Cash or Card?
One of the theories is that people think harder before reaching into their wallet for cash instead of just swiping a card. Personally I do not think that argument is particularly meaningful. Maybe it is like that for older folks who spent most of their adult lives doing things with cash. For those under 30 or so it is my observation that there isn’t really a difference. Heck, some kids get allowances and pay for chores from their parents via online bank transfers these days. Unless you are the kind of person who gets stupid drunk and buys the whole bar a shot of Crown on your credit card or are so addicted to shopping that you spend money you don’t have I would say it doesn’t matter much.
Cash is better if you are seriously working about a tight budget. No surer way to spend $50 or less on groceries than to go to the store with two twenties and a ten. Obviously with cash you can only spend what you have. For those sorts of absolutely no wiggle room situations this could have a place I guess.
The downside to cash is that it is a lot harder to track where it has gone. I usually get $100 when I go to the ATM. A week later when I have $65 there is about no way I could tell you what I spent $35 on. Yeah I could carry a little notebook and a pen and write down every transaction but I am not actually going to do that and I do not know anybody who does. An advantage of online banking and services like Mint.com is that you can look and see what you have bought. Not in a month when statements come but this weekend when you are curious.
While nowhere near as desperate as trying to stretch things out to payday or whatever and going all money Nazi with cash it is good to know where your money is going. It lets you see trends you would otherwise miss and make decisions. Instead of saying “where did our money go?” you can look. Maybe you have started eating out a lot more or something and it is adding up to more than you would like. With this kind of information you can make choices that aren’t possible due to lack of information if you use cash.
Personally we mostly use cards because they are convenient. We both keep cash on us because it is necessary for personal transactions, sometimes it is convenient and it is good to have just in case (in addition to a stash at home). Also we like being able to look back to see transactions and recent trends as it helps us manage our money better.
There is some sharing of information with the Trilateral Bildenberg conglomerate but we are OK with that because we are boring. Who cares if somebody sees how much cereal we buy? If I was going to buy a thousand gallons of diesel, a truck load of chemical fertilizer, and some miscellaneous stuff from radio shack on the same day I rented a moving truck I would use cash. Otherwise I don’t see it as an issue.
Cash makes it slightly easier to manage total amounts and cards make it easier to keep track of spending trends so on the whole it is a wash. My advice is to use whichever you prefer.
What Did You Do To Prepare This Week?
Also I got some tuna pouches and granola bars for the get home bag I am working on. It is pretty much functional now though I do need to order a few things. Kinda holding off on buying anything until the Glock 19 mag deal is completed.
We organized and inventoried our medical and hygiene supplies. I am pretty happy with what we have got, especially considering most of it can’t be shipped when we move back to the US. My one big take away is that we need to be more organized. I think there were 2 half empty bottle of cough syrup and 3 things of Ibuprophen that were being used. We shifted to one area for stuff we are using and another to store replacement’s.
Also I tweeked my workout routine some. More on that once it is solidly underway.
Though not exactly traditional preparedness tasks we did get some good stuff done this week. What did you do to prepare this week?
Edited to include: This was supposed to post yesterday, I am not sure why it didn’t.
It Isn’t Useful For X
This is something that has bothered me in the past. I will be talking about how it is a good idea to have some cash around and someone will inevitably say “that cash would be worthless in a hyperinflationary economic collapse” or talking about PM’s and they would say “you can’t barter with PM’s during the Mad Max end of the world scenario I envision”. The implication is that since a given thing is not useful during that one specific event it isn’t useful at all. I am just coming to see this train of though clearly today.
The issue is simple. That something is not useful for X scenario does not mean it isn’t useful overall which is the implication of the above mentioned paraphrased quotes. Look at it like this. A Glock 17 is a poor substitute for toilet paper but that doesn’t mean it is not useful. Does the ridiculousness of that sentence explain the foolishness of this train of thought? You get a thing or learn a skill not for what it doesn’t do, but what it does.
Part of the problem is folks getting tunnel vision on one scenario. For some reason it is usually a very specific one and unlikely one. The guy who is worried that $500 in small bills would lose their value if hyperinflation hit is so fixated on that one thing that he discounts numerous, far more likely, scenarios where having some cash would be useful. Also he fails to see that there is a far higher chance that he will be able to use that cash to buy goods and services in numerous other situations than that it will go up in proverbial hyperinflationary smoke.
My point isn’t that you need to think or do like I do. Different folks have different concerns and at the end of the day we all pays our money and takes our chances. My point is that you need to look at the big picture, not just one possible scenario.
Don’t get tunnel vision.
Random Observation: Got Cash?
Wifey buys and sells a lot of used stuff. It is my job to pick it up and or deliver it and give or receive payment. I am like a drug used stuff mule. (Having a vehicle big enough to deliver puts me in that role and it also helps her close a lot of deals) Seriously it is sort of weird. I am regularly going to some place with a piece of paper that has an address on it to pick up or drop off something and exchange cash.
Recently she has been selling off unneeded stuff. Twice in the last couple weeks I have gone to deliver something and needed to run them to the ATM to get cash to pay me. Not a big deal really. Lots of folks here don’t have cars and we can all forget something. The more interesting part is that we aren’t talking about a lot of money. One time it was $40 and another it was $60. One of the gal’s had no cash and the other was $20 short. I sort of shrugged the first one off but the second showed it is a noteable trend.
This was a stark reminder that there are lots of folks out there who have what amounts to no cash (probably a few crumpled ones and a bit of change) on hand. Folks who would be unable to pay for gas or food (I’d bet a c note the cupboards are almost empty too) if the electricity and ATM/ computer networks were down. Part of a day would be an inconvenience but if there was a power outage/ regional disaster these folks would be screwed.
If you do not keep some cash on hand you are a fool. Despite what the ‘tangible investment’ and beans and bullets folks say in all of the more realistic and likely scenarios people still deal in cash. You don’t see complex systems of barter appear overnight in anything but a total collapse. Maybe a good bargain can be made for gas, shotgun shells or canned food but folks will accept good old greenbacks. As for how much you should keep around I am a lot more flexible. Different people have different needs and concerns as well as incomes, assets and tolerances for specific types of risk. I think establishing the minimum is significantly more important than setting a maximum.
Chief Instructor says that a month’s worth of cash expenses kept on hand is a good number. Cash expenses would be stuff you need that is not locked into a regular contract. They are also things that if, and I am just tossing some stuff out here, ATM’s crashed or banks went on a holiday, there was a power outage or whatever you would still need to pay for regularly in cash on the barrelhead for. Food and fuel are primary considerations here with stuff like medication, smokes, booze, vehicle maintenance, etc in there also. If you have drank the coolaid and are following Dave Ramsays baby steps just keeping baby step 1 ($1,000 in savings, $500 if you are real low income or 2k if you have a high income) in mixed bills at home. However you choose to figure it the end result is pretty much the same. The point is to have enough cash to get yourself through some sort of emergency or otherwise sustain yourself for awhile.
These low numbers should be fairly easy to meet with a bit of planning assuming you live a sane financial lifestyle. They aren’t enough money that inflation is a significant issue but are enough to deal with most of what could come up. Also these minumum amounts are low enough that if your stash happens to get found it shouldn’t break you. Though as Commander Zero noted once it is far more likely that your stash will be frittered away by you on a pizza here and a $20 for a trip to the bar there then actually get stolen.
As for the maximum. It is really about what you are willing to risk being lost in a fire or by theft. I wouldn’t want so much cash in my home that I couldn’t afford to lose it should something happen. A certain percentage of your overall liquid assets is probably the way to figure it out. For me 10% seems reasonable and 20% doesn’t seem nuts. That means if you have 10 grand in various stuff 1 or 2k in cash. If you have 100k it would be 10 to twenty. Unless you live a particularly high risk lifestyle where you might need running money I would not want to go much higher than that. Baring the potential sudden need to get out of town for a few months I would not want more than then at risk of theft and getting eaten away by inflation.
New Years Resolutions Concluded
Well the year isn’t quite over yet but it seemed like a good time to see how I have done on my goals. Lined through are completed.
My goals for this year.
Personal:
1. Pay more attention to my wife. This one is continual but I think it went OK.
2. Travel a lot. We did pretty good at this one. Went to Croatia, Italy, Spain, Luxembourg and the Czech Republic and Paris.
Personal Stuff:
3. We can use a few smaller things like a new TV and another laptop. The main push however is to get a reliable second car which we pay cash for.
Financial:
4. Stash some more Euro’s. Say E400 or so. Didn’t quite get to 400 but I am calling it close enough.
5. Contribute 10% of our total take home to retirement.
6. Stash at least a half an ounce of gold and 40 ounces of silver. Didn’t get too far on
the silver. Sorta misestimated what we were capable of. Also prices going up did not help.
7. Continue to not make stupid choices.
Skills:
8. Take an automotive class. They offer them on base and I need to know more about car repair.
This one got replaced by brewing some beer which I did.
9. Be able to setup and trouble shoot a small solar setup. Sorta mute since I went with a solar charger and a bunch of eneloop batteries.
Preparedness Stuff :
10. A good radio that can pick up everything. Probably a Grundig.
11. Maybe a Berkey water filter and maybe some spare elements for it and the portable filter.
12. A basic solar setup.
Gun Stuff:
12. Buy a full case of .223
13. Buy a full case of 9mm.
14. Glock 9mm mags. At least 10 and ideally closer to 20.
15. Some M1a mags. At least 10 and ideally closer to 20.
16. A few more spare parts and at least one AR15 full bolt carrier group.
Also picked up a full case of 7.62×39 and another 10 mags for that gun.
Food Rotation:
17. Get a pressure canning setup and can something.
This one just didn’thappen. We can’t get any of the stuff locally and paying shipping negates any financial benefits. I am willing to do it just for the sake of the skill but not with that hassle.
18. Get a dehydrator and dehydrate something. Did this.
And Just To Get To An Even 20……
19. Get a subscription to Backwoods Home Magazine and otherwise work on my self sufficiency/ preparedness library.
20. Join a gun rights organization.
Time for discussion. Things went pretty well. All the more expensive goals have been met. A couple goals just didn’t pan out. I never got around to more spare parts because I ended up getting other stuff. On the whole I am happy with this years accomplishments.
Oh yeah and click on my advertisers links and buy lots of their stuff.
Interesting Note and a Reminder To Keep Currency On Hand
Something sort of strange happened. My sister came to Germany and of course she brought money with her. A lot of banks charge crazy (10% isn’t unheard of) rates for using ATM’s in Europe so we suggested she bring cash. Usually changing it to and from Euro’s is easy. However it just didn’t happen before Thanksgiving and stuff was closed then. We headed out of the country for a trip to Paris, her destination of choice and weren’t particularly worried because we figured we would be able to change it at our destination. Most countries have those little money changing booths everywhere.
Not Paris. There are no convenient money changing booths and banks won’t change money. Maybe you can do it at the airport but I am not sure. We walked around for more than an hour this morning trying to change money. It is definitely very convenient if not impossible.
It wasn’t a big deal in the course of things. Our travel money was mostly in an account that doesn’t have punitive charges for outside of the US transactions so we just paid for stuff. Wifey told her to just have me get whatever she wanted and we would figure it out later. I got the bonus of being able to make fun of her for nobody being willing to take her stupid American money. Things like telling her a pick pocket would just give her wallet back because it’s not like he can buy anything with or change dollars here anyway.
It was nice that we could make light of the situation. However as she pointed out if she was alone it would have been a real problem. I would extend that idea into preps. If you are planning to be able to buy stuff you need a means of exchange people will accept. While can openers, AK mags, common caliber ammo and 5 gallon buckets of food are great to have for a lot of reasons they are not regular means of exchange. You need a stash of whatever the currency in your area is. It isn’t necessarily a bad idea to have some money in a currency you see as stable like the Swiss Franc or the Euro or the Yuan but that should be in addition to your stash of currency you can spend at the gas station, corner store, etc.
In this precious metals have an interesting category. They are bought and sold everywhere it is legal and the same I presume is done underground in places where it is illegal. It is however not convenient. In most places you have got to sell them to an individual who understands them, knows the value and how to make sure they are legit, etc. You’ve got to sell them to a guy to get currency before you can go to the store. I can see how a reasonable person might not want to hold onto a ton of dollars these days, particularly if they bought a good amount of gold and or silver 5 or 10+ years ago at very good prices. However I would still say they need a decent stash of cash (sticking with a months cash expenses as a minimum) just to make things work for awhile and then if need be sell some PM’s. Of course there is a risk of those dollars getting hit by inflation but there is a risk to everything. I would however submit to you that if things are bad enough that a months cash expenses getting inflated away rapidly (vs a high of even 8-15% in a year which would still be devastating) in weeks or months then you’ve got bigget problems than missing that bit of cash.
So keep some of the currency that is used in your area. Might not be a bad idea to keep some currency of an area where you could reasonably decide to go to if things get wonky. Wouldn’t get crazy about that but enough to rent a room and get some food would be wise.
Personally I keep both of the currencies I use. I also store precious metals. Regardless of the situation I cannot see how I wouldn’t go through all of at least one type of currency (even if in a day or two) before going to the shiny stuff. It is downright hard to realistically see a situation where random prep type items (even barterable ones) are more desirable for trade then the shiny stuff, let alone cash.
Caching Assets
Our friend Bison Risk Management wrote a great post about caching assets. I strongly suggest you read it and think. I also have some thoughts.
First I think it is important to consider that kind of scenario is making you want to cache assets. Mostly we are talking about physical cash or precious metals though I guess the same stuff pretty much applies to bearer bonds and bags of diamonds for the super rich. Maybe you are worried about a banking holiday or shenanigans with the dollar or other economic/ government issues. While of questionable legality maybe you want to maintain a low profile so keeping cash in the bank is out or you need to hide assets from somebody. Maybe you’re just a shady guy and might need to leave town for a few weeks. While I obviously do not condone hiding money from the government, dodging court settlements, and such I will talk about them in a judgment neutral fashion.
If you are trying to hide 50 thousand dollars from your ex business partners lawyer you just need to keep it off the radar. Nobody is going to break into your house looking for it. If you are into something shady and occasionally need to take off for awhile unexpectedly then you probably want your running money stored someplace discrete. If you hear Big Lou is looking for you then going home to get into the wall safe would probably not be very smart. However it is unlikely that Big Lou knows anybody at the bank in another city 100 miles away where you keep a few thousand dollars.
Broadly speaking there is a compromise of security versus access. For example if you keep a big stack of money on the living room table it is very accessible but not very safe. Conversely anyone with modest handyman skills can hide compact items in such a manner that you would have to destroy the house apart to find it. That same stack of cash would be very safe but not very accessible. This theme of access versus security as well as security from different threats will drive your decision making.
Some smart people suggest that if you are going to keep cash of precious metals in your home or office you have two safes/ locations. The first is obvious and easily accessible. This is your ‘diversion’ safe. I also think this is a good place to keep stuff you want to access more than once in a blue moon. Your other location is well hidden maybe in a wall or floor type cache. So lets say you keep ten grand and some precious metals at home. I would keep a couple grand in the diversion safe. First to get someone to stop looking and not find the real stash. Secondly there are some times you want to get to some cash in a reasonably convenient way. Don’t want to need to take a hammer to the wall to buy a gun, at a very good price, for cash on the weekend. Same deal if your neighbors house burns down and you want to give them some cash to help them out.
I think it is really important not to put all your eggs in one basket here. Of course every method of caching discussed has weak points. I would say that as a general approach using different methods to limit your overall risk is a sound idea. Your goal is to mitigate risk and preserve at least some of your wealth. If your home burns down the safety deposit box at the bank is still fine. If your home is broken into it is doubtful they will search the nearby park. Especially the nasty spot away from the trail with the prickly bushes with a metal detector.
How many baskets to have is an interesting question. The amount of assets you are looking to cache is a big factor. Common sense dictates some kind of threshold what amount of assets is worth establishing a cache.
It would be worthwhile for a rich guy trying to stash a few million dollars worth of assets to have a half dozen or more separate caches of different types. He might have a diversion safe, wall cache, safety deposit box, buried cache, safety deposit box in countries B and C, wall cache in your vacation home in country B and on his boat. He would need to balance the upper limit of size/ value he wants in any one cache with being overwhelmed by trying to set up too many caches. Really the only upper limit on the total number of caches would be the amount that you could realistically establish and keep track of. If you have far more modest means and want to cache a few ounces of junk silver and a couple hundred bucks in small bills then it probably isn’t worth a second cache let alone a half dozen. For most normal folks who are somewhere in the middle three or four caches is probably a reasonable number.
As a final thought I just want to remind you that caching assets is a very personal decision. It is based upon your financial situation, what you are concerned about, your lifestyle and goals. You might want more eggs in one basket for a particular reason. However the concept of having multiple diverse baskets should probably be followed none the less. There is of course risk to all the methods we have discussed. If you can’t sleep well at night with a bunch of cash in the house then don’t keep a bunch of cash in the house. The goal of this is to be and feel more secure, not the opposite.
quote of the day
Be Able To Buy Stuff
It is great (and essential) to be able to sustain yourself and for family without outside help. However in almost every possible situation you need to be able to buy stuff. Even if you have a paid off place and can produce a good amount of your own food property taxes and the need for fuel aren’t going away.You need to pay for a place to stay, food, fuel and depending on how long you hang out someplace all sorts of other stuff. However in many situations the best course of action is to, at least for a little while go somewhere else. We have bug out bags and plans to go here or there. All of that stuff is great. If you are getting out of town because of an upcoming hurricane and plan to crash at your cousins 500 miles inland it is probably more important to have money than a dozen 5 gallon pails of beans (though 2 pail is probably smart).
In most situations in the continental US dollars are best. Dollars are generally pretty useful in other places too however that may be waning a little bit. Even if the dollar (or whatever the local currency) takes a major hit you will still need to buy stuff. Having some other currency like the Euro or Swiss Francs or the Yen or gold or silver will let you purchase stuff.
Be able to buy stuff.
What Did You Do To Prepare This Week?
Work was pretty nuts for me but that is life sometimes. Monday I dehydrated some apple slices for Wifey. Stashed some Euro’s because instead of going out for dinner we just grabbed a pizza and stayed home on Saturday. Had some fun with the shortwave radio last night. I cleaned out the paperwork cabinet getting rid of unnecessary or outdated stuff and excessive copies. While doing that I took all the real essential stuff which isn’t in our wallets and put it into one of those plastic paperwork envelope things. Passports, birth certificates, marriage certificate, car title and an extra checkbook. The stuff we would really want if leaving in a hurry and packing light. I had been meaning to do that for awhile. We picked up some extra ketchup at the store today because it was on a good sale.
All things being equal it was a pretty productive week.
What did you do to prepare this week?
Total Survivalist Blog 