[Previous entry: "An eclectic assortment"] [Main Index] [Next entry: "Microsoft vs. EU"]

03/27/2004 Archived Entry: ""

Kudos to the Onion's satirical poll of readers, asking what they think of Martha Stewart's prison sentence. A sample, "I'll be able to sleep easier knowing that another motivated, powerful woman is off the streets."

Remember to check out the shining-new Bulletin Board at ifeminists.net before moving on to today's McBlog commentary...Thanks!

I don't want to be doom-and-gloom about economic prospects...or, rather, I do want to be doom-and-gloom because that's an accurate reflection of what I believe is true; I can't see any other end to the government-created crisis we are veering into. But I also want to give people a practical sense of how they can protect themselves against an economic battering. I am not an investment counselor but I have consciously developed various financial strategies that are commonsense and which have worked well in my life. For example...

A friend of mine, Jack Pugsley, had a deep influence on how I view investment planning. (As I write this I realize I've never told Jack that he made such a happy impact on my life. I'll correct that oversight as soon as he is more available. Jack is currently in Florida, helping to care for Robert Kephart who is in the last stage of prostate cancer.) I met Jack in my early twenties, back when I had no money and no concept of how to make money except by pulling down a paycheck. I thought investments were the purview of rich people; for me, talking about bonds or "selling short" was like talking about the atmosphere on Mars. I still claim no expertise on stock trades or Mars but, thanks to Jack, my attitude toward investing has changed dramatically. He was the first person I ever heard speak of investment strategies for poor people. I'll explain...

If you look at an investment as a store of value -- for example, a gold coin that has intrinsic worth as a commodity quite apart from its worth as currency -- then the world of investing opens wide up to almost anyone who has two cents to rub together. One night Jack urged me to stock my cupboard with cat food which I bought regularly as an investment. My local Safeway was selling it at less than 1/2 what I was accustomed to paying. He explained: the cans were as much "stores of value" as the dollar bills in my pocket. Arguably, they were more reliable "stores" than dollars because cat food has consistently become more expensive over time. By buying as much cat food as I could afford when the price was low, I saved about 30 cents a day. For most people, that amount is too trivial to even speak of but 30 more cents meant I could take the bus to work rather than having to walk. Since then I have moved on from cat food and applied Jack's advice whenever non-perishables are to had at a bargain...but I follow certain rules. 1) The items must be ones I use regularly or for which I have a predictable need. 2) They must not be likely to deteriorate before I use them. 3) They must either hold their value or increase in value; for example, I do not buy extras of most electronic goods not only because we keep our "machinery" repaired and running but also because the price of e.g. digital cameras or computers has gone down faster than the purchasing power of the dollar. Thus holding onto the dollar is a better investment. 4) The purchase price must be at least 1/2 of the normal one otherwise I start debating the "opportunity cost" of stocking up. (For example, with the cat food, my opportunity cost was that I no longer had that $40 in my pocket to spend on a book or record.) 5) You must have the storage space. Everyone is able to shove ten cans of tuna into a corner on a shelf but serious stocking up requires a pantry, a garage or some planning...e,g, use the space under your bed.

With these rules in place, I hardly ever leave the grocery store without several items for the pantry -- the Mormon habit of stocking a year's worth of food is an admirable goal. Most people look upon such behavior as "survivalist"...that is, you stock up because civilization may crash about us and -- when society becomes Hobbesian -- you'll be able to take care of yourself. I do not dismiss such concerns but they don't overly occupy me either. My main reason for having 50 cans of tuna on hand is financial. (An unexpected benefit is the convenience of always having a wide variety of food in the house so that I rarely have to run to the store.) This may seem like a simple, obvious idea but -- until Jack Pugsley -- I had never thought of such behavior as "investing," I had never realized that even poor people (as I was) invest wisely or foolishly every day with whatever money they do have. Today, I have so thoroughly integrated Jack's advice into my life that I don't even think about. I automatically buy twice what I immediately need of any frequently-used bargain item. It has ceased to be a strategy and become, instead, a habit I don't think about...like how I brush my teeth.

I have been harping on how local governments -- even more than the federal one -- will be trying to maneuvre you out of every penny that isn't glued down. Yesterday I used teetering-on-bankrupcy Ohio as an example of a state that has no choice: it has to engage in creative gouging while, at the same time, cutting "services" left and right. (I use quote marks because I dislike referring to anything provided by government as a valid service.) Today, I stumbled across an example of creative gouging in Ohio -- tho' the cost imposed by the profiteers is on the privacy of people rather than on their pocketbooks. The Dayton Daily News reports "Ohio State University sold the names, phone numbers and addresses of all 358,000 alumni to a credit-card company, university officials said. It's the first time the school has given out a complete alumni contact list, said Eileen Bertolini, director of information services for university development, which manages the alumni database." I wonder what else the cash-strapped state university is willing to sell. Meanwhile, in case you think I am picking on Ohio, this is what the city of Sante Fe New Mexico is considering as a way to write the average person yet another budget-easing ticket. "Santa Fe is considering requiring doggie seat belts. A major rewrite of the city's animal control ordinance proposes that Santa Fe dogs be buckled up when riding in trucks and other vehicles." While the bureaucrats are at it, they want to fine you for walking your dog without a leash or on a leash longer than 8 feet in length. Amazing how public safety and revenue enhancement parallel each other.

Best to all,
mac2