Wife kitteh shocked me this weekend. Talking about how inflation is kicking up and how government debt is out of control, she told me that she's changed her mind and now thinks she'd like us to pay off the house. I shocked her by saying that I've changed my mind and I don't. Pondering it further this morning, I think she's right.
We're going to remodel our place and turn it into a bistro for our friends. We'll have a serious kitchen and a single great room where we could fit 30 or more guests. It's not a business venture, just a place to indulge our hobby of hosting parties.
To prepare for it, we refinanced the place. I think our interest rate is slightly north of 0. Rates these days are crazy low, like getting money for free. The new interest rate is what changed my mind. Our future income at risk from a debt-induced crash is what changed hers.
It's Not About Investments
I've spent some time researching various crashes throughout history, looking for a theme in profitable investments. If there is one, I can't find it. The problem is that society becomes unstable. Markets and exchanges cease to function in an orderly manner. While you can own stock and property and wait out the mayhem, it's getting through the mayhem that is the real problem. Thus, the best course of action is one that helps you ride out the storm.
Given our age, our opportunities for employment are rapidly vanishing. After I retire for good, it will be very hard for me to come back. Wife kitteh could go back to her job, but that won't last much longer.
How do you prepare for a possible crash when your income is fixed and likely to be withered by inflation?
The goal would be to reduce your expenses to as small a number as you can. Here are just a couple of thoughts along those lines.
- Pay off your mortgage.
- Pay off all loans.
- Learn how to fix your cars.
- Learn how to make repairs on your house.
- Learn how to cook.
- Learn how to grow and preserve your own produce.
If all you had to pay for were utilities and the least expensive foods like beans, rice, you ought to be able to live on almost nothing.
Advice For The Kids
Since our kids aren't in positions to pay off their mortgages or buy houses with cash, my advice to them would be steps 2-5 above. I wouldn't expect a young man to learn how to can anything. The others are not only doable, but done for most of them. They're in good shape.
So that's about it. If I could summarize the concept in a single sentence it would be to live like a pre-1960s farmer. Yes, I know most of them had mortgages, but I think the imagery conjured up succinctly describes the safest way of life for a period of financial upheaval.
|Plus, that rugged, competent look is a real turn-on for the ladies. In fact, wife kitteh recently told me that she thinks pickup trucks are sexy. Sort of like this. :-)|