Uh Oh!

As most of you know, I enjoy writing essays. This activity forces me to focus, analyze, critically assess, and ultimately to conclude - and maybe find a little humor to temper the serious. For the past year I've had trouble writing essays about a favorite subject of mine - investing. Mostly, it's because I've had a sinking feeling.

Now, when you live on a boat for months at a time, that is NOT a good feeling. Now, I must admit I don't know what it is like to really sink on a boat (oh, I've flipped rafts, kayaks, canoes -- but I was running white water and knew the risk so when flipping I merely went 'overboard' knowing I could easily swim ashore with life jacket on and climb back aboard). With this sinking feeling about the economy I don't have a life jacket, can't see the shore, and the waves downstream look huge and I'm on a boat. Sure don't want to jump overboard.

Many of you know that I seldom watch tv. Why, I'm from another planet and don't have a clue when friends talk about the 'stars' or latest 'shows.' My general habit, when ashore, is not to turn on the tv until evening news and then seldom watch long. I don't read any newspapers (except sometimes headlines and editorials on line), and don't read any news magazines (except the Economist, two weeks late forwarded from England). But, since being aware of the water level rising around me I've taken to watching (or listening) to the morning news, and, under the excuse of checking for upcoming weather hazards, even tune in at noon when I can. Why? I honestly have to admit it isn't the atmospheric storms - it's the economic hurricanes I fear. Near dawn I listen to know what has happened in European and Asian markets overnight, or how the Dow futures are doing. This morning I heard the futures market was 'frozen' due to huge declines. At noon, I check on the Dow.

Is there something I can do, I ask myself? Oh, of course I can't alter the markets, but is there a life jacket around here? How far IS IT to shore? When I was younger, I was seldom concerned about economic storms. Why, we quit our jobs in '86 (and I knew about the huge economic problem then), so that should say something about no fear when there's 'eternity' stretching out ahead to weather the storm.

So, perhaps my fear of sinking has more to do with age -- I don't have thirty more years to weather this one. And this one looks far bigger, and different, from any I've lived through - even Greenspan said the same is true for him, yesterday.

Now we've been frugal and lived simply. When you hike 2,000 miles with your food (renewed weekly), shelter and clothing on your back you know how little we really need. We'll survive the sinking (if it happens), perhaps gripping on a bit of flotsam. But what about family, friends, our country, our world ...

If we all come out of the storm (and most always have, through history), what will the new world look like? What kind of boat will we have, how long until the seas calm, how far from refueling stations or a safe cove?

Ah, the sunset is marvelous out the window. The migrating geese are chatting about tonight's flight, yellow leaves are drifting past the window and the wind ruffles fingers through the lake. A flicker is calling and there's a racoon working the shore of the lake. Sorry, must leave - I'm being called back to the real world.
 
Bill,

Certainly, you must know - the sky is falling. All you have to do is watch any news show for just a few minutes. Self-fulfilling prophesy, perhaps? Panic selling begets more of the same. Granted, that doesn't make it hurt less when investments continue to tank.

You and El have been promoters of living more simply for a long time. And investing. Two things that a lot of folks don't do, or don't understand. This past year has been brutal for most investments, but still many people didn't make an attempt to live more simply. Those who already know how to conserve will weather this storm with less suffering.

Living simply sure doesn't mean you have to do nothing. You two are fine examples. While I don't see 2,000 miles of backpacking in our future, I look forward to more of those priceless sunsets at anchor. I recall asking you several years ago, "Can you really spend that much time on these boats?" :wink: Who knew?

Best wishes,
Jim
 
Hi to all,

El and Bill, folks like us that enjoy living on a small budget will probably see little difference in our life style. We had our C-Dory partly because it was cheap to operate and live on. Our Road Trek motor home is about as small a unit that you can live in for months at a time. We were able to spend over 5 months on the road this year in spite of high fuel prices ect. We drive at 55 MPH and get around 16-17 MPG. WalMart camping prices are very cheap and Mr. Grey likes to watch the gulls on the parking lot in the mornings.

Our last trip in the C-Dory on the Erie /Canal resulted in over 5 MPG. The point is that you do not have to spend a lot to have a lot of fun.

I did get a toy to help fill the hole in my chest from not having a boat. I got a Miata MX5 sports car. It gets around 28 MPG so I can be cheap and still have fun.

C- Dory owners are lucky we can operate and cruise with out breaking the bank. I am sure that new boats sales are off due to all the bad news.

Fred, Pat, and Mr Grey (the cat)
 
Yes, well, ahem...I guess I am working four more years, and we shall see what develops. My neighbor keeps saying (like Warren Buffett) "Now is the time to buy all you can afford." Warren said something like "Be afraid when others are greedy and be greedy when others are afraid" - I think that was posted in another thread here. If the housing market had not gone to Hell in a handbasket as well as the stock market, we definitely would have considered selling the house and living in a fifth wheel between the time Austin leaves home (next year we presume) and retirement. Maybe the housing market will rebound a bit in the next year, who knows? This house is definitely too big and too expensive for just the two of us... I do feel incredibly lucky that I (a) have a job (2) I don't hate.
 
ECHOE14":1a2mngre said:
ZEITGEIST ADDENDUM ..GOOGLE IT!
Click to expand...

Here's a synopsis by Wikipedia:

ZEITGEIST, The Movie

While I can agree with some of it's views on how religion is used to manipulate and control people, the overall movie seems to be a giant all-inclusive overblown conspiracy theory that attempts to explain all the world's history by a twisted paranoid mind working outside reality, perhaps in it own little confines of delusion.

Sorry, no cigar!

Joe. :thdown :cigar
 
Have you thought about this? A nice long recession might be good for this country. Seems to me there's a lot of folks out there that have forgotten they're on a beer budget and bought a lot of champaign.

A year ago I was planning on a two year down turn now I'm thinking five.

I'm 51 started poor worked my butt off and now have 6 diversified sourced of income. My net worth is down but because I own oil stocks my income is up. Married late so no kids, two dogs, one cat. Total debt about 300k at 5.6%.

Five year plan:
Have salt in blood will boat, dive, and drink with Brats.
Major mods to the boat under way itching to get back in the water.
Went back to work for five years to invest all. (I work 185 days a year.)
Dollar cost averaging will save what I had. (I adjusted my roth IRA, and 403B to 50/50 fixed income/stocks before the down turn but now will start upping percentage of stocks)
New stocks bought at low prices will be worth more in five years.
Bought a Smart car to commute. Cool ride.
Sold off a few vehicles not earning their keep.




Be greatful if you have a job and be generous to those who have less. Just think if you bring home 50k you would have to have a million dollars invested at 5% to have that income. A job is an investment.

Question? Can I order a bigger boat now at today's prices and take delivery in five years when I retire again? :)
 
mpmccoy,
Sure you can-just get a 5 year sub-prime, interest only, big balloon payment loan! Ha Ha just kidding. Sorry you had to go back to work, there is a lot of that going around.
 
In response to some of the recent posts on this thread - from my perspective, this is not Henny Penny saying the sky is falling nor is it drummed up only by the 'media', and real only to them. My sources of info are rarely the 'media' but are economic numbers. Is there "panic selling?" Sure, some selling may be irrational, but a foreclosure notice to a house owner in real, a pink slip from an employer is real, a 30% decline in 401K and IRA is real, etc. Not saying these things to generate fear -- but to recognize what is and has been happening to our economy.

If one first starts with the facts, you can perhaps make more sound judgement on your response. Each of us in a unique situation. There are no simple responses to "what would be the best way to respond to the economy collapse around us?" - we will all have our own way to respond, given employment security, amount of outstanding debt, income, savings, perhaps college or health expenses, ability to handle risk, years to (or in) retirement, age ...

We began this thread to facilitate sharing of ideas in the pub about the economy and what we are each doing to safeguard our present and future financial needs, and how these adjustments might affect our boating. There have been some good ideas posted, and we appreciate your sharing those. Joe asked some interesting questions. I have not ignored those, but am pondering a response to him. However, again, he is a unique person and suggestions would differ depending on each individual.

One thing most all agree on -- our boats are a wonderful way to relax, forget the day-to-day concerns, and kick back into the 'real world.' They are a common 'joy' we share. I don't think anyone has said they will sell their boat, or spend less time aboard ... quite the opposite. Although many (including us) have said we have and will continue to reduce the miles traveled, we have not said we'll reduce the hours aboard.
 
Lottsa people are saying, "worse financial crisis since the depression." However, I remember the late 70's. Double digit inflation, unemployment, gas shortages and increase, and a virtual freeze on mortgages. It wasn't until 1983 that I was able to buy my first home, at 12% interest.

So....I'm wondering if this situation is a blip. My money says yes. I bought 5k worth of mutual funds last week.

-Greg
 
Good point, Greg. The '70's were tough times, and we remember them well since we had recently moved to Nevada and began a new job. I did a little research on the similarities and differences. Here's the info:

How it's like the 1970s

• Stock markets fluctuate sharply, with rallies followed by a period where markets give up much of their gains amid concerns of a prolonged downturn.

• Market watchers talk about recovery in terms of a decade or more, instead of a few years.

• Consumer confidence and spending trend down; unemployment trends up.

How it's not

• In the 1970s, the oil embargo created shortages and a sharp spike at the pump. Today, oil prices are trending down from recent highs and are pushing gas prices below the $3 mark.

• Inflation eventually roared into the double-digits in the ’70s. Today, despite the recent spike (and now decline) in energy prices and food prices, across-the-board inflation hasn't weighed as a serious threat.

• Americans routinely saved more than 10 percent of their income in the early 1970s. The savings rate today has dwindled significantly.

How we hope it's not

• The 1970s recession, by strict definition, lasted only a year and a half. But it took until 1992 for the market to make a full recovery and move past the prolonged bear market.
 
I remember getting 16% on my CD's in the late 70's& early 80's :D.

I wanted to build a new comerical building for my business in 1982, could get a loan for 2% over prime, that made it 21%, the building wasn't built.

In 1930 unemployment was at 25%, no welfare or unemployment insurance.
This country is spoiled rotten. Turn off the TV and you will feel better.

C-Otter
 
Moved to Wyoming in l981 and lost my Cal Vet home loan of 6%. Cost us 2 points and then a loan of l6% to keep home. Home finally sold 3 years later for 75% of its l980 value. If the inflation rate of that time period was added in it would have been a much larger drop in value then that. Inflation actually hurt us the most then and though its presently not a problem, it would appear to me with the increased odds of almost no future restraints on government spending and the large drop in future revenues from business and individuals due to recession that those 70's and early 80's inflation rates or worse are looming on the horizon. How to cope best in an inflationary economy could become very valuable knowledge.

Like El and Bill we plan on spending just as much time on boat as past years, but travel distances will be much shorter. Have put the one ton truck on blocks, removed insurance and will likely let registration drop untill retired. Plan on renting a dock space at Bridge Bay on Lake Yellowstone for the season and leave the boat there and travel back and forth in economy car on weekends and vacation. Will buy another Mokai and Jo-Lee and I will have much fun practicing on them there in preparation for our next adventure cruise on the inland passage after retirement.

Jay
 
Lets not forget a huge point on how this financial situation is not like the 70s. The 70s crisis did NOT require a 700 BILLION dollar bail-out of the economy essentially nationalizing a huge part of our financial system.

I don't remember that far back, how big were the "stimulus checks" that Carter sent out in the 70s?

We need to get a Democrat in the white house so we can start calling these things socialism again.
 
Would be best to refrain from turning this political. Seems to me we've had plenty of that lately. Already has been a lot of good financial information shared pertaining to our future boating and it might be wise to keep it in that vain. Interesting to see how others may or may not change their boating plans in the future, while adjusting to recession concerns.

Jay
 
Right on, Jay. This thread has been interesting for us to share the financial views of those in the 'pub' and share how we adjust our personal money management and boating. Hate to see this thread lost due to political discussion on a thread where we share ideas about our financial choices.

We are fortunate to have boats that are relatively inexpensive to operate. However, the lifestyle El and I have shared - long distance live-aboard cruising - can be altered if we feel an economic pinch, and we are interested in opinions from others (such as the one Jay shared about being on Lake Yellowstone next summer) .

We could afford that lifestyle by making a few choices (not necessarily easy ones) - not owning a house, for almost three years not owning a land vehicle, having no debt, foregoing 'unnecessary' electronics on the boats (necessary is defined for safety), etc. These choices were necessary for the obvious reason that we were both teachers, quit our jobs at age 50, and are certainly not wealthy. As teachers we were not part of Social Security (have a little soc. sec. from my jobs as a teenager) and our pensions were greatly reduced by quitting early.

So, we have to make our financial decisions carefully. We love our boat and the lifestyle it allows us. But now we have a small rental condo (for a safe harbor at our age) and have had (and still have) relatively high medical expenses. We don't want to lose our financial ability to continue boating so this thread allowing the sharing of ideas of a financial nature (not political) is very useful to us, and we presume for others.
 
It's quite wonderful to follow the comings and goings of El and Bill, Jim and Joan, Jay and Jolee as well as others on the C-Brats. That they share so freely their successes and failures, their joys and sorrows, as well as their differing judgements regarding perceived wants and needs, amazes me. These are gifts for which I am thankful.
 
While I have lost about 18% of my 401K investments of late :x , my financial situation in the coming year will improve, overall. My wife will graduate from RN school in early December. She has been a full time student for the last three years and so we have been without her income. Hence, the wait to purchase our dream boat. Once we pay off a few other financial loans (school loans etc) we'll be set to take the dive. :thup I'm hoping to have that 25 in the driveway by the end of 2009.
 
El and Bill":2luoc3ue said:
So, we have to make our financial decisions carefully. We love our boat and the lifestyle it allows us. But now we have a small rental condo (for a safe harbor at our age) and have had (and still have) relatively high medical expenses. We don't want to lose our financial ability to continue boating so this thread allowing the sharing of ideas of a financial nature (not political) is very useful to us, and we presume for others.
Click to expand...

I'm presuming both of you are of medicare age. If so, your medical costs should be well covered, especially if you buy a PPO advantage plan. There are many to choose from and this is the time of year to shop.

Commenting on the Carter years and the bailout. I remember Carter getting on the tube and proclaiming that 100,000 jobs were just created by the government. Socialism....at it's worst. I think the "bailout" is a superior idea because it actually buys assets that will grow in value through time. A government created job is a handout, not a hand up.

-Greg
 
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