Food, will it always be cheap?

I know most of us do not consider our food cheap, but when you consider what you pay for gasoline, mochas and movies, and the worth it actually is to your survival, it is very cheap.

But will it always be so cheap? Interesting Bible verse in Revelations states there will be a day when just a cup of oatmeal will be expensive. Could that really happen?

Our food supply chain holds less than three weeks of food at any given time. In other words, if the system breaks down all grocery stores would be out of food within a month.

Farmers are at their max capacity over farming the soil trying to keep up with the demand we currently have.

A huge amount of our food comes from the mid-west which depends on summer rains to keep us supplied with corn and wheat. As a matter of fact, all our food needs are dependent on rains and snow pack or in other words - our weather patterns. Have you noticed the change in weather patterns recently?

So we are very dependent on nature providing rain and snow to keep the food chain full.

How prepared are you for a three or five year change in the weather pattern?

A friend coming back from Russia told me there are no lawns, the lawn space is all garden produce.

Do you know how to successfully raise a garden?

Can you raise your own food?

Debt equals Death

Our Grandparents lived through it and learned the lesson that they took to their graves; debt equals the death when preparing for the future.

The Great Depression had survivors and even folks that did very well economically, but no one that was and serious debt made it through.

Cash flow is the formula banks use to grant debt with no consideration of how to prepare for a situation where cash flow slows or stops. The worse thing to count on is your current job, the next worse thing to count on is social security or a pension. These are NOT secure cash flow sources.

A secure cash flow source is one that people must pay you or suffer terribly if they don't. What kind of assets can you provide as a service to people whereas they would have to pay you no matter what happens to the economy?

The Arabs have found one called oil and have driven our economy with it. Food should be the next item but farmers have been slow to create a monopoly like the oil companies have to control supply and drive up demand. That may be changing in the next few years with corporations buying out our small farmers. Housing is the last item in that the rules and regulations have made it difficult to get a dead beat tenant out of your asset.

This sounds harsh but when push comes to shove, all people will fight to try and survive in a bad economy. If you don't believe that you need to read some of the stories about depressions in world history.

So what are you going to invest in that will guarantee cash flow and how will you get out of debt so no one has leverage to take that away from you?

Estate size property, will it really grow in value.

Large Estate Properties are so common now that we don't even notice a 6,000 foot, 5 acre property. The presumption was that this was going to grow in value and become even more of an asset. But do large properties really guarantee that?

I remember a elderly woman looking across the street at a large home being built who made the comment, "I remember houses like that being called the haunted mansions during the depression."

It was a startling thought. Could these large estates just be abandon at some time, due to the cost to keep them up and maintain them? We've seen this happen in Houston during the oil bust of the 80's and the latest crash as people just walked away from high mortgages.

So what do you do if you are in one of these places and your job ends or a financial set back happens? I ask the question because a friend just hit this wall last week, his plan is to sell and down size. But what if the economy is such that it won't sell fast enough or at all?

The answer comes back to a plan. One thing to consider is that accountants feel a mortgage is one of the better write offs. So is paying down the value of that property the key? Perhaps refinancing the equity out of that property and investing it in a more liquid asset is the better plan.

Weighing the options is part of being ready for that possible future.

Financial Safe Room

We talk about Tornado Safe Rooms, but is there a Financial Safe Room we should be building?

To most people finances revolve around paying their bills. This narrow immediate point of view can be as deadly as standing in the path of a Tornado with no place to run and hide from flying debris.

In the great depression many people were caught by "flying debris" that was not their making or something they'd ever thought would happen to them. That debris included accounts receivable they had counted on, banks they had counted on closing with their money still locked up. They found insurance policies not paying after a husband committed suicide. They had creditors call notes they didn't realize the fine print allowed.

The problem was they expected the existing system to work. The way to avoid that kind of damage is to presume the current financial system will not honor the promises it has made for you.

One of the weakest parts of most folks Financial Safe Room is depending on Social Security and their Pension. These will be the first to go, guaranteed. How would you survive if these were suddenly destroyed.

Your Financial Safe Room is a plan of action that looks for alternative options without the current financial system being intact. What do your REALLY need to survive. Food, Shelter and Clothing are the three real elements we need. So build a Financial Safe Room that has options with those factors.

Food; can you raise your own food? Shelter; can you share a home with enough family members to pay that mortgage? Clothing; should be the simplest of them all. Really not that big a stretch is it. And with that plan in your file, you have that room to escape to. So you can rest knowing a plan is in place.

Surviving Tornados

Tornados survival, what is key?

Tornados are a personal thing for me. My Grandfather moved from Kansas to California after his daughter was killed. One of my best friends was on the phone with me in Oklahoma when a twister went through his back yard and nearly killed him. There is nothing more helpless than being a thousand miles away from someone and not be able to help them.

So what is key to survival? The safe room is proving itself over and over to be the only true key to survival. Early warning systems are getting better, but if we do not have a room that can withstand a telephone pole coming at 70 miles per hour at us, we lose.

Safe rooms should be mandatory in Tornado alley, but no one seems to have the courage to pass the legislation. A design that is always in a specific area of the foundation to help first responders and a vault as simple as a cement room.

This really is not that expensive at the time of manufacturing. A simple cement room can come from even a new septic vault buried right at foundation level. Keep in mind this is a room you would be in for at the most 12 hours and more likely 2 hours.

If we are going to live in peace in Tornado alley we are going to have to take the responsibility for our own survival and make arrangements to protect our families.

2014 Weather

If anything the Tornado, Earthquake, Mudslide and Snow storms are teaching us; it is that we have to be prepared for the unexpected.

We are never immune to disaster and need to be ready in every way. With this in mind we have to go back to the focus of creating lists on what could happen with contingencies with what we will do if it ever occurs.

Doesn't matter if it is financial, weather or a complete break down of the fragile systems we depend on from the power grid to the banking system.

I believe one of the reasons we don't do this is our mind goes into a panic as we imagine things happening. Our mind actually reacts with adrenalin and other chemicals when it thinks it is in danger and as the mind thinks the body reacts.

To overcome this and be able to logically and systematically think of disasters and how to handle them, one of my colleagues is writing a book on "A good day to let go" which basically teaches us not to use dramatic words in our thinking such as "ruin" or "all is lost" but to dis-embody ourselves by saying if this happens to someone this is what they should do.

I know it sounds corny but surprisingly it is an important part of getting your mind to focus on devastating issues without reacting to them.

Success in Economic Depression

Our futures are at a cross roads; every news cast and book release seems to point at disaster looming on America's horizon...so what do we DO about it?

I don't know about you, but the fanatical ideas, in the TV shows and Movies profiting on this fearful situation, do not seem realistic.

The examples in the pages above of the Oklahoma Dust Bowl and the Great Depression historically prove that during economic upheaval there is less drama and more slow suffering.

They also prove that there were people that made right decisions, and did well, during those economically difficult times.
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What if we do enter another Great Depression? Can people actually survive, and more than that...actually do better economically?

First ; Take a look at five interesting stories of Great Depression success stories.

Do you see a common thread in these five stories?

1. The first most obvious answer, you should have quickly responded, was the fact they all were aggressive in making changes and moving quickly to implement those changes.

2. They didn't "scale back" and try to hide from the circumstances around them.

3. And most importantly - they focused on rising above the fear and havoc to find that road less traveled by the suffering masses, and looked for a way to adapt and succeed.

Are YOU ready to look for ways to adapt and succeed?

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So why do I have the audacity to talk to you about adapting to economic difficulties? 

My Father, pictured here to the left with Roy Clark and myself, was born to a very successful California business man Elwood Smith.

Elwood Smith built himself a fortune through the Great Depression, owning 50 acres down to beach front property in Lake Tahoe, and a large estate in Carmel California.

Walt Smith was not a business man though, his focus was on ranches (one he lost in the bank crack down on farms and ranches in 1980) but he was still the son of a wealthy man.
With those millions Elwood Smith should have been able to pass that wealth on to Walt Smith, and his son's, amassing an even larger fortune. But instead, his son (my father), was more focused on his new guitar invention called the Melobar (see history).

When my father died, he not only had spent $700,000 in his inheritance (that is 1970's dollars btw), but had left me with $200,000 of debt. The instrument had endorsements from the Rolling Stones to Roy Clark but had sold less than a hundred guitars over twenty years.

I turned that economic disaster into a profit within two years. But then made my own mistakes, and ended up going bankrupt from that guitar company ten years later, having to pull myself up from the boot straps again, and within five years had a company grossing near a million dollars with 26 employees.

I've published several books on the experience you can purchase on Amazon (click here)

Three times in life I have had to face that wall of economic crash, and if there is anything I can share in life, it's the fact that there is ALWAYS a way to win.

Because of the overwhelming odds I've had to face economically on those occasions; it has become a study of mine to determine if there is a common design to succeeding in tough circumstances.

The field of study took me to one of the worse depressions in world history...Germany 1920's.
Here was a beaten country, with hyper inflation beyond, hopefully, anything we will ever see again; that within 7 years nearly took over the world. The ugliness of the NAZI party overshadows that history, so many people never even think of looking at the WHY and HOW of it's incredible success. But the truth is, people like Charles Lindbergh, saw how the economic decisions had rescued a failing country.

Fate then brought me into a relationship I never thought possible. I found that my wife's Grandfather had lived right in the middle of that part of history in Germany, and his insight was incredible. Something I'm so excited to share as we continue with this blog.

As we look for answers to how to survive and actually succeed in hyper-inflation and probable economic depression; we will separate out the fascism and radical politics, the fear mongering and lack of hope, to drill down on how we can learn from those who had SUCESS IN ECONOMIC DEPRESSION.