The Cost of Living

With the price of oil plummeting, I'm expecting to see other costs destabilize.  At this point and time, I'm not even sure what that really means or could possibly entail, but without the gold or silver standard, and so many global currencies; oil is really the global standard.  If the American dollar now has more buying power regarding a barrel of oil, I think that usually means deflation or inflation is coming.  I think both are on the horizon.  Economy experts have forecasted an improved 2015 for America's economy, but much of that is based upon oil and gas, while the price of oil has dropped dramatically.

I believe we're going to see another drop in the value of tangible assets, or at least the selling power of them and I think we're going to see an increase in the cost of living.  The Great Repression of 2008 brought about a real change in the economic climate of this country, with a severe drop in the standard of living for the Middle Class.  In going back to campaign rhetoric of our current leader, he frequently used the term "working class" in reference to what used to be the Middle Class.

In recent conversations, I've experienced not sticker shock, but what I would call "Cost of Living Shock."  I truly had not realized how far out of the economic loop this homesteading lifestyle had taken me.  My daughter started it, last year when we were talking about her sister's move.  I had said something about them being here for a month and giving me $200.00.  My daughter just looked at me over her wine glass and asked, "Two hundred dollars, what's that even begin to cover?"  I then stopped and thought about how much my kids talk about their cost of living, especially the one who had given $200.00 . . . so I certainly quit feeling guilty for having taken almost enough money to cover the cost of my internet overage through their stay.  I have now heard others speak of their income, their monthly expenses, and in many cases, their continued need for assistance.

Obviously, some of the cost of living has to do with money management.  I choose to be frugal to a point, but really, I buy what I need and usually what I want.  I just don't require a lot of high tech gadgetry and I still prefer investments to just purchases.  I don't know that I'll be here in 40 years, but if America is still in business, some of the things I've implemented here in Goshen could still be operational and of course, much of the homesteading lifestyle is perpetual.  As others describe their income, I'm shocked.  I've been out of the mainstream workforce for so long, I had no idea people actually complained about the level of income I'm hearing about.  I can't imagine how they find a way to be broke with that much income!

Our economy did not recover and it's shaky.  We can't keep mismanaging our income and expect G-d, government, or charity to continue to provide.  Wealth does not begin in the wallet, it begins in the way we think and manage.  

Beefing Up the Investments

This spring, I heard and have shared, that I am to prepare practically.  That meant the hobby farm herd needed to be upgraded to actual productivity.  Now that the grandkids have outgrown me, and their pygmy goats were aging and not mothering so well, it was time to reassess the whole situation.  Since they rarely visit anymore, and when they do, have no interest in the critters, it seems much more economically advantageous to stop spending money on feed and when I sell next year's kids, just put some money in their accounts.

That led to more figuring.  I figured the cost of raising my grass fed beef, which led to the discovery that the price of a milk goat is about the same as a couple of bags of milk replacer.  I love figuring stock investment on real stock and real investment.  Even if I don't process the beef myself, but pay the local locker plant to do the deed, and figure the price of a milk goat in each calf, my grass fed beef will be less than $2.00 a pound, and Abba willing, there will be kids to sell and more milk next spring.  A healthy milk goat will provide milk for about 8 years, plus produce offspring for herd expansion annually.  

I'm not counting my chickens before they hatch, but I'll give some figures, since I've been at this awhile.  The average milk goat, in milk, runs between $100 and $200 dollars.  There are cheaper ones, but they're usually old and there are much more expensive ones, but that's usually for the registered ones, and that doesn't make the milk taste any better.  Although I'm giving a single example, I keep a herd of about a dozen and generally milk about half of them at a time.  So, taking the average, a $150 milk goat will produce enough milk to raise a bottle calf and her own kid.  I don't buy any milk at the store, make my own cheese, as well as provide goat's milk for my soap company.  Now in a milk goat's lifetime, she will also produce about a dozen kids, maybe more, which are either sold or kept to replenish the herd.  Selling one set of twins usually pays for the price of mama and there are still seven more years of kids, milk, and bottle calves . . . not to mention goats make wonderful pets.  I can get 3 goats for the price of a puppy from the pet store or some breeders!   

This is the kind of stock I can appreciate.  There is minimal volatility and some fluctuation, but it's primarily seasonal variables, so it doesn't come as a shock!   When the economy began to crumble in 2007, very little of my personal investments were affected.  Since beef prices are so high, I decided to hang all the new goat investment on the cost of raising my own beef, and it's still coming in much cheaper than buying beef at the super market.  The new members of the herd are really cheap pets, too.