I did not read the article but on the front page of today's (London) Financial Times is a snippet saying the Bear Sterns analyst who first predicted oil reaching $100 a barrel in the timeframes when it did is now saying he thinks it will hit $200 a barrel inside of two years. So minimising dependence on oil may be a smart move.

On the more general theme as other have said good financial planning normally means 1) live within your means 2) pay off your debts and 3) diversify your investments to reduce the 'eggs in one basket' risk.

I just found an interesting/scary article on oil and economics released today which might lend to this discussion:

Hey MoBoB, Check these cargo bikes out: Ricksha style

But you are correct, we do not have children and our strategies won't work for many folks.

Jshannon,

Your comment reminds me of a comment my grandfather said a while back. Simplicity is always best. I told him my roommate at the time had taken a postdoc job utilizing genetic studies for the human obesity research center at UCLA. My grandfather quickly retorted "I can tell your friend how to cure obesity...just put those folks to work and tell em' not to eat so damn much."

And I just noticed I'm not the only one reading that article on $200/barrel oil.

Cheers,
Nemo

Nemo - It's hard to get rid of cars (or as you say kick oil) if you have a kid(s) (as someone mentioned) or you need to haul a trailer, or if your recreational activity involves getting away into the mountains, or going to the lake to use a boat, etc.

Did you get rid of your cars/oil to solely save money or to be 'greener'? It sounds like so you can be more 'self reliant' but I wanted to ask outright to be sure.... also, how come a car is not part of being self reliant and/or prepared?

Please don't take this as a personal attack I`m curious and, after all we are neighbors

Just to stir this conversation back on track... this book is an investment book, i.e.: "how to be financially well off during hard times"

Sorry for taking it more off Track!

My answer to Todd will qualify as investment decisions in hard times I think. This is a very pertinent topic given our current verge of recession and you are correct Redflare this might be more appropriate for a new thread.

Being green is hip right now but honestly the green of money is more what we were concerned with. Unless your vehicle generates income or entertainment (boating/hiking) to outweigh its cost it makes for a very poor investment that depreciates over time even with consistent investment of maintenance money. We also saw that our costs for the car were increasing (with fuel and such) outweighing our "need".

Interesting decision.

What is your plan for an emergency? Broken bone, maybe a foot or a leg... Wait for an ambulance or a friend to give you a ride? What about if you have to evacuate a bike can have it's positives but not if you have to be gone for a LONG time and need to take a bunch of your belongings? I just can't see how not having a car at all out weighs having one, even if it is old and not used daily.

Investment wise... you are right people do not buy cars to make them money but they can be used to facilitate income generation (getting to work etc.)

Thanks Nemo
-Todd

7 steps to surviving the rough economy

March 23, 2008

BY TERRY SAVAGE
Yes, the Fed saved the system last week (though not the shareholders of Bear Stearns), but the Fed doesn’t have unlimited power to rescue the economy, which is having a massive deflation in asset values.

So, it’s up to you to get your own personal finances in shape to ride through an economic slowdown and the consequences of economic problems that already exist!

Lower interest rates and tax rebate checks may help the economy a bit.

But rising numbers for foreclosures, bankruptcies, and energy prices will tax consumers’ spending power and limit growth in coming months.

Even worse, all the “liquidity” the Fed has created recently is likely to lead to inflation down the road. And inflation always brings higher interest rates.

So here are seven steps you must take now to ride out uncertain economic times:

1. Understand that the rules have changed. The very first step is to change your “mind-set.” What worked before won’t work now. In the past, debt allowed you to have things today and pay for them tomorrow. Now, debt will bury you. Especially if it is floating rate debt. It’s time to remember that old-fashioned concept of “saving up” to buy a car or for a down payment on a house. “Old-fashioned” is coming back in style!

2. Take an honest look at your finances. Start by making a list of what you owe — and what you own. Write down the interest rate on each borrowing, and the minimum monthly payment. Now compare with your after-tax income. You can’t fix your situation until you look at it honestly. If you need help, contact Consumer Credit Counseling Services at (800) 388-2227.

3. Cut your expenses. It’s tough to cut back on your lifestyle. But little things add up. Check everything from your cell phone plan to your cable service to see where you can save a few dollars. Consider raising the deductibles on your homeowner’s or auto insurance to lower the monthly payments, and free up cash.

Big cutbacks can make a big difference. If you’re living on your own, you might need a roommate. Or move home with your parents and offer to pay rent — which will help them, too! (And as costs continue to rise, adult families might have to offer a room to Grandma, who simply can’t live on Social Security.)

4. Earn more! It’s easier said than done, I know. This is not a suggestion to ask for a raise! But do pay attention to your current job, networking to find opportunities to advance within the company, or to come up with ideas that make you a more valuable employee.

To earn extra cash, try to find a weekend or part-time job that you or another family member could do to earn more money — even temporarily. Put all of your hours to productive use.

5. Deal with your debt. In spite of the Fed’s action, rates on credit cards may be slow to drop, so pay extra to lower your balances. Take advantage of the current decline to refinance your mortgage or home equity loan and lock in current low rates. You can always refinance again if rates drop further. But if inflation comes, you won’t get that chance.

6. Keep investing. The stock market is scary, and so is the economy. But if you’re investing for a retirement that is years ahead, the stock market is your best opportunity to do that on a tax-deferred basis. So keep contributing to your company retirement plan or IRA. Make sure your assets are well-diversified in funds within the plan. And if you’re close to retirement, move some money to the short-term bond or money market fund option.

7. Stay optimistic. Bad news makes headlines. But we’ve gotten through tough times before. In the early 1980s, we had double-digit inflation, double-digit interest rates and double-digit unemployment in many parts of the country. At that time, few were predicting the incredible growth of technology that boosted our economy and stock market.

Who knows what the future will bring? Maybe nano-technology will be the catalyst for the next round of growth. History reminds us that America has always gotten through tough times and moved forward. And that’s The Savage Truth!

Terry Savage is a registered investment adviser.

Hey Todd,

Good points about injuries. Honestly, economics of health care didn't come to our minds first and foremost when making the decision to sell the car and it should be calculated into Redflare's plans to invest in the future.

First and foremost it will be an ambulance if a situation is life threatening but we have been looking for a used utility bike big enough to carry a person or a "complete/long term" bug out. Unfortunately, I think we are going to have to buy it new...anyone who owns one seems to know its value economically, especially in the current energy situation.

We have 3 general hospitals and a university medical center within a 2 mile radius of our home so hopefully we could get to an ER without a car or ambulance if the serious injury is non-life threatening. We also have plans to update and take more advanced first aid courses. We have the basics but we need more training for greater independence. Bugging out by car in a mass evacuation from an urban area seemed to us to most likely be as slow or slower than by bike.

This only really makes sense for an urban area. The benefits may not justify the risk in rural/suburban areas. Just some thoughts.

Here is an example of a bike that would work (although 600 lbs carry capacity seems a little much): http://www.catoregon.org/hpm/trihauler.htm

P.s. Maybe we should move to Canada for the healthcare. The thought has crossed our minds. We'd hate to jump ship but...Canada has universal healthcare, larger fossil fuel reserves, growing wheat yields etc...I wonder if Canadians think the same way with the cliche of fences and green grass .