Entries Tagged 'Energy' ↓

According to various measurements, the price of food and energy have increased anywhere from 6% to 9% in the past year. Meanwhile the interest rate on savings accounts have been slashed dramatically to less than 2%. In this environment, it is easy for a saver to feel like a fool, but there are ways you can mitigate the effects of inflation and still save for the future.

1. Stockpile food - Obviously, you can’t stockpile fresh food for very long, but you can certainly keep quite a bit of dried, canned, and freezable goods.  If you have room for storage, things like pasta or wine can be kept for a pretty long time. Sales are even better for stockpiling. For example, in my story about Safeway’s promotion I got quite a bit of pasta roni,canned tomatoes, and toothpaste for very little money. Now I wish I bought more because we went through the food pretty quickly. Stockpiling food is a form of non-financial investment that could pay off better than stocks as long as you do eat the food before it goes bad.

2. Invest in High Yield Dividend Stocks - I have a few stock holdings that have been giving out very high dividends. The ones I own are mostly natural resource and mineral stocks. I’m not an expert in stock picking, though, so the percentage of my individual stock holding is about 6% of my entire portfolio. There are a lot of ways to pick your dividend stocks and a simple and popular method is The Dogs of the Dow. In the current market, you have to be careful with the stocks that give too high of an yield because some of them may be dying financial services. As always, do your research before you invest.

3. Buy a Reasonably Priced House to Live In - If buying a house makes sense in your area it may be a good hedge against inflation. I am a staunch bubble sitter here in San Mateo because home prices are still way too high to justify buying a home. If inflation actually drove rent to within 10% of mortgage prices, I would consider buying, but the situation I am facing now is that home prices are falling but rent is still 1/3 to 1/2 the price of a mortgage on a comparable unit. However, if you can afford a home and in your area it is cheaper to buy than rent, it makes sense to buy a house to protect yourself against further rent hikes. As long as you get a fixed rate mortgage, your payments will stay the same throughout the term of a home loan.

I am sure there are many other ways people protect their savings from inflation. I have read that many people invest in I-Bonds or TIPS, which have variable rates related to inflation. I actually own some I-Bonds because they are state tax free. The problem is that these treasury bonds fluctuate with the core inflation rate, which doesn’t include food and energy. The result is that the return is lower than the real inflation, but they are generally better than dumping all your money in the bank or in a money market. The key is that you can manage your money well and diminish the effect of inflation when you put a little time into it. What have you been doing to fight inflation?

Share This

We are officially in a recession! I have written about how I would deal with a recession previously, and also shared the views of one of my company’s founders.  I think most of us saw this coming, and a lot of us will just go on quite unaffected as long as we have a source of income. There are some effects I am seeing due to the recession all around me and I feel like I should address them here.

1. Cuts to education in California- Unfortunately I am hearing a lot of news about good teachers being fired all across California and student walking out of schools  to participate in protests in the hope of keeping their teachers.  It is a pretty difficult situation for everyone, but with 1 in 240 or so homes in foreclosure, the state of California is losing billions in tax revenues.  The former budgets made in the flush housing bubble years are just not sustainable anymore. The funding cuts are necessary because I heard that municipal bonds are not selling well these days and there just isn’t enough money.  I still think it is stupid to fire good teachers, and I hope it really is the last resort.

2. Devaluing of the dollar - The value of the dollar is plunging around the world.  This is going to make travelling quite a bit more expensive for Americans. I know my trip to China later this year will be much more expensive than the past two years.  It will also make everything we import more expensive.  Since we import almost every thingamajig from China and the Chinese Yuan is 12% higher than last year, I expect household goods will increase in price quite a bit. However, it also makes American exports more attractive so hopefully that will make our economy recover more quickly.

 3. Food prices skyrocketing - This is insane, but last  month I picked up pizza dough for 99 cents at Trader Joe’s, and this month it was 1.29!  The same item increased 30% in a month.  Then I heard on the radio that flour prices are skyrocketing and many bakeries are paying 2 to 4 times what they paid last August for flour.  The reason is that wheat supplies dwindled this year and the demand increased.  Other foods are also getting more expensive because of increased  global competition for food and gas.

I haven’t really heard of massive job loss here in the Silicon Valley…yet.  It seems like companies are hoarding tons of cash, and that could be a good thing.  Today our CEO said that “difficult economic times are times for great companies to shine”, and I agree with him.  Anyway, I feel like my life hasn’t been affected greatly by the current recession, but that may change in the future if food gets more expensive than rent.

Share This

This is a bit late notice, but I heard on the radio that PG&E is giving away a million compact fluorescent lightbulbs this week in the Bay Area. These are the energy saving bulbs mentioned in the previous post. You have to call PG&E’s Smarter Energy Line at 1-800-933-9555 to find out where to go. My coworker just asked me where to go buy compact fluorescent bulbs, and well, you can get them for free. Though you shouldn’t get too excited and drive a long time for these!

Share This

So at the beginning of the year I heard that one of my ex-coworkers left our ex-employer and joined a startup called Instructables in San Francisco. The idea of the site is that anyone can post step by step instructions for making anything and doing anything. So I signed up for the site because my ex-coworker is a pretty cool guy and I wanted to support him. From time to time Instructables sends me newsletters with some quite odd things that people posted. Anyway, here’s my own Instructables newsletter with a collection of tips and do it yourself guides for saving money and saving the world:

1. Save Money By Melting Your Deodorant — This is written by a tightwad who combines the forces of his old deodorants together. I actually did this with my lip balm before, by accident. Basically I left the little jar of it in my car and it all melted. I guess this will work with all kinds of things you can melt.

2. How to Save Water by Showering Navy Style — Very simple Instructable that makes a lot of sense. You really don’t need the water on when you’re putting on soap. This especially works well when you’re in sunny California and it doesn’t get very cold.

3. Cheap Redneck Ceramic Smoker — If you’re into smoking meat or fish, this is pretty awesome.

4. Carbonating the Cheap and Easy Way — This is the guide to homemade sodas. I don’t really drink sodas very often, but it’s still pretty cool.

5. Make Your Own Prescription Card and Save at the Pharmacy – I’m not sure how this works since I always just pay $10 at the pharmacy as a copay. This could help people who don’t have an insurance plan that covers a lot of drug expenses though.

6. EXTREME Power Saving Wireless Mouse Mod — My hubby actually has a wireless mouse. I wonder if he will let me experiment.

7. How to save water in gardens and small-holdings: the Scrooge Bottle — I don’t have a garden, but this contraption is an awesome idea.

8. Hack a Toilet for Free Water — I think the people who don’t flush to save water will enjoy this hack. It is true that it’s pretty wasteful to use so much clean water to carry our waste down the drain.

9. Homemade Laundry Detergent — I don’t know if I would make this, but it seems that if you make it in large enough batches it’s worth it. It does take work though.

10. How to Make Bacon Soap — If you eat a lot of bacon and save the fat then this may be useful to you. It’s a little gross, but it is good fat!

11. Refill Scrubbing Bubbles Automatic Shower Cleaner for $1.00 — The hubby’s friend gave us one of these things for our wedding. Now I know what to do with it when we need refills.

12. Build a Solar Hot Dog Cooker — Use enewable energy to heat up wieners! The picture is awesome on this one.

13. Homemade Fabric Refresher — Very easy instructable, though I’m not quite sure if it’s cheaper than just buying the Febreze.

14. Compact Fluorescentize Your House — This is sort of a propaganda piece for compact flourescent lights, but it’s pretty well written and full of information.

15. Lazy Line Dry — Pretty much all Chinese people in China actually do this and dry their clothes with the power of the sun. We used to do this when we first moved to America and then one night all of our clothes were stolen by some vagabond. My mom was pretty sad and stopped putting clothes outside. If you have a pretty safe yard or patio this is a good way to dry your clothes in sunny weather.

All of these guides should be used with caution. There are some Instructables that are truly frightening and could harm people. I will not list them here but I do enjoy reading them. Until next time, have fun on Instructables and save our planet!

Share This

Many of my friends ask me, “why are you worried about retirement already? You’re only 24 and you have more than forty years until your retire!” The truth is that I don’t think we have forty years until retirement and a lot of us will be forced to retire early. In fact, a recent article in Newsweek stated that the current average retirement age is 57. That only gives me 33 years, which still seems like a long time. However, I think in the future the average retirement age will only get lower and here are my reasons.

1. No Job Security — Our generation no longer work at a company for life. I don’t think it means that we are less loyal, but it’s more of a reaction to the profit seeking inhumanity of corporations. There are often mass layoffs and good benefits such as pensions are mostly eliminated. Basically there are no advantages to being an employee for life. I think the only people in the Silicon Valley who have worked for a private company their entire lives are all at Lockheed Martin, and they’re relics of the old economy waiting to cash in on their pensions. The new world order means that we have no job security and one day we may not be able to find a job and be forced to retire.

2. A Growing Population — The United States population is growing fairly slowly right now, but it is expected to increase to around 392 million by 2050. Why does this affect our retirement age? Well, basically in 15 to 20 years our children will enter the work force and compete for the same limited pool of resources and positions. In China many baby boomers are forced to retire at age 50 so that their jobs can be passed down to younger people. You may say that it’s ageism, but I think it actually makes sense because you can’t let millions of young people run around without a purpose. Our skills need to be passed down to our children, and we need to step aside at some point. I think forty five years is way too long for us to hold on to a job because two generations of people will enter the workforce in that time period.

3. Technology Eliminates Jobs — We live in an age where so many things are automated and simplified so that it takes much less people to do a job. For example, my parents are accountants, and they all use software like Excel and Quicken to balance their books these days. However, before these software packages existed people had to do everything by hand. It definitely took many more accountants to run a billion dollar enterprise sixty years ago. I imagine that technology advancements will eliminate a lot more jobs in the future. It’s possible that technology related positions will increase, but if you’ve ever worked in the Silicon Valley you’d know that these jobs are dominated by the under 40 crowd. Additionally, not all of us work in the tech industry so as technology phases out more and more jobs some of us will be forced to retire.

4. Global Competition — Globalization is something a lot of people fight against. Right now, a lot of manufacturing jobs in America have already been outsourced to other countries. Since technology has expedited the delivery of goods and services around the world Americans are competing with the global workforce for business. High end professional jobs are also being outsourced to other countries because their workforces are cheaper. This all means that wages will probably decrease for Americans in the future. In fact, our generation is the first generation where our wages have decreased compared to our parents. This means that we should save as much as we can now before our earning power is further eroded.

5. The Bottom Line of Corporations — Corporations outsource because it is cheaper, and they also hire younger workers because they are cheaper. I have heard of stories of where senior engineers are laid off and replaced with cheaper college grads. Ageism is rampant, and in some cases it’s reasonable. For example, an 80 year old probably isn’t as good of a physical laborer than a 23 year old. However, most of the time corporations want younger workers to pad their own bottomline.

6. The Zenith of a Career – The proverbial “glass ceiling” is reached much quicker by our generation because our parents’ generation is still in charge of the current state of the world well into our middle ages. Generally people work so that they can reach higher places in their career, and if the peak is reached so quickly then work may become meaningless.

This post may seem pessimistic and paint sort of a grim future, but I think it’s what my mom calls “cautious pessimism”. I think it’s highly likely that our generation will need to or be forced to retire as early as 45 to 50 and that only leaves me 20 to 25 years to save for the rest of my life. A lower retirement age coupled with longer life spans mean that our generation needs to save as much as we can during our working years. I am not really worried about retirement because I am taking steps to prepare for it. It’s much better to start preparing for the second half of your life now and not worry about it when you get there. I am also very optimistic about our generation because we may be able to enjoy our lives more if we plan well and retire early. So to my friends, if you haven’t started contributing to your retirement plan you should do it now before it’s too late.

Share This