Comments on: Ain't It Funny How the Money Makes the Honey Taste Like Nothing? Financial Planning for Tough Times http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/ Finding the keys to the future…and trying not to lose them in the mess. Thu, 09 Feb 2012 18:26:03 -0700 hourly 1 http://wordpress.org/?v=3.0.1 By: Teresa Fetterhoff http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-30482 Teresa Fetterhoff Sat, 20 Nov 2010 05:29:16 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-30482 Only another half the post is showing, strange, is this my on-line browser or the internet site? Only another half the post is showing, strange, is this my on-line browser or the internet site?

]]> By: Natalia Sackos http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-25896 Natalia Sackos Sat, 21 Aug 2010 14:47:27 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-25896 Proper thanks are due for this awesome article. I've read id for a couple months now and they're always very informative. Thanks! Proper thanks are due for this awesome article. I’ve read id for a couple months now and they’re always very informative. Thanks!

]]> By: Anonymous http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8219 Anonymous Sun, 31 Aug 2008 05:50:38 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8219 My situation is a little bit different than the others who have posted so far. I'm 25, just finished graduate school about a year ago, and am married with no kids. My husband and I have seen our income go up since I graduated, and have been saving a good portion of that extra income in the past few months -- though with little direction. We both have student loan debt, having taken the loans out with the belief that we would have many years of the business-as-usual economy to pay them back. Of course, I came to the conclusion earlier this year that this was unlikely to be the case. After moving through some anxiety and anger, I've been trying to sort through the best course of action for the money we have saved up so far (which, at about $20,000, is far from a huge sum; I knowingly signed up for a rather low paying field and we paid for part of our wedding last year, though it was modest). Although I know what I would do financially if I expected forty more years of the same for the economy, it is of course much more difficult to sort through planning financially with so many uncertainties. At my age, the things I think I should be doing with extra money assuming business-as-usual seem too risky to me (putting money into a Roth IRA, for example). As far as getting out of debt, the extra savings we have so far would cover less than half of our combined student loan debt. We also have a car loan, but no credit card debt. Our small savings are obviously not enough to buy a house outright (we rent currently), though it would be enough for a down payment on a house in our area. However, my husband and I have no interest in more debt, and we live in an urban area that we plan to leave within the next year or two (and would certainly leave in a heartbeat were things to get really bad sooner). So I cannot really implement major household preparedness changes or strategies, beyond minor, short-term efficiencies for our apartment. I also feel as if I live in a twilight zone of sorts, torn between the prevailing world view, with all of its associated common 'wisdom,' and making hard decisions based on peak oil, which has so many uncertainties. For now I figure that having money in the bank at least gives us some options. And we plan to at least pay extra every month on student loans and our car loan, though it would still take us years and years, assuming we are able to maintain the payments... I am thankful for your post on this topic, Sharon. - Jenn in Ohio My situation is a little bit different than the others who have posted so far. I’m 25, just finished graduate school about a year ago, and am married with no kids. My husband and I have seen our income go up since I graduated, and have been saving a good portion of that extra income in the past few months — though with little direction. We both have student loan debt, having taken the loans out with the belief that we would have many years of the business-as-usual economy to pay them back. Of course, I came to the conclusion earlier this year that this was unlikely to be the case. After moving through some anxiety and anger, I’ve been trying to sort through the best course of action for the money we have saved up so far (which, at about $20,000, is far from a huge sum; I knowingly signed up for a rather low paying field and we paid for part of our wedding last year, though it was modest).

Although I know what I would do financially if I expected forty more years of the same for the economy, it is of course much more difficult to sort through planning financially with so many uncertainties. At my age, the things I think I should be doing with extra money assuming business-as-usual seem too risky to me (putting money into a Roth IRA, for example). As far as getting out of debt, the extra savings we have so far would cover less than half of our combined student loan debt. We also have a car loan, but no credit card debt. Our small savings are obviously not enough to buy a house outright (we rent currently), though it would be enough for a down payment on a house in our area. However, my husband and I have no interest in more debt, and we live in an urban area that we plan to leave within the next year or two (and would certainly leave in a heartbeat were things to get really bad sooner). So I cannot really implement major household preparedness changes or strategies, beyond minor, short-term efficiencies for our apartment. I also feel as if I live in a twilight zone of sorts, torn between the prevailing world view, with all of its associated common ‘wisdom,’ and making hard decisions based on peak oil, which has so many uncertainties. For now I figure that having money in the bank at least gives us some options. And we plan to at least pay extra every month on student loans and our car loan, though it would still take us years and years, assuming we are able to maintain the payments…

I am thankful for your post on this topic, Sharon.

- Jenn in Ohio

]]> By: Cindy Mathieu http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8218 Cindy Mathieu Sat, 30 Aug 2008 17:05:23 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8218 Sharon, I admire the breadth of your knowledge on many subjects and the productivity of your life. However, I must disagree with you on the current dollar price of gold. Gold is money. Aristotle concluded that gold is the perfect money in the 5th century for 5 reasons which are still true: Durability, Convenience/Portability, Divisibility, Demand, Consistency. The US dollar is a fiat currency. Inflation is not actually rising wages and prices. Rising prices and wages are symptoms of too much currency (or credit, in our present case) in circulation. Inflation began in earnest when Nixon took the US off the gold standard in August of 1973. So, when the government is planning to create so many more dollars in order to cover its obligations (Social security, national health care, more guns, etc.), you can count on inflation to continue and intensify. What is the typical hedge against inflation?…gold. Instead of gold being overvalued in terms of dollars, its price is actually being suppressed by the “8 or less” traders on the COMEX. These traders (bullion banks) suppress the price by shorting the precious metals and never having to cover their shorts. Ordinary people would not be able to do this, legally, but these entities are allowed to do it. There is an organization called GATA which has mounted some legal action to stop this, but the courts grind slowly in these cases. Physical silver is actually in short supply because its price is being suppressed so badly. Cindy in Spring, Texas Sharon,

I admire the breadth of your knowledge on many subjects and the productivity of your life.

However, I must disagree with you on the current dollar price of gold.

Gold is money. Aristotle concluded that gold is the perfect money in the 5th century for 5 reasons which are still true: Durability, Convenience/Portability, Divisibility, Demand, Consistency.

The US dollar is a fiat currency. Inflation is not actually rising wages and prices. Rising prices and wages are symptoms of too much currency (or credit, in our present case) in circulation. Inflation began in earnest when Nixon took the US off the gold standard in August of 1973.

So, when the government is planning to create so many more dollars in order to cover its obligations (Social security, national health care, more guns, etc.), you can count on inflation to continue and intensify.

What is the typical hedge against inflation?…gold.

Instead of gold being overvalued in terms of dollars, its price is actually being suppressed by the “8 or less” traders on the COMEX. These traders (bullion banks) suppress the price by shorting the precious metals and never having to cover their shorts. Ordinary people would not be able to do this, legally, but these entities are allowed to do it. There is an organization called GATA which has mounted some legal action to stop this, but the courts grind slowly in these cases.

Physical silver is actually in short supply because its price is being suppressed so badly.

Cindy in Spring, Texas

]]> By: wasteweardaily http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8217 wasteweardaily Sat, 30 Aug 2008 01:55:28 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8217 I have been struggling with the idea of spending money on the house, getting a new metal roof and rain water catchment system and some more new windows and doors OR selling the house and moving up north near my friends and buying land with a house. I go back and forth between staying with what I know and thinking it will be better somewhere else. Will you be teaching the AIP class again? I think I will take it if you do. Cindy in FL I have been struggling with the idea of spending money on the house, getting a new metal roof and rain water catchment system and some more new windows and doors OR selling the house and moving up north near my friends and buying land with a house. I go back and forth between staying with what I know and thinking it will be better somewhere else.

Will you be teaching the AIP class again? I think I will take it if you do.

Cindy in FL

]]> By: Ani http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8216 Ani Fri, 29 Aug 2008 21:28:38 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8216 Good points I think. In terms of college, I really do agree that if one decides to go to college that spending time at a community college is a great idea. I have taught at both community and private colleges and can vouch for the fact that the course content and standards were equal at a vastly lower cost at the community college. I would second the motion that not having a degree can hinder job prospects in the current economy,unless of course one is looking for work in fields where one is not needed. But it does seem that getting one as cheaply as possible is the best solution. I myself am currently very frustrated as I tried to get some grant funding to take some courses to assist me in starting a new career; although my income is very low and I should qualify, as I own a home(farm) and have no mortgage on it (it's an owner/friends built home, still incomplete), I'm considered to have assets to borrow against. Thus the state education funding folks think I should borrow money against my paid off home, using it as an ATM machine basically; and if I couldn't pay it back, would lose my home. Insane.......... I know- I'm lucky to not have a mortage, but not everyone is willing to start out with an outhouse and no running water, etc and take it from there..... Of course if I had used my home to fund trips to Europe and cars and clothes and dinners out, I'd be in deep debt, have no or minimal equity in my home and they'd happily send me the money to take the classes..... doesn't seem right to me..... Good points I think.
In terms of college, I really do agree that if one decides to go to college that spending time at a community college is a great idea. I have taught at both community and private colleges and can vouch for the fact that the course content and standards were equal at a vastly lower cost at the community college. I would second the motion that not having a degree can hinder job prospects in the current economy,unless of course one is looking for work in fields where one is not needed. But it does seem that getting one as cheaply as possible is the best solution.

I myself am currently very frustrated as I tried to get some grant funding to take some courses to assist me in starting a new career; although my income is very low and I should qualify, as I own a home(farm) and have no mortgage on it (it’s an owner/friends built home, still incomplete), I’m considered to have assets to borrow against. Thus the state education funding folks think I should borrow money against my paid off home, using it as an ATM machine basically; and if I couldn’t pay it back, would lose my home. Insane………. I know- I’m lucky to not have a mortage, but not everyone is willing to start out with an outhouse and no running water, etc and take it from there….. Of course if I had used my home to fund trips to Europe and cars and clothes and dinners out, I’d be in deep debt, have no or minimal equity in my home and they’d happily send me the money to take the classes….. doesn’t seem right to me…..

]]> By: Susan http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8215 Susan Fri, 29 Aug 2008 19:23:32 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8215 • Especially liked three points made here: 1.)"Money as a means to an end, not an end in itself." Words of wisdom! One starts thinking about those ends or purposes and working towards them. 2.) Creative means to educate young people without burdens of debt or big wastes of money (such as if the courses paid for do not lead to real-world useable knowledge and skills.) 3.)The courageous look at simply (but with careful planning) dumping debt and taking the consequences. It surprises me that this is not often talked of, since, I agree, it will end up being the most usual recourse. It seems tragic for hard-working people to give priority to the "tapeworm cartel" hoping for benefits from the faltering system, while neglecting their own needs to prepare along with their neighbors. Financing young people (or anyone) into peak-suitable local businesses is very wise advice. The most likely source of income in coming times will be in the informal economy. Perhaps already is for many. Such businesses, or individuals, could specialize in survival-friendly things, such as rainwater harvesting off rooftops and roadways, edible landscaping, local (non-chemical) fertility-building with composting and agrichar-making, community-based seed-banks/plant nurseries, construction with local materials, natural wastewater treatment, or small, local alternative energy solutions all the way from little, easy-to-make solar ovens to wood gasification (a resurgent technology) to small-farm-scale ethanol distillation (a venerable old technology) using inputs from wastes or marginal land. My take is that government and most of the system will soon be quite bankrupt and chaotic. • Especially liked three points made here: 1.)”Money as a means to an end, not an end in itself.” Words of wisdom! One starts thinking about those ends or purposes and working towards them. 2.) Creative means to educate young people without burdens of debt or big wastes of money (such as if the courses paid for do not lead to real-world useable knowledge and skills.) 3.)The courageous look at simply (but with careful planning) dumping debt and taking the consequences. It surprises me that this is not often talked of, since, I agree, it will end up being the most usual recourse. It seems tragic for hard-working people to give priority to the “tapeworm cartel” hoping for benefits from the faltering system, while neglecting their own needs to prepare along with their neighbors. Financing young people (or anyone) into peak-suitable local businesses is very wise advice. The most likely source of income in coming times will be in the informal economy. Perhaps already is for many. Such businesses, or individuals, could specialize in survival-friendly things, such as rainwater harvesting off rooftops and roadways, edible landscaping, local (non-chemical) fertility-building with composting and agrichar-making, community-based seed-banks/plant nurseries, construction with local materials, natural wastewater treatment, or small, local alternative energy solutions all the way from little, easy-to-make solar ovens to wood gasification (a resurgent technology) to small-farm-scale ethanol distillation (a venerable old technology) using inputs from wastes or marginal land. My take is that government and most of the system will soon be quite bankrupt and chaotic.

]]> By: Christina http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8214 Christina Fri, 29 Aug 2008 19:21:37 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8214 Patrick, you'll have less than 90% of your 401k funds if you withdraw. The 10% is the early withdrawal penalty; you also pay taxes on the full 100% (including the 10% you don't get to keep). You pay those taxes at your marginal rate, which a large withdrawal could bump higher. You are required to pay a mandatory withholding of 20% up front, with reconciliation to a higher or lower tax rate at tax time. We are ten years beyond you in 401k savings and growth, and are still struggling with the issue of whether to access what capital we can after taxes and penalties to build our post-peak infrastructure. Patrick, you’ll have less than 90% of your 401k funds if you withdraw. The 10% is the early withdrawal penalty; you also pay taxes on the full 100% (including the 10% you don’t get to keep). You pay those taxes at your marginal rate, which a large withdrawal could bump higher. You are required to pay a mandatory withholding of 20% up front, with reconciliation to a higher or lower tax rate at tax time.

We are ten years beyond you in 401k savings and growth, and are still struggling with the issue of whether to access what capital we can after taxes and penalties to build our post-peak infrastructure.

]]> By: Patrick http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8213 Patrick Fri, 29 Aug 2008 16:13:20 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8213 I'm a new fan of this blog for starters. Also, by the sounds of it I'm the youngest to post a comment about this subject at 28 years old. Quick recap is that I have a wife and 2 kids under the age of 4. We've "bought," 3 houses to date, all during the housing boom here in the US, and we've gone from a low priced house to a high priced house and now back to a smaller and less expensive house than we first started out in. The reasons for downsizing are obvious enough to readers here. In addition, we now have a small amount of land to put to use. Anyway, I say all of this because since graduating college and landing a professional job, sans student loans thankfully, we built up a small 401k balance. Now I need access to some funds to do necessary things to our land like clearing and leveling. I could do all of this myself, to a certain degree, but a few thousand dollars would get everything done quickly. I would consider this money well spent. But, I haven't yet pulled the 401k withdrawal trigger. The 10% penalty is a pain for sure but it's better to have 90% of my funds than 0%. We are also going to liquidate a college savings fund for our kids because it's a paltry sum and I can't stand all of the gov't regulations. So to sum it all up why haven't I withdrawn the 401k? Honestly I'm not sure. Maybe it's the fact that I find it hard to believe how much things have changed from 5 years ago when we started all of this "retirement savings." In the end though I do feel that investing in your land, tools, and skills much outweighs a number of digits held out in cyberspace. Also, at 28 years old I know that hell just might in fact freeze over before I ever see a dime from Social Security. No reason to even mention Medicare because I highly doubt most boomers will see anything there either. This is all especially funny as well because part of my work duties include analyzing Medicare reimbursement for a large hospital. To end, invest in yourself and stay free from debt. This seems to me how all of history (successful history, that is) has been lived with the exception of the past 75-100 years. I’m a new fan of this blog for starters. Also, by the sounds of it I’m the youngest to post a comment about this subject at 28 years old. Quick recap is that I have a wife and 2 kids under the age of 4. We’ve “bought,” 3 houses to date, all during the housing boom here in the US, and we’ve gone from a low priced house to a high priced house and now back to a smaller and less expensive house than we first started out in. The reasons for downsizing are obvious enough to readers here. In addition, we now have a small amount of land to put to use. Anyway, I say all of this because since graduating college and landing a professional job, sans student loans thankfully, we built up a small 401k balance. Now I need access to some funds to do necessary things to our land like clearing and leveling. I could do all of this myself, to a certain degree, but a few thousand dollars would get everything done quickly. I would consider this money well spent. But, I haven’t yet pulled the 401k withdrawal trigger. The 10% penalty is a pain for sure but it’s better to have 90% of my funds than 0%. We are also going to liquidate a college savings fund for our kids because it’s a paltry sum and I can’t stand all of the gov’t regulations. So to sum it all up why haven’t I withdrawn the 401k? Honestly I’m not sure. Maybe it’s the fact that I find it hard to believe how much things have changed from 5 years ago when we started all of this “retirement savings.” In the end though I do feel that investing in your land, tools, and skills much outweighs a number of digits held out in cyberspace. Also, at 28 years old I know that hell just might in fact freeze over before I ever see a dime from Social Security. No reason to even mention Medicare because I highly doubt most boomers will see anything there either. This is all especially funny as well because part of my work duties include analyzing Medicare reimbursement for a large hospital. To end, invest in yourself and stay free from debt. This seems to me how all of history (successful history, that is) has been lived with the exception of the past 75-100 years.

]]> By: Sharon http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/comment-page-1/#comment-8212 Sharon Fri, 29 Aug 2008 12:39:44 +0000 http://sharonastyk.com/2008/08/28/aint-it-funny-how-the-money-makes-the-honey-taste-like-nothing-financial-planning-for-tough-times/#comment-8212 Bunnygirl, you are certainly right - but I still think that the crushing debt that most students endure probably isn't worth the price of a good job - and if this is anything like previous recessions, newly graduated college students aren't going to be getting jobs anyway, but moving back with their parents, since they will be competing with older, more experienced workers with college degrees. The best advice I can give is, for now at least, stay out of the college market unless they give you enough money to go more or less cheaply or unless parents can pay outright. In the early 90s recession (when I finished college) and the early 2000s, having a degree was not a ticket to a job by any means. The system is going to have to shift, and it will - I think training for the new low energy life skills may work, but honestly, I don't think being hard to employ can be worse than hard to employ plus Sallie Mae on your ass. Sharon Bunnygirl, you are certainly right – but I still think that the crushing debt that most students endure probably isn’t worth the price of a good job – and if this is anything like previous recessions, newly graduated college students aren’t going to be getting jobs anyway, but moving back with their parents, since they will be competing with older, more experienced workers with college degrees. The best advice I can give is, for now at least, stay out of the college market unless they give you enough money to go more or less cheaply or unless parents can pay outright. In the early 90s recession (when I finished college) and the early 2000s, having a degree was not a ticket to a job by any means.

The system is going to have to shift, and it will – I think training for the new low energy life skills may work, but honestly, I don’t think being hard to employ can be worse than hard to employ plus Sallie Mae on your ass.

Sharon

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