I find it sad

I read more and more stories in the news about older people losing their jobs. Now, that may be a sad state of affairs, but not as sad as the aftermath. So many of these people are quoted as not knowing what to do with their time. The loss of human productivity through lack of alternatives is appalling. It doesn't seem to occur to these people to volunteer at a local charity, or library, or homeless shelter, or volunteer at the local school.

What about learning? There are always hundreds of free classes, on-line, off-line or from schools, community colleges or universities. What about learning a new trade, a new language, a new way of life? What about starting a new business? Or just getting out and exercising and enjoying nature?

There are the exceptions. One man in our neighborhood, upon losing his job, has turned his whole back yard into a productive garden, growing fruit and vegetables to feed his family. Personally, if I were to lose my job (not likely, by the way unless through illness or senility) I have so many projects in place, lined up, that it would be years before I ever had a day off.

The tragedy of life isn't in the things we lose, but in what we do or do not do with what is left.

Some thoughts on the financial crisis

A recent article in USA Today highlighted the anxiety and need for second jobs of those impacted by the recent economic woes. Using the example of a bank manager whose wife was laid off by Anheuser-Busch. "There's definitely anxiety," says the husband, whose employer is cutting his salary by 5% this year. Now, if you have read any of my past posts, you can probably guess what is coming: (names omitted)

The family's income dropped from about $93,000 to $47,000 a year. After paying their $1,700 mortgage and some of their roughly $50,000 in credit card debt each month, the husband says, there's barely $200 left.

So they tap their savings, and weigh every expenditure — from an ice cream cone to a haircut.

"Sometimes you can't afford to get food," he says. "We just scrape whatever's in (the pantry)."

The wife remains unemployed, but is searching for a job.

In February, the husband tried to get food stamps and make payment arrangements with his credit card companies. But he was turned down for both — because he earned too much money to qualify for food aid, and he already had the lowest interest rates offered on his cards.

What is wrong with this picture? $50,000 in credit card debt on the previous income of $93,000 a year!!! Not only that, on an income of $47,000 a year he tries to get food stamps. Why aren't I sympathetic to this scenario? What happened to thrift, provident living and food storage? And we expect the U.S. Government to bail out these people?

The article also mentions a 39-year-old lawyer, who has three children and is concerned about her family's financial security. She fears her husband's job could be cut. What happened to savings and paying off debt? Why not use some of that $93,000 to pay off all those credit cards and the house too?

Now, someone is going to say, they probably got all that debt from medical bills. Not likely, with a job at Anheuser-Busch and medical coverage.

It is really time not just to think about the basics of provident living, but to do something about it. Get out of debt. Build up your food storage to have a three month's supply of food and other necessities, put off purchasing anything that you cannot afford. Live frugally and survive. What is more prosper in hard times.

5 ways to significant savings

Here are some simple and reasonable suggestions for saving money. They do not take any major changes in the way you live or spend, but they are methods of savings that will, in some cases, dramatically affect the way you view your expenditures. Recent news reports indicate that Americans are saving more for the first time in years. If you aren't one of those whose savings have increased, maybe you could try some or all of the following:

1. Pay off existing debt and avoid interest payments.

One of the first ways to save significant amounts of money is to stop using credit and start moving towards paying off high interest loans. Begin by identifying the actual rate of interest you are paying on any credit balances. You are in real danger if you are paying only the minimum due on credit cards or other revolving credit obligations. Start by paying more than the minimum on the debt with the highest interest. Even a small payment in excess of the accumulated interest will start to have an effect. When one obligation is paid, take the money that went to that payment and apply it, plus the regular payment, on the next higher interest rate obligation. Although this method starts slowly, as payments accumulate, the debts will get paid faster and faster.

Once you have paid off high interest obligations. Do not use those credit cards again. Cut them up.

2. Substitute lower priced store bought items.

Many times brand name merchandise is no better quality or usefulness than the generics. But beware of generics that actually cost more than the name brand! Use the cost comparison labels in the supermarkets and try not to purchase items on a whim or spur of the moment. Plan all your purchases.

3. Plan shopping and activities to conserve fuel.

It is amazing how much time and money you can spend on short shopping or activity trips. Many the children don't need five extra curricular classes a week. Maybe, by making lists and keeping track of purchases, you can go to the store only once a week, rather than daily. Use your networking skills to carpool, even though gas prices have come down from historically high levels, there is still room to make significant savings through driving less.

4. Lower your thermostat.

High fuel costs do not just affect driving costs. Home heating and cooling costs can be one of the most significant expenses for a family. Lowering your thermostat in winter and raising it in the summer can have a dramatic impact on the cost of heating and cooling. Wear a sweater, rather than heat the house. Use the outside temperature to your advantage by opening and closing windows. Spend a little time analyzing your window coverings and shade possibilities. Spend more time outside.

5. Take advantage of sales.

The Internet has given all of us the ability to shop for values on items we need. But it has also made a available the ability to purchase items we would never have purchased. Be aware of the actual cost of items. I have seen items marked for sale, some of which were really higher priced than the "regular" cost. It may be necessary to monitor the price of an item over a period of time to see if a "sale" is nothing more than the usual seasonal variation in prices.

The amount that can be saved by being aware of your spending habits and taking charge of your spending can be significant.

Poverty -- a perspective

Once while traveling home from my mission for The Church of Jesus Christ of Latter-day Saints, I visited Lima, Peru. Lima is a unique city. The coastal desert of Peru is very dry, it makes the Sonoran Desert look like a jungle. Even though I had lived in Argentina for two years, nothing had prepared me for the poverty of Lima. I was by myself and walked or rode the buses around the city. It took me a while to realize that the cars that were stopping at the bus stops, were actually "buses." The private owners had a route and when they stopped, you just climbed in.

I soon discovered that in Peru, the rich people lived in the center of the city and the poorer people lived on the hills in the "suburbs." I climbed the hills and soon became very concerned for my well being. The pens were full of pigs and chickens and the smell was overpowering. I felt very rich and very vulnerable. I took the picture above and hurriedly left.



Years later, I was living in Panama. I worked in the Church in downtown Panama City, while I was serving in the U.S. Army. I took the above picture from a hill overlooking the city. Now, Panama is much more modern and the downtown is all high rise hotels and offices, but back then the areas with the metal roofs were crowded with the poorest people imaginable. The average occupancy of the downtown area, in some places was 50 people per room. In my work in the Church, I would often go into these poorer areas. By this time in my life I had no fear. I walked through the crowds and the garbage and refuse and felt right at home. I loved the people and I loved the City.

One day we were looking at old pictures from my missionary experience. When I came to the picture at the beginning of this post, I could not remember where this place was. I had not remembered going into a nice prosperous looking suburb, especially one with hills. It took me a long time to realize that this was the "poor" neighborhood in Lima.

I have now seen real poverty. I know what it is like to live without sufficient food or clean drinking water. I know what it is like to have a whole family, mother, father, six or seven children, some married and grandchildren, 23 people living in a one bedroom apartment with one bathroom.

I do not feel that I am any better than any of these people. They are all children of a loving Heavenly Father. But one thing I can say, if you haven't lived with these people you don't know poverty. Losing a few dollars (or even a lot) in the fall of the stock market is no preparation for real poverty. Get a perspective on life and appreciate the great abundance and blessings of our lives. One thing I did learn, we can certainly live happy and well without much more than a tin roof and some rice and beans.

Netbooks, the challenge to never stop learning

There are thousands of well paying jobs today that did not even exist ten years ago. Changes in technology are accelerating despite the economic crisis. Right now, for example, a whole new type of computer is being sold, the netbook. This category of computer is so new, you may not have seen one or you may have seen one and not noticed. Recently, Costco featured a display of netbook computers by HP for under $500. The first true netbook is considered to be the ASUS Eee PC introduced in 2007. As reviewed in Wikipedia, it was noted for its combination of a light weight, Linux operating system, solid-state drive and relatively low cost. Newer models have added the option of Windows XP operating system and traditional hard disk drives. Following the EeePC, Everex launched its CloudBook, MSI released the Wind, Dell and HP both released a "Mini" series (the Inspiron Mini and HP Mini), and others soon followed suit. Windows XP based models were also introduced.

A quick check of the prices shows that these mini-computers begin around $250 new.

It is even rumored that Apple may develop a model, perhaps a hyped up iPhone with a keyboard.

One measure of preparation is the ability to react quickly to changing circumstances. As these new products begin to sell in the millions of units, various secondary markets, programs, accessories and add-ons will likely become available. These new inexpensive computers are not a passing fad, they will fundamentally change the way computers are sold and marketed again, and probably yet again when the market is redefined. Meanwhile, those who ignore reality and fail to prepare through additional learning, as the old saying goes, prepare to fail.

At a recent software company presentation, I was disappointed at the antagonism the computer users had to change. Not only were they unhappy that they might have to learn a new program, they were positively angry at the prospect of something new. Too bad for them. In this changing world economy, change and preparation and learning are the keys to survival.

When all around are losing theirs...

It is hard to read the news without encountering a comparison of the recent economic downturn and the Great Depression. I didn't live through the 1930s, but my parents and grandparents did. There is not one of the comparisons about the present economy that bears even the slightest shadow of resemblance to the Great Depression. I have written about this topic before, but it bears repeating.

In the 1930s the life expectancy of the average male was 58.1 years and female was 61.6. Today, the average life expectancy is around 75.2 years for males and 80.4 years for females. The average salary in the 1930s was around $1,368 dollars a year. In 2009 dollars that salary is about $17,296 a year. In 2007, the median annual household income was $50,233. In the 1930s on an annual income of roughly $1000, most families had between $20 and $30 a week for food, clothing and shelter. That same $20 in 1930 translates to about $250 a week in 2009.

Before we start wringing our hands about the economy, think about all the things you couldn't buy in 1930; computers, CDs, DVDs, cell phones, home air conditioning, household refrigerators, digital cameras, the Internet and on and on an on.

I need only mention segregation, lack of education, the fact that a huge percentage of the U.S. population lived on farms and any of a hundred or thousand other changes in our society, to show that there is no way that conditions are even faintly comparable to today to the 1930s.

Will the economic downturn have an effect on our lives and our society? Yes, of course, but lets not get carried away thinking we are in any way comparable to the suffering and deplorable conditions that existed in the 1930s.

The hidden costs of credit cards and debit cards

Visa announced a new ad campaign. In previous campaigns Visa showed people making major purchases for vacations and other large ticket items using their credit card. The new campaign is an attempt to overcome the effects of the major downturn in the economy. The company explains the goal of the ads to deliver "a single marketing message that is consistent with the company's core strategy of migrating cash and check spending to Visa. The campaign is not about spending more, it is about using Visa for more of your spending."

Previously Visa was concerned that people were not using their credit card and were migrating to using debit cards. However, even though the user does not pay a fee for the use of their Visa Debit Card, the merchant who sells to the user does pay a fee. That fee is passed on to the consumer in the form of higher prices for goods and services sold with the "convenience" of a debit or credit card. This hidden cost is compounded even more if the user is charged a fee for the use of the debit card, as is done in many gas stations across the country.

Another hidden cost of using your credit or debit card is the cost of the world wide advertising campaign. See videos of campaign. Notice the absence of such values as thrift, industry, savings, self control and provident living. We are in the middle of a severe economic downturn and Visa is advertising ice climbing, surfing, travel and a lot of people doing things that have nothing to do with everyday living, especially those people shown flying in a private plane.

Credit and debit cards are not free. You pay extra for every purchase.