Letter Re: How To Use Your IRA /401k to Fund a Survival Retreat Property

Dear SurvivalBloggers,
How do you use your IRA /401k to fund survival property or fund a startup business in the area you want to exit to?
I have been running into many of my clients here in the north east, way outside the American Redoubt, that want to take greater control over their 401k or IRA’s that have accumulated over a period of time.
Being a reader of this web site for a number of years, I felt that I could explain to your readers thru a simple monograph of what an individual or group of individuals could accomplish with a little planning and action in regard to this premise:  The stock market is not a place to have any of your assets.  Let alone your retirement assets.  How can you remove the assets from a stock or mutual fund based IRA or 401k ?     You know you need to do something to protect you and your family soon, very soon, but you may not have the funds to accomplish this now.  If you spend a few minutes to read through this to gain a small understanding that you don’t have to lose all your retirement contributions when the fall occurs you will be half way there.  I must warn you up front that this will be a complex transaction. Extremely time consuming and hopefully the custodian you utilize along with your legal and financial advisors can handle it. This is a small overview, food for thought.

Face it, the retirement you in vision or hope for has a limited if at all chance of occurring. The financial actions of the last fourteen years of our federal government have just about removed the United States dollar from being the base currency of the world.  It has also enslaved its populace by transferring economic growth for social programs.  For better or worse this is not the government of our parents.  We will have to live in it until the pendulum of normalcy swings back; or be prepared to deal with the consequences of it not occurring. Remember that inflation is coming. To what extent no one knows,   hopefully, not the inflation of the late 1970’s or early 1980’s.  When it occurs what will happen to your money? Your retirement funds which are locked down into money markets are probably not indexed for inflation.  Should have, would have, and could have decision tree will all be told.  This nest egg could be put into use right now not ten twenty years from now.   You have heard and read enough here and other sites that the stock market is ripe for another correction. “Oh don’t worry good stocks will always come back” Or, you may have heard that if you put stop limit loss (which is basically a tool that if you own a stock you can direct your broker to sell the sock if it drops to a certain price) you will mitigate the loss on the price.  Great Plan in a normal economic system.  However, with over seventeen trillion in debt the financial china-syndrome is just around the corner, by the way, how will you get your money back from the brokerage house? Only those who diversified thru debt free real estate will have something of value. Especially if you start as soon as possible to put it into place a strategy.

This is where a self-directed IRA/401(k) can help. This will be the tool that you will be using to redirect your funds from the retirement vehicle into an ultimate safety net such as:  farm land; timber land with cabins; survival retreats; horse farms; coal mine; a franchise, a startup business etc…I think you get the idea.   How can you do this? It all started back in 1996 when the IRS lost in Tax court the Swanson case (Swanson v commissioner 106 TC 76 1996) this held that a newly established entity owned by an IRA and managed by the IRA owner may make investments using IRA funds without violating the prohibited transaction rules under Internal Revenue Code Section 4975.   This allowed individuals to fund investments with their retirement funds and not consider this funding to be a prohibited transaction (explained later). This was subsequently affirmed by the IRS in Field Service Advice Memorandum (FSA) 200128011.

Enough technical stuff, just know that it is legal and you will have some hoops to go through, but look at the alternative. Your money stays were it is unable to be accessed without penalty until you reach 59 ½ years of age and then you would need to include it in ordinary income (taxed) on what you withdraw (unless of course you have a Roth) and hopefully able to access. So how do we take advantage of this? Many advisors and stock brokers are not aware of this method because it does not provide sufficient profit for themselves or for their institutions (surprise-surprise).  However, there are many ways to accomplish this; I will present one that I have seen utilized to build and construct a 2,800 square foot underground bunker on 300 acres of land.  

The first step in this process is to contact the entity in which you have your investment.  This may be a bank, brokerage house, or your current employer.  (As an aside: why would you have all your retirement funds invested in the company you work for? ask former Lehman Bros. employees if it worked for them!). If they allow you to accomplish this great if not then you need to find another custodian of your funds that will allow this to occur and transfer (rollover) your assets to that entity.  Once allowed some of the questions you need to ask are: what is the setup fee? (Usually around $6,000—not cheap which must be paid with funds outside the IRA) what is the annual fee to manage such a task? How much cash must be kept within the IRA to fund future expenses of the investment?  Once the fee structure is settled then your custodian must establish a business entity which will ultimately own the real estate.  This is an easier process then you think, the entity used must be a C-Corporation and not a pass-through entity.  To my understanding the LLC or S-Corporation (pass-through entities) are specifically not permitted to be used. Then, for simplicity sake, the IRA buys the stock of the C-corporation from the C-corporation, thereby transferring funds into that entity. The funds go from IRA/401(k) into a 401(k) entity that owns the stock of the corporation.  It should be noted that the entity that your IRA invests in must meet the simple definition of an operating company.  More than likely the Real Estate Operating Company that is created will purchase the land/farm/survival retreat and actively managing the property. 

It is important here to discuss an operation company.   An operating company is an entity that sells a service or a product.  If the company is to be considered a Real Estate Operating company the entity must hold the property as inventory to sell it ; or, actively managing the property thru collection of rents, responsibility of repairing and general improvement.  You cannot go and buy a farm and sell the commodities (wheat, corn, oats, hay, straw, beef, milk etc…) and keep the cash.  The entity receives the proceeds. You are what the government considers a disqualified person. It can pay a fair wage, however you must be careful not to violate the prohibited transaction rules of IRC 4975.  A disqualified person covers a range of people including those persons who have a fifty percent or more interest, a member of their family, or even an individual with a 10 percent or more interest. (I know 50% or more? 10 % or more interest this is why you need competent advisors).   Because a prohibited transaction can happen if a sale, leasing, lending of money, furnishing of goods, services, facilities, or the transfer thereof to a disqualified person for their benefit can cause the whole plan to become nonexistent and all be taxed and penalized.  Are we having fun yet? 

Let me simplify: You your wife, your like-minded brother and his wife all agree that it is time to purchase a survival retreat.  However, you all realize that you do not have the cash on hand to accomplish this without taking on a vast amount of debt. All four of you have IRAs or 401k.   You all transfer your funds into one financial advisor. A new corporation entity is created.  The corporation sponsors a 401(k).  Existing retirement funds are rolled over into the new 401k .  The new 401k purchases the farm/money producing entity.   The entity is in existence to make money, so it has a business purpose. Its an operating company. It has filed its Articles of Incorporation with your state.  You have obtained a tax identification number (EIN). You may have to register with the State for a sales/use tax ID number. You may need a business license or register with the local Ag agent. Since it is a viable business it will need workers.  You then can pay yourself and the others a fair, competitive, arms-length wage. You may have a need to store items in a secure environment and build an underground facility to accomplish this. 

Every corporation is responsible for keeping at its principal place of business accurate and complete books of records of accounts and minutes of the shareholders/directors. 
This short narrative was written for informational purposes only. If you want to relocate to the American Redoubt and would like to open a business; purchase an existing business; buy a working farm; buy a timber outfit ; or just take control and have some retirement funds or have family or friends of like-mind this summary is for you.  Please also keep in mind that your financial advisor and accountant does not need to know the true reason behind what you are accomplishing with your funds; nor, do they need to know that your underground storage facility is really a bunker.  – An Anonymous CPA

Economics and Investing:

Reader C.J.C. suggested this piece by Lars Seier Christensen, the founder of Saxo Bank: What is the broader relevance of Ayn Rand for society?

Extreme Cold Weather Freezes US Fuel Supply

Items from The Economatrix:

Unemployment Benefits Clear Senate Hurdle

Employment Recovery? 1,600 Workers Apply For Just 36 Jobs At An Ice Cream Plant In Maryland

How Will The Economy Improve In 2014 If Almost Everyone Has Less Money To Spend?

Odds ‘n Sods:

I just heard about the Buckmaster, a 7 Band, 300 Watt ham radio off-center feed (OCF) antenna that currently sells at a special price of $207. (The regular list price is $273.) It is manufactured by the same folks who operate the widely-visited Ham Call web site that lists more than 9.8 million amateur radio call signs from over 200 countries, also available on DVD.

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Reader K.A.F. mentioned an upcoming free online Survival Summit from January 20th to 26th, 2014.

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B.B. sent this interesting news: 3D Printed metal gun hitting the market

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Reader Dave W. mentioned that he found an item called FiberFix at his local Home Depot. It looks quite useful.

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Bob G. liked this page: The Forgotten Technology

Note from JWR:

Today we present another entry for Round 50 of the SurvivalBlog non-fiction writing contest. The $9,700+ worth of prizes for this round include:

First Prize: A.) Gunsite Academy Three Day Course Certificate, good for any one, two, or three course. (A $1,195 value.) B.) A course certificate from onPoint Tactical. This certificate will be for the prize winner’s choice of three-day civilian courses. (Excluding those restricted for military or government teams.) Three day onPoint courses normally cost $795, and C.) Two cases of Mountain House freeze dried assorted entrees in #10 cans, courtesy of Ready Made Resources. (A $350 value.) D.) a $300 gift certificate from CJL Enterprize, for any of their military surplus gear, E.) A 9-Tray Excalibur Food Dehydrator from Safecastle.com (a $300 value), F.) A $300 Gift Certificate from Freeze Dry Guy. G.) A $250 gift certificate from Sunflower Ammo. H.) A roll of $10 face value in pre-1965 U.S. 90% silver quarters, courtesy of GoldAndSilverOnline.com. The current value of this roll is at least $225, I.) Both VPN tunnel and DigitalSafe annual subscriptions from Privacy Abroad. They have a combined value of $195. J.) KellyKettleUSA.com is donating both an AquaBrick water filtration kit and a Stainless Medium Scout Kelly Kettle Complete Kit with a combined retail value of $304. and K.) APEX Gun Parts is donating a $250 purchase credit.

Second Prize: A.) A gift certificate worth $1,000, courtesy of Spec Ops Brand, B.) A Glock form factor SIRT laser training pistol and a SIRT AR-15/M4 Laser Training Bolt, courtesy of Next Level Training. Together, these have a retail value of $589. C.) A FloJak EarthStraw “Code Red” 100 foot well pump system (a $500 value), courtesy of FloJak.com. D.) $300 worth of ammo from Patriot Firearms and Munitions. (They also offer a 10% discount for all SurvivalBlog readers with coupon code SVB10P.), E.) A $250 gift card from Emergency Essentials F.)A full set of all 26 of the books published by PrepperPress.com. This is a $270 value, G.) Two cases of Meals, Ready to Eat (MREs), courtesy of CampingSurvival.com (a $180 value). H.) EP Lowers, makers of 80% complete fiber composite polymer lowers for the AR-15 rifles is donating a $250 gift certificate, I.) Autrey’s Armory — specialists in AR-15, M4s, parts and accessories– is donating a $250 gift certificate, and J.) Dri-Harvestfoods.com in Bozeman, Montana is providing a prize bundle with Beans, Buttermilk Powder, Montana Hard Red Wheat, Drink Mixes, and White Rice, valued at $333.

Third Prize: A.) A Royal Berkey water filter, courtesy of Directive 21. (This filter system is a $275 value.), B.) A large handmade clothes drying rack, a washboard and a Homesteading for Beginners DVD, all courtesy of The Homestead Store, with a combined value of $206, C.) Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy. This is a $185 retail value, D.) Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security., E.) A MURS Dakota Alert Base Station Kit with a retail value of $240 from JRH Enterprises. F.) Mayflower Trading is donating a $200 gift certificate for homesteading appliances, and G.) Ambra Le Roy Medical Products in North Carolina is donating a bundle of their traditional wound care and first aid supplies. This assortment has a retail value of $208.

Round 50 ends on January 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and that articles on practical “how to” skills for survival have an advantage in the judging.

Non-Internet Social Networking for TEOTWAWKI, by A.K. in Kansas

If you have finally decided to take the plunge and eliminate social networks from your life (Facebook, Twitter, etc.), the skills for maintaining interpersonal relationships should not be completely thrown by the wayside.  Over the course of the last five years our “group” has created a network of people that has proven to be very valuable.  One disclaimer that I must put forth is that the flippant nature of social networking on-line must be completely discounted as OPSEC is paramount.  I would never bring someone into my home to have contact with my family or include them in my preps if I didn’t fully trust them.  This is why most of the people in my network I have met through my church.  Developing a relationship with other families who have similar values and beliefs has been the backbone of the group that we have formed.  Although there are only a dozen active members (not including 14 children) we have developed a set of skills that crosses many areas of need come TEOTWAWKI.  Aside from having a wide range of skills the ability to work together as a team, the members of our group encourage growth “as iron sharpens iron” (Prov. 27:17).

I have isolated six areas of preparation that our group network has been most beneficial:

1. Physical Training:

This has been the greatest area of growth for our group.  Five years ago more than half of the members were overweight and only a few exercised on a daily basis.  As a challenge to all of our group members we started our road to fitness with an eight week program similar to the Get Healthy Challenge.  Group members kept in touch with each other on a daily basis to hold one another accountable.  After this eight week program we decided to focus on strength and core training through the Hundred Push-ups and Two Hundred Sit-Ups challenges.  While working on individual fitness goals group members encouraged and challenged each other with daily progress reports through e-mail, phone or text to see how the others were doing.  Doing these challenges with our wives was also an eye opener, as many of the women took the challenges more seriously than the men.  One of the wives actually won the Two Hundred Sit-up Challenge ending with 312 total reps.  Over the course of the last year the physical training has been taken to a much more intense level.  The majority of the group members participated in a Tough Mudder  Event and a GORUCK Challenge.  While not every member participated in these events due to ability, injury or pregnancy the bottom line is that all of us are in better shape today than we were five years ago.  The average member has lost 20 pounds (I have personally lost 40) and we all have a regular schedule of physical activity that maintains strength, flexibility and endurance.  The challenge, support and accountability that doing these types of activities as a group brings is immeasurable.  I doubt that most people would see the same results if done individually.  Working at the retreat property together has also been good physical training for the group.  Bucking hay, cutting and hauling wood and other chores at one of the two sites we have as retreat properties can be grueling work.  You really find out who your friends are when the hay needs to come in or several cords of wood needs to be put up.  Physically the group dynamic is tested with hard physical labor, but working together completes the task sooner and builds relationships with group members.

2. Medical Training:

This has been the weakest area for our group as we need to increase our level of training.  We do have a doctor (optometrist) and a registered nurse in our group.  Although they both have medical training, by no means are we able to fulfill needs like trauma care or even general surgery.  One of the goals is to get several of the members to take an EMT course at the local community college.  This would not solve all of our needs for medical training, but it would be a start for gaining more knowledge concerning emergency medicine.  This course will be a major undertaking, as 120 hours of classroom, observation and practicum is a commitment that will not be taken lightly by most families.  Ultimately the benefit of the knowledge of life saving skills will have to outweigh the cost of loss of time with one’s family.

3. Food Preps:

Buying in bulk is always better when done as a group.  Greater quantity means lower cost per unit and the most value for the money you invest into your preps.  We bought beef from a local slaughterhouse, grains from the local co-op and worked on preserving them as a group.  Whether it is canning, storing in Mylar with oxygen absorbers or dehydrating, it is always better to have more hands helping with the work.  While most of the food preps were done successfully we have decided as a group to not try to brew beer anymore.  After hours of labor and weeks of waiting we had a pretty nasty batch of skunk beer that was not worth the effort or resources allocated.  Pickling has been discovered as a fun way to spend time together as a group.  Many of the wives were looking for ways to put up excess garden produce, so pickling parties became the summer staple.  Developing the mindset that putting food up was important became the norm.

4. Ammo/Shooting Preps:

Again working as a group to purchase ammo in bulk has always been better than trying to find the best deal for each individual.  Utilizing common calibers as the group standard for our center fire rifle and pistol, 12 gauge shotshells and .22 LR we were able to accumulate adequate supplies of ammunition for each group member.  The greatest resource to ammo preparation as a group has been reloading.  Most of our group members did not know how to reload ammunition when we formed five years ago.  Today most have at least a working knowledge if not their own presses and dies.  We have worked together sorting range brass, going through the steps of case preparation and even pooled our resources during the recent shortage of components.  Sharing load data and ballistics has also helped with refining the accuracy of the rounds we produce through reloading.  It is always better to have someone else check your load data just to be safe when reloading.  We have also purchased several sets of reactive steel targets for our shooting sessions.  While I admit this is the area that the guys enjoy the most and pour the majority of their enthusiasm behind, the wives in our group have all taken classes (as husbands are often the worst firearms instructors for women) and are continuing to hone their skills with range time.  The area for improvement would be to take a tactical course like one at Thunder Ranch or Gunsite Academy.  We did participate in a 1,000 yard long range shooting match (which just demonstrated everyone’s then-current lack of ability beyond 400 yards) as a group, but this was more of a recreational activity, not tactical training.  A couple of the guys do IPSC or IDPA, but the majority of the group is not involved in competitive shooting.  To encourage group participation in a serious training course or a competitive shooting series is the goal for the future.  While all group members have firearm proficiency, few have had shooting experiences under pressure.

5. Communications Preps

Our group started out with FRS/GMRS radios as our primary method of communication in the field, and then we got CBs which were slightly better, now most members have Ham radios.  Studying and taking the ARRL tests together was also a good experience.  While the technician test is not hard, it did require some studying to refresh knowledge of electronics and radios.  It was also amazing all of the different FCC requirements and regulations that we needed to know.  Pooling resources together to build antennas and radios is another good function for the group.  A few members have actually joined a local club that maintains the repeater in our town.  The next step would be to have more members go for their General licenses to increase the bandwidth we can access and broaden knowledge concerning Ham radio.

6. Spiritual Prep

As I mentioned earlier, all of our group members were found through our local church.  We are not exclusive to church members (as some have left the church but are still a part of the group), however it was important to find people that all had similar values and beliefs.  The group members have been a part of a couple of small group fellowships that meet at least once a week.  There is a family Bible study, a women’s study and a men’s study that meets at different times on different days.  This has been probably the most important area of our network.  To “bear one another’s burdens (Gal.  6:2)” and not only hold each other accountable, but to support one another through trials and blessings is perhaps the greatest function of our group.  One of our group members is active duty Army and has been deployed four times overseas.  The group has rallied around his wife and children to provide support during his prolonged deployments, which to me fulfills the second greatest commandment (Matt. 22:39).  While a group may be squared away with beans, bullets and Band-Aids if they are not squared away with their Maker then all is for naught.

Letter Re: Lessons From The Polar Vortex Invasion

Dear Mr. Rawles,

This week has been a wake-up call for me. Living in the Deep South, I have never worried too much about being too cold. We have made quilts and have had many quilts passed down to us when my wife and I married. We had more quilts given to us when our daughter was born. But, our electric heat pump loses its efficiencies when the temperature is below freezing. Using natural gas is not cheap and the price varies based on the economic principals of supply and demand. We have never had to worry about our pets as we place extra straw in their houses. I have always checked my vehicle’s anti-freeze and thought if it gets down to zero degrees F, I would just stay home.

Then the bitter cold [from the Polar Vortex] ravaged the South.

Lesson 1: Piling on too many quilts can get heavy and the heat pump cannot keep up with the house’s demand. My wife’s sinuses have dried out from running the natural gas backup. I will have a wood burning stove added soon and will cut wood. I will [continuously] use a cast iron tea pot [on the wood stove] to put humidity back in the air.

Lesson 2: The dog and cat are staying inside. I even brought my dog to my office so she can use the facilities. I am blessed to have an office with a gated back area where she can exercise and do her jobs. She is also trained to only go on guard with a key word. I have a very safe feeling with her at my office. In my line of work, I work late nights from mid-January thru the end of April. I have always been reserved working late at night during this time of year. But, I keep my guard up. That may include having my dog with me this year.

Lesson 3: I will make it so the dog and cat can be comfortable outside without disrupting our schedule. I will have to study on this to come up with some practical ideas.

Lesson 4: Better prepare our vehicles for what is to come. I thought I would get one more summer out of this set of tires. They are not real good for snow or ice but work great in rainy conditions. I will have a set of “take-off” tires which I screw some small sheet metal screws into to act as ice cleats if needed.

Lesson 5: Know how your insurance works. I did not have any pipes to freeze; praises to God! But I went to lunch with an agent and talked about what insurance covers. Insurance does not cover the broken pipe, but will cover damage caused by the pipe. So it will pay to re-do your home but not pay to re-plumb your home. It can pay for you live somewhere else while your home is being redone. Talk to an agent in your area.

Lesson 6: If you have water pipes in your ceiling, insulate, insulate, insulate. Several businesses with pipes in the ceiling froze and burst. So many are closed and undergoing remodeling.

Living in the Deep South, I worry more about heat and rain rather than cold and snow, but this has shown me that any part of the US could be susceptible to any type of weather. We never lost power, but we need more options for heating. – Anonymous in The South

JWR Replies: I wholeheartedly agree about insulating houses. Don’t forget that it helps with both cold and hot weather!

Economics and Investing:

C.J.A. spotted this news: One Week Into 2014, UK Royal Mint Runs Out Of Gold Coins

North Carolina Sheriff Swaps Out 2 Vintage Tommy Guns for 88 new ARs. (Thanks to T.P. for the link.)

Dr. Paul Craig Roberts-U.S. Markets Rigged by its Own Authorities–It Blows the Mind

Items from The Economatrix:

Doug Casey: “We’re Really Close To The Edge Of The Precipice”

A The Prepper Podcast: Three Warning Signs That A Financial Crash Is Imminent

Here Is The Most Frightening Prediction For 2014

Odds ‘n Sods:

Outbreak of ‘nightmare bacteria’ in Illinois stirs worry. (Thanks to C.D.V. for the link.)

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Mexican Vigilante Gunmen Disarm Local Police So They Can Rid Town of Feared Drug Cartel. (A hat tip to H.L. for the link.)

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California Gun Law Paves the Way for Confiscation: Starting in 2014, the state will keep a list of every gun owner and the specific guns each person buys. (This explains the rush to buy long guns before December 31st.)

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Huge Solar Flare Delays Private Rocket Launch to Space Station until Thursday. (The flare is rated at an X1.2, so it is fairly large. If it were an X6, you probably wouldn’t be reading this right now.)

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Hidden Hybrid Holsters has announced another 10% off coupon for the month of January 2014. Use coupon code IG141 when ordering.

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Yer Ol’ Woodpile Report just celebrated its 10th Anniversary. It bears mentioning that 10 years is in fact a quite venerable age, since few blogs existed before 2004.

Jim’s Quote of the Day:

"What is the meaning of a gold standard and a redeemable currency?  It represents integrity.  It insures the people’s control over the government’s use of the public purse.  It is the best guarantee against the socialization of a nation.  It enables a people to keep the government and banks in check.  It prevents currency expansion from getting ever farther out of bounds until it becomes worthless.  It tends to force standards of honesty on government and bank officials.  It is the symbol of a free society and an honorable government.  It is a necessary prerequisite to economic health.  It is the first economic bulwark of free men." – Walter E. Spahr, Professor of Economics at New York University

Notes from JWR:

January 8th is the birthday of the late Algis Budrys (born 1931, died June 9, 2008.) He was the Lithuanian-American science fiction author who wrote the classic survivalist novel Some Will Not Die.

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Today we present another entry for Round 50 of the SurvivalBlog non-fiction writing contest. The $9,700+ worth of prizes for this round include:

First Prize: A.) Gunsite Academy Three Day Course Certificate, good for any one, two, or three course. (A $1,195 value.) B.) A course certificate from onPoint Tactical. This certificate will be for the prize winner’s choice of three-day civilian courses. (Excluding those restricted for military or government teams.) Three day onPoint courses normally cost $795, and C.) Two cases of Mountain House freeze dried assorted entrees in #10 cans, courtesy of Ready Made Resources. (A $350 value.) D.) a $300 gift certificate from CJL Enterprize, for any of their military surplus gear, E.) A 9-Tray Excalibur Food Dehydrator from Safecastle.com (a $300 value), F.) A $300 Gift Certificate from Freeze Dry Guy. G.) A $250 gift certificate from Sunflower Ammo. H.) A roll of $10 face value in pre-1965 U.S. 90% silver quarters, courtesy of GoldAndSilverOnline.com. The current value of this roll is at least $225, I.) Both VPN tunnel and DigitalSafe annual subscriptions from Privacy Abroad. They have a combined value of $195. J.) KellyKettleUSA.com is donating both an AquaBrick water filtration kit and a Stainless Medium Scout Kelly Kettle Complete Kit with a combined retail value of $304. and K.) APEX Gun Parts is donating a $250 purchase credit.

Second Prize: A.) A gift certificate worth $1,000, courtesy of Spec Ops Brand, B.) A Glock form factor SIRT laser training pistol and a SIRT AR-15/M4 Laser Training Bolt, courtesy of Next Level Training. Together, these have a retail value of $589. C.) A FloJak EarthStraw “Code Red” 100 foot well pump system (a $500 value), courtesy of FloJak.com. D.) $300 worth of ammo from Patriot Firearms and Munitions. (They also offer a 10% discount for all SurvivalBlog readers with coupon code SVB10P.), E.) A $250 gift card from Emergency Essentials F.)A full set of all 26 of the books published by PrepperPress.com. This is a $270 value, G.) Two cases of Meals, Ready to Eat (MREs), courtesy of CampingSurvival.com (a $180 value). H.) EP Lowers, makers of 80% complete fiber composite polymer lowers for the AR-15 rifles is donating a $250 gift certificate, I.) Autrey’s Armory — specialists in AR-15, M4s, parts and accessories– is donating a $250 gift certificate, and J.) Dri-Harvestfoods.com in Bozeman, Montana is providing a prize bundle with Beans, Buttermilk Powder, Montana Hard Red Wheat, Drink Mixes, and White Rice, valued at $333.

Third Prize: A.) A Royal Berkey water filter, courtesy of Directive 21. (This filter system is a $275 value.), B.) A large handmade clothes drying rack, a washboard and a Homesteading for Beginners DVD, all courtesy of The Homestead Store, with a combined value of $206, C.) Expanded sets of both washable feminine pads and liners, donated by Naturally Cozy. This is a $185 retail value, D.) Two Super Survival Pack seed collections, a $150 value, courtesy of Seed for Security., E.) A MURS Dakota Alert Base Station Kit with a retail value of $240 from JRH Enterprises. F.) Mayflower Trading is donating a $200 gift certificate for homesteading appliances, and G.) Ambra Le Roy Medical Products in North Carolina is donating a bundle of their traditional wound care and first aid supplies. This assortment has a retail value of $208.

Round 50 ends on January 31st, so get busy writing and e-mail us your entry. Remember that there is a 1,500-word minimum, and that articles on practical “how to” skills for survival have an advantage in the judging.

Maintaining Good Morale, by Audax

If you take prepping seriously, you’ve probably stored up quite the array of supplies—or are at least working diligently at it.  You may have even downloaded the Excel spreadsheet found on Survival Blog, and if you’re like me, you might have been slightly overwhelmed at first, at the number of things that are necessary in order to really become self-sufficient in the case of a SHTF scenario.  For those of us who are actively preparing for whatever may come, prepping is a never-ending exercise in gathering, training and building.  In between all of these prepping activities, however, sometimes we forget that one of the single most important supplies in our “arsenal” is an intangible thing.  Morale, otherwise known as positive attitude, can mean the difference between life and death—whether you have 2 days’ worth of food or two years of it.

Morale is so critical that the military spends an incredible amount of time and money training troops to understand its necessity and teaching them how to maintain it even in the most dismal of situations.  Major Alexander Cox, in a monograph published by the Army’s Command and General Staff College in 1995, explained that morale and unit cohesion are “the intangible entity that bonds men together and motivates them to push themselves to the last ounce of their strength or ability.”  In the worst case scenario, that type of motivation can be the last deciding factor in victory or defeat, whether the situation is a battlefield or just keeping your family focused on surviving from day to day when everything is crashing down around you.

So what exactly is morale?  It seems to be a fairly elusive concept that is often oversimplified or even given trite, clichéd meanings.  I polled several co-workers of mine, for instance, and asked them how they would define the word, and I received a plethora of varying responses.  “Just staying in a good mood,” said one.  Another stated that morale was “something you have in the military.”  Oddly enough, when I asked my boss, a former medevac chopper pilot in Vietnam, he gave me the best answer yet.  “Morale,” he said, “is the absolute belief, way down in your gut, that you will survive by any means necessary, for yourself and for the man next to you.” 

This sounds noble and courageous and lofty, but how does this translate to the average citizen in a SHTF situation?  How does one impart this to the members of their family and/or group?  More importantly, how does one cultivate this within himself?   Many prepper articles about morale offer games to play, or little distractions to engage in to keep the mind busy.  While these are all helpful, the truth is that morale building starts long before SHTF, and it is far more than just stashing a deck of cards in your bugout bag.  Morale is a mindset, a combination of core belief system, emotional health, training, and focus—and one member of the group without it can jeopardize everyone else.

The Marine Corps is often held up as the standard of esprit de corps, or the spirit of the unit.  What makes a Marine so different from other servicemen and women?  Certainly any member of the Armed Forces contributes something, but the mindset of a Marine is wholly different from the rest.  This is because Marines are not only taught to fight and kill, but they are taught the history of their beloved Corps.  They are taught about the spirit of those who came before and they have a pride instilled in them that spurs them on in situations that would break the average man.  They are part of a legacy, if you will, and every one of them believes forever after in the values and the standards of their Corps.  “Ex-Marine” is not something they say [as some even chafe at “former Marine”] , for they are Marines until the day they die.  Every piece of a Marine’s uniform is a symbol of a battle, a hard-earned day of reckoning—right down to the red “blood stripe” down the side of their dress trousers.  Everything has a meaning, and no recruit leaves boot camp without understanding the stories and the pride behind them.  They cultivate a mindset, and that training becomes the foundation for their endeavors both in and out of uniform, for the rest of their lives.

“So what?” you might answer.  “How does that help me here in my home, with my family, facing the whole End of the World As We Know It?”  Trust me when I tell you that you have far more in common with the United States Marines than you think—or at least, you should.

For those of us who call ourselves patriots, who love our nation and believe in the Constitution, prepping is not just setting up food stores in case of economic collapse.  It is not just putting escape plans in place in case of fire or tornado or flood.  For us, prepping also includes the solemn knowledge that we are in 1775 all over again.  Our freedoms are under attack.  Our government seeks to subjugate us under a socialist philosophy.  Our privacy is non-existent, and if the administration has its way, we will be disarmed very soon.  Stripped of our ability to defend ourselves, we will simply be sheep led to the slaughter, with no recourse, no way to save ourselves.  This is a sobering realization, for this knowledge brings with it another fact: We may be called upon to defend our freedoms in our streets, perhaps even in our homes.  The idea of morale, then, takes on a whole new meaning, for suddenly it is not just doing some stretches or playing cards by candlelight to “stay in a good mood.”  It is keeping that same frame of mind that allowed Marine Gunnery Sergeant Dan Daly to rally his Marines in the darkest hour, screaming, “Come on! Do you want to live forever?”  It is the frame of mind that drove American fighting men through the mud and the gore of Iwo Jima, through 30 days of endless fighting.  It is the mindset that pushed thousands of wounded and starving Marines to survive Bataan. 

For us, morale begins with understanding that we have a history.  We are the descendants of Nathan Hale, of Patrick Henry and John Adams.  Our ancestors faced this same fight, and in their writings we see not only their humanity and their fear, but we also see their courage, and their steadfast belief in liberty.  We see their own willingness to do whatever was necessary to ensure they won this battle; even if they died, they would die free.  This, then, is the first step to building morale in your families and neighborhoods—understanding our history, and the legacy that we carry in our blood.  We should be teaching our children about our ancestors, and teaching them about who we come from and what was sacrificed on our behalf.

Secondly, morale comes from a core belief system.  Are we sheep?  Or are we the sons and daughters of liberty?  What do you believe in?  What is worth fighting for—or dying for?  When you’ve asked and answered these questions within yourself, there is a sense of confidence that stems from that self-awareness.  People who already know what they believe and how far they are willing to go in defense of that belief have a certain peace because the internal struggle about these things is no longer necessary.  They are free to move to action.  Corporal Jason Dunham did not have to stop and think about what he believed when the insurgent he was guarding attacked him and his men, dropping a live grenade on the ground.  Dunham did not need to stop and think about whether it was his job to protect his men, or whether he loved them enough to give himself for them.  He already knew the answers to these questions, and so he acted, shielding the grenade with his helmet—and his body.  He died eight days later…but his men are alive because of him, because he did not need to question his core beliefs during crisis.

There is a misconception that those who are willing to fight for liberty do not value life, or that they are eager for war.  This could not be further from the truth.  It is because we do value these things that we choose our path.  Please understand—I am not advocating that we all rush out and find a way to die for each other.  On the contrary: we are learning and preparing to survive.  But in order to survive, we must be willing to do what is necessary within the parameters of our moral code and belief system.  We only truly believe that which we are willing and able to defend.

Training is another critical piece of the morale puzzle.  Firefighters train constantly so that when they are inside an inferno, their mind can stay clear.  When you train, morale becomes easier to maintain because you have already prepared for the situation you find yourself in.  When you learn mental discipline, you can steel your mind against the emotions that we all possess, and get the job done.  We put flashlights and candles in strategic areas so that when the lights go out, we don’t have to hunt around for light.  We load rounds into magazines so that when we need them, they are already prepared.  In the same way, we must practice mental discipline so that when we are tested, we can remain strong—and keep the positive attitude that is so necessary.
Those of us who believe in the founding principles of this nation, who understand the purpose and the cost of liberty, know we have a target on our backs.  We have no illusions about what is coming.  But we prepare.  We learn.  We teach.  We persevere.  Because morale, at its core, is survival.

Who Shall Protect Us?, by Shepard Humphries

Imagine you and your family are asleep in your home and at 2am you hear a downstairs glass window breaking.  You hear voices laughing and cursing, saying that they are going to F-Up you and your family.  Based on the historical length of violent encounters, you know that this whole violent situation will likely be over in 1 to 3 minutes.

This is not a pleasant scenario, but I am setting the stage for you to do a mental exercise.  I will not give you solutions; rather you will.  As Gavin DeBecker describes in his must-read book, “The Gift of Fear” you already have within you much more knowledge than you might first think.  Join me as I lead you along a train of thought and as you consider my ideas, I ask that you challenge them, all of them; you are in charge.  From these ideas and your own, I challenge you to develop potential solutions.

Who Shall Protect Us? A professional team of warriors would be a good choice, perhaps a military Special Forces group, a team of private “security” contractors or perhaps your city’s SWAT team.  These men with their High Speed Low Drag (HSLD) gear, training and mentality would be an excellent choice.  They will happily respond if your situation warrants it; how close in distance and time do you think they are to your home?  Let’s assume they have just been executing search warrants and are all geared up, mobile and ready to go.  In another stroke of good luck, they are working only five minutes away from your home!  Yeah!  Let’s keep this as one of our options!

Another choice would be your local government law enforcement responders, a group of men and women that shoot an average of 200 qualification shots with their pistols each year, do not know what you or your family looks like, are not friends with your dog, have never been inside your home or studied its layout and are at least 2+ minutes away.  (Contact your local law enforcement agency and inquire about their average response time to emergencies, it is probably at least double what I assumed above.) 

Most of these nice folks have received between 20 and 160 hours of training on dealing with emergencies like yours, and 2% or so regularly practice martial arts, paintballing, shooting and tactical maneuvers; perhaps they will be the ones that respond.  These people will also collect evidence and write a report of what happened, including detailed descriptions of your family’s blood splatter patterns.  Consider how much time an average cop spends gathering evidence and writing reports compared to actively using their hands and tools to counter active and dynamic violence.  I do not aim to disparage cops, I do however suggest that we remove our romantic movie-based views of them and consider what their true capabilities are.

A third choice would be for you and your spouse to respond tactically to the situation.  What good can you do though?  You don’t have a police uniform or a star or shield to pin on your chest or access to criminal record checks.  You have not been to a 6-month police academy. What could you possibly do?  You are helpless, right?

Perhaps you are helpless, but I suggest that you are not.  I propose that if you and your spouse spend even an hour each week developing your skills, within one year, You will be the best of the three options above.  Depending on how much preparation you and yours are willing to do, this will require a lifestyle change. 

What kind of “training” can you do without a level 1-alpha security clearance?  What can you do to prepare?  Following are some suggestions, not all are necessary and the list can be as big as your imagination allows.  I suggest making all of these fun!  If you are having fun doing them, you are more likely to continue and will think of your training as fun recreation rather than a chore.

Take your spouse on a date to play paintball every few months!  Spending an hour learning from the school of hard balls to use concealment to observe and record in your subconscious your adversary’s movements and pre-motion indicators along with many other tactical skills will be of great value.

Take classes in hand-to-hand fighting.  It is prudent to evaluate your personality before beginning.  If you habitually start diets and don’t stick to them or join gyms on New Year’s Day with big plans for the year, then drop out by the end of January; perhaps you don’t have “ideal” self-discipline.  Yes, this is a weakness, and one that I share with you.  Until we fix this weakness, we should be realistic in our training.  Studying Taekwondo or Judo might not be the best option for a person lacking in discipline.  These take many years of dedicated study to turn one into a tough guy.  Mixed martial arts, boxing, and many other styles dispense with the “extras” and focus on fighting immediately.  Hiring a private tutor for a monthly or twice-monthly lesson who is an active or retired MMA fighter that is able to communicate well with you and your spouse and comprehends your goals might be an excellent option.  To be competent, you will absolutely need to practice on your own.

Watch some felony fights on YouTube and search for real street fighting videos.  These show how things really happen in a real fight.  Use these graphic and perhaps upsetting videos to make up your own scenarios, “What if I walk into a gas station and a drunk guy shoves me in my chest and I fly backwards and hit the store shelves, what could I do?”  If someone has your spouse in a headlock, what exactly would be a good way to respond?  Consider many scenarios and think about responses.

Learn the defensive tactics that cops and security personnel use.  If you have someone “proned out” at gunpoint and police are 20 minutes away, how should your spouse handcuff and search the man for weapons?  If you are alone and have someone proned out and police are nearby, should you approach them to handcuff them?  How do you put someone in a position of disadvantage to search them and handcuff them?

Investigate personal protection dogs.  Contact an expert like Ridgeback for advice on solutions for all budgets.  Dogs can serve not only as protectors in a fight, but more importantly can help prevent the fight from ever happening.

When you and your spouse dine out, select restaurants that allow you to “people watch.”  Come up with your own secret codes for evaluating people.  Perhaps “nice lady” means a person that a criminal would likely target for robbery, so when you see an affluent woman in furs with a thousand dollar purse walking with a slouch and ear buds in her ears you can say to your spouse, “She looks like a nice lady.”  Look for “victims” through the lens of a predator and look for predators with the lens of an astute observer.  Doing so will help you learn not to be a victim or appear to be potential one.

Read Terry Vaughan’s entertaining book on reading body language, “A Dad’s Guide to Screening Your Daughter’s Boyfriends.”  Read “The Gift of Fear” by Gavin DeBecker and “On Killing” or “On Combat” by David Grossman.  Play poker with friends or at local tournaments, focusing on improving your ability to read the subtle “tells” of others.  This important skill set can help keep you safe.

Find local IDPA and USPA matches and compete frequently.  While the stress of a timer and a handful of observers does not exactly replicate the stress of a home invasion robbery, it is a good substitute.  Be humble at these matches and identify the nice folks that shoot well.  Ask them to watch you and give you tips.

Find a good shooting instructor and learn some basics of tactical shooting.  Be careful in selecting an instructor, of the more than 100,000 instructors in the US, few are “excellent.”  3 Hours of private instruction with Gabe Suarez, Clint Smith or another Top-25 Shooting Instructor will cost the same as a 40-hour class at a certificate-mill academy, but some believe that you get more bang for your buck.  Admittedly, I am biased, and do agree.  J

Use your local instructor for a 1 or 2 hour tune-up every few months, and if your budget allows, use your shooting instructor much like a personal trainer in a gym.  They will be able to guide you through great drills and help ensure that you are doing things properly.

Visit your local shooting range and practice shooting as much as possible.  Buy a Dillon reloading machine to make this practice much less expensive.  Set a goal of 500 or 1,000 or 4,000 rounds per month of practice. 

Dry practice at home!  You can practice the most important fundamentals without live ammo.  Your draw stroke, front sight focus and trigger press can be practiced safely thousands of times.  Many Top 25 instructors suggest that 90% of one’s practice be dry practice.

Take the NRA’s Personal Protection Inside the Home and Personal Protection Outside the Home or other similar courses. 

Practice safety drills with your family.  Make this a fun exercise and include your children.  Make your practice age appropriate, but I suggest you push the envelope to make it as realistic as possible as you and your family play your, “Defending Our Castle” game.  Does everyone know where the safe room is?  Does everyone know the 4 keys to punch to call 911 on your cell phones?  What other tactics are appropriate to teach and practice?  Perhaps you might also play a game rehearsing roles of each family member if you witness a serious vehicle collision right in front of you or if your house catches fire.  It is important not to frighten your family into thinking that a violent threat is imminent.  

If you have a friend that is a cop, go over scenarios with them, keeping in mind that your goals are not identical.  Good cops will happily share tactics with you if you are a normal peaceful person.  If you have a friend that just returned from a war zone and has experience performing violent home invasions, ask them to help with your defensive plan.

Play a sport at least twice-monthly that requires fast reading of your opponent’s body movements.  Basketball, boxing, soccer and many other sports will help you not only in understanding and predicting body movements in others but are also a great way to stay fit.

Send a Christmas card to the patrol division of your local law enforcement station, they will probably put it on their bulletin board.  Have it include a picture of you and your family in front of your home with the caption, “Happy Holidays from the Doe family at 1234 Elm Street.”

Build a few gear bags or gear vests.  If you shoot one intruder and the other is being held at gunpoint by your spouse, do you have a way of securing the intruder with handcuffs, zip ties or duct tape?  Would a flashlight and maybe your old cell phone (charged) be handy?  (Remember, cell phones without active plans still work for 911.)  What else should be in the bag?  Pepper spray, an extra car key, a key to your neighbor’s house…?

Evaluate your neighbor’s mentality and coordinate with them appropriately.  If they have their heads buried deeply in the sand, at least hint that if anyone ever starts a neighborhood watch program, your family would enjoy being involved.  If they are more savvy and trusted, perhaps they would allow you to hide a laminated simple floor plan of your house in the middle of a magazine hidden on their property.  Might you do the same for them?  Might this be of use to a responding cop, “There is a floor plan of our house under the South end of the camper shell at 1254 Elm Street.”

Learn about use of force standards and relevant laws.  Recognize that you will be sued if you ever shoot someone, even if you were absolutely justified in doing so.  Recognize that it will cost tens of thousands of dollars for you to “win” and get rid of the ridiculous lawsuit.  Consider that you are not only morally better off, but also financially better off if you can solve problems peacefully without seriously harming anyone.

Multi-tasking practice is a great way to improve your skills.  Why not practice your draw stroke while sitting on the toilet, and perhaps throw a few punches and do a few parries.  Each time you walk through your house alone, pretend a bad guy is playing hide and seek and is hidden somewhere.  Use your imagination to develop drills, perhaps connecting them to tasks that you will do anyway.  Perhaps each time you urinate you practice American Kenpo inward and outward blocks five times.  While brushing your teeth with your strong hand, practice eye gouging moves with your weak hand.  What else?
 
I hope the above ideas have helped get your brain wheels get turning.  I hope you have already decided that some of the ideas are really dumb and are not right for you and yours.  I also hope some of the ideas will serve as a foundation on which you can improve and implement.  Every single idea has pros and cons, and it is up to you to weigh them.  I will make the bold and controversial suggestion that if you train better than cops and know your equipment, know your home and your family better than cops, that you are pretty darn capable!

Objections?  I promise that if you show this article to a police officer friend, they will advise that most of it is ridiculous and that you should not try to “play cop” and handcuff and search people; after all you are not as highly trained and practiced as they are, are you?  They will likely advise that you plan to call 911 and let the professionals do their job.

I will not argue with those that disagree, I was once a cop and would have taken their side knowing what I knew then.  I still recommend that one of your first steps in a violent emergency should be to call “911 SEND!”  My suggestion is not that you eliminate government law enforcement’s response, I only suggest that you prepare to handle the situation until the cops arrive.

About The Author: Shepard Humphries is a former Police Officer, having served in Investigations, Patrol and SWAT as a sniper team leader. Shepard resides in Jackson Hole, Wyoming where he operates several small businesses including an executive protection and security consultation firm and two firearms related businesses, the Jackson Hole Shooting Experience  and Counter Violence Institute. He provides shooting instruction, consultation and public speaking services in Jackson and elsewhere.

Economics and Investing:

From SurvivalBlog’s Poet Laureate G.G.: U.S. Mint’s Silver Coin Sales Hit Record High

Jim Rickards: Gold: Declining Prices Versus Skyrocketing Demand

Items from The Economatrix:

Going Under: Over One Million Lose Unemployment Benefits – Will Hit Five Million By End of 2014

Comparing The Inflated Cost Of Living Today From 1938 to 2013: How The US Dollar Has Lost Incredible Purchasing Power Since 1938

“The Biggest Redistribution Of Wealth From The Middle Class And Poor To The Rich Ever” Explained…

Odds ‘n Sods:

Reader Pierre M. sent: Break Up: Will California splinter into six states? Voters, Congress could soon decide. [JWR’s Comments: Looking at the way their proposed state lines are drawn, it would appear that three of the new states would be libertarian/conservative while the other three would be statist/liberal. California’s present two senate seats are currently held by ultra-liberals. They would be succeeded by 12 senators — and presumably that would mean six libertarians/conservatives and six statists/liberals.] While the plan might seem like giving inordinate political power to the populace of what is now the single state of California, this fragmentation would very likely pave the way for the eventual partition of many other states. These might include: Western New York, Northern Arizona, Northern Wisconsin, Northern Minnesota, Northern Michigan, Southern Ohio, Northern Pennsylvania, Northern Colorado, Northern Nevada, Eastern Oregon, and Eastern Washington–most of which are more conservative and freedom-loving than their parent states. All in all, I’d call this a Redoubtable proposal.

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How Many Constitutional Rights Have Americans Lost? (Thanks to Brian H. for the link.)

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T.P. suggested this amazing story: From USA to South America on a 250cc Motorcycle

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R.B.S. spotted this: European Commission To Ban Heirloom Seeds and Criminalize Plants and Seeds Not Registered With Government

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Camping Survival has launched a new Canned Foods section, with very competitive prices.