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I enjoy reading SurvivalBlog each morning as I prepare for my day. I have only been a reader of the blog for six months, and enjoy all the varied insights. So I feel compelled to share some of my experiences. Let me start off by saying I was raised in a Christian preparedness household.  Both my parents suffered through the Great Depression as children and my mother was deeply impacted by the possibility of being hungry and cold again. As a teenager in the mid-1970s I remember we had a basement full of Neo-Life brand long term storage food, thousands of pennies in ten pound cans, water, silver, gold, but no guns or ammo that I knew of.  I have been involved with long term provisioning all my life.  When the fuel crisis hit in 1973 my mother was sure it was the beginning of the end of America (she was an avid reader of the “The Ruff Times”). As it looks like we are nearing the end of life as free Americans I’m ashamed to say that I gave my parents a hard time over their “crazy” desire to provide for us “come hell or high water”.  

I have been blessed to have had two great careers, first as a financial planner, and then as a commercial Pilot. In both situations my employers invested large sums in training me. In every instance there are rules to follow. Every six months we fly the simulator and practice every possible type of emergency and hazard with the aircraft. When a problem comes up in real-time, there is never a hesitation. We have trained to respond without pause so we are ready. How can we approach protecting our families any other way than to plan, and practice?
  Growing up I was paying attention to what my folks were doing, and these are the lessons I’m sharing now. Even though things never really broke down the way my parents expected, their planning didn’t go to waste.  The food, barter items, and silver all got used or saved. If nothing else they are great investments that have had excellent returns. Their planning did no harm, financially or strategically to our family in fact we are still benefiting from decisions they made 40 years ago.

[JWR Adds: People who bought gold in 1975–soon after it was first re-legalized in the U.S.–and who have held on to it since, have done very well. Gold was selling for $145 per ounce in October of 1975. When I last checked (February 19, 2011), it was $1,389 per ounce. That is a 1,043% gain. For comparison, if someone had just left their earnings in cash (so-called “mattress money”) in 1975, it would have lost about 75% of its purchasing power by 2011. ($145 worth of groceries in 1975 would cost $593 in 2011.) Granted, stocks on average listed in the DJIA have seen a gain of 850% since 1975. (But of course you could have picked a bad stock like Pan Am Airways–now worth zero, or a more consistent blue chip stock like GE.) But the beauty of gold is that it provides both a long term hedge on inflation and insurance against a full-scale currency collapse, which we may soon experience. When that happens, nearly all U.S. dollar-denominated investments will suffer tremendously.]

 So you want be prepared? My mother would say get your financial house in order.
 Myrtle’s Rules:

1. If you do have to borrow, get the shortest term possible. The Highest payment you can afford, will force you to buy fewer things that you don’t need. Get you out of debt quicker with less interest = lowest total cost. This forces you to live by a budget and to waste less on impulse purchases.

Example: When we bought our present home in 1991 we took out a five-year mortgage. The payments were almost out of reach and we barely qualified for the loan. We did little for the next 60 months but make sure the bank was paid on time. It was tough. My young children did not think it was cool that we drove 5 and 7 year old cars (that were paid for) and had no television.  We paid off the house in 1996 right on time and then transferred the title to a “Family Trust” to remove it from our personal estates and ownership. It’s hard to imagine a situation where the house could be taken from us, other than non payment of property taxes.   By the way we paid less than $12,000 in interest to the bank!

1. Don’t worry about saving until you are out debt.  This is a big issue. Get your home (retreat) and cars paid off; otherwise you are just renting them from the lender. Once your house is really yours the freedom it creates is unbelievable! I know about all the tax advantages from mortgage interest, and savings in your 401k with employer matching. In eight years most people can be debt free. Then you will have ability to save and invest most of your earnings. It’s amazing how fast you can create wealth when your partner isn’t the bank.
2. Stay married: this is a big factor that defeats many of the people I counsel. I observe countless examples of unhappy dissatisfied people blaming their spouse for all the problems.  I’m not a marriage counselor but I sure get tired of hearing it’s the other guys fault. Grow up. If you are looking for someone else to make things right in your world you will end up broke and alone. Be a team; involve your partner in your plans and prayers. You want to prosper during the coming times? Plan together…you can’t do it alone.
3. Buy Silver: Metals are the future and paper is paper. A gold coin that may be worth $5,000 USD in the future is not a good medium of exchange.  Silver dollars and silver rounds are about $30 each right now and will be very practical for commerce down the road.
4. Plan for the worst, Hope for the best. Yes, I have a few guns, and plenty of ammo and the best offense is a killer defense (no pun intended) but I pray that we will never have to take a human life. I know this sounds naive but as a family we want to minister to the needy, it will be much tougher after we’ve put a few holes in them.
5. Be generous with your time: giving of yourself is not the same as writing a check. Our tithes and offerings are a command, but true giving as a form of worship that means giving of your physical self. If you need further explanation: read a chapter of Proverbs every day, it is a wealth of practical knowledge and wisdom.               (31 chapters/ 31 days: coincidence…. I think not)
6. Learn a new skill: One new hands on, sore back, stiff knees dirty nails skill every year, when you know enough to teach it to another you’ve got it. NOTE: we will need many more diesel and small engine mechanics down the road. We have raised a whole generation that can’t find the dipstick.
7. Partnerships don’t work: A week seldom goes by that someone doesn’t ask me to underwrite, finance, partner with, or otherwise join in some grand scheme. My wife and I made a deal when we got married …. No partners. I am married to my partner, Period. No others allowed. Think about the difficulties of communication in your marriage. My wife and I have a great marriage and we still after all these years still have miss communication. We have the same goals, ideals, morals and yet there are still days we fail to connect. Throw another family in the mix… their needs, problems, differing belief system and you can see why 98% of all business partnerships fail within two years.

Not enough for two. Partnerships evolve because someone has some cash and the other party has the skill, idea, or product. So from day one there is a disparity in expectations for the parties involved. The investor wants a Return on Investment (ROI) and the inventor/worker/labor wants a paycheck.  A new business that is run very well with a skilled bookkeeping normally won’t turn a profit for two years, so you just multiply the problem with two families trying to eat out of the same trough. In the great book by Michael Gerber “The E Myth” he describes that the desire of owning your own business as follows:
10% dream (idea) everyone has an idea it’s the entrepreneur in us.
10% technician (i.e. the product, service or goods) we all want to work for ourselves.
 80% management. No one wants to do this Job!
We have learned the hard way it’s difficult to wear all the hats that make a small business prosper. Early on I was forced to become a manager, I still don’t like it but I have come to embrace it as the most important part of every business venture.

Good enough to do alone. Most partnerships start because you are unwilling to take the plunge alone; you want to dilute the downside risk. I say if it’s a great project and you’re confident of its chances then raise the money and do it with the partner your married too. Following this rule has saved us many broken relationships, including our own.
What is your exit strategy? People are always amazed when I ask this question. Most reply, “I’m just getting started, how would I know?” If you are going to start something you need to have a plan how to end it. When we start a business we always have a plan to get out, a huge success or a big bust, we still have time limits as well as financial benchmarks to tell us where we are and when to move on, sell, or liquidated.

TIP: Service businesses that don’t have a physical location (brick & mortar) are very difficult to sell. Think in terms of resale value.
Over the last 30 years we have started (or bought) and sold more than 15 businesses. Most were great success (11). A few were bombs (3). One was just more trouble than it was worth. While doing all this we had other income and I had an employer that provided our healthcare coverage. No small thing, not needing to pull income to meet living expenses from a new enterprise. This gave us the time to correct our mistakes and get the right employees trained and in place. I would encourage each family to start and operate a small home business making something. It will teach your children basic business skills, the value of their time to make (Money) while you sleep.

Note: Parents as the Boss and children as “paid help” works best.

I realize this article is merely Business 101 for most readers, and you may question whether it has a place on SurvivalBlog. The feedback I get from many people is that they know they should get better prepared but they just can’t afford to. I have seen a few partnerships prosper and survive long term, but they are few and far between.  Partner with your family, create some prosperity together, you will be richer for it.

The first step in preparedness is your heart and relationship to the Savior, the next is your finances.

To lead in times of trouble, be gracious in times of peace. I say you can’t afford not to.