Common Cents # 14 – Of Hogs and Horses

Common Cents # 14 – Of Hogs and Horses 

Throughout my teen years in Southeast Kansas, my family lived in the country and had a variety of farm animals. Along with the chickens and goats, we had hogs and horses.

My regular before and after school job was to feed the animals. The hogs were always scary. They would charge at me when I had a bucket of food, then race each other to the feed trough. The biggest and fastest would then fight the slower and smaller hogs, trying to keep all of the food for themselves.

The horses would come in from the pasture and patiently wait in their respective stalls until I brought each one a bucket of oats. The hogs acted as if each morning meal would be their last and would gladly fight for every bite. Eventually they were right as they went off to become bacon, pork chops, and ham. The horses were rewarded with fancy saddles, got to ride in parades and lived out their years in green pastures.

As humans, we can decide which perspective we want to emulate. The scarcity view is like a hog, believing that there is only a limited amount of anything important.  The abundance view is like the horse’s apparent opinion that there is an endless supply of oats not only today, but in the future as well.

We see these two perspectives play out in many areas of life. Do we feel like we have to grab for everything we can today, because there is limited supply, racing to the store to buy what may be the last roll of toilet paper? Do we not have enough because the big, mean, powerful hogs chased us away from the trough? Or do we see the world from a different viewpoint as big beautiful place with enough love, joy, food, and energy for everyone? The Abundance Philosophy believes there is plenty of room to grow food if we use the land properly, and even if we run out of oil and coal, we will never run out of sun and wind.  Perhaps it also helps to do just a bit of advance planning to avoid the stress of the times we’ve lived through recently.

In business, scarcity says that there are winners and losers. Abundance thinking means when someone wins, we all benefit from the victory in some way.  We can fight like hogs or pull together like a good team of horses.

Jesus said that he came that we may have life and have it abundantly. God’s abundant provision is a consistent theme throughout the Bible. Whether we see the world through the eyes of scarcity or see it as an abundant place, we are right. The negative thinking of scarcity will lead to difficult and stressful days and it rarely turns out well. The optimistic life of abundance will lead to hope that green pastures will prevail.

 

Common Cents # 13 – Starting a business

Common Cents  # 13 – Starting a business

 

My family’s history is filled with family members starting and running small businesses of many kinds. Since a large number of people dream of owning their own business, but few people act on that dream or know how to go about it, it seems appropriate that we consider that topic this week. I have started a few businesses so I will tell you a little about what my experience has been.

I had developed a real love for black and white photography while in college and really enjoyed working in the darkroom. While I was working in a camera store after college, I realized that owning a custom black and white photo lab could be a real possibility. Many days at the camera store I would take a camera off of the shelf and shoot a roll of film or two around the store. I would use different cameras, some new, some antique, different formats, and different types of film. Each evening I would develop the film, experimenting with different developers, temperatures, times, and various techniques. Along the way, along with experience, I began to accumulate some cash and equipment.

I thought of this recently when I came across all of those negatives, carefully labeled with date, camera, exposures, and the developer that was used.

Within a relatively short time, I began to realize that I had as much darkroom experience and knowledge of black and white film as just about anybody on the planet. That is when I started telling people that I was going to open a custom black and white lab. The response was sufficient, and I was able to leave the camera store and do film processing and printing full time. My wife joined the company, and Mathis Photo was a profitable business from 1973 until 1996.  We only sold the company when we saw the digital age coming and the end of film processing in that volume on the horizon.

The basic idea then starts with a passion, or the spark that could become a passion. Included in that is a service or product that has been proven as needed, one that people are willing to pay someone else to do for them. The next step is to become an expert. It is unlikely that there was anyone with more experience with black and white film than I had. We also held excellent customer service and care as a very high priority.

Years later, I studied the coffee industry, coffeehouses, and how to build a caring community for more than a year before I opened a coffeehouse, a “Third Place” for people to congregate and spend time while having excellent food and great coffee. It is vital to be well grounded financially with a clear understanding of what the endeavor will require to stay solvent. Avoid debt like the plague, of course now we know that people aren’t very good at avoiding the plague. Create a business plan, then step out and do it.

A website that I created not long ago may answer a few of the questions that come to mind when considering starting a new business.  The address for that is:  OnYourOwn.help

Common Cents # 12 – Thrift Stores

Common Cents # 12 – Thrift Stores

 

For anyone interested in having nice clothing for reasonable prices, a number of strategies can be utilized.  Retail stores have good sales during the year and a smart shopper watches for those.  Being able to sew clothing for ourselves can often be more economical than purchasing a similar garment in a department store. And an ever-growing choice of Thrift Stores and Consignment stores can be the source of some remarkable items at very good prices.

We began shopping at thrift stores when we had a few free minutes as we dropped off items to add to their sales inventory. We quickly developed the philosophy that we were not looking for bargains, since everything is a bargain, but to look for quality. For example, I was in a thrift store a few years ago and noticed a beautiful leather jacket. At $35 it was one of the more expensive things in the store. It was obviously of high quality and of an unusual design. After I bought it, I did a little research and found out that is a German made motorcycle jacket. The company had recently lost their US distributor, so they were no longer available here. They were selling in Europe in the $300 to $400 range. I got a like-new jacket for 90% off. I receive comments about the great jacket every time I wear it.  

We don’t normally go to thrift stores to buy something specific, but rather we see it as more of a treasure hunt, to see what we can find. We look for brand name items with little or no wear. I am always surprised when I see clothes with the original store tags. The item should not be purchased if it is the wrong size or color. It pays to watch for good workmanship and develop an eye for something of quality.

In addition to finding quality items at huge discounts from new, thrift stores are a great way to recycle the things we don’t need, or perhaps have outgrown. We don’t consider giving to a thrift store as getting rid of our worn-out stuff, but rather putting something good into the hands of somebody who can use it. Donating to thrift stores is the most efficient form of recycling and is good stewardship of our possessions.

The money that thrift stores make from selling used merchandise often goes to non-profit organizations to support their work. We usually decide where to take our used items to support the work we believe in. For example, City Thrift is run by City Union Mission that helps the poorest people of our city. Savers is operated by Big Brothers and Big Sisters that has improved the lives of children for many years. Adelante Thrift support Mission Adelante, a ministry to the immigrant population based in Wyandotte County. Furthermore, these places employ people to sort, stock, clean, and sell the things we donate.

Thrift stores allow us to get great value for our money, give us a place to recycle the things we no longer need, provide resources for causes we believe in, and provide jobs for members of our community. It’s a Win, Win, Win!

Common Cents # 11 Finding More Money

 

In the past few weeks we have been talking about investing verses spending. Every penny we have we either invest or spend. If it is gone forever, we call it “spending,” if we can get it back later, we call it “investing.” Some things like food are obviously spending while other things like putting money in a retirement plan are clearly investing. Many things, like a house, are a little of both.

Today I want to talk about finding more money to invest, moving some of our money from the spending category to the investing category.

A big chunk of our income comes right off the top in the form of taxes. That is really spending because it goes to pay for things we all want, like highways, bridges, airports, national defense and thousands of other things. The basic principle of taxes is to pay all we owe, but not to pay any more than we need to. The trend toward DIY taxes has added billions to the nation’s coffers from people over-paying their taxes, but we will save that story for next tax season. The government will not return your money unless we ask for it – on the right forms.

The majority of people, 80% in fact, get a tax refund each year, not only from the IRS but also one or more states. A refund means that we have overpaid our taxes and we are asking the government to give back the part we overpaid. I cannot imagine very many of us, intentionally paying too much for a refrigerator or for clothing, and then asking the store send part of it back next year. No, we want to pay the correct amount the first time.  Adjusting our income tax withholding amount to more correctly reflect our taxes due will immediately put more investable money in our pockets. If we owe taxes on April 15, that is a good thing; it means we have delayed paying those taxes for the year and had access to those funds in the interim.

There was time not many years ago when we all paid cash for about everything. Forty years ago, I always had a couple of hundred dollars in my pocket. Now I have had the same two twenties for six months. Like most people, I always use plastic. Credit cards are safer than carrying cash, we don’t have to wonder if we have enough money in our pockets for an immediate need, and we get a statement every month telling us how much fun we had. Most cards even give rewards or cash back. What a deal, assuming we pay the balance every month. With interest rates of 15-20% and very high late charges, we can easily double the price of everything we buy if we have not developed good credit card practices. I heard someone say, “I want to charge my lunch, I don’t want to finance it for 36 months.”

Adjusting our withholding, have our tax returns completed correctly by someone like a tax professional who knows all of the legal procedures, and paying our credit card balance every month could easily put a few hundred dollars of investable money in our pockets each month.

More ideas to save money next month.

 

 

Common Cents # 10 Other Investments

 

Last week we talked about investing in the stock market using mutual funds and individual stocks. The problem with these kinds of investments is that they are usually not very much fun. It is far easier to get more excited about investing in baseball cards, vintage model trains, or classic cars.  If we employ good investment strategies, the hobbies or items we own that bring joy to our lives can also be part of our net worth and retirement calculations.

The secret to investing in collectibles is knowledge. It is very easy to get burned and very hard to find appreciating investments unless we are extremely knowledgeable about the subject. The big rule of thumb is that anything manufactured to be sold as a collectible isn’t. By that I mean that anything advertised as a collectible is almost never a good and appreciating investment. In my sixty years of observing such things I have seen dozens of items rise and fall because people thought they were an investment. I am talking about Beany Babies, Jim Beam Bottles, Cabbage Patch Kids, Avon Bottles, Commemorative Coins, Hallmark Christmas Ornaments, anything from the Franklin Mint. . .  you get the idea. If you really love owning those things, go right ahead and buy them; just remember that you are spending not investing.

I remember talking to a couple a few years ago who were very excited about adding an item to their collection that they had been looking for. It was a brand-new “collectible” in a retail store. When I commented that they were buying at retail prices and would someday be selling it at a wholesale price, they looked at me like I was nuts. They somehow thought that they could sell it next week for more than they paid though they had never tried to sell anything from their collection yet. That is not investing. That is speculation and seldom works out well.

If we watch the very popular American Pickers, Pawn Stars, or Antiques Roadshow, we learn that there are thousands of obscure items that are highly sought after by a small number of people. If we are one of them, and know exactly what we are doing, collecting and investing in antiques can be extremely rewarding and possibly lucrative in the long-term.

If there is one thing that we are passionate about, say for example electric guitars from the 1950’s or Tri-Five Chevrolets, we must learn everything there is to know before we buy, enjoy owning the item every day we have it and consider it part of our investment portfolio until the time is right to sell it. Someday we will pass the item on to another collector who may love it even more than we do. Selling our collection may be part of our retirement plan, but we cannot consider this to be the only investment made toward these long-term goals, just as we wouldn’t want to own stock in only one company. High-end collectibles are seldom liquid, and the values can vary in many ways. And of course, unless we are a dealer in the business, we are buying at retail and selling at wholesale.