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.