Saturday, October 27, 2012

I'm a Trillionaire

Yes, I am now a trillionaire!  I invested less than 30 dollars, did no work, and waited less than a week.  I promptly received the return on my investment: a total of $260,000,000,000,000  issued by the Reserve Bank of Zimbabwe in 2008. 

The problem with this rich quick scheme?  It's only paper.

Zimbabwe hyperinflation reached it's peak in 2008-2009.  Hyperinflation was preceded and caused by droughts, a large national debt, the redistribution of wealth, and "uncontrolled government spending."  Read more at the Dallas Federal Reserve's website.

Would you like to be a trillionaire like me?   You can for 1 cent plus $4.99 shipping and handling  (here)  or (if you're interested in hundreds of trillions) here or here.

But if you're hungry, I recommend you skip this investment and use your 5 dollars to buy a Whopper at Burger King instead.  Don't invest in something that can quickly lose its value with the whims of politicians.  Invest in something real that has inherent value--be it sandwiches, businesses, gold, silver, or oil...because, well, you can't eat paper.

Wednesday, October 17, 2012

Book Review: Unfair Advantage

     A friend recently suggested that I read Unfair Advantage: The power of financial education, by Robert Kiyosaki of RichDad.com, author of NY-Times best-selling Rich Dad, Poor Dad.  The book is 176 pages long, and the Kindle version can be purchased for only $9.85.  I found the book very thought-provoking, challenging many of the most commonly held beliefs of our time.  My only complaints are a few typing errors and a few mild slang expressions the book would have been better without.  The book was well worth its price, and I would definitely recommend it.  

Information Age v. Industrial Age
Kiyosaki claims that the Industrial Age ended with the birth of the world wide web ,and the Information Age has begun.  For those still clinging to outdated Industrial Age ideas about going to school, job security, steady paychecks, early retirement, saving money, assets & liabilities, and government support, Kiyosaki predicts the next few years will be the worst of times.  If you want to be free, he says, it is necessary to let go of old ideas.  "For those who are financially educated, prepared, flexible, and adaptable, the next 10 years will be the best of times.  For those who are waiting for the happy days of the past to return, the next 10 years will be the worst of times."  In the Information Age, Kiyosaki says financial education (not training)  is essential.

Assets v. Liabilities
Kiyosaki's definition of assets and liablities is quite different than anything we learned in accounting class.  To him, anything that brings cashflow in is an asset and anything that sends cashflow out is a liability.    For example, he considers his house a liability because he has to pay taxes and insurance on it and pay for its upkeep (cash flows out).  He considers the apartment building he owns and rents to tenants an asset because after all the expenses are paid he has a net income from the rent he is paid (cash flows in).  "Assets put money in your pocket, and liabilities take money from your pocket."

Saving Money
Saving money, according to Kiyosaki, is a bad idea.  Why? because since the United States went off the gold standard during Nixon's presidency, money hasn't been real money.  Why save money when the government is always printing more?  Kiyosaki believes higher taxes and inflation are coming, and the U.S. dollar could even collapse.  Since 1971, he says, the dollar has lost 95% of its purchasing power, and it won't take 40 years to lose the remaining 5%.  Instead of saving paper, he recommends that those who have a limited financial education save real money (gold and silver).  "If our leaders do a good job, gold and silver will decline in value.  If our leaders are incompetent, gold and silver will go through the roof" (Take your bet :P).  For the financially sophisticated, he recommends using debt to acquire "assets."  He also recommends investing money for cash-flow.

Investing
"Nothing is a good investment if you are a bad investor," Kiyosaki says.  First of all, he believes sending money to others to invest for you (in mutual funds, etc.) is a bad idea.  He believes 401k's are a very bad choice.  "Mindlessly sending your money to complete strangers is not the end result of good financial education.  It is the end result of dog training." Cash flow is the most important word when it comes to investing.  "Cash is always flowing.  It is either flowing in, or it is flowing out.  True financial education trains you to have cash flow in."  He invests primarily for cash flow, not capital gains; and he likens investing mainly for capital gains to gambling.  "We invest in investments that require people to send us money, good economy or bad," he claims.  For example, people always have to have a place to live, so he invests in apartments, and his tenants send him rent whether the economy is up or down.  People always need gas for their cars, so he invests in drilling.  His focus is on acquiring assets that will work for him, so people will always be sending him money.  He also believes in having a diversified portfolio.  But the typical "diversified portfolio" is what he calls a "de-worsified  portfolio" because most so-called diversified portfolios only contain a variety of paper assets--so they are "less worse" but not diverse.  For him, a real diversified portfolio has investments in different asset classes--real estate, businesses, paper assets, and commodities.  This book contains advice on reducing risk in various investments.   

Education
"The real financial crisis is a crises of an educational system that is old, obsolete, and out of touch with the real world," Kiyosaki asserts, "One of our biggest problems is an antiquated educational system that hangs on to the past and cannot see the future.  It's an obsolete system that insists on preparing students for a world that is dead and dying."  Traditional education teaches people to become employees and small business owners.  These students will work hardest and pay the most taxes (if they are able to find jobs at all).  Kiyosaki says schools change too slowly while the world changes too fast and claims that to solve the financial crisis, more true capitalists are needed.  To become a big business owner or investor, it's best to have instructors from these quads.   What he considers most important in an education is the skills learned, who the teachers are, and how the education prepares a person for the real business world.  He goes to seminars and lectures, hires coaches, learns from his mistakes, and believes financial education is essential, especially for the uncertainty of the world ahead.  ROI for Kiyosaki stand for a Return on Information.  "This means the more information I have, the higher my returns--and the lower my risk."  He claims that life-long learning, and good teachers, coaches and friends are the key to success.  

Financial Freedom
     Kim Kiyosaki, Robert's wife, writes in his book that "Shifting [her] focus to acquiring assets took the attention off me working forever for my money, and put it on [her] money working forever to make money." Every year they set their goals...they were looking for financial freedom.  "Financial freedom to Robert and me was not amassing millions of dollars in savings on which to live.  It was simply to have the cash-flow coming in every month from our investments, whether we worked or not," she wrote.  She said they were always learning.  They achieved their goals and financial freedom, and went from being homeless, in bad debt, and living in a friend's basement, to being multi-millionaires.  


A Motivational Book
"Your brain is your greatest asset.  Your brain can also be your greatest liablility," Robert Kiyosaki says  .  Kiyosaki forecasts a coming financial storm/crisis and a "crash of nations".  He gives advice for the reader, depending on where they are in life, and urges the reader to "Learn more so you can do more.  Focus on doing more with less, and enriching the lives of others.  Your job is to use your unfair advantages to put the power of financial education to work in your life.  First change yourself.  Then change the world."

So, that's my summation of Unfair Advantage's 176 pages.  If you, like me, are pondering whether some of his ideas are good or bad, practical or impractical, it's time for you to start reading.  Kiyosaki expresses his ideas cleverly and keeps the book alive with stories from his own experiences.  He also had his wife and a few experts on taxes and investing write segments of the book.  Most importantly, Kiyosaki keeps the reader engaged and thinking about what improvements he/she can make in his/her own life.  If you're up to some unconventional and surprising reading which may challenge you to look twice at some of your own beliefs, this book is for you!



Saturday, October 6, 2012

Hike Around Upper Pine Lake

We decided to take the trek around Upper Pine Lake.  

The trip started with a detour down a steep trail and a rickety ladder to take a look at one of our favorite spots on the Iowa River.


Then, we went on to Pine Lake, 
starting on the same nicely paved trail we used to walk around the lower lake.





The upper lake was beautiful with autumn colors.
We glanced at the spillway, which was still dry as a bone, and then headed up this path

(My parents)

Until we came to a fork in the road


  
The right path leads around the lower lake, and the left path leads to an adventure around the upper lake, so we chose the upper lake.

The going was still easy...a leisurely stroll on a decent path...but it was only a decent path for a while.


Remnants of an old bridge

To cross this bridge we would have needed wings.  
Fortunately for us, though, the water was gone too.  This is what our path looked like next:

If you can't see the path, I can't blame you

We ran down some hills (slid down the ones that were too steep) and crawled up others.  We also spotted about 4 deer.

Finally, we saw the rock dam which keeps silt from the stream from flowing into the lake.
There was some talk of walking across the rock dam like we did this winter.  But the decision was out-voted by the majority of people, who were not interested in getting their shoes and socks wet.

We left the woods behind and reached a dilemma.  How were we to cross the stream that feeds the lake?

The answer:

Jump onto an over-hanging tree branch and walk over!


There was a SPLASH...and it's a good thing there are no piranhas around.

Our courageous scout accidentally slipped into the creek just as he was landing on the other side.  He jumped out of the water, dripping wet from the waist down. 

I waited to see how the others would fair; with my brother's help on the other side, everyone made it safely.  So, I crossed second to last...

and, fortunately, I made it without mishap.



  A dinosaur egg?  Nope, it's a  mushroom.

Our path became less than pleasant on the other side of the lake.  We had to stoop to get through brush, and sticker bushes and cockle-burs wouldn't let us forget their presence.   

But the fun wasn't over yet.  Next we crossed a little swamp/wet-land.  So, everyone who didn't have wet socks yet soon had them.  I was wearing rubber boots, which I thought would keep my feet dry, but unfortunately I stepped in one spot where the water was too deep. We all faced the same fate.

We hiked through another wooded area and then came to another grass/wet-land.  This one was, except for one small stream, dry.  But we were in for a big surprise.  My brother took a step and stopped.  Not more than 6 feet away from him, a giant wild turkey jumped out of the grass and flew away.  I couldn't resist thinking what a good Thanksgiving dinner that turkey would have made.

We walked through a stretch of pine trees, over a couple creeks,and under and over dead logs, and  acquired more cockle-burs in the wood-lands and brush.
Our pathway... 

Papa found an arrow an archer had lost.  Then finally we glimpsed civilization through the trees!





Our hike was over, and we were very glad to get back to our van for glasses of water and refreshments.

   In my post "Gone Hiking: This Land is Mine" I wrote, "I know from experience that the route around the upper lake is not for the faint in heart."  Well, it isn't, but it's certainly a lot of exercise and a lot of fun.

Friday, October 5, 2012

Let's Whip Up a Batch of...Concrete!

 Today instead of whipping up a batch of cookies, we're mixing concrete.  I'll give you the recipe and a view of our latest concrete job.

What you will need:
1 part Type 1 Portland Cement
 (how much a part is depends on how much concrete you want to make, 
1 part could be 1 teaspoon, 1 coffee can, 1 bucket, or 1 ton. 
 Just be consistent and keep the proportions right; proportion is the important part.)


2 Parts Sand

                   
3 parts rock  (We use a mixture of gravel and pea gravel... 
2 parts gravel and 1 part pea gravel does the job).

Make sure your rock and sand is clean.  Dirt, sticks, and leaves would make the concrete weaker.

For a small operation like ours, a wheelbarrow is a great for mixing the concrete in.  So, we pour 1 part cement, 2 parts sand, and 3 parts gravel/pea gravel into a wheelbarrow.


Next, grab a shovel and mix the dry ingredients.

Add a little less than 1 part water.



Mix thoroughly.

This mixture is rather wet, your mixture should appear slightly drier.

After the concrete is thoroughly mixed  (everything should be gray and you should not be able to see any sand), you can put the concrete to work.

We make concrete pads for propane tanks, so we pull out our forms, grease them with oil (to make the finished concrete pads slip out easier), and set them on a work table.


The forms are filled about 3/4 full with concrete.  Then the re-bar goes in.  


The forms are filled completely, and then smoothed with a finishing trowel.
  
Next the concrete should be vibrated, but if you don't have a vibrator handy--we don't--move the form to the edge of the work table and bounce the form 50 times up and down.  
Concrete after vibration (shaking)
The forms are then carried to the rack seen in the photo so that the table can be used for other projects.  My sister grabs the finishing trowel and re-finishes the concrete, adding extra where it is needed so the forms are full and the concrete is smooth.

 

The concrete is then left to dry in the forms for a few hours (the exact number of hours depends on weather conditions.  If it is hot and dry the concrete dries more quickly).  When the concrete looks solid, it is moved in the forms into large tubs of water to be cured.  



Water curing is one of the most effective methods of curing concrete.  It retains moisture so that the concrete can become stronger and it delays shrinkage until the concrete is strong enough to resist shrinkage cracking.  


After a day (2 days in cold weather), the concrete is taken out of the forms.  The concrete pads are placed back into the water for about a week.

The finished product:


Thursday, October 4, 2012

I Declare! What it took to declare our independence

This essay was orginally written for the Joe Foss Institute Essay Contest, I Declare.

     The Founding Fathers valued liberty and justice more than life. They believed the purpose of government is to secure the unalienable rights of life, liberty, and the pursuit of happiness, and that whenever any government becomes destructive to these ends, the people have the right and responsibility to God and posterity to alter or abolish it. The Founders saw a long train of abuses of power, all designed to reduce them to despotism. They appealed to the Supreme Judge of the world, mutually pledged their lives, fortunes, and sacred honor, and fought for, died for, and built a better future for posterity.

     The signers of the Declaration of Independence were young men, except for Benjamin Franklin who assured his fellows, “We must all hang together, or assuredly we shall all hang separately.” Three of the signers were in their twenties and eighteen were still in their thirties. They had wives and children. If they would only avoid the threat of hanging, they certainly would have many more years to live. But what good would life do them if the sacred flame of liberty were extinguished within their hearts? They pledged their lives.

     Thomas Nelson Jr. offered a bounty to the first American gunner to hit his own home—the most prominent house in Yorktown—which, he was certain, was British headquarters. He ordered his own hard-earned wealth destroyed. Eleven of the signers were prosperous merchants; one owned the largest mercantile house in America. Twenty four were lawyers or jurists; others were doctors, career politicians, and a minister. Rather than continue to live ordinary lives, become richer, and enjoy a comfortable retirement, they pledged their fortunes.

     “Our declaration of Independence, I dare say, you have seen,” Abraham Clark wrote to a friend ten days after signing the Declaration, “a few weeks will probably determine our fate. Perfect freedom or absolute slavery….our fates are in the hands of an Almighty God.” Many contemporaries may not have viewed their “treason” as honorable, but the founders pledged their sacred honor, and they did not look back. No, Abraham Clark did not even look back when he heard a heavy knock on the door. A breathless messenger gave him a message from the British: they had captured two of his sons, and if he would renounce his signature on the Declaration of Independence, both would be freed. One son, Captain Thomas Clark, was held in a dungeon of the notorious prison ship Jersey. No food was given him except for the bread fellow prisoners managed to smuggle to him through a keyhole. Abraham Clark refused to compromise. For seven long years the founders fought for liberty. They struggled, they never looked back, and they won.

     What did it take to declare our independence? Independence of mind: the founders knew that eternal vigilance is the only way to preserve freedom. As Charleton Heston said, "If Americans believed in political correctness, we'd still be King George's boys--subjects bound to the British crown." If we would be free, our minds must be freed from conventional indifference. We must declare our independence with every heartbeat, with every thought, with every action, and with every jot and tittle we read or write. The founders protested the smallest infringements of liberty because they knew that a small infringement always leads to a larger one; as James Beck said, the Founding Fathers “waged a 7-year war in protest against a two penny tax on a pound of tea, because it involved a principle.” The founders took their responsibility to posterity seriously. They asked themselves, “What kind of inheritance will we hand down to future generations?”

They refused to pass on to their children a giant British debt incurred by wars. They refused to shackle their children as slaves to taxation without representation. They refused to leave to their children a country where justice was not executed and where the king had “erected a multitude of new offices, and sent swarms of officers to harass our people, and eat out their substance.” They would not leave to future generations a country where standing armies were kept in peacetime, unreasonable searches and seizures were conducted, and citizens were deprived of trial by jury. They had faith for a better future; they believed in a beautiful America where liberty and justice would prevail. They did the impossible; they declared independence from what was then the greatest nation on earth. They had an ideal; they stuck with their principles. Their ideal became a reality; it became the United States of America, the land of the free and the home of the brave.

     Today, are we proud of the inheritance we will pass on to future generations? Will we pass on to our children the great America, the beautiful America, the noble America that was passed on to us? Will we make the Founding Fathers proud? “Posterity,” wrote John Adams, “you will never know how much it cost the present generation to preserve your freedom. I hope you will make good use of it. If you do not, I shall repent in heaven that ever I took half the pains to preserve it.” You, reader, are “posterity.” The spirit of 1776 must live within your heart. As Dwight D. Eisenhower said, “Freedom has its life in the hearts, the actions, the spirit of men and so it must be daily earned and refreshed--else like a flower cut from its life-giving roots, it will wither and die.” You must protest the smallest infringement of liberty because the smallest infringement will always be precursor to a larger one.

     Thomas Jefferson gave three provisions for the preservation of liberty. First, “Educate and inform the whole mass of the people. Enable them to see that it is their interest to preserve peace and order, and they will preserve them…[The people] are the only sure reliance for the preservation of liberty.” Educate yourself in the works of the Founding Fathers. Study books such as Democracy in America (Tocqueville), The Law (Frederic Bastiat), and the works of Von Mises and Hayek. Share your love for liberty in essays, Facebook posts, letters to editors, blog posts, town hall meetings, and everyday conversations with friends and neighbors. Make your own personal declaration of independence: let the whole world know “I declare! I will preserve the principles of the Founding Fathers! I will pass on the torch of liberty to my friends, my family, and future generations!” For the preservation of liberty, pledge your life.

     Second, Jefferson said, “[The people] are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt…” You must set a good example by keeping your own budget balanced. Do not burden yourself with a large debt which will be difficult to repay. Debt is oppressive on a personal level; it can be even more oppressive on a national level. The British levied taxes on the colonies to pay the debts incurred during the French and Indian wars, and this taxation without representation drove the Founding Fathers to call for independence. We must not pass on a 15 trillion dollar debt to our children. As voters, we must support candidates who will substantially reduce the national debt, that “fore-horse of misery and oppression” (as Jefferson called it). Declare your independence from debt, pledge your fortunes; you have everything to gain and nothing to lose. Third, "Can the liberties of a nation be sure when we remove their only firm basis, a conviction in the minds of the people, that these liberties are a gift from God?” Jefferson asked. Without faith in God, we will quickly become disillusioned. People fail, governments fail, we fail, but God never fails. He is the One who gave us liberty, and it is His will that we preserve it. Without His help we can do nothing. Our future is the gift of God, and we can be confident when we place our future in His hands. As Abraham Clark said, “Our fates are in the hands of an Almighty God, to whom I can with pleasure confide my own; He can save us, or destroy us; His councils are fixed and cannot be disappointed, and all His designs will be accomplished.” We must declare independence from immoral inclinations and pledge our sacred honor to the work of God. If we follow where God leads us and if we do His will, we will never be disappointed.

     Today, as I see a giant and growing bureaucracy devouring our tax dollars and stifling the free market by enforcing numerous unnecessary regulations upon the American people, I realize more than ever that we need an awakening at the voting booths. We need an awakening in our check books, and most of all, we need an awakening in our hearts. We do not need the government to care for us from cradle to grave. We must not exchange any of our essential liberties for a little temporary safety. We need a revitalization of justice. We need freedom to make our own decisions, and we must take responsibility for the results. We are Americans. We must pledge our lives, fortunes, and sacred honor. Stand with me, stand with the Founding Fathers and proclaim, “We declare! We will not pass on to posterity an inheritance of which we would be ashamed! I will preserve liberty and fight for freedom. I declare!”

Note:  You should warn others when they are on the wrong course, but you cannot expect others to listen to you; you cannot stake your life and future on it.  Believe me; nothing is going to change for the better when it comes to the federal government.  Remember my post Live Unconventionally—declare your own independence, and don’t sink with the ship!