or broken before the day was finished. One good reality check is to go out and look in your garage or storage room. Is there anything there that you don't need or are tired of storing? Have you ever made a purchase only to discover that you already owned what you purchased? If not, you are very fortunate indeed.

Shopping can be an addiction. We can drown in our own refuse. Let's look the value of purchasing new items and less at the price. Real security, that can overcome fear, comes with a balance between our needs and our wants.

Tuesday, December 30, 2008

Wheat prices fall -- perhaps time to buy

One of the staples for any serious food storage plan is wheat. During the past few years, wheat prices have climbed, due primarily to increased fuel costs and increased plantings of corn for biofuel. With the downturn in the economy, and the lowering of gasoline prices, one small benefit is lower wheat prices. I saw an ad recently for wheat in 50 lb bags for less than $20 a bag.

One thing I have found about the availability of wheat and not flour, is that it not particularly available on the Internet. It is best to look for local suppliers. The prices on the Web are as high as $46 or more for 50 lbs and $69 for 45 lbs plus shipping. Sometimes the grain is referred to as "wheat berries" especially in the context of seed wheat. To find bulk wheat for sale, you may wish to start asking local farmers and feed stores about the availability in your area.

We used to buy directly from the farmers, although the wheat needed to be cleaned since it was often full of weed seeds and other extraneous substances but at that time we were paying only about $6 for 100 lbs. We usually bought in bulk by organizing a number of people to buy at the same time. Cleaning the wheat was not too difficult in smaller batches.

Sunday, December 28, 2008

Interest never sleeps

There is a much quoted saying which has long since passed into our collective folklore but it was first given by President J. Reuben Clark in a Conference talk for The Church of Jesus Christ of Latter-day Saints in April of 1938. The saying is more relevant today than it was in 1938. The complete quote is as follows:
It is a rule of our financial and economic life in all the world that interest is to be paid on borrowed money. May I say something about interest? Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits or travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours; it never has short crops nor droughts; it never pays taxes; it buys no food; it wears no clothes; it is unhoused and without home and so has no repairs, no replacements, no shingling, plumbing, painting, or white-washing; it has neither wife, children, father, mother, nor kinfolk to watch over and care for; it has no expense of living; it has neither weddings nor births nor deaths; it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders, and whenever you get in its way or cross its course or fail to meet its demands, it crushes you. (J. Reuben Clark Jr., in Conference Report, Apr. 1938, 103).
In a previous year, President Clark stated: "Let us avoid debt as we would avoid a plague; where we are now in debt let us get out of debt; if not today, then tomorrow" (J. Reuben Clark Jr., in Conference Report, Apr. 1937, 26).

In today's world credit has become a god, worshiped as a solution to all of life's problems. I have had people come to me as an attorney, about to lose their home, who are more worried about their credit rating than they are where they will live. But credit comes with a price and that price is the payment of interest. It is not unusual for credit cards to carry interest at 18% or higher and rates as high as 28% are not uncommon. Payday loan companies, in some states, can legally charge interest as high as 300% or even up to 700% per year. Presently, there is an attempt to limit the rates to 36% per year.

If we live within our means and learn to save for the things we need and want, we can avoid paying a penalty for a lack of self denial. As President Gordon B. Hinckley said,
“Reasonable debt for the purchase of an affordable home and perhaps for a few other necessary things is acceptable. But from where I sit, I see in a very vivid way the terrible tragedies of many who have unwisely borrowed for things they really do not need.” “I Believe,” Ensign, Aug. 1992, 6.

Of course, more later.

Tuesday, December 23, 2008

Recognize hidden charges to avoid debt

Being prepared is a way of life, not like a New Year's resolution to lose weight. One way to be more prepared economically is to be aware of the multitude of hidden charges built into our high speed electronic way of doing business. This problem was brought forcefully to mind with a recent letter to the editor of a national magazine.

Right now, it is popular to write articles on weathering the financial storm. In the recent letter, the writer noted that he went to his local bank ATM weekly to get pocket money. He observed that the bank fees had jumped to "$3 a transaction." In this one area alone he calculated he was spending $156 per year on ATM charges. He went on to say that he had started using the ATM at Wal-Mart stores and found that their fees were only $1.40 per transaction, thus saving $119.60 per-year.

What is wrong with this picture? First of all, this person was using the ATM to get "pocket money." How much was he spending each week on pocket money purchases? Did he even know? Cash has a way of being spent and not necessarily for necessities. If you are worried about $120 in ATM fees, perhaps a better place to start is looking at what you spend on unnecessary items each week from pocket money.

As to the ATM fees, there are a multitude of ways to avoid them altogether. First, use a debit card rather than cash. Second, get cash back from purchases rather than withdrawing money from an ATM. He was already in Wal-Mart, I assume he was also making purchases, he could get the same "pocket money" by asking for cash back on his debit card, rather than paying to have the machine spit out a twenty dollar bill of his own money.

Economic security begins and ends with awareness of each expenditure and the cost of using our society's convenience services. Look at your bank statements carefully. You might just see charges that can be easily avoided.

We need to return to the old adages, waste not, want not and if we don't need it, don't buy it. Financial security can come from paying attention to details.

Sunday, December 21, 2008

Spending our way into insecurity

In my last post, I expressed incredulity that purchasing a $6000 was a necessity. I believe the post needs some clarification. The real question is the need or motivation for purchases. When I was a just starting out as an attorney, I drove a 1967 AMC Javelin. I suppose someone might now think that this was a "cool" car and it could be a collectible. But at the time, it had seen too many miles. The windows did not work, they were stuck either up or down. Since it does not rain much in Phoenix, having open windows was not a problem. However, there obviously was no air conditioning. The car had a three speed manual transmission. It was nearly ready for the junk pile.

One of my lawyer friends at the time, took me aside one day and told me that if I wanted to get ahead in the legal world, I needed to purchase a Cadillac. He said people didn't like to go to attorneys that didn't look rich.

I didn't buy a Cadillac, but eventually, I did buy a used Suburban. I have often thought about that advice. (I did drive a Cadillac for a while once and did not like it at all). Now, would I buy a $6000 bedroom set to impress my neighbors and friends? As a comment on the side, I doubt that any of my present clients even know what kind of car I drive. If we make purchases based on our perception of what others think of us, then this is the saddest and most destructive reason for spending money.

Some would justify purchases for the reason that they want "quality." That is a good thing but needs to be tempered with a realization that some things don't need quality. A brown paper bag, as cheaply purchased as possible, is more than adequate to carry your lunch to work. On the other hand a cheap tool may not perform its function. For example, a cheap screwdriver will seldom last long or work properly. The difference in price between a quality screwdriver and a cheap one is insignificant, but the quality difference is immense.

Part of being prepared for life's contingencies, is learning to distinguish needs from wants. It is also learning to purchase real quality rather than accumulating more and more junk. It is learning to set priorities and spend our time and resources on things, as Christ says "But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal, but lay up for yourselves treasures in heaven, where neither moth nor rust does corrupt, and where thieves do not break through nor steal."

The choices we make each day on how we spend our resources, money, time and effort will determine whether we are rich or poor, fearful or secure. Maybe one family can purchase a $6000 bedroom set without creating a problem, maybe, in some circumstances, it would be better to do without. In a recent news story, it was noted that because of the economy that Macy's Inc. offered $800 sapphire or ruby and diamond rings for $249. Maybe, this isn't a bargain, maybe the $250 would be better spent on helping poor around us who are struggling this Christmas season? Maybe a $2,100 Marc Jacobs dress at Sak's Inc. marked down to $629.95 is not a bargain, but a rope leading us down into into insecurity and away from the things that will help us to lay for ourselves treasures in heaven and give us real security.

Thursday, December 18, 2008

Furniture is not a necessity

I was reading a recent copy of the AARP Magazine (showing my advanced age) and read a column supposedly giving advice on money matters. The question came from Utah and asked about a problem with renting furniture. That wasn't what caught my attention. The person with the problem mentioned that they had rented furniture in Texas, a bedroom set, and "we had paid $4,976 and had only five payments of $254 to go until it was paid off." Maybe I don't have a real good grip on reality, but simple arithmetic, using a calculator, shows this person paid $6,246 for bedroom furniture. What is interesting is that the furniture was rented, so they were paying interest on the furniture. Now if this amount doesn't faze you, then you probably don't worry about a budget.

One thing I have learned in my life is that used furniture has almost no resale value. I am not talking antiques or collectibles, just ordinary house furnishings. A quick check online shows 6 piece bedroom sets from Costco Furniture for about $5,500 without a mattress or box springs. Apparently, some people place a great deal of importance on furniture. However, $6,000 is close to what I have spent on furniture in my entire life. A further check online showed Queen Bedroom sets starting at under $500 from other vendors.

I would guess that many people, however, are caught having purchased or rented expensive furniture and are now feeling the pinch. My point is that furniture is not a necessity. We can get along quite nicely with a very minimal amount, perhaps a chair or two, enough for each one in the family, and a table. Beds are nice, but not absolutely necessary. If you are thinking about your financial priorities, particularly in these chaotic financial times, perhaps you need to reassess your attitude about what is a luxury and what is a necessity. Maybe $6,000 is a lot of money to you, I know it is to me, especially for furniture. For me, being prepared for hard times probably doesn't mean going out an spending money on furniture.

Wednesday, December 17, 2008

My Christmas Card to Everyone

We wish you the most joyous Christmas and a happy New Year.

This is my Christmas card to everyone this year:

Joy to Everyone This Christmas

Please feel free to share this wonderful message with everyone.

Tuesday, December 16, 2008

Walden Revisited -- self-sufficiency as a philosophy

I first read Walden by Henry David Thoreau when I was still in high school. Here are some more recent references to his three most available and popular works:

Thoreau, Henry David, and Carl Hovde. A Week on the Concord and Merrimack Rivers. Princeton, N.J.: Princeton University Press, 1980.

Thoreau, Henry David, Owen Paul Thomas, and Henry David Thoreau. Walden, And Civil Disobedience. Authoritative Texts, Background, Reviews, and Essays in Criticism. New York: W.W. Norton, 1966.

According to WorldCat there are some 520 editions of Thoreau's Walden.

Despite his enduring popularity, Thoreau's ideas would not really revolutionize mankind's condition. First, Thoreau had a very low opinion of the common working man. One of his most famous quotes is "The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation." This was an interesting perspective from a man who, apparently, never felt the compulsion to keep a regular job and support a family. He also said, " I have lived some thirty years on this planet, and I have yet to hear the first syllable of valuable or even earnest advice from my seniors." What a sour way to view life and those around you! With perspective of age, Thoreau's rejection of "middle-class" values sounds a lot like what happened in the 1960s that was all bad.

Although I was initially attracted to Thoreau's philosophy, I have come to the conclusion that Thoreau's version of "self-sufficiency" and independence is an illusion based on some pretty persuasive fallacies. Basically, Thoreau's view of the world was not scalable. That is if many people tried to follow the solitary, "independent" existence, they would likely starve. It is notable that in his so-called independence he relied on his friend Emerson, for free land to live on during his year or so on Walden Pond. The measure of a philosophy's usefulness and validity is its scalability. Will this idea or system work, not only for one person? But what would happen if millions of people adopted the system or philosophy?

One of the basic differences between the teachings of modern day Prophets in The Church of Jesus Christ of Latter-day Saints (Mormon or LDS Church) and the philosophers, like Thoreau, is the scalability of their teachings. If we all followed the Prophet's teachings and the Lord's version of "self-sufficiency" many, in fact most, of the worlds economic problems would be eliminated. For example, if all of the people of world, not just the Mormons, fasted one day a month and donated their savings to the poor, we would likely eliminate the problem of poverty in the entire world. The Mormon principle is called "Fast Offerings" and members of the Church are encouraged to donate a generous amount each month towards the maintenance of the poor and needy. It is not just the money given in the Fast Offering that makes the difference, but the emotional understanding of the plight of the poor that comes from an honest fast. This concept is the antithesis of Thoreau's independence from all mankind. It is an admission that we are all poor before God and that we should follow the example of Jesus Christ, our Savior in serving the needs of those less fortunate. Following the Lord Jesus Christ in this way would be truly revolutionary.

Sunday, December 14, 2008

Alternative food storage methods

There is no doubt that you should store what you eat and eat what you store. But one alternative is to store some type of emergency food either freeze-dried or the military style MRE (Meals Ready to Eat). All I can say about this type of food storage is, that you had better eat a sample of the food before you store it. Some of the MRE's I have eaten would have been refused by starving Boy Scouts. Most of the suppliers of the freeze-dried and MREs claim a shelf life of from five to ten years or longer. Right now, there are some super sales on both types of food.

Years ago, there were considerably more outlets for freeze-dried and emergency food. Now, it is only common to see freeze-dried food in some of the pricey sporting goods stores, where it is sold to backpackers. The prices, on a per meal basis, are fairly high and purchasing a lot of food in this fashion could cost more than is reasonable. There are, however, on-line stores that sell a wide selection of either main entrees or full meals.

I remember the MREs we got in the army, not that many years ago. The main course was usually highly spiced. They used to have this packet with something like a cracker. We could never decide if it was a cracker or supposed to be a cookie, but in either case, it was inedible. It was rock hard and could have been used for ammunition had we found a way to throw or shoot it. However, suprisingly, some of the dinners are pretty good and will fill you up rather quickly. In later years, on occasion I have taken MREs on backpacking trips with good results.

On sale, MREs go for about $6.50 per meal per person. In freeze-dried food, you can purchase a whole year's supply for one person for about $3000. That works out to about $2.75 per meal, a little more reasonable. For freeze-dried, the manufacturers claim a 20 to 30 year self life. There is a major catch however, the freeze-dried route contains no dairy products, no sweets and no water to unfreeze-dry the food. This storage method has no oil, shortenings, breads or crackers, no salt, no sugar, no spices at all. It is clear that unless you were really into freeze-dried food, living on a steady diet of it would probably get old really fast.

The only person I ever knew who actually bought a whole year's supply of freeze-dried food had, unfortunately, not tried it. When he finally did, he threw away the whole pile. First and most important rule in food storage: Eat what you store and store what you eat. Do not buy any kind of emergency or food storage items without actually fixing a meal and eating it to make sure you can stand it. Enough said.

Thursday, December 11, 2008

Shelf Life and how to live with it for food storage.

Since most foods are organic, immediately upon their being removed from their vine, plant or tree, they begin to spoil. We do eat non-organic substances, like salt and other minerals, but almost all our nutrition comes from organic substances. Since ancient times, humans have developed a multitude of ways to preserve organic food substances beyond their normal period of spoilage. Many of these methods come immediately to mind; drying, salting, pickling, freezing, canning and adding preservatives. Even if these methods of preservation are employed, organic foods still have a shelf life or time until they become either unpalatable or even dangerous to eat.

There is a detailed analysis of shelf life with a chart showing the Recommended Food Storage times for many foods at the Virginia Cooperative Extension. (Click on the words to go to the site).

To avoid waste, rotate your stored foods on a regular basis. If you put them on shelves, make sure newer purchases are put in the back and the older items come to the front. If you find that items stay on your shelves for more than the recommended time of storage, don't buy those products. Use what you store and store what you use.

Monday, December 8, 2008

Storing Wheat

Wheat can be stored indefinitely if it is kept dry, cool and bug-free. It is best stored in smaller quantities, for example, five pounds or less per container. I have stored wheat in all types of containers and find canning jars or other glass containers to be best. However, plastic containers and foil pouches can also be used. One problem I have had with plastic containers occurred when the wheat got too humid and the weevils hatched. The weevils chewed right through the plastic containers and made hundreds of holes. Needless to say, it was a mess.

Metal containers are OK, as long as the containers themselves remain dry. Most metal containers, even No. 10 cans, will eventually rust in humid conditions. It is convenient to use No. 10 cans, if you have access to a canning machine.

Most methods of preserving wheat focus on preventing the weevils from hatching in the first place and keeping the wheat in an optimum condition. Two traditional methods involve coating the wheat with diatomaceous earth and putting Bay leaves in the containers. Neither of these methods is foolproof. Diatomaceous earth (DE) is a powder of the fossilized remains of diatoms, a type of hard shelled algae. DE is inert and can be eaten without harm to humans. When it comes in contact with insects, of any kind, the DE gets into the cracks in their chitin or shell and cuts it, the insect then dies. It is used by pest control companies to kill insects and spiders of all kinds. I have found it to be effective but not 100%. Bay leaves are only effective when fresh and will not stop weevils if the grain becomes damp.

The other methods of storage focus on depriving the organisms of oxygen. This can be done in a variety of ways, including putting dry ice into the containers until the container is full of carbon dioxide or putting in oxygen absorbing packets. Both of these methods are fairly expensive on a large scale. Another method involves injecting the grain in the containers with nitrogen. Once again, this is fairly pricey.

Opening the container usually compromises the protection, hence, the suggestion that the grain be stored in smaller containers.

I would prefer to store smaller quantities of grain, either in No. 10 cans or canning jars. However, larger containers, including plastic, are satisfactory as long as they are inspected periodically for failure.

Please feel free to add your own suggestions and comments.

Saturday, December 6, 2008

Perilous times

Shortly after the great tragedy of September 11, 2001, President Gordon B. Hinckley of The Church of Jesus Christ of Latter-day Saints, spoke in the Church's General Conference. He began his talk by referring to the recent incidents and commented, "I need not remind you that we live in perilous times. I desire to speak concerning these times and our circumstances as members of this Church."

We are still living in perilous times. But as President Hinckley went on to say;

"We cannot provide against every contingency. But we can provide against many contingencies. Let the present situation remind us that this we should do.

As we have been continuously counseled for more than 60 years, let us have some food set aside that would sustain us for a time in case of need. But let us not panic nor go to extremes. Let us be prudent in every respect. And, above all, my brothers and sisters, let us move forward with faith in the Living God and His Beloved Son."

In the past, the LDS Church has urged its members to store a year's supply of food. Recent announcements have focused on a 3 month's supply. A previous copy of the Church's Essentials of Home Production and Storage would produce the following recommendations for one adult (child):

Grains (including wheat, flour, corn meal, oats, rice and pasta) 300 lbs (148 lbs)

Fats and oils (including shortening, vegetable oil, mayonnaise, salad dressing and peanut butter) 13 lbs (7 lbs)

Sugars (including honey, sugar, brown sugar, molasses, corn syrup, jams, powdered fruit drink, and flavored gelatin) 60 lbs (29 lbs)

Dairy (including dry milk, evaporated milk, and other dairy products) 75 lbs (37 lbs)

Of course, you would decrease these amounts by storing other types of foods. Some of these foods have a long shelf life. For example, wheat can be stored for years if kept in a cool, dry location and protected from insects. Sugar will also keep indefinitely. However, the oils and dairy products need to be rotated and used, or replaced on an annual basis. For more information see the booklet Essentials of Home Production and Storage, available from the Church's Distribution Services for $1.20 US, Item Number 32288000.

Some of these food items are little used in today's fast paced convenience food life style. It is also important to learn how to make edible meals from these basic food items. Contrary to popular belief, it is possible. You might try the book, Food Storage for the Clueless published by Deseret Book Co. Although the book is out of print, there are still copies available on the Web.

More later.

Wednesday, December 3, 2008

Why do we store food?

Recently, I represented a client in a jury trial. It was a dispute about the amount of inheritance in an estate. In an attempt to discredit my client with the jury, the opposing witnesses testified that my client was acting very strangely, including storing rice in a large quantity. In fact, she had almost 60 pounds of rice and she was obviously, from this fact alone, mentally unstable. At the time, I wondered what the witnesses would think if they knew about the thousands of pounds of wheat stored in basements and storage areas all over the country.

The testimony did raise some concerns, some people not only do not store food, they think storing food is crazy. Why then do we store food? I think the Presidency of The Church of Jesus Christ of Latter-day Saints said it well:

"Our Heavenly Father created this beautiful earth, with all its abundance, for our benefit and use. His purpose is to provide for our needs as we walk in faith and obedience. He has lovingly commanded us to “prepare every needful thing” (see D&C 109:8) so that, should adversity come, we can care for ourselves and our neighbors and support bishops as they care for others.

We encourage members world-wide to prepare for adversity in life by having a basic supply of food and water and some money in savings."

We can never tell what might happen to us or our families. Recent labor statistics indicate that "
Unemployment rates were higher in October than a year earlier in 361 of the 369 metropolitan areas and lower in 8 areas. Among the 310 metropolitan areas for which nonfarm payroll data were available, 125 metropolitan areas reported over-the-year employment gains, 169 reported losses, and 16 had no change." See the Bureau of Labor Statistics. The BLS goes on to state: "Nonfarm payroll employment fell by 240,000 in October. Job losses over the last 3 months totaled 651,000. In October, the unemployment rate rose from 6.1 to 6.5 percent, and the number of unemployed persons increased to 10.1 million." To show the trend, the BLS states: "Among the unemployed, the number of persons who lost their job and did not expect to be recalled to work rose by 615,000 to 4.4 million in October. Over the past 12 months, the size of this group has increased by 1.7 million."

To put these figures into some kind of perspective there are more people out of work than the live in New York City. See

It is likely that some, if not most, of these people were surprised to lose their jobs. How long could you and your family survive without an income? How fast would you run out of food? What would you do for housing? What would you do to pay for your car? Your boat? Your ATVs? This is the purpose the Lord had in mind when he told his Prophets to warn us to stay out of debt and to have food storage.

Sunday, November 30, 2008

Housing--a pressing issue

Driving around newer subdivisions, in some areas of the country, it is not unusual to see four or five homes for sale, some with notices of short sales, on one small street. The net effect of this situation is families losing their homes. The current forecast for home appreciation is, at the highest, no more than 4.9% for the highest appreciating market in the U.S. in Biloxi, Mississippi. The worst U.S. market is in Ontario, California losing 24.5% value during 2008.


For years members of The Church of Jesus Christ of Latter-day Saints have been counseled by their Prophet leaders to get out of debt. Those that heeded the counsel have nothing to fear in a market of falling housing prices. Those who fell victim to the greed of the housing bubble, are many of those now losing their homes to foreclosure.

The FDIC predicts that 1 out of every 200 homes in America will be foreclosed on and every three months 250,000 new families enter into foreclosure.


The FDIC says that "More than 6 in 10 homeowners delinquent in their mortgage payments are not aware of services that mortgage lenders can offer to individuals having trouble with their mortgage."

Maybe it is also time to listen to the voice of the Prophet.

Thursday, November 27, 2008

What do you spend?

More of our friends and neighbors are facing hard times with job layoffs and pay cuts due to lack of sales. Although times can certainly get worse than they are right now, it is always a good idea to be aware of your spending habits. Over the years, I have worked with a lot of people and one of the things I have always noticed is the amount of money spent on lunches. It is very common for workers who are making an average or below salary to buy lunch, often from a fast food outlet.

Even if you try to eat healthy, the cost of the food is significant. For example, at McDonalds, a Premium Caesar Salad with Grilled Chicken is almost $6. If you order a drink and a side, you can pay almost $8.50 or so plus tax. Multiply that times five days a week and you have a significant amount of money spent on a lot of food. Most of my co-workers justify the expense by claiming that they don't have time in the morning to fix food for lunch. But spread out over a month, the cost of lunch is as much as a car payment. One study found the average person spends almost $3000 a year on restaurants and fast food.


One of my friends confided in me that they were having major problems with paying bills. I suggested a simple solution. Get a notebook and write down every penny spent on what ever item for a whole month. Within a couple of weeks the friend talked to me again and said, essentially, that he had no idea how much money he was wasting on things he didn't want and didn't need.

There is a trade off. You have to be aware of what it costs, to you, to buy a drink at the convenience market or to go to a movie. Maybe you need to carry your own water bottle filled at home, and maybe you need to go to the library and check out movies for free or even better, read a book.

Unless it is monitored, money will run through your hands like water, and when hard times come, like right now, you will not be prepared.

Saturday, November 22, 2008

The staff of life

Wheat is often called the staff of life. As a food storage item, wheat is ideal. But it is a good idea to have some general background information. There is an excellent article on wheat at:
Big Oven

We have stored wheat for years with excellent success. Recently, we have gone back to eating cracked wheat cereal for breakfast. We had been eating prepared store-bought breakfast cereal, but in the course of writing for this blog, I got disenchanted with breakfast cereal again, and we went back to cracked wheat (with some occasional oatmeal). One benefit is that I do not get hungry after an hour or so and it is certainly a lot cheaper. Although the price of wheat has risen dramatically over the years, it is still a lot less expensive than any of the prepared breakfast cereals. I like the cereal leftovers cold from the refrigerator. Although there are some who do not share my taste in cold mush. If you haven't tried cracked wheat, I would certainly recommend it.

Monday, November 10, 2008

The only thing we have to fear, is fear itself

It is getting interesting to see how many news articles are comparing the present financial and economic crisis to the Great Depression. It would seem that few of the prominent financial experts quoted have any idea what they are really talking about, they may know finance (but if they do, why are we having a crisis?) but they apparently flunked history. Here are a few comparisons to put things in a historical perspective:

(See from the University of Illinois at Urbana-Champaign)

In 1929 and the years following, stock prices declined to 20% of their pre-1929 value.
In 2008, stock prices, as measured by the Dow Jones Average of Industrial Stocks, has declined about 32% during the entire year, not to just 20% of the value.

By 1933, 11,000 of the 25,000 U.S. banks had failed.
Since 2000, according to the FDIC, there have been 46 bank failures. See FDIC

By 1932, unemployment had risen to between 25% and 30% of the work force.
In 2008, the unemployment figure has risen to 6.5% See U.S. Bureau of Labor Statistics

By 1932 the total value of world trade had fallen by more than half as country after country took measures against the importation of foreign goods.
In 2008, trade with China, for example has actually risen during the year.

Although we need to be concerned about the current economic and financial situation, let's not get carried away and ignore history. Things can definitely get worse.

Wednesday, November 5, 2008

Now we get it...

OK, in my last post I talked about sugar in breakfast cereal using a standard 100g serving size, but wait a minute, the cereal companies don't use a standard serving size. For example, General Mills Cheerios. The standard serving was 100g with 6g of sugar. However, to deemphasise the sugar content, General Mills has its serving size on the package, as 1 cup which works out be only 28g. Lucky Charms on the other hand, has a serving size of 3/4 cup at 27g and shows 11g of sugar. Think about it! 27g serving with 11g of sugar? A baby could eat 3/4 of cup, one Lucky Charm at a time.

Now here's the real concern. Check out the number of calories in soda pop. The average carbonated cola drink with caffeine contains 11g of sugar or 42 calories in 100g serving size. Therefore, a normal 12 fl. oz. can has 370g of liquid with 155.4 calories. Just for a reality check, 100g of granulated sugar is about 1/2 cup and contains 387 calories. So a can of soda has roughly 1/4 cup of sugar.

The point is obvious. Many of the common food substances are nothing more than sugar delivery systems. One was to combat the growing obesity problem is become more aware of what you are eating and what it contains. Fortunately, all of that information is on-line in a format that avoids the pitfalls created by the manufacturers and gives you a standard measuring system so that two dissimilar foods can be conveniently compared.

Tuesday, November 4, 2008

Just when you thought you were safe...

Rather than going to the supermarket and trying to read the small print on the breakfast cereal boxes, here is a Web site that has links to all of the nutritional information. This site works for all types of foods, not just breakfast cereals:

In my last post, on this subject, I had to rely on only those cereal boxes we had at home, now we can get down to the real nitty-gritty of the content. Here are some of the more interesting figures on the sugar content of popular breakfast cereals:

General Mills (all with 100g serving size):

Count Chocula, Frankenberry, Cocoa Puffs, Boo Berry: 47g
Trix: 44g
Lucky Charms: 43g
Reese's Puffs: 39g
Whole Grain Total: 16g
Wheaties: 14g
Cheerios: 6g

Kellogg's and Kashi (all with 100g serving size)

GoLean: 12g
Heart to Heart: 20g
Organic Promise Autumn Wheat: 12g
Frosted Mini-Wheats: 20g
Apple Jacks: 49g
Cocoa Krispies: 34g
Corn Flakes: 11g
Corn Pops: 45g
Froot Loops: 41g
Frosted Flakes: 38g
Special K: 13g

Kraft/Post (all with 100g serving size)

Cocoa Pebbles: 44g
Grape Nuts Flakes: 18g
Grape Nuts: 12g
Honey Bunches of Oats: 22g

Wheat has 0g of sugar, no saturated fats and no cholesterol. You may wish to think about this.

Smoking and hunger

It has been my experience for many years that tobacco smokers (and others with addictions) will often neglect their own health and welfare to support their habit. A new study shows that the negative effects of this addictive behavior extends to family members, especially children. A study reported in the Archives of Pediatrics & Adolescent Medicine, Vol. 152, No. 11, November 2008 is entitled "Increased Rates and Severity of Child and Adult Food Insecurity in Households With Adult Smokers."

The objective of the study was "to investigate rates and severity of child and adult food insecurity (the inability to access enough food in a socially acceptable way for every day of the year) in households with and without smokers." The study found that:

"Food insecurity was more common and severe in children and adults in households with smokers. Of children in households with smokers, 17.0% were food insecure vs 8.7% in households without smokers (P < .001). Rates of severe child food insecurity were 3.2% vs 0.9% (P < .04), respectively. For adults, 25.7% in households with smokers and 11.6% in households without smokers were food insecure, and rates of severe food insecurity were 11.8% and 3.9%, respectively (P < .003 for each). Food insecurity was higher in low-income compared with higher income homes (P < .01). At multivariate analyses, smoking was independently associated with food insecurity and severe food insecurity in children (adjusted odds ratio, 2.0; 95% confidence interval, 1.5-2.7, and adjusted odds ratio, 3.1; 95% confidence interval, 1.4-6.9, respectively) and adults (adjusted odds ratio, 2.2; 95% confidence interval, 1.6-3.0, and adjusted odds ratio, 2.3; 95% confidence interval, 1.4-3.7, respectively)." The full effects of smoking are summarized in an article from the same journal (Arch Pediatr Adolesc Med. 2008;162(11):1096-1098)which states, in part,:

"Extensive research has documented the harmful impact of smoking on adult and children's health. Smoking causes numerous diseases and harms nearly every organ in the body, while exposure to secondhand smoke causes heart disease and lung cancer in nonsmokers. Maternal smoking during pregnancy increases the likelihood of premature birth, still birth, and low-birth-weight birth, as well as a number of other complications during pregnancy. Infants exposed to secondhand smoke are twice as likely to die of sudden infant death syndrome as those who are not exposed. Secondhand smoke significantly increases children's risk of acute respiratory infections and ear problems and for children with asthma, increases the frequency and severity of asthma attacks. Children's and adolescents' exposure to secondhand smoke is associated with various psychopathologies, including conduct disorder, aggression, and attention-deficit/hyperactivity disorder. In addition, tobacco use imposes a substantial economic toll..."

To read these, and other articles see

Almost two hundred years ago, God revealed to Joseph Smith:
And again, tobacco is not for the body, neither for the belly, and is not good for man, but is an herb for bruises and all sick cattle, to be used with judgment and skill. See Doctrine and Covenants, Section 89:8

What a different world we would have if more people would heed the word of God from his Prophets.

Sunday, November 2, 2008

Wheat is for man

Nevertheless, wheat for man, and corn for the ox, and oats for the horse, and rye for the fowls and for swine, and for all beasts of the field, and barley for all useful animals.... (D&C 89:17)

Whole wheat contains manganese, phosphorus, magnesium and selenium in substantial percentages. It also contains adequate amounts of zinc, copper, iron, potassium and a small amount of calcium. It is rich in Vitamin B6, Niacin, Thiamin, Folate, Riboflavin and Pantothenic Acid. Vitamin E and Vitamin K are also present in small but significant amounts.

Unfortunately, processing the wheat, especially into white flour, removes most of the nutritional value and nearly all of the fiber. The nutritional value of whole wheat has been known for years, but recently, the breakfast food industry has appropriated the idea of "whole grain" as an advertising gimmick. All you have to do to see the difference is measure the weight of one cup of unprocessed wheat and compare it to the weight of one cup of processed breakfast cereal. For example, one cup of wheat weighs almost exactly 8 oz. or 1/2 lb. Kelloggs' Special K Cereal weighs 1.3 oz. or so per cup. So you can easily see that breakfast cereal is mostly air. It is also interesting to note that most breakfast cereal products claim to have added vitamins!

Also, wheat has no added sugar. If you look at the nutrition information on the side of the cereal box you will see some amazing things. Here are a few types of cereal and the sugar content of each:

Whole Grain Oat Cheerios 1 gm/cup
Raisin Bran Crunch 20 gm/cup
Honey Nut Cheerios 9 gm/cup
Total 5 gm/cup
Special K 7 gm/cup
Honey Bunches of Oats 6 gm/cup

And these are all "whole grain" healthy (supposedly) cereals. Just to know, 20 gm of sugar is .7 of an ounce. If the whole cereal only weighs 1.3 oz per cup, then most of the weight is in sugar.

Of course, we all knew that already. Right? So what are we going to do about it?

Let's look at price. Wheat has been rising in price for the past two years, it is just over $5.50 a bushel in the commodities markets, but it is sold in 45 lb. buckets for about $1 a pound as of November, 2008. A bushel is 128 cups. Breakfast cereal, on sale, is about $2.00 a box for about a 10 to 12 ounce box. It doesn't take a lot of math to see that at 1/2 lb per cup, wheat is a lot less expensive in bulk than prepared cereal, four cups or two pounds of wheat for the same price as 10 ounces of breakfast cereal.

More later.

Monday, October 27, 2008

Mormon work ethic extolled in national press explains why Utah’s economy is soaring above its neighbours.

The article entitled "The Mormon Work Ethic" declares that Utah has more to be proud of than any other state in the West. "In September its unemployment rate was just 3.5%—less than half of California’s and the second-lowest rate in the region after oil- and gas-rich Wyoming." Mormons are members of The Church of Jesus Christ of Latter-day Saints.

The article further notes: "The “cultural thing”, as businessmen from out of state delicately refer to Mormonism, helps in other ways. Utah’s almost universal conservatism makes for stable, consensual politics. It took the state legislature just two days last month to plug a $272m hole in the budget. By contrast, California’s budget was 85 days late. Nevada’s politicians are preparing for a nasty fiscal fight next year."

In a time when the whole world is sliding into economic chaos, it is reassuring to know that solid Christian values matter. That people who have a fundamental belief in the Divine Nature of man, also produce a stable economy and run counter to the modern destructive trends.

Personally, having traveled extensively throughout the U.S., I can say, without equivocation, that Utah Valley has the most friendly and helpful people on earth. You are treated better by store clerks and fast food workers in Utah Valley than anyplace else in America. For example, my wife and I were purchasing supplies for a wedding reception in Utah Valley. We needed some Cherry 7 Up for the punch. We could only find two or three bottles on the shelf. One of the clerks in the local supermarket asked if he could help. He led us into the back of the store and found the storage area with the soda. We still didn't have enough but started to leave the store and were waiting in line, when he came running up and led us to another display, in another part of the store, we had overlooked. There was enough of the soda to complete our requirements. Now, that would only happen in Utah Valley and that is one reason why the Utah economy will not falter as it will throughout the rest of the world. The people in Utah prosper in the land because they follow the teachings of our Savior Jesus Christ.

Sunday, October 26, 2008

What are people thinking?

My wife and I went to visit a close friend in the hospital where she had recent surgery. It was one of the larger regional style hospitals in the east part of Mesa, Arizona. In walking through the parking lot, I spotted a garbage can, right next to the entrance to the hospital, with an attached cigarette disposal tray. The entire tray was covered with extinguished cigarettes. In addition, we had to run the gauntlet of smokers, sitting outside the hospital indulging their habit. Some of these smokers were sitting right next to large signs extolling the hospital as a major stroke treatment center. Apparently, none of these people can read.

One of the best ways to begin to prepare for hard times is to seriously consider any addictions you might have and immediately do what is necessary to start to break those habits.

Effects of the Economic Crisis

Unless you are a hermit living in a cave in the wilderness, you probably have heard that there is a financial and economic crisis going on around the world. During the past few months, the media's comparisons beginning with recent recessions, have now escalated to comparisons with the Great Depression beginning with the stock market crash of 1929. The statistics on the present "economic downturn," as it is called, are overwhelming. If you have been relying on the standard news broadcasts, including National Public Radio, you probably still believe that the problems stem from the U.S. housing decline. What you may not realize, is that there have been many days in the past few weeks when virtually every single stock exchange in the world has been down at the same time. The problem is far from just a U.S. problem.

Perhaps, you have missed the news that there are significant job losses, plummeting stock prices and rapidly eroding real property values. You may also have missed the news that several countries, including Iceland, the Ukraine, Belarus and soon, Argentina are in collapse or default of their international obligations. The Nasdaq has retreated 78 percent from 2000 to 2002. The S&P index of homebuilder shares has dropped 82 percent from its 2005 peak. The news goes on and on.

In talking to local businessmen, as I do on a daily basis, I find many are seeing significant declines in their business, in areas as diverse as sales, real estate, contracting, and insurance. Many of my older friends are alarmed at the dramatic decline in their retirement accounts. A number of people, I have talked to, are delaying plans for retirement.

In all this chaos and confusion, we need to listen to the voice of President Gordon B. Hinkley, a Prophet of God who said in 2005:

"We can so live that we can call upon the Lord for His protection and guidance. This is a first priority. We cannot expect His help if we are unwilling to keep His commandments. We in this Church have evidence enough of the penalties of disobedience in the examples of both the Jaredite and the Nephite nations. Each went from glory to utter destruction because of wickedness. ...We know, of course, that the rain falls on the just as well as the unjust (Matthew 5:45). But even though the just die they are not lost, but are saved through the Atonement of the Redeemer. Paul wrote to the Romans, "For whether we live, we live unto the Lord; and whether we die, we die unto the Lord" (Romans 14:8)... Our people for three-quarters of a century have been counseled and encouraged to make such preparation as will assure survival should a calamity come. We can set aside some water, basic food, medicine, and clothing to keep us warm. We ought to have a little money laid aside in case of a rainy day.",5232,23-1-559-20,00.html

Let us head the counsel of this great man and make preparations for worse times ahead.

Wednesday, October 22, 2008

Listen to the right sources

One of the hallmarks of any crisis is the appearance of rumor and innuendo. It is all too easy to become alarmed by giving credence to the latest unofficial document making its rounds on the Internet. Fortunately, it is relatively easy to verify the origin and reliability of anything that comes through chain E-mails or any other rumor mill. Here are a couple of examples of the process:

Years ago I was contacted by a near relative who was visibly upset because Madalyn Murray O'Hair was going to force the FCC to remove all religious programming from the airwaves.

As shown in Wikipedia:

Madalyn Murray O'Hair (April 13, 1919 to September 29,1995)was an American atheist and activist. She is best known for the lawsuit Murray v. Curlett which led to a landmark Supreme Court of the United States ruling and ended the practice of daily prayer in American public schools. She was murdered in 1995 along with her son and granddaughter, for reasons unrelated to her public image and activism.

For years, this rumor was and still is circulating. I personally called the FCC about the rumor and found out that they had a department specifically established to try and stop the rumor. The rumor was and is without any basis at all in fact. The whole episode has now passed into the realm of urban legend. Notwithstanding, the efforts of the FCC, I recently received an E-mail claiming that the FCC was going to ban religious programming due to the efforts of the now, long dead, O'Hair.

All it took was my call to the FCC where the issue was immediately laid to rest to my satisfaction.

Recently, I received another Internet document with some highly inflammatory statements. This document purported to be a report of statements made by a prominent religious leader. Fortunately, the validity of the material could be easily ascertained. In a matter of minutes, I had a response confirming my suspicion that the document was not an official statement and contained misstatements.

The rule is simple, verify your source and verify the content. Do not be alarmed by rumor.

Wednesday, October 15, 2008

Prophetic Counsel

In a talk given at the Church's General Conference in 2005, the then Church President, Gordon B. Hinkley said:

"We have built grain storage and storehouses and stocked them with the necessities of life in the event of a disaster. But the best storehouse is the family storeroom. In words of revelation the Lord has said, "Organize yourselves; prepare every needful thing" (D&C 109:8).

Our people for three-quarters of a century have been counseled and encouraged to make such preparation as will assure survival should a calamity come.

We can set aside some water, basic food, medicine, and clothing to keep us warm. We ought to have a little money laid aside in case of a rainy day.

Now what I have said should not occasion a run on the grocery store or anything of that kind. I am saying nothing that has not been said for a very long time.

Let us never lose sight of the dream of Pharaoh concerning the fat cattle and the lean, the full ears of corn, and the blasted ears; the meaning of which was interpreted by Joseph to indicate years of plenty and years of scarcity (see Genesis 41:1–36)."

In addition President Hinkley gave the following counsel:

"We can so live that we can call upon the Lord for His protection and guidance. This is a first priority. We cannot expect His help if we are unwilling to keep His commandments. We in this Church have evidence enough of the penalties of disobedience in the examples of both the Jaredite and the Nephite nations. Each went from glory to utter destruction because of wickedness.

We know, of course, that the rain falls on the just as well as the unjust (see Matthew 5:45). But even though the just die they are not lost, but are saved through the Atonement of the Redeemer. Paul wrote to the Romans, "For whether we live, we live unto the Lord; and whether we die, we die unto the Lord" (Romans 14:8)."

We have the guidance and counsel of a Prophet of God, let's listen.

Monday, October 13, 2008

Good advice for difficult times

"We encourage you wherever you may live in the world to prepare for adversity by looking to the condition of your finances. We urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt. . . . If you have paid your debts and have a financial reserve, even though it be small, you and your family will feel more secure and enjoy greater peace in your hearts."
—The First Presidency, All Is Safely Gathered In: Family Finances, Feb. 2007, 1

Friday, October 10, 2008


I had to memorize a poem in grade school, that keeps coming back to me during the present economic crisis. The poem was written by Rudyard Kipling and is called "If..." It says, in part, "If you can keep your head when all about you, are losing theirs..." Keeping your head seems a good idea right now with the stock markets of the world gyrating hundreds of points within a matter of minutes. The poem goes on to say:

"If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss..."

Now is the time for social and emotional strength. In talking to friends the last few days, there is a preoccupation with loss, primarily from those worrying that their present retirement funds will evaporate or that their plans for the future are now drastically changed. There is no denying the real effect of the economy on individuals' lives, but the way we react to those challenges is under our control.

The AARP magazine did a survey concerning hunger in America and found, surprisingly, that many people were going hungry that lived in large homes, drove late model cars and had good jobs. The subjects of the study were so attached to their material wealth, that when they could not make enough to pay for all their "stuff" they would rather starve than give up their car or house or boat. Luke 12:34 "For where your treasure is, there will your heart be also."

Ardeth G. Kapp, then, general president of the Young Women of
The Church of Jesus Christ of Latter-day Saints said the following in a devotional
address given at Brigham Young University on 13 November 1990:

"I believe the most destructive threat of our day is not nuclear war, not famine, not economic disaster, but rather the despair, the discouragement, the despondency, the defeat caused by the discrepancy between what we believe to be right and how we live our lives. Much of the emotional and social illness of our day is caused when people think one way and act another. The turmoil inside is destructive to the Spirit and to the emotional well-being of one who tries to live without clearly defined principles, values, standards, and goals."

Link for the entire talk:

Now is the time to reassess our goals and our lives and, if we haven't already started, begin now to implement a plan of preparedness. Let's all hope that it isn't already too late.

Wednesday, October 8, 2008

Action not reaction to economic crisis

One of the most compelling reasons for establishing a food storage plan is now being played out on the international stage. The economic downturn is more than an academic exercise. The events of the past few weeks will, undoubtedly, affect more and more people in a direct and substantial fashion. To qoute the First Presidency of The Church of Jesus Christ of Latter-day Saints:

"Our Heavenly Father created this beautiful earth, with all its abundance, for our benefit and use. His purpose is to provide for our needs as we walk in faith and obedience. He has lovingly commanded us to “prepare every needful thing” (see D&C 109:8) so that, should adversity come, we can care for ourselves and our neighbors and support bishops as they care for others. "

The Church recommends that every family have a three month's supply of food, a store of drinking water for circumstances in which the water supply may be polluted or disrupted and a financial reserve in a reasonable amount. When local laws and custom allow, the Church also encourages long term storage of food that you can use to keep alive, such as wheat, white rice and beans.

Please see:,10803,1653-1,00.html

My previous discussions looked at the average cost of food in the U.S. Through provident living and the proper use of a food storage program, it is possible for a family to spend far less than even the Thrifty Plan advocated by the United State Department of Agriculture.

This is a much repeated story but perfectly applicable to the crisis of the day:

A farmer needed an extra hand to help on his farm. One young man came to interview for the job. "What are your qualifications?" the farmer asked. "I can sleep when the wind blows," the young man said. This simple reply confused the farmer, but he was desperate for help and the young man was hired.

The young man was a diligent worker through the harvest season, but the farmer still questioned his answer.

Autumn ended and the first cold storm of winter came late one night. The farmer panicked as the winds began to blow. Calling the young man for help, the farmer grabbed his coat and pulled heavy boots on his feet. He was disappointed to find the young man asleep in bed at a time like this. Grudgingly he ventured out alone planning to shuffle all of the animals in the barn and then fix that last hole in the roof. He mumbled about the young man sleeping and was sure all the farm equipment was left standing in the field, collecting rust from the snow.

However, when the farmer reached the barn all the animals were tucked safely inside. In fact, clean hay had already been set out for the new day. Not a single hole could be found in the roof, and the tractor was parked perfectly in the shed.

"Who could have done it?" the farmer wondered. And then, he realized what the young man's answer meant, "I can sleep when the wind blows."

How many of you can sleep when the wind blows? The first step, in our economic hard times is to have a basic food storage plan.

Friday, October 3, 2008

Spending on non-food items

Implementation of a food storage program can be severly limited by the perception that the family food budget will not allow any additional purchases. This reticence is based on a lack of awareness of the amount spent on food as opposed to the amount spent on non-food consumption items. The three non-food items that take up a surprising amount of home food budget money are coffee, alcohol and tobacco products.

According to in 1999 there were 108,000,000 coffee consumers in the United States spending an approximated 9.2 billion dollars in the retail sector and 8.7 billion dollars in the foodservice sector every year (Specialty Coffee Association of America 1999 Market Report). Coffee drinkers spent an average $164.71 per year on coffee. By 2002, the total retail figure had risen to $10.74 billion with a propotionate rise in the average per capita cost of consumption.

See and

Based on the USDA figures for average weekly food costs on the Thrifty Plan, two adults spend $79.60 a week on food. So the average American couple spends more than two week's worth of food money for coffee each year.

As I have mentioned before, figures giving accurate per capita spending in the United States for alcohol and tobacco products is very difficult to find. One statistic shows that the per capita consumption of alcohol in the U.S. was 2.18 gallons. Considering the number of children and non-drinkers, the real average has to be considerably higher. I can find how much you spend on okra faster and more completely than any statistics on alcohol consumption or spending. Whatever is spent, it is too much.

In addition, over 60% of the U.S. population is (according to government definitions) either overweight of obese.


The conclusion is that Americans spend too much on food, too much on alcohol and too much on tobacco products. The reduction or elimination of any of the non-food categories of spending would more than finance a food storage plan.

Wednesday, October 1, 2008

More on spending habits vs. real food costs

Before going further on the subject of spending habits and real food costs, I would like to point out that we have seven children. I am certain that we have never come even close to spending the amount recommended by the USDA as their "Thrifty Plan." If Americans are really spending as much as the Liberal Plan would allow, then we can certainly see why obesity is such a problem. We can not imagine eating that much food. Bear in mind that these amounts do not include anything for "eating out." This is the estimated cost for in-home food.

I did have a friend, years and years ago, who drank at least six or seven cans of soda every afternoon. I used to sit there and watch him drink it down. So I do know that people can spend more than I would on non-food items. Some of the items are not food, in our definition. We do not consider coffee, tea, soda, and chewing gum to be food, for example. Conspicuously absent from this food list is any purchase of alcoholic beverages which would certainly add a considerable amount to the weekly cost. It is surprisingly difficult to find accurate figures as to the per capita consumption of these "non-food" items. We do not chose to avoid these items merely because they are detrimental or habit forming, as members of The Church of Jesus Christ of Latter-day Saints we have a religious based reason. Modern revelation to a Prophet of God instructs us to avoid, alcoholic beverages, coffee and tea and to eat in moderation.

Fortunately, our family's spending habits were formed by my wife and her family. We have some basic rules of food purchase and consumption:

1. Never buy anything that isn't on sale at the lowest price available. Now, this rule isn't always possible to follow, but it is a good starting point. This principle is one of the basic tenants of food storage.

2. Never buy prepared food when there is an unprepared or unprocessed substitute available. This takes some effort and I will talk about this more in future blogs.

3. If the price of a certain type or brand of food goes up or does not go on sale, do not buy it. This is hard to do, since we often buy through habit or what we a accustomed to purchasing.

4. Always buy day-old or "manager's specials" especially if they are things you would normally eat.

5. Always shop with a list and never buy anything in the store merely out of convenience when you plan to buy the item in another store for less. Time is money but money is also money. Don't spend more just out of convenience.

6. Never buy staples, i.e. milk, eggs, butter, meat etc. from a convenience store. In fact, in our viewpoint don't buy anything, especially sugar drinks and snack foods at a convenience store.

More on these rules later.

Spending habits vs. real food costs

Once again, the United States Department of Agriculture is a good source for basic information on food. I suppose that is not really much of a surprise the billions of dollars have to go somewhere. The latest food cost figures are from August of 2008. The lowest cost Food Plan is the Thrifty Plan. In this Plan, two adults are supposed to pay from $79.60 a week for the over 51 age group and $83.50 a week for the under 51 age group. For a family of four with young children under 5 years old, the amount is $121.10 per week. For a family of four with two children up to 11 years of age, the amount climbs to $139.10 per week or $7,233.20 per year. This Food Plan isn't based on some average figure but the USDA's standard nutritious diet.

Just in case you are wondering, here is the link to the study:

The other three plans are more expensive. The Low-cost plan would have the following four costs per week: $101.80, $105.70, $153.10 and $179.70. The Moderate Cost Plan's cost per week: $125.10, $130,60, $188.20 and $223.40. The last one, the Liberal Plan's cost per week is: $150.40, $163.10, $233.00 and $271.80.

Spending with the Liberal Plan jumps to $14, 133.60 per year in food costs. The plans are based on the purchase of a hypothetical food basket which is determined by determining the average consumption of each of the USDA's food categories, the average price of each of the categories and nutrient profile and MyPyramid Equivalents Profile of each of the food categories.

Now what are these categories? The list is long, but here it is:

Table 1. Food categories and examples of foods in each category, Thrifty Food Plan, 2006
Food category Examples of foods
Breads, yeast and quick—whole grain (n = 38) Whole wheat, multigrain, or pumpernickel breads, rolls, bagels, scones, English muffins, biscuits, tortillas, and pancakes—all with 50% or more of ounce equivalents1 from whole grain
Breads, yeast and quick—non-whole grain (n = 271) White, French, potato, bran, or rye breads and rolls; muffins, English muffins, bagels, waffles, corn tortillas, taco shells, cornbread, and pancakes—all with less than 50% of ounce equivalents from whole grain
Breakfast cereal—whole grain, regular calories2 Cooked cereals (e.g., oatmeal and bulgur) with sugars, fat, and whole milk or 2% milk added; (n = 74) sweetened ready-to-eat cereals (e.g., frosted wheats and granola)—all with 50% or more of ounce equivalents from whole grain
Breakfast cereal—whole grain, low calories2 Cooked cereals (e.g., oatmeal, bulgur, and buckwheat groats) without added sugars or fat; (n = 54) nonsweetened ready-to-eat cereals (e.g., shredded wheat and mueslix)—all with 50% or more of ounce equivalents from whole grain
Breakfast cereal—non-whole grain (n = 214) Cooked cereal (e.g., cream of wheat, grits, and oat bran); sweetened or nonsweetened readyto-eat cereals (e.g., frosted cornflakes and puffed rice)—all with less than 50% of ounce equivalents from whole grain
Rice and pasta—whole grain (n = 15) Brown rice, wild rice, whole wheat pasta (e.g., macaroni, spaghetti, and noodles)—all with 50% or more of ounce equivalents from whole grain
Rice and pasta—non-whole grain (n = 48) Long or short white rice, sweet rice, rice noodles and pasta (e.g., macaroni, spaghetti, and noodles)—all with less than 50% of ounce equivalents from whole grain
Cakes, pies, and other sweet bakery Oatmeal cookies, granola cookies, whole wheat doughnuts, granola bars, and graham crackers—products—whole grain (n = 20) all with 50% or more of ounce equivalents from whole grain
Cakes, pies, and other sweet bakery Pies, cookies, pastries, doughnuts, shortbread; all cakes (e.g., white, yellow, shortcake, sponge, products—non-whole grain (n = 425) pound, and angel food); croissants; and sweet rolls—all with less than 50% of ounce equivalents from whole grain
Grain-based snacks—whole grain (n = 30) Popcorn, salty snacks, crackers, multigrain pretzels, and puffed wheat cakes—all with 50% or more of ounce equivalents from whole grain
Grain-based snacks—non-whole grain (n = 58) Crackers (e.g., soda, oyster, cheese, and rice); hard or soft pretzels; and salty snacks (e.g., tortilla chips)—all with less than 50% of ounce equivalents from whole grain
Grain mixtures—regular fat (n = 229) Foods such as tacos, burritos, enchiladas, pizzas, egg rolls, and pasta and rice with meat where grain is major ingredient and containing 6% or more fat by weight
Grain mixtures—lowfat (n = 140) Foods such as rice and pasta with vegetables and/or beans, noodle or rice soups with vegetables and/or meat, and garden rolls where grain is major ingredient and containing less than 6% fat by weight
Vegetables and fruits
Potato products—regular fat (n = 34) French-fried potatoes, potato chips, hash browns, potato puffs, potato patty; and potato salads and mashed potatoes with added fat, eggs, or cheese
Potato products—lowfat (n = 60) Boiled, baked, scalloped, mashed, and stuffed potatoes; and potato salad, German style
Dark-green vegetables—added fat (n = 34) All dark-green vegetables such as broccoli, spinach, chard, collard greens, mustard greens, and Dark-green vegetables—no added fat (n = 21) kale—with or without fat added
Orange vegetables—added fat (n = 28) All orange vegetables such as carrots, pumpkin, winter squash, and sweet potatoes—with or Orange vegetables—no added fat (n = 28) without fat added
Tomatoes—added fat (n = 32) Tomato, tomato sauce, tomato puree, tomato paste, tomato soup, and tomato juice—with or Tomatoes—no added fat (n = 37) without fat added
Other vegetables—added fat (n = 136) All other vegetables such as green beans, beets, cabbage, cauliflower, corn, eggplant, green peas,
Other vegetables—no added fat (n = 163) iceberg lettuce, bell pepper, snow peas, turnip, and Brussels sprouts—with or without fat added
Mixed vegetables—added fat (n = 101) Foods such as stuffed vegetables, creamed peas and carrots, batter-dipped fried vegetables, and
Mixed vegetables—no added fat (n = 43) vegetable stir-fry where vegetables are the primary ingredient—with or without fat added
1The following each counts as 1 ounce-equivalent (1 serving) of grains: 1/2 cup cooked rice, pasta, or cooked cereal; 1 ounce dry pasta or rice; 1 slice of
bread; 1 small muffin (1 oz); 1 cup ready-to-eat cereal flakes.
2In this context, “calories” refers to total calories from discretionary solid fat and added sugars in the product. Discretionary solid fat in cereals is the fat that is solid at room temperature and is added to the cereals during processing or at the table.
Note: n refers to number of food codes in the food category.
Citrus fruits, melons, and berries (n = 62) Oranges, grapefruits, limes, lemons, and tangelos; melons (e.g.,watermelon, cantaloupe, and honeydew); berries (e.g., strawberries, blueberries, cranberries, raspberries, and blackberries)
Citrus fruit, melon, and berry juices (n = 38) 100% fruit juices made from citrus fruits, melons, and berries
Fruits other than citrus fruits, melons, and berries Fruits such as bananas, apples, cherries, peaches, pears, grapes, plums, papayas, and apricots (n = 185)
Fruit juices other than citrus, melon, and berry 100% fruit juices made from fruits other than citrus fruits, melons, and berries (n = 70)
Milk products
Milk and milk-based foods—regular fat (n = 56) All fluid, evaporated, condensed, and dry whole milk; regular yogurt; all fluid creams; cream substitutes; cream cheese; and dips
Milk and milk-based foods—lower fat (n = 38) All fluid, evaporated, and dry reduced-fat and skim milks; buttermilk; and lowfat or nonfat yogurts
Cheese (n = 98) Natural, processed, and imitation cheeses; cottage cheese; cheese spreads; cheese dips; and cheese soups
Milk-based drinks and desserts—regular fat Milk-based drinks (e.g., malted milk, hot chocolate, eggnogs, cocoa, infant formulas, and (n = 125) meal-replacement drinks) with fat equivalent to that of whole milk; dairy desserts (e.g., ice cream, frozen yogurt, ice milk, custard, and puddings) having more than 6% fat by weight
Milk-based drinks and desserts—lower fat Milk-based drinks made with reduced-fat or skim milk and dairy desserts having 6% or less fat (n = 136) by weight
Meat and beans
Red meats—regular discretionary solid fat,3 Beef (e.g., battered and fried steak, barbecued short ribs, and pot roast), pork (e.g., fresh ham, regular cost4 (n = 59) loin, and spareribs), lamb (e.g., roast), game meats, and jerky—all with more than the median amount of discretionary solid fat
Red meats—regular discretionary solid fat, Pork (e.g., skin, ground, chop, roast, cutlet, and bacon), beef (e.g., brisket, short ribs, neck low cost4 (n = 61) bones, regular ground beef, and corned beef), lamb (e.g., ground or chop), and organ meats—all with more than the median amount of discretionary solid fat
Red meats—low discretionary solid fat, Lean beef (e.g., steak, veal, and oxtail), lean only pork (e.g., roast, steak, fresh ham, and loin), regular cost (n = 62) lamb (e.g., ribs and loin chop), and game meats—all with the median amount of discretionary solid fat or less
Red meats—low discretionary solid fat, Lean pork (e.g., lean spareribs and smoked or cured roast), lean only beef (e.g., brisket), low cost (n = 74) lamb (e.g., shoulder chop), and game meats—all with the median amount of discretionary solid fat or less
Poultry—regular discretionary solid fat, Coated and fried poultry (e.g., breast, leg, thigh, and drumstick) purchased without skin—all regular cost (n = 50) with more than the median amount of discretionary solid fat
Poultry—regular discretionary solid fat, Coated and fried dark meat (e.g., wing, thigh, and drumstick) purchased with skin; nuggets; and low cost (n = 42) organ meats of chicken, turkey, and game birds purchased with skin—all with more than the median amount of discretionary solid fat
Poultry—low discretionary solid fat, Roasted or broiled poultry (e.g., breast, thigh, and drumstick) purchased without skin—all with regular cost (n = 54) the median amount of discretionary solid fat or less
Poultry—low discretionary solid fat, Smoked or roasted white and dark meat mixture or dark meat (e.g., thigh and drumstick) low cost (n = 156) purchased with skin (but skin not consumed); turkey and game birds purchased with skin (but skin not consumed); and canned chicken soups—all with the median amount of discretionary solid fat or less

3Discretionary solid fat in meats is the fat that is solid at room temperature and is the excess fat from (1) the meat and beans group (including meats,
poultry, fish, eggs, nuts, and seeds) beyond amounts that would be consumed if only the lowest fat forms were eaten and (2) solid fats added to these
foods in preparation or at the table.
4The top 66.66 percent of foods were placed in the regular-cost category; the bottom 33.33 percent of foods, in terms of cost, were placed in the lowest cost category.
Note: n refers to number of food codes in the food category.

Fish—regular discretionary solid fat, Fish, pan-fried or baked with solid fat (e.g., fresh tuna, swordfish, trout, salmon, ocean perch, regular cost (n = 60) and porgy) and battered and fried shellfish (e.g., scallops, oyster, shrimp, and crab)—all with more than the median amount of discretionary solid fat
Fish—regular discretionary solid fat, Fish sticks or other fried and battered fish (e.g., mullet, smelt, haddock, herring, and catfish)—all low cost (n = 54) with more than the median amount of discretionary solid fat
Fish—low discretionary solid fat, Broiled, steamed, or smoked fresh fish (e.g., tuna, salmon) and fresh shellfish (e.g., crab and regular cost (n = 37) clams)—all with the median amount of discretionary solid fat or less
Fish—low discretionary solid fat, Canned fish (e.g., tuna, sardines, and herring), canned shellfish (e.g., shrimp), and canned low cost (n = 54) seafood-based soups and chowders—all with the median amount of discretionary solid fat or less
Lunch meats, sausages, and bacon—regular fat Sausages, salami, frankfurters, bologna, sliced ham, bacon, and pastrami (n = 55)
Lunch meats, sausages, and bacon—lowfat Sausages, salami, frankfurters, bologna, sliced ham, bacon, and pastrami containing 25% less fat (n = 41) than regular fat form
Eggs and egg mixtures (n = 69) Fresh, frozen, and dried eggs; egg substitutes; meringues; and egg mixtures
Meat, poultry, and fish mixtures— Meat, poultry, and fish with grains or vegetables with more than the median amount of regular discretionary solid fat (n = 345) discretionary solid fat
Meat, poultry, and fish mixtures— Meat, poultry, and fish with grains or vegetables with the median amount of discretionary solid low discretionary solid fat (n = 355) fat or less
Dry beans, peas, lentil dishes, and mixtures Black, red, pinto, lima, white, mung, and kidney beans and all types of peas—all with or without (n = 113) other foods; soybean products (e.g., miso, tofu, and soybean-based meat substitutes)
Nuts and seeds (n = 74) Nuts, peanut butter and other nut butters, nut mixtures, carob, and seeds (e.g., sunflower, sesame, and pumpkin)
Other foods
Fats, oils, salad dressings, sauces, and condiments Butter, margarine, vegetable oils (e.g., corn, olive, and sunflower), butter blends, salad oils, (n = 188) lard, shortenings, all salad dressings, mayonnaise, pickles, relishes, salsa, soy sauce, catsup, tomato paste, and gravies and sauces
Coffee and tea (n = 81) Instant, ground, and fluid coffees and teas with or without caffeine and with or without sugar or sweeteners
Fruit drinks, soft drinks, and ades—regular calorie Fruit drinks, cola- and pepper-type soft drinks, ginger ale, root beer, fruit punches, ades (e.g., (n = 89) lemonades and limeades), and other sodas containing sugar Fruit drinks, soft drinks, and ades—low calorie Sugar-free or low-sugar drinks such as cola- and pepper-type soft drinks, ginger ale, root beer, (n = 35) fruit-flavored drinks, fruit punches, ades, and other sodas
Sugars and sweets (n = 215) All types of sugars, sweeteners, and syrups (e.g., honey, jams, jellies, marmalades, preserves, icings, gelatin desserts, marshmallow, and fudge); all types of candies and chocolates; and chewing gum
Note: n refers to number of food codes in the food category.

Now, you are asking yourself, what is in these hypothetical food baskets? Basically a selection of the foods listed above. Just an observation, there are food items listed that we, as a family, have never, ever, in the whole history of the world, ever purchased.

More later.

Tuesday, September 30, 2008

More thoughts on the cost of food

One excuse for not having any stored food on hand, is the cost. If you feel like you are struggling to provide food for your family, you are not likely to be receptive to the idea of buying extra food to begin a storage program. It is helpful to get a realistic idea of the true cost of food in America. The United States Department of Agriculture, Economic Research Service is a great source for information on food consumption in the United States. I will refer to a the USDA Website:

Americans spent over $583 billion dollars on food in 2007. Although this figure is stagering, the percentage Americans spent on food as a share of their disposable income has dropped from over 20% in 1929 to 9.8 percent (including food purchased away from home) in 2007. Americans annually spent $2,242 per capita on food in 2007, including, once again, food purchased away from home. In other countries for the same year, people spent as much as 50% of their disposable income on food. Some countries, such as India, have an annual per capita spending on food of only $174.

I admit, it is difficult to believe that Americans only spend about $2,200 a year per capita on food when you are following someone pushing two huge carts of food out of Walmart or Costco,,, , but from these figures, it appears that as of 2007 the daily average food cost per person, has now risen to just over $6. Americans have a long way to go before they can be considered poor, compared to other places in the world.

However, the pattern of food spending varies with income:

Food expenditures vary by income level

First number is for Income below 130 percent of the poverty line
The second number is for Income between 130 and 150% of the poverty line

At-home foods
Per person weekly
spending, 2003 dollars

Bread and baked goods 2.22 ---- 2.67
Dairy foods 2.42 ---- 3.03
Fruit 2.06 ---- 2.67
Beef 1.66 ---- 1.98
Frozen prepared foods 0.90 ---- 1.03
Vegetables 1.99 ---- 2.39

Notes: In fiscal year 2003, the poverty line was $18,660 per year for a
family of four with two related children under age 18.
All differences in expenditures between the two income groups are
statistically significant at the 10-percent level.
Source: Analysis by USDA, Economic Research Service, of the Bureau
of Labor Statistics’ 2003 Consumer Expenditure Survey.

A comprehensive study entitled "Household Food Security in the United States, 2002" examines the prevalence of hunger in the United States.


To get an idea of what the U.S. Government considers to be the standard for food costs, you need to understand the USDA's Thrifty Food Plan. To quote:

"The Thrifty Food Plan—developed by USDA—serves as a national standard for a nutritious diet at low cost. It represents a set of “market baskets” of food that people of specific age and gender could consume at home to maintain a healthful diet that meets current dietary standards, taking into account the food consumption patterns of U.S. households. The cost of the meal plan for each age/gender category is calculated based on average national food prices adjusted for inflation. The cost of the market basket for a household is further adjusted by household size to account for economies of scale."

"For example, the weekly Thrifty Food Plan cost for a household composed of a married couple with no children, ages 29 (husband) and 30 (wife), is given by adding the individual Thrifty Food
Plan costs for the husband ($30.50) and wife ($27.50) and adjusting the total upward by 10 percent. The adjusted total ($63.80) represents the cost of the Thrifty Food Plan for this type of household. "

The cost for the Thrifty Food Plan for a family of two adults and two young children is $92.70 per week.

More later.

Why should we have a food storage program? The challenge of food prices

The U.S. Department of Labor's most recent report on the Consumer Price Index shows that food and beverage prices are rising at an annual rate of 9.1 percent based on the three months ending August, 2008. The Special Index for food shows an annualized increase of 9.6 percent.


Another report from the U.S. Department of Agriculture, Economic Research Service predicts that food-at-home prices, led by eggs, dairy, and poultry prices, increased 4.2 per cent in 2007. The same report notes that among 154 forms of fruits and vegetables priced using ACNeilsen Homescan data, more than half were estimated to cost 25 cents or less per serving. Consumers can meet the recommendation of three servings of fruits and four servings of vegetables daily for 64 cents.


"According to the Homescan data, consumers spent $223 billion on food at retail stores in 1999. Expenditures on fruits and vegetables accounted for 7.6 percent and 7.7 percent of this total. Fresh fruits and vegetables accounted for more than half of all expenditures on fruits and vegetables, while canned vegetables and fruit juices accounted for almost one-third of expenditures. In comparison, consumers spent 9 percent on bakery products, 8 percent on red meat, 6 percent on carbonated soft drinks, 4.3 percent on cheese, 3.4 percent on breakfast cereals, and 3.2 percent on candy (table 2). We ranked the 27 fruits and 30 vegetables in our sample according to quantity purchased, expenditures, and total servings purchased, regardless of the form in which they were purchased (fresh, canned, frozen, or juice). Again, totals include only the processed products that are plain, unflavored, and/or unsweetened (to the extent possible). Among the 27 fruits, Americans spent the most money on oranges, bought the most pounds of bananas, and ate the most servings of apples (table 3). These three fruits were the top three in quantity and servings, and among the top four in expenditures (consumers spent more on grapes than apples). For most fruits (except for watermelon and plums), quantity, cost, and servings are closely related. Among the 30 vegetables, potatoes accounted for the largest share of expenditures, pounds purchased, and servings eaten (table 4). Potato totals were more than three times as many pounds purchased, and nearly four times as many servings (but only 15 percent more dollars) as tomatoes, the second most popular vegetable in all three categories."


Figure it out, in the U.S. in 1999, we spent over $7 billion on candy! The same study shows that in 1999 the cost of nutritional food was 64 cents per day when the average American was spending $5.50 per day on food. Fulfilling all of a person's nutritional needs could be accomplished for less than a dollar. Although there has been some inflation since that time, the nutritious food for a family of four would cost far less than $120 per month.

I would suspect that most people would not believe these figures.

More later.

Monday, September 29, 2008

Let's Focus on Food

One of the most insidious problems resulting from the current economic crisis is the possibility that many more families will go hungry. Rather than participate in a polemic on the cause of the crisis, it is important to realize that there are things we can all do to lesson the impact of the crisis on our family. One of the ways, is to have a program of home storage. The Church of Jesus Christ of Latter-day Saints has developed extensive programs and materials that will assist in setting up your own personal or family plan to carry you through hard times.

The Church's First Presidency has stated:

Dear Brothers and Sisters:
Our Heavenly Father created this beautiful earth, with all its abundance,
for our benefit and use. His purpose is to provide for our needs
as we walk in faith and obedience. He has lovingly commanded us to
“prepare every needful thing” (see D&C 109:8) so that, should adversity
come, we may care for ourselves and our neighbors and support bishops
as they care for others.
We encourage Church members worldwide to prepare for adversity
in life by having a basic supply of food and water and some money in
We ask that you be wise as you store food and water and build your
savings. Do not go to extremes; it is not prudent, for example, to go into
debt to establish your food storage all at once. With careful planning, you
can, over time, establish a home storage supply and a financial reserve.
We realize that some of you may not have financial resources or
space for such storage. Some of you may be prohibited by law from
storing large amounts of food. We encourage you to store as much as
circumstances allow.
May the Lord bless you in your home storage efforts.
The First Presidency

The fact is, you don't have to be a member of the Church to enjoy the benefits of home storage. My family has always made food storage a priority. As a result, we have weathered many hard times and have always had food for our family. We have seven children and sometimes our budget barely covered our house payment. Without a food storage program, there would have been many times that our family would have gone hungry. During the next few weeks, I will discuss some of the practical realities of having an adequate food storage plan. Historically, we have talked about a year's supply of basic necessities. Currently, the Church encourages its members to have a three month's supply of food that is part of your normal, daily diet; also to store drinking water. Provident home storage also includes a plan to save a financial reserve and, where permitted, have longer shelf-life storage such as wheat, rice and beans.

One of the first challenges faced by those living in today's world is the loss of skills associated with food production, storage and preparation. Highly prepared foods usually have a very short shelf-life. Some foods, like milk, vegetables and fruits, have a shelf-life limited to a matter of days. Other prepared foods may last longer, such as canned goods and dried foods, like pasta, but they may still deteriorate over time. In any food storage situation it is very important to have a plan. It only makes sense to buy foods when they are in stock and cheaper and then use the foods over a period of time. Because of the loss of basic skills concerning food, most people rely heavily on prepared food. In my work experience, I have seen my co-workers spend considerable time and even more money buying expensive prepared foods each day for lunch. Now for more than forty years, I have been eating a simple lunch of a sandwich and a piece of fruit and occasionally, a cookie. It is truly amazing how much money can be saved from this simple habit.

More later.

Sunday, September 28, 2008

Four Red Flags

Since there are many more scams than these 10 common types we discussed, we have four “red flags” or things that should increase your suspicion and make you aware of a possible scam. These four warning signs are 1. the solicitor fails to give you or is reluctant to disclose all the terms of the “deal”; 2. you hear the words “good deal” or “free”; 3. the salesperson engages in high-pressure tactics and demands immediate action; and 4. the salesperson promises unrealistic high returns or earnings.

#1. The solicitor fails or is reluctant to give you all the terms of the “deal”

Legitimate businesses will always give you more information than you want concerning their products and services. If you find any resistance at all in producing information about the “deal” then you should become concerned. Federal laws require extensive disclosure especially in the areas of securities regulation and land sales. If you receive any pressure at all to commit yourself before receiving complete information you can assume that you are the victim of a scam. For example, if you have ever purchased stock through a legitimate stockbroker or opened a money market account you know that you’re provided with many documents explaining your investment in detail. You should immediately become alarmed if this detailed information is not available.

Sometime ago, my parents, who are in their 70s, were in the process of purchasing a new home to be constructed. When presented with the purchase documents, my father, who had practiced law for nearly 40 years, began to read the documents. He quickly discovered that the seller, the local real estate developer, was requiring, my father, the purchaser, to assume the construction loan. Normally, the developer borrows the funds for construction that are then repaid when the house is completed. In this case, the developer was attempting to transfer the risk of the construction of a home to my father. Further reading of the documents disclosed that the funds provided by my parents would be used to pay off other lots in the subdivision. Obviously, my father objected to using his credit to finance the developer. When my father called this fact to the attention of the real estate salesperson, she said that she “hated working with attorneys, accountants, and doctors because they read all the documents.” Needless to say, my parents did not purchase the house.

One tactic commonly used in lieu of full disclosure, is to present a pile of documents for signature in a high-pressure environment giving the impression that there is not time to read the documents. This amounts to the same thing as if all of the terms of the deal had not been presented in the first place.

#2. You hear the words “good deal” or “free”

It is almost impossible to pick up a newspaper or magazine without finding an ad with the words “good deal” or “free.” Not every free offer is a scam but the word “free” is certainly overused. In fact, nothing is “free.” There is cost associated with every offer and product. Commonly, the cost of the “free” item is covered by the ever present “shipping and handling charges.” Scam artists use free offers to get the attention of their victims. The simple rule is that if you have to pay‑it isn’t free. Sometimes “free prizes” are given away for advertising purposes or are sponsored by a business. In these cases, someone else is paying for the item.

In a scam, the free item is either never produced or has little or no value. Sometimes, the enticement of the free item is simply a ruse to obtain personal information about the victim, such as credit card numbers or bank account numbers. Occasionally, free offers are used to generate sales leads so that high-pressure salesman can close a sale or engage in other scams.

Other commonly-used phrases include:

“You have won a valuable, free prize.”

“You have been selected for this special offer...”

“As a special added bonus you will receive...”

“There are very few of these special items left.”

“You must make up your mind right away.”

“Hurry, this offer can’t last.”

“This is a special low-risk investment with an extremely high return.”

“You can only receive this special offer by calling this number right now.”

“This investment has a higher return than any other available at this time.”

“We know you won’t want to miss this special offer.”

#3. The salesperson engages in high-pressure tactics and demands immediate action

Good deals sell themselves. There is no room for high-pressure sales tactics in legitimate businesses. Scam artists know that if the victims are allowed time to think things over they will see through the scheme and fail to be victimized. If there isn’t time to consult with friends, relatives or professional advisers then you are probably about become a victim.

#4. The salesperson promises unrealistic high returns or earnings

Every investment has a risk and a rate of return. In most scams, the rate of return is zero. Therefore, the risk is infinite. You are absolutely going to lose your money in a scam. There is no chance that you’ll get a return on your investment. If you are unfamiliar with the investment and have no way of judging the risk or potential return, then you should use extreme caution. For example, if the normal rate of return on a certificate of deposit at local bank were 6%, a promised rate of return of 12% would be unrealistic. Even though 12% interest is not remarkably high, speaking in the context of a certificate of deposit, it is unrealistic. Some friends of mine, were convinced to put $50,000 into a 12% certificate of deposit. The only problem was that the bank was non-existent. They lost all their money. The simple rule here is: “the higher the return‑the higher the risk.” In many scams the promised returns are so high that the victims have to leave commonsense behind to believe that they are possible.

Before paying any money to anyone with the promise of a high return, it is extremely important to investigate thoroughly. Make sure all offers are in writing and that you understand everything. Talk the deal over with an attorney or trusted financial adviser. Think through the consequences of losing all your money. Can you really afford to make the investment? Understand that any financial institution making the same investment would require substantial collateral. Collateral is something of real value used to secure the investment or loan. Financial institutions such as banks take collateral in real estate or valuable personal property. In both cases, the financial institution will require an independent appraisal of the collateral property before investing or making loan. It is also normal practice to require the principals of the business to sign personal guarantees. If any of these elements of the normal investment or loan transaction are absent you should be very wary. It is not unusual for the scam victim to think far enough through the transaction to require collateral but fail to require an appraisal. Collateral in worthless property is worthless.