Advice on personal preparation….
Right, I’ll get straight to it. I need some help. I have a good friend who introduced me to the Peak Oil Theory a couple of years ago, and me being me, dragged my heals in relation to looking further into it. However as my interest grew so did my understading of the gravity of the situation and the elements interlinked with it. Upon advice from my friend Chris Martenson.com has become one of the best sources of information I could hope to come across. I am slowly getting my head around the world of finances as it simply does not come easy to me…..but I’m persistant.
My current situation is as follows; 32 years old, live in the Gold Coast Queensland Australia, fully employed with Local Government, live with partner, have mortgage of 320k, personal loan of 30k and very very limited savings, have only made small steps in storing food etc……
As I am not overly savy with finances I am looking toward advice from all the very intelligen Chris Martenson followers. I feel I have put myself in a terrible position and should do something to prepare for the next 20 years, beacause as we all know they are going to be nothing like the last 20. I am leaning toward to the following and would love any advice on what I am considering and/or other options I may not be aware of:
– Sell my place
– Pay out our personal loan
– Hopefully make 20k profit
– Save as much as possible
– Buy some gold
– Lean as much as possible (i.e. finances, general peak oil prep, skilling-up etc)
– Become part of a community
I understand the Ausralia has been somewhat insullated to what has been going on overseas but believe that much more is to come including property price decline. The above seems like the only options so me and my partner at the moment….again any advice is appreciated….
Hi Krid64 and welcome,
I am far from the most qualified to give advice right now. Never the less, I’ll take a stab at a little:
1. Selling your place: What are the laws where you live about selling if you got behind or could not pay? Would you be out on the streets soon if that is the case? Depending on the scenarios that could play out, how secure is your job in some bad ones but not total disaster? And, how much is your mortgage relative to what a similar house would have been worth 10 or 15 years ago? If the answers to these questions are not "good", then selling is probably a great idea.
2. Under current conditions, you think it is realistic to clear $20K after selling the house and paying off the other bills? How quickly can you save $ if you rent a very cheap but safe apartment while you two still have your jobs? Would it be feasible to save enough to buy a small place away from the city, perhaps in a small community with your savings in a year to 18 months?
3. Savings: I am not sure I would save more than a month or two of $ in currency – Australia is probably in much better shape than the U.S. so the Australian dollar may hold it value – but may want to consider gold, silver, and supplies/food as part of your savings.
I guess that is enough to get the ball rolling and more discussion started!
I too feel less than being the most qualified to answer your questions. However, having been responsible for all the family finances and investments for over 40 years and having never lost money on anything, plus now comfortably enjoying retirement, maybe I haven’t done too badly.
If you were my son, I’d advise you to completely get out of debt and build up a cash emergency fund of 8 months worth of expenses. Rent a modest small house with plenty of space for simple gardening to supply all your fresh vegetables during the growing season in order to not only save on grocery money but also to have your own supplemental supply of food if times get tough (I expect that they will). Immediately start building up a supply of food you like that can be used in case of emergency; quickly acquire 1 month’s worth and build up to 3 months. Also immediately have an emergency supply of water on hand, no less than 1 gal. per person per day for 2 weeks. Yes, learn as much as you can about prepping, skill building and community connecting; the information is readily available on the internet and people here can give you good links. Then don’t just read about those things, put them into action.
The world has never been as secure a place as we in the West have thought it was in the past few decades. It doesn’t hurt to be prepared for tough times. If they don’t happen, you aren’t out much and you’ve gained a whole lot of skills to pass on to someone else; if they do happen, you’ve greatly increased your chances of weathering the storm. The degree to which you prepare depends on your personal assessment of risk. Will it be a shorter term 1-5 year period of various hardships or will it be the end of our culture as we have known it? Many would disagree with me, but I see it as more of a 1-2 year highly unstable period followed by partial recovery and significant permanent alterations but not TEOTWAWKI. I also believe that the pandemic’s potential for becoming severe in terms of global disruption is significant enough to enter it into personal planning; it’s the wild card in the mix right now.
Best wishes to you.
Thank you for your comments, again much appreciated….
Just in respone to comments from Septimus, here in Oz we can’t walk away from our house if we default. The main thing I’m afraid of is a decline in the property market and being stuck. not able to sell and owing more than its worth. Its a cool little place near the beach but hasn’t got much land content….
My job would be fairly safe since I’m in a Public Health role in Local Government. However my partner is in Travel and ofcourse we all understand the future of that industry. I’m doing my best to have her change jobs.
Rents on the Coast for something similar to what we are living in would be around $100-$150 less per week then compared to the mortgage. Take away rates (or utilities I think you call them) and personal loan repayments and we would be able to save a fair bit….
We currenlty have whats called a ‘first home buyers’ Government Grant of $7000 for existing and $14000 for new homes in Oz. This grant is stopping at the end of the year and has articifically stimulated the market in terms of property sales. I feel that once this stops selling will be even harder.
I guess I just have to trust myself as Chris says and make a decision…….
I speak only from personal experience and totally understand your situation. I live in Sydney. After watching the CC we quickly sold our house and moved to a rental. we managed to sell right when the first home owners grant was increased and are very glad we did. we have cleared all debt and are now starting to grow our own food. You’re right when you think that once the FHOG is stopped that it is likely the bubble will burst again, I don’t think we have seen the real drop like they have in the US because that FHOG and the stimulus has held it off. Once the stimulus works it’s way through and the FHOG stops, I’m sure we will see more unemployment and further drops in the market.
I can’t emphasise how important food and water is going to be. if you haven’t already, have a look at videos on you tube about Codex Alimentarius and flouride in water. On this site there is a number of threads on agriculture where you can start to learn a few things. I can also point you towards some more links if you are interested.
Your decisions now are going to be personal ones and you have to be comfortable when you make them because it will be very likely that you wont be able to go back. I have friends on th Gold Coast and they have managed to move inland a bit and find really good rentals on land much cheaper than rentals near the beach. It’s a big move, but it will be worth it in the long run.
Why is it that you are all keen on renting rather than owning property?
Is there any reason other than not being in debt?
We have a small mortgage which we will either pay off in a few years or eliminate if we downsize earlier than that – which is what we are considering – smaller house but more land.
In the meantime we are trying to improve the energy efficiency of our house, which is something we probably wouldn’t try to do if we were renting.
I agree with the home ownership and now is the best time in my lifetime to buy. Going with the old "buy low – Sell high" and I think we’ll see those who have committed to land and house values now will be set for the future.
In time – I think hyperinflation will make it so hard for the younger generations to buy a house that they may never move from their parents homes. Then we’ll be back to having generations of family living together again and being the support system.
If you were my son, I’d advise you to completely get out of debt and build up a cash emergency fund of 8 months worth of expenses. Rent a modest small house with plenty of space for simple gardening to supply all your fresh vegetables during the growing season in order to not only save on grocery money but also to have your own supplemental supply of food if times get tough (I expect that they will).
I’m on the retirement end of the scale of life, I agree with his post entirely. Certainly a conservative track to take, but in my opinion, one that makes the best of sense given the current situation worldwide. I would add that it will be a good idea to put some funds aside as you are able and look to buying land (your "Homestead" ) at the right price in the future.
Somehow I’ve managed to keep our family homestead (yes, a real government free land homestead) for many years and now have the the luxury or owning acreage free and clear of any loans that can be sustainably farmed — and I like the feeling of being relatively independent of the vagaries of the market place.
Still have some investments that give me fits from time to time — maybe I’m just getting old and yearning for the simple life but a good wife, dog and horse plus a few head of cattle, some chickens, a garden, good fishing out the front door and a good rifle to go hunting if I need to is where I’m headed.
[quote] Then we’ll be back to having generations of family living together again and being the support system.[/quote]
This could only be a good thing for the world.
I have to admit. the reason we sold and got out was because we had a mortgage we were decades from paying off and we have the chance to go back to New Zealand to live on the family land, so for us, it was not wise to hold on to it because we had decided going to NZ and getting onto the land was likely to happen sooner rather than later.
I know everyone doesn’t have that option but I think most people can choose to leave the inner city and get a cheaper block of land in the outer suburbs, rented or owned. Like krid76 I am in my early 30’s and have only recently "woken up" so haven’t had the benefit of having put away or built up savings. we are pretty much starting from scratch, but still really enjoying the path we are on.