The Alpha Strategy

[patience]

I buy stuff we don't need at the time, but probably will--like an Ace knee brace for my trick knee that acted up yesterday. I gave $2 for it on a clearance sale last year, but they retail for over $10 now. I got it during our weekly shopping, so it was not a special trip. It's called "The Alpha Stategy", after a book by that name, basically buying ahead because you know the Fed is inflating the currency. This is an old book, but is still in print, or at least is available here: http://www.amazon.com/Alpha-Strategy-Ultimate-Financial-Self-Defense/dp/0936906049

Many, if not most people here do something like this already, in the name of prepping. Mostly, it is the same idea, but done primarily because we EXPECT our dollars to be worth less, if not entirely worthless at some point. We have followed this approach for at least the past 30 years, and it has paid off in a big way.

The cost of living is comparatively low here in southern Indiana, so we get along very nicely on our SS, and have a lot of it left over. That extra is now going into productive items. Our SS = $2,028/month - $330/month health insurance (deducted from our bank account) = $1,698/month, or $20,376/year. Any income from our shop business either goes back into the business, or is paid to me in wages, which goes into productive items for us.

We have more income than we need at the moment, but I don't for a minute think it will stay that way. With the Fed pouring massive amounts of funny money into the banks and govt's accounts, we will eventually see the dollar erode to far less value than it has today.

It's more about positioning oneself, than it is about "prepping". Well, yes that IS prepping. What I mean is, arranging your life to not NEED income.
We pay essentially nothing for a lot of things. Like car maintenance, haircuts, and other services that we do ourselves. We pay very little for things like fresh produce, eggs, herbs, fruit, tools that I refurbish or make, clothing that we buy at thrift stores or make, building construction that I do, and local things like grains, sorghum molasses, and firewood. We paid $6 for an evening out at the Senior Center, that included a good local band, dancing, and snacks. We buy books for entertainment and reference at the Goodwill store. We could save half our income if we chose to, but it looks like a better idea to put it into other productive things at the moment. We do have some savings, though not much.

It has taken us a very long time to get into a debt-free position that allows us to do this, but it pays big dividends. Is that "prepping"? I think so. It's just common sense, not a fear reaction to some anticipated calamity, but rather a sensible way of approaching life in an inflating economy. Works for us.

What do you think? Do any of you do things this way? I'm looking for all the ideas I can find about how to deal with living on a fixed income. Maybe I should have said, a declining income.

[momma_to_seven_chi]

We were sooooo poor when we first married and had a boatload of kids that we just learned to live that way. It hasn't been all that long that we could even get a loan somewhere-- maybe 20yrs? The only good parts to being poor early in life is that you learn to live that way-- using swing set pipes for tailpipe, reusing everything in creative ways, making your own laundry soap, finding the least expensive way to do things..... You just learn to live that way, and it's natural to do it even when you don't have to do it that way.

When we bought our home, nobody would lend us $. We had to pay cash for a "fixer-upper" bought out of a bankruptcy sale, so we have never had to deal with a mortgage. We bought cars with cash for years because nobody would have given us a car loan. You just learn to do it that way because it is the way you have always done it.

A dozen years back we needed better carpet for the pantry. For some reason only known by God, I saw some in the dumpster behind the furniture store when my pastor's wife was in the van with me. Of course, I stopped and picked it out of the dumpster. (free is good) It was just natural for me to do that. We ALWAYS did those types of things. It turns out it greatly offended her. I hadn't realized how she would feel. She came over to my home the next day and gave me a lecture on "God didn't want me having garbage......" We don't go to that church any more. But I still have that maroon carpet in the pantry and the small bathroom. It taught me that 1. Faith churches don't do cheap well 2. Not everyone thinks like me.

I guess it's only the last five years or so that I realized not everyone is comfortable with a goat knocking at their backdoor or a hen eating dogfood off the porch.

[firegirl969]

Patience,

Great post! Funny you posted this and DH and I are doing the exact things now. I got approval from SS Disability on Friday from my claim 19 months back. DH and I have both been paying in SS for over 30 years, so we are glad to get a return on our investment even though we know that it probably won't last throughout our lives. We intend to take the back pay they owe us and put in our solar we have been working towards for limited electrical capabilities even in the coming economic downturn. We intend to add a propane fridge and tankless hot water heater and possible solar hot water due to the tax incentives and the GA rebates being offered now. We do plan to stay on grid for as long as we can afford it, but will switch over to 12 volt charging of the computer, some lights, charging batteries and tools, and 12 volt TV and DVD capabilities. We also are going to finish the root cellar, add a well house to the old well with a handpump, and add a couple of heifers to the pastures to raise our beef and sell a couple to help pay taxes or to barter other services with. My dad gave us a fuel tank before he died. It has a small pinhole leak, so DH is going to find that and fix it so that we can add the hand pump we bought with our tax return and we will begin filling it up so that we can have 500 gallons of gas for emergency needs and for the tiller and tractor. We also got an extra 220 gallon propane tank when we bought our gas stove, so we are going to hook that up to the existing 110 gallon tank setup and fill it up so that we can top off these tanks once a year, in the summer when rates are lower, and have propane backup. The things we have listed will not only provide us a much greater degree of self-sufficiency, but will also save money on our monthly bills so that we can pay all of our monthly utilities out of 1/2 of my social security check, amd we will be able to save all of DH's checks for future needs. Can you think of anything that I may need to consider adding since now is the time? We plan to add to our small emergency fund, but as you mentioned, we think that the money will be a much better investment in providing for our self-sufficiency than in being buried in the woods. LOL

[patience]

firegirl969,

You listed a lot of good ideas. I don't know enough about your situation to be really specific, but here goes.

Food, water, energy, and shelter come first. How about paying property taxes? Soil tillage? Seeds and fertilizer? Home heating--firewood? source of wood?

Look down your own list of monthly expenditures. Not just the bills that come in the mail, but what you actually spend money on, like eating out, medicine, clothing, oil changes, entertainment, travel (whether for business or pleasure), repairs of ALL sorts, insurance, new shoes, U-name-it. What could you do about any of those?

Wife and I (takes both of us) cut my hair. I have a $10 Chinese hair clipper, a comb, mirror, and scissors. Haven't bought a haircut in 20 years. It was about $7.50 back then, say $12 now at a cheap place, say every 2 weeks, so that is an average of $10 x 25 haircuts/year x 20 years = $5,000 savings. I'm on my second set of cheap clippers, so I'm still over $4950 ahead on the deal, and I have NEVER had to make a trip to town or wait in line for a haircut. During the time I saved that way, I could have built a house from scratch!!!

It's those insidious little things that get you. Expenses for smoking, chewing gum, decorative coffee mugs, and greeting cards, it all adds up at the end of a year. We quit sending Christmas cards (saves a lot of postage, too) and find coffe mugs at the Goodwill for 50 cents each. (I break a lot of them in the shop.)

But MOSTLY, my post was about spending NOW to save LATER. Things like stocking up when toilet paper is on sale--you will use it someday, and it doesn't spoil. Building materials for specified projects (don't try to get every little thing, but the big items when they are cheap) caught as surplus, salvage, whatever, can save a bundle. My wife does Christmas shopping all year long for our kids. And they get stuff like a wringer washing machine, solar panels, and horse harness!

I just bought a case of canning lids online for $103 and change, delivered. That is 60 dozen = $1.72/dozen, IIRC. They were over 2 bucks here last year, and I'm betting that they go to $2.50 this year. That case will last us for maybe 3 years or maybe 4. By that time, what will they cost retail? Maybe 4 bucks? If the average retail cost over the next 3 years is $3, then I saved $1.28 x 60 = $76.80 on the deal. And I won't have to make a flying trip to get some when the season is here.

Our chickens are a good example of this long term investment thing I'm suggesting here. We use about 18 eggs/week and our daughter uses a couple dozen. Our feed cost for raising a dozen eggs is about 54 cents. the store wants $1.29 for large eggs right now, and they ain't fresh, either. At those rates, our investment in hens and their facility is paying us about 74 cents/dz x 2 1/2 dz/week x 52 weeks/year = $96/year. And that is on 6 hens! It doesn't take long to pay off a couple hundred bucks for the henhouse, particlularly if you raise enough to put some fryers on the table, too.

Got milk? That is a confining project, since milking animals is an every day job, but it can pay well. Less confining and better paying are fruit trees, berry bushes, and the like. Something is up with strawberries in Florida, I read. Time to put some plants in the ground.

Plan to get any pigs? Might be on the lookout for a lard kettle--not necessarily the old cast iron jobs, but something to fry out lard. Watch for feeders, watering equipment and such at auctions if you plan to get stock that will need them. Pitchforks, scoop shovels, and similiar things often go cheap at auctions, too.

We buy garden seed in bulk size packages, enough for 2 to 3 years at a time, and save a bundle. Although germination will drop some, it will still grow if stored well. I like Mountain Valley Seed Co.: http://www.mvseeds.com/ (http://www.mvseeds.com/)
Cheapest place I 've found and they have a lot of open pollinated varieties, give great service, too.

[SPIKE]

I like the way you think!

SPIKE

[Pokeberry Mary]

I was like Mom of seven--we started out very poor and had lots of kids right away. We learned to live poor. Frankly I think that's the best way to start-- marry young--which biologically is the best time for a woman to have kids anyhow--grow together and learn together and especially learn to stretch what you have.

I posted on my blog about this very topic yesterday--but I like to have streams of income--I also like to get deals and think ahead when I buy things. Get enough for later when its going to be more--and I am not ashamed of picking up stuff on the curb--although I do get some teasing from my kids because we did figure out why grampa's near new Lane recliner was on the stoop one day... LOL--well let's just say it needed some extra good cleaning. ;-)

After that it smelled fine and was very comfy for a tired Mom.

I love landscaping--that's one of the fun things I've been working on since we got our place last year. I had already been nursing some shrubs and perennials along before we bought this place, had gardens in my rented houses. (with permission)

I buy clearance priced plants at Lowes for super cheap--staple the receipts to the plant tag, make a duplicate tag to put out for perennials, shrubs and trees--then if it doesn't make it I can take it back for a full refund within the next year. I have 3 to return this year. Everything else did fine.

I also took advantage of paint rebate sales to paint our house inside and out--and my son's room was actually painted free cuz I got a couple gallons of $5 mis tinted paint that matches his bedding--and there was a $5 rebate on each can. :)

I have a frugal little friend and we get together now and then, split lunch, and go to country plant sales or rummage sales or salvage yards, auctions, anything like that. We LOVE it! She and I plan to do some sleep overs this spring so we can hit those early morning rummage sales for baby stuff for my future grandbaby.

My kids are always shocked if we actually run out of something like soap or shampoo cuz those are 'buy aheads' usually. I used to get them very cheap with coupons. Lately I'm too busy to fuss with those so much but I still know good deals and that's when I buy--not when I need, but when its cheap.

I generally make gifts, I'm doing my daughter's wedding from scratch, in a pretty park decorated mainly with plants and vines from our yard. Stretch it while you got it and get ready for the days when you won't.

Always look for a good deal and do good trading!

I'm going to start selling my extra plants after I get my place done the way I want. I like to buy them from folks who do that and I love to trade.

We once got the best German Shepherd dog our family ever owned--already trained-- for $50 and a used kitty carrier. Swap Ahoy!:heart_blue1:

[iowasue]

I posted on my blog about this very topic yesterday--but I like to have streams of income--I also like to get deals and think ahead when I buy things. :


And your blog is??

IowaSue
http://iowasue.blogspot.com/

[Pokeberry Mary]

I'm never sure if you are supposed to post your blog/website info on here or not--but it is in my profile so I guess it must be OK.

http://pokeberrykitchen.blogspot.com

Since we moved I renamed it Pokeberry Hill but the URL is the same as it was before.
:) Stop by if you like!:)

[Pokeberry Mary]

And your blog is??

IowaSue
http://iowasue.blogspot.com/

I love your pictures and graphics! Very nice!:)

[GoodDaughter]

I've been buying ahead for most of my life due to being poor, like many others have mentioned in this thread. It was just the best way to stretch what money we had. We learned that if something was a very good deal to go ahead and spend a little extra money to get a quantity of it at the reduced price, even if it meant going without something else for a couple of weeks in order to compensate financially.

But here is my main (and growing) concern in all these discussions about the economy collapsing, hyperinflation making the dollar worthless, and general SHTF and most of us being out of work and no way to make money because no one else will have money to spend.... taxes. Property taxes, federal and/or state income taxes.

So even if you aren't employed or have no financial income, you may be able to get by raising your own food--meat, vegetables, etc. But at some point you're going to *have* to pay your local government property taxes. How you gonna do that with no money coming in? And I have no illusions that the local government is going to give a rat's backside that you're broke. They need their revenue and will get it by any and all means possible, even if that means seizing your land and selling it on the courthouse steps for back taxes. If that happened, where are you going to live to raise your own meat and vegetables? Think about it... where is that money going to come from if the economy totally collapses?

Federal/state income taxes...same deal. Is Obama et al. really going to care if you have literally no money to pay them with? No, they won't. They just need their revenue too and will likewise get it at any cost. Else why are the number of federal employees and agencies mushrooming right now? To *enforce* new laws and regulations, which equal $$$.

This is my main concern lately. If the economy gets as bad as some think and some are predicting (i.e. total economic collapse, tens of millions more out of work) what are we going to do about paying property taxes? When you get down to it, if you can't stay on your land, nothing much else is going to matter.

[Junie]

Seems like we've been doing this all our married lives. We don't even realize we're doing anything special anymore until someone says something about it. Hubby won't be old enough to retire for at least 4 more years, but I've been preparing for his retirement. We are out of debt and intend to stay that way. We try to get anything we can for free or on the cheap, by shopping secondhand stores, clearance stores, flea markets, and yard sales. I'm always on the lookout for anything we might need and is in good condition (and will keep, of course). We have replacements for just about anything that might break down, including extra elements for the stove, oven, dryer, and water heater. I bought a bunch when we bought the appliances and got them cheaper than they are now. Not only are we saving on the part, but on the repair, too, since we do it ourselves.

I also buy secondhand books and print online articles about how to do all sorts of things. They come in handy now and, if things go south, we have whatever information we might need.

BTW, if anyone is interested in the book, "The Alpha Strategy", you can download it free here~

http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf

[patience]

Junie,
Thanks for posting the link!

GoodDaughter,
Taxes are a real concern for everyone. Legallized theft, IMHO, and they have armies to back them up. :(

Our effort to deal with that was to buy some pre-1965 silver coins, to hedge against inflation wiping out our savings. It was the only way I could think of to keep something liquid on hand that wouldn't inflate away.

My 88 year old neighbor says that during the last Depression, people figured if they could assure they had enough to eat, and enough money to pay the taxes so they didn't lose their place, they could make it. Looks like those days are here again. He said that as a kid, he worked all summer on the farm next to me (digging post holes, clearing fencerows, cutting firewood, pitching hay) for room and board, and school clothes in the Fall--a couple pairs of new overalls, and a pair of cheap shoes. Later, he got a job in a factory, but got drafted and ended up on the beach in Normandy, then in the Battle of the Bulge. I wonder how some of the current crop of kids would stack up in those situations?

I would LOVE to really retire, but my GM pension is toast, so Social Security is all we have, beyond what I earn in my repair shop. I'm afraid we will need what I can make there, or I'd close the door tomorrow. That is the last defense we have for facing the worst, and I can't see giving it up. At least I can adjust my prices for work to suit what is available, and keep something coming in as long as I am able.

[Junie]

My biggest fear is that they'll raise our taxes so much that we can't pay them. Right now, they're just $11 a month (we pay by the year, so we could earn that much in one growing season, by selling vegetables, fruit, and eggs)

It helps to position yourself to be able to live on a single, minimum wage job. That's what we've done. We've added extras, like internet and satellite tv, but without a contract, so we could cut back to that level whenever we want.

[NCLee]

This is a good thread. Thanks for starting it Patience.

The two main things I worry about for the future are property taxes and medical expenses, especially prescriptions.

I hope we have enough set aside to keep those taxes paid. Although I realize that any number of things can make that plan go astray. The other must have are medications. Worry there is on two fronts - inflation in prices that'll consume what we have set aside for taxes. And availability if the world goes to heck in a handbasket.

While I mainly piddle around in my shop, these days, I hope that if the need arises, I can produce some revenue or barter situations from it. For example, I have a good scroll saw, and plenty of blades stockpiled. Plus, several hundred patterns. I latch on to every pattern I see for utilitarian items, as opposed to craft items. I never throw away a scrap of wood, from larger projects, if it has the potential for use with that scroll saw.

Gradually increasing my stash of non-wood materials that can be cut on that saw. Old CDs and DVDs are an example.

I currently barter restoring castiron cookware and other cast iron objects. Laying in a goodly amount of supplies for both lye bath and electrolysis methods.

Here in the forum, I often talk about alternative cooking methods. There's an underlying reason for it. If things get bad enough, there'll be a market for beer can stoves, rocket stoves, and such. There should also be a market for teaching others how to cook in dutch ovens without commercial charcoal. How to render lard and make soap. Even how to make lye for that soap. Remember, if it's that bad, the internet probably won't be available and/or accessable.

Continually look for things/ways to convert common things into functional products. Grapevine, pine needles, and kutzu for baskets. Gave homemade broomstraw brooms to other family members for Christmas a couple of years ago. Wild plums, kudzu, and mullberries can be turned into good jelly. It's good to know where these grow that are off the beaten path. And, that huge wild strawberry patch that's few know about.

Another one on the list is raising crickets and worms for fishing. Both are easy to do and can supply a small revenue stream (or barter potential) if people have to fish to get food to eat.

There are a lot of uses for that big patch of reeds that are trying to take over one corner of our back 40. Just think miniature bamboo, to get an idea of the potential.

I'd better close. Just my 2-cents on some of my thoughts this morning on this topic, for whatever they're worth.

Lee

[leera]

A more modern term to "buying ahead" is stockpiling...which is what I've been doing for years.....Buy what you know you'll need and use when its at the cheapest possible price.....it saves you money in the long run as long as you USE what you've pruchased and stockpiled.....having more or extra does no good if it ends up sitting unused.

While we were planning to purchase our house,we stocked up on things we knew we'd need,a lawn mower,gardening things,plant starting stuff,we were gifted a riding lawn mower and a garden tiller from my Dad,I got a free 6x6 trailer last year,that I am going to fix and sell,and use the money from it to buy the small garden trailer that I need....I also need a large capacity sprayer for my trees,but haven't found the right deal on one yet...