Will it be inflation or deflation as the major trend for the coming decade? What about Peak Oil and the skyrocketing cost of energy? Will the Dollar continue to do well, or will it finally collapse under the weight of the twin deficits?
Better yet, how is one to plan for financial security in the declining years of one’s life in an age of economic uncertainty?
That seems to be the major question facing many Americans right now.
A number of conservative pundits advocate buying gold. Gold is a popular investment with people who have money to invest, but what if you don’t have the money to buy gold? What if you’re doing good to pay your bills and have a little left over?
The Secret Is To Not Have Bills
Think about it. What if you didn’t have bills to pay- or if your bills were very few and very small? That isn’t a joke- it’s a serious question. Most people can get their monthly spending down to less than $1000, and if they had to they could live on less than $450 a month: if they knew how.
Use a multi-pronged approach to get rid of bills.
Your house is the soil from which most of your bills sprout. If you want to get rid of bills, you have to choose housing that keeps the bills at bay. The idea is to have housing that doesn’t produce bills: You want your house to be a zero-net-energy input home or something very close to it. You also want a well and septic tank (no water or sewer bills), and enough space to have a large garden and some chickens and rabbits if you want to. Producing wholesome organic food is definitely part of this strategy.
The final part is the taxes, and our recommendation is to find a location where you wouldn’t pay more than $500 a year in property taxes on a $100,000 property. Always consider the property taxes very carefully. They only go up.
For most people their biggest bill is their mortgage. There are two basic ideas about how to deal with a mortgage: either pay it off quickly or sell the house and downsize. The best way to do it is to sell the place and downsize by building your own home.
Now is a great time to sell your suburban home, because prices are still high although the housing market is slowing down. Sell the house in the burbs now and you’ll be a lot further ahead — even if all you do is break even. The value of an asset will fluctuate, but the value of a debt does not: in a deflationary housing environment many people will find themselves with a mortgage much greater than their home is worth.
Don’t Buy a House, Build It
You cannot buy a zero-net-input home because builders aren’t building them, so the only way to get one is to build it yourself. You can build it high-cost or you can build it low-cost and still get more or less the same house, you just have to be willing to do some of the work yourself.
To get started you need to decide on a plan. Read “Your Engineered House” by Rex Roberts you’ll learn all you need to know about home design to design your own home. You can download a copy of the book for free from the Soil and Health online library (google it). Read the parts about house design and ignore the parts about materials: a lot has changed since Roberts wrote the book in 1964.
A serious point to consider is to design the home on 1 floor in complete ADA compliance. You’re only going to get older, and even if you don’t plan on staying there forever the house will be worth much more if it’s easy for older people to live in.
Once you know what you want and you’ve got a house design, you need to start collecting materials. Buy a 40 foot shipping container and find a place you can put it. You might need to rent someone’s vacant lot, but you’ll need a place to put it. Just be sure to put it on concrete blocks so it’s off the ground (use lots of blocks).
Getting Your Act Together
For the next year or two your job is to go to every estate sale and auction in your area to find good construction material for dirt-cheap prices. Your mission is to find high-quality windows, doors, bathroom fixtures, kitchen cabinets and appliances and mechanicals (heating and air) for the house you’re going to build. The majority of the cost of a home is in the kitchen, bathrooms and mechanicals, and after that the windows, doors and floor covering. The renewable energy equipment is also expensive, but it eliminates energy bills that are only going to go higher.
While you’re busy collecting building material, you need to read everything you can get on the subject of renewable energy, super insulating a home and building a zero-net-energy input home. If you want a life without bills, you need a home that doesn’t cost anything to live in. It sounds crazy, but it’s not that difficult to do.
Keep track of your purchases, and incorporate the materials purchased into the building plan for your home. Got a great deal on odd-sized windows? Design the house with windows that size. Work with what’s available for pennies on the dollar. If you’re willing to look, you’d be amazed at what you can find.
Once you get the materials, you need an experienced builder who will take on the project. You’ll meet the builders if you frequent the sales, you just have to be willing to talk to people. A good builder will help you keep costs down and be willing to work with you on the “odd” requests.
After getting a good education in renewable energy, you need to find some land. Absolute perfection would be a southern-facing slope with a year-round stream running through it with enough flow to use a hydro-electric generator. You could afford to pay an extra $20,000 or more for land like this because that is what it would save you just in the beginning. The real savings would come year after year with lots of free electricity. Don’t try to find land until you’ve learned about solar, wind and hydro-electric power generation.
With material on hand, a good builder and a good parcel to build on, it’s time to get started. Talk to your builder and see where you could cut the cost of construction by doing some of the work yourself. Plumbing and wiring are good candidates for this. Yes, lots of places require a licensed plumber or electrician, but there’s no reason you can’t do the work under their supervision for a lot less money.
The most critical phase of the project is to get the renewable energy assets into place. The solar collector, the solar panels and whatever else you’ve got will have to be properly sited and installed. If you’ve done your homework you’ll either feel comfortable installing it yourself, or you can find a RE installer to help.
Hopefully you’ll be building in a state that supports “net metering” because that’s were the real advantage is: when you produce more power than you use, the meter runs one way, when you use more power than you use the meter runs the other way. Under this scheme the power company is essentially “buying” power from you at whatever rate they’re selling it to you. This is how to have electric bills of $0.00.
Once the home is finished, you have to be prepared for the problems that occur from time to time in life. The Alpha Strategy is a great way of ensuring your home has all the basic supplies to support you. The idea is to invest your extra money by spending it on tools and the basic household supplies you use on a long-term basis. By stockpiling the supplies in your home, they become a source of stored wealth that you will eventually consume. By purchasing in bulk you get a better price and avoid the ravages of inflation.
You Still Need Income
Once your home is secure and capable of supporting you, you want to have a way of making money- what they used to call a “cash crop” back on the farm. We like production better than service. We like independent service better than a job working for someone else, but some people don’t have the personality to go independent.
Our pick for a production function is to grow wild-simulated ginseng. Nothing else even comes close in terms of investment required, time consumed and income generated. Unfortunately, it takes time to get a return on investment, but for long term investment we think it would be hard to find a better product to produce.
In the interim, we advise buying an existing business (buying a job), starting a business, or if necessary- getting a job that doesn’t demand too much of your time.
If you think you might like to buy an existing business, you ought to consider buying the “How To Buy A Good Business At A Great Price” course by the Diomo Corporation. It’s a good buy even if all it does is convince you not to buy a business. If you do buy one, you’ll be very thankful you bought the course: there are a lot of places to get in trouble when buying a business, and if just one thing you learn saves your nest egg it was money well spent.
You cannot completely “get out of the system” and there isn’t any point in trying. You can minimize your exposure to the games that central bankers and politicians play with paper money and get a better quality of life while you’re at it… but the adage that “no man is an island” still holds true. The trick is simply to become as self-sufficient and independent as you can tolerate.
Standard Of Living Does Not Equal Quality Of Life
It seems to us that quality of life issues are paramount. Standard of living does not equate to quality of life and it never did. The problem with pursuing “standard of living” goals is that you not only won’t necessarily get the quality of life you desire, but you’ll also be placing yourself at risk in the coming currency wars: sooner or later the paper money game is going to end, and when it does things will be ugly.
Time is the commodity that everyone works for, and it’s control of time that often gives us our quality of life. That’s why people who live fairly simple lives in the country usually tell you how high their quality of life is. They have freedom from fear because they are often pretty self-sufficient and their needs are few.
The people who are part of the rat-race are the ones who have the least control of their time, and they often complain of feeling like their lives are spinning out of control and that they live in fear of layoffs, crime, an uncertain future and many other things. The more money they make the more they spend and they never get anywhere.
The point is that your efforts should be oriented toward quality of life issues instead of standard of living goals. If you pursue quality of life you’ll find that you’ve insulated yourself from the uncertainties and vicissitudes of life and you’ll be in a position to help others- especially family.
Copyright 2005-2006 Bulletproof Retirement.
All Rights Reserved
Brian Botta
http://bulletproofretirement.com
