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Thursday, August 16, 2012

Four Step Plan for Weathering the Financial Storm-Survive Tough Times

Surviving Tough Times

Becoming Independent during challenging times

©2012-2013 Bruce David

A Four Step Plan for Weathering Financial Storms


   I want to see a show of hands.  Which one of you is responsible for the recession?

For the past 35 years Congressional policies have bankrupted our country.  I don’t recall signing any of the checks Congress authorized to special interests, lobbyists, military contractors, etc.  Did you?

In the past 10 years we’ve lost roughly 10% of our middle class; we’ve sent our jobs overseas, we no longer produce much.  Our dollar, just since 2005, has lost about 40% of its buying power.  Nearly half of our fellow citizens get some kind of public assistance – a record number.  The average middle class family has lost roughly 30% or more of their financial net worth, much due to the decline of housing.  I now call them the Whittled Class!

Wages, when you factor in the ever increasing cost of living, have been realistically stagnant since the late 1970s.  The upper five percent of wealthy Americans control about 90% of the wealth in this country – the gap between the ‘haves and the have-nots’ hasn’t been this wide since the Great Depression.  There are fewer good paying jobs and even fewer with decent benefits and pensions…the exception have been those employed by the government.  Now, governments, at every level, are going broke trying to keep up with gold plated retirement benefits, especially with the decline of tax revenues due to so many non-working citizens.

Since the 1980s US jobs have been sent overseas in record numbers as many US and multi-national companies find it cheaper to pay someone in China $10 a day vs. $10 an hour here AND we all flock to WalMart to buy those foreign made goods, helping these corporations to be profitable.  Government tax and labor policies actually encourage this which is why I call it the Washington-Wall Street Cartel.

It’s been said we have the ‘finest government money can buy’ and I no longer dispute that claim.  Congress has become ineffectual and rarely serves the people any longer.  Think about the gold-plated benefits Congress gets after just one term (full pension and health care).  Frankly, I don’t care which party you support, each has proven dangerous to the American people and cannot be trusted.  I am tired of the shallow and empty promises candidates make during the election process.

Your vote at the national level doesn’t really matter as far as I am concerned, collectively, we all get snookered. 

How many of you are counting on Congress or the President to fix the economic mess they created?  I, for one, am not holding my breath.

Therefore, it’s up to us to help ourselves.  Historically, Americans have been a self reliant nation, a ‘can do’ people.  I figure it’s time for us to get off the couch and take back control of our lives. 

Who is looking out for you?  You had better take control of the reins of your life if you wish to survive!

The Four Steps

1.       Recognize that you are part of the problem…AND part of the Solution!

A.     Doing the same thing over and over again but expecting different results is the definition of insanity, wrote Albert Einstein.  Yet, that is precisely what most of us do when it comes to voting.  Our Founders never envisioned lifelong politicians, yet we see dozens of such people in Congress who should have been put out to pasture long ago.  They no longer serve the people and many of them have never had a real job and are out of touch with mainstream Americans.  What would happen if NO ONE voted in the next election?  Do you think politicians might get the message we are not happy with the whole process?  Elections today seem to be more about generating large amounts of cash contributions than anything else.  Politicians will say anything , promise you the moon and the stars to get re-elected but as the Native Americans always said, “The White Man speaks with a forked tongue.’

B.      Many Americans, like Congress, have spent themselves into oblivion, creating a financial nightmare of debt for themselves.  Unlike Congress however, none of us has an unlimited credit card backed by “print-as-you-will’ fiat currency.

Since the end of WWII, the credit industry took on mammoth proportions, urging Americans to buy now, pay later and did we ever take them up on that challenge.  How many of us, when times were good and overtime cash was flowing in, took on a ton of debt buying second homes, motorcycles, boats, jet skis, snowmobiles and more?  Later, when the overtime stopped or the job was lost, we faced tough times trying to manage the debts?  Did we plan for the unexpected, did we salt away extra cash for those rainy days, weeks or months?  That leads to the second lesson…

2.       Get out of debt

Despite new rules Congress applied to credit card firms and banks, mortgages and other debt, few of us saw any immediate benefit or relief.  Interest rates on credit cards are killers and few states anymore have usury laws on the books.  Paying the minimum required on a $15,000 (about the average credit card debt for American families) balance can take a lifetime.

Most financial planners tell us to put away our credit cards and set up a target to pay off one card at a time, to negotiate interest rates with existing cards and to set up a strict budget and spending diary based on 80% of our take home income.  For many, spending is an addiction or hobby which may require counseling.  Many churches and non-profit groups offer free or low-cost financial counseling. As a last resort, consider bankruptcy.  Usually, a lawyer will speak to you about the ramifications of such an action free of charge.  Each state differs on which assets you are allowed to keep, but will not lose everything and you do get a fresh start which can be a lifesaver!

During your quest of debt recovery, your new start may be aided by applying for rent and utility assistance, food stamps, WIC or other government programs.  There are 46 million other Americans on assistance and sometimes it’s necessary.  This is a personal choice but with the cost of living so high, many of us can use all the help we can get.

 (You will find many resources for this and many of the other areas we discus here at our site:

3.      Develop additional sources of income-Make it a family endeavor

Those who rely on a single source of income are the ones who run into the most problems.  Consider treating your family like a business.  Few businesses sell one product or service.  For example, when new car sales are down at a dealership, many survive because of the repair shop revenues.

Every member of your family should develop one or more circles of income, even your children.  Revenue producing activities can range anywhere from babysitting, lawn care, pet care, handyman chores, to starting a sideline business.  With computers and the internet, there are literally thousands of service businesses one can start ranging from writing and bookkeeping services to graphic arts and marketing services.

The goal is to use this income to pay off all your debt and then for saving up for emergencies and investment.  Again, visit our site for resources on sideline businesses or part time jobs using our Boot Strap Biz and Jobs section.  We’ve posted many resources for companies which hire at-home workers and you’ll find a PDF book you can download which lists 100 Firms Which Offer At-Home Employment – all free of charge.  Personally, we’re involved with Watkins Home Products, a firm which has been around for more than 100 years and its products are environmentally friendly.

The job picture in America is none too bright and we especially feel sorry for those graduating from college saddled with large debt and a dim employment outlook.  The earliest economists forecast for a recovery is the beginning of 2014, but I would not hold my breath.

4.       Developing community networks for mutual support

In the old days…most of us grew up in tight-knit communities where everyone knew each other.  Indeed, the mothers in my neighborhood had their own mental telepathy network; in a heartbeat every mother knew if we had misbehaved!

I grew up in such a neighborhood, lower middle class and even though we didn’t have ‘two nickels to rub together,’ as my mother was fond of saying, she was the neighborhood Kool-Aid mom.  She always had home-made pop-sickles and cookies for neighborhood kids.  If someone new moved in, she went over to introduce herself, usually carrying a dessert she had baked.  If someone died, she was there with prepared dinner for everyone.

It was not uncommon for her to do the laundry for other families if their washer broke down or mend their clothing or even give a haircut to someone who couldn’t afford it (I hated the cuts she gave me and my brother – military buzz cuts).

Since the 1960s everyone wanted more from life, a bigger house, two cars, new this and new that so many mothers went to work in order to obtain all the goods and services we might ever desire and children became wards of day-care or extended family and we often lost touch with our neighbors.  In some cases, we don’t even know our neighbors.

Although some might argue that despite living in a disconnected world, they stay in touch through Facebook and other social networks.  Maybe?

Although there are exceptions, most of us became less active in church organizations as well.  Churches often formed the backbone of mutual support networks for families.

There are still communities like the one I recall from my youth, but they are becoming somewhat rare.  My suggestion in this last segment is for each of you to sit down over the weekend and with pen and paper, evaluate the kind of friends you have currently. Are they like-minded, would they be a part of your ‘mutual support network?’  Make a list of those who might be interested and plan a party, backyard BBQ, brunch, afternoon tea, whatever…invite those folks over and share this outline with them.

Give each a 3x5 card and have them fill in their name, address, phone, email and the kind of things they might bring to the table.  Skills might include gardening, carpentry, computer repair and so on.

Make copies for each member who decides to participate.  You might agree to meet one day each month to share ideas, war stories, resources, etc.  If your group becomes large enough, you may consider creating a ‘community money’ program (see our site under this same name for information), like Syracuse Dollars in order to foster trade among members without the use of cash.  Some of these groups have been around for decades and services often include haircuts, meals, massage, lawncare and more.

Some groups meet just to exchange coupons, recipes, children’s clothing, books and other areas of group interest.  The goal is to help each other.  As motivational speaker Zig Ziglar always says, You can get everything you need if you just help enough other people get what they need.

Parting Note:  It’s been my long term goal to help others and the economic demise of our country was my incentive to launch the Poor Man Survival Series which includes a helpful website and twice weekly online newsletter geared toward independent minded people who want to increase their self reliance, frugal living and economic-political awareness.  We live in times which are difficult for many.  Signup for the free newsletter and get several free reports including the Best of our Frugal Living Resources and How to Survive the Economic Crash.

Yours for better living,

Bruce ‘The Poor Man’  

**Based on our mini-workshop program.  If you feel this is worthwhile, please consider making a donation using the PayPal donate button found on our site.  Also, please feel free to share this plan with others who might benefit.


escapeartist said...

Always happy to see a viable action plan for helping out the country (something Congress can't do).

minimalistgroup said...

Terrifically simple but effective plan. I am sharing this as many I know can use it.