The Vegetarian Dilemma (revisited)

by Ouida on June 2, 2010

One word of caution, this blog deals with issues affecting people in middle age, which is why I am devoting some time to health and nutrition. I don’t have growing children so I won’t ever post frugal ways to feed a family of four.  Trent Hamm of the Simple Dollar, does that much better than I ever could.

Last week I wrote the vegetarian dilemma defining what I believe the dilemma is: that vegetarian cooking so often lacks flavor and texture that it often leaves you wanting a slab of meat just to feel satisfied.

I excitedly tried a new recipe, spiced potatoes with lentils and barley.  On the nutrition scale it scores big time.  On the flavor scale, the recipe sucked big time.  I am still eating it, because while my palate is quite unhappy, my colon is.  I keep thinking about all that wonderful nutrition with each spoonful of that crunchy-yet-flavorless slop that I consume.

What went wrong?

The dish is boiled. So some whole potatoes are pan fried in olive oil and coated with prefab cajun seasoning.  (Paul Prudhomme has a great recipe for home made cajun spices that actually involves using fresh herbs. His recipe for cajun spices can be made in advance and stored in an airtight container.)  The potatoes are then boiled along with the peas, barley and parsley the recipe calls for in a stock pot filled with vegetable broth.  The recommended lentils are canned and lemon juice is added to the broth.  The liquid is allowed to evaporate and the barley, lentils, peas and potatoes are tossed together along with lemon zest to create a brown white mixture that is not even remotely interesting to look at, much less eat.

What would I do differently, for I will try again?  Toss the recipe…it truly sucks and start over.  Start over with red potatoes rather than the new potatoes the recipe calls for.  Boil until fork tender, then toss with olive oil and K-Pauls’ homemade cajun seasoning and roast them until golden.

Next, boil the lentils, peas and barley in chicken stock rather than vegetable stock, drain.  Then toss in fresh parsley, lemon juice, the potatoes, garlic, and a roasted pepper.  Add the potatoes and salt and pepper to taste.  The prep time will be twice as long as the original recipe, but the flavor should be quite good.

I have used a recipe from the NYTimes a wheat berry in tomato sauce for topping vegetables.  The Times recipe uses this sauce with Asparagus but the sauce can be used with roasted butter nut or acorn squash.  It is quite good.  The recipe calls for coriander which makes the aroma just as pleasing as the taste.

From the Moosewood Restaurant is the farm-fresh meals deck.  This is a card deck with well-seasoned recipes.  Including a roasted squash, beans, corn, sage and red onion concoction that is quite good.

Why am I spending so much time on this topic?  We are becoming a nation of heavy people.  Travel internationally and you’ll see that we are truly becoming the heaviest people on the planet.  We love our protein and all of the animal fat that goes with it, but red meat isn’t the only source of protein.  If we don’t learn to get more of our proteins from whole grains and less from animal fats, especially red meat, there won’t be a health care system in the world or a dollar amount big enough to provide for the health needs of our citizens.

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Lending to Family

by Ouida on June 1, 2010

I might as well have written I would streak naked down the streets of Gallup, New Mexico.  This is just as incendiary a post title as that.  I don’t mean it to be so.  I was sitting here reading Ellen Ruppel Shell’s, Cheap: The High Cost of Discount Culture when this post title came to me.  I have been taking in the details of the lives of many of my friends as they lend to family, some of it repayed, most of it not.  Loan cosigners usually cosign for family and end up paying for, then owning, the thing they cosigned for.

Just as I don’t believe you should pay for a child’s education, I actually don’t believe you should lend to family.  I do believe under certain circumstances you can, and should, gift to family then walk away from whatever sum of money it was.  When money is considered a gift, not a loan, the amount of money given will generally be smaller than the amount of money loaned.  You will give only what you can contemplate doing without;  you will loan much more than that.

Families are a funny business, some family members feel entitled to the fruit produced by other family members forgetting that all, having been raised in similar circumstances, had the same opportunity for advancement.  Other family members feel complete discomfort around having achieved more than their siblings and parents and stand at the ready to meet every family need often doing so at great personal cost.

Some time ago I was on a conference call with a financial strategist whose name I cannot even remember,  he discussed this very problem within families, lending money, and proposed something more formal.  A family bank.  The truth is that most adults, given time, can solve their own problems.  It is human nature, though, to take the path of least resistance and ask for money from a relative.  Asking for and receiving money from a relative may forestall austerity measures that the person requesting the money probably needs to take but would prefer to avoid.  The person who needs $800 dollars to stay in their apartment probably needs to bite the bullet and rent a cheaper apartment.  The person who needs $4000 to make a mortgage payment probably needs to loose the home and rent a cheaper place.  Personal loans are often asked for in confidence and one sibling may not know that his sister Sallie also received loans from Mom, Dad and brothers Dave and Sam.  When deciding whether or not to loan or give money it would be wise to ask yourself whether or not this loan or gift will address a temporary or on-going situation.  Unfortunately, when family is involved, we don’t ask those questions.

A family bank is what it sounds like.  It is a bank that all family members contribute to.  The bank’s capital will be accessed under certain circumstances and the loans repaid under terms agreed to by all.  If someone defaults on a loan from the family bank, they can never access the bank’s capital again.  When I first heard this idea, I grew very excited and told as many people as I could about it.  Most were very uncomfortable with the idea.  One person told me that in her family one person would access the bank all the time.  Having to do so formally would isolate her from the rest of the family.  Another person told me that only “rich white folks” would do that and she didn’t want to hear any more about it.  Actually family banks are now used by the wealthy to distribute an inheritance with strings attached to an heir who might otherwise squander it.

Whether or not to loan money within families is a complicated issue.  In general, I believe people are uncomfortable discussing issues of money.  Treating a loan within a family like the business transaction it really is would make most people squirm, but that does not make it a bad idea to do it.  What I have found is that not doing so is much worse.  The person who is constantly in need, generates anger and resentment within a family and those feelings only grow with time.  Family gatherings become uncomfortable and that person ends up isolated anyway.  I was just speaking with a friend of mine who is constantly helping out family members.  He has come to the conclusion that in the long run, the financial assistance he provides really does not help.  The recipients just create a new problem and a new need.

Do you loan to family?  What is the result?  Please comment.

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Stag?!…It’s a Goat, Idiot!

by Ouida on May 31, 2010

“That wasn’t your Patronus!” said a Death Eater. “That was a stag, it was Potter’s!”

“Stag!” roared the barman, and he pulled out a wand.  “Stag! You idiot —expecto patronum!

Something huge and horned erupted from the wand:  head down it charged towards the High Street and out of sight.

“That’s not what I saw–” said the Death Eater , though with less certainty.

“I still say I saw a stag Patronus!” shouted the first Death Eater.

“Stag?” roared the barman. “It’s a goat, idiot!”

Harry Potter and the Deathly Hallows, JK Rowling

And so begins deception.  You know something because you have seen it, yet somewhere along the way you begin to doubt what you have seen.  And you doubt what you have seen because another, presenting a reasonable facsimile, tells you that you are mistaken. The stock market is the way to a sure retirement, yet there have been two bear markets in a matter of a decade wiping out trillions in retiree wealth and pushing back planned retirement dates.  Home prices would always rise yet we are in the midst of one of the worse housing markets in 2 decades.  The popping of this most recent bubble has wiped out 1 trillion in home owner wealth.  Anyone who bought home in the late 1980’s and early 1990’s and saw the aftermath of the Savings and Loan debacle knew that home prices could not possibly continue to rise unchecked, yet financial pundits and mainstream media armed with charts and graphs insisted that they could. And so many ignored the lessons of history and bought.  Deutsche Bank now predicts that through 2011 some 25 million homeowners will be upside down on their mortgage.

Too many tell us that what we see as and know to be a stag is really a goat.  What I have found as I plan for retirement is that without the pension plan that I thought I would not need, retirement would not be possible until well into my 60s despite saving regularly into my 401K and having a generous company match.  I don’t have to search very far to read the same pablum that I have read for 15 years: maximize your 401K, maximize your match, diversify your portfolio.  Why didn’t I think I would need my pension?  Because the 401K is king.  Now I am glad to have my pension because the King is really a Joker.

Financial planners have taught millions to do net worth calculations when they should have been focusing on cashflow.  The real question should be how much of my net worth can be converted to cashflow for me to live on in retirement?  For far too many, a high net worth translates into too little cashflow. Sure your home may be paid for in retirement, but what is your cashflow?  Does it make sense  to have $200K tied up in a home in retirement or does it make sense to liberate half of that money, avoid income tax and carry half in a small mortgage over 30 years?

Many of us see stags running around the streets of our financial lives, yet we are too willing to believe that what we see is a goat because an entire industry is predicated upon our doing just that.  What would happen to the stock market if people stuffed their 401ks with bonds rather than stock mutual funds?

What would happen if people began to focus on cashflow and therefore chose to create the extra time to start a small business? We are told that starting a business is too hard and too time consuming, yet I can think of nothing more wasteful  and nothing more risky to one’s overall financial well being than spending 30 years thinking  a stag is a goat only to find in the end it was a stag after all.

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Understanding Spending Priorities

by Ouida on May 30, 2010

Because as every housewife knows, the first check you write is for the mortgage and the second is for the insurance.

Leigh Ann Tuohy, The Blind Side

One of the first steps in sound personal finance is understanding and exercising spending priorities.  This simple opening from the Blind Side illustrates a sound principle: pay for the roof over your head first, then pay for the insurance to protect the roof over your head.  In personal finance an appropriate modification would be to pay yourself first at least 10% of income, then the roof over your head etc.  Unfortunately very few people exercise spending priorities.  They treat their household budgets as ants treat food at a picnic, clamoring for every morsel until the meal is completely carried off.

I am amazed by the people that we have to evict from our properties, not because they don’t have the income, because they choose not to pay a portion of their income to keep a roof over their heads.  I am amazed by the people with mortgages who are paid on the first but who are constantly paying late fees to their lender because their mortgage payment is late. Financial stress is the number one reason for divorce, but if we dig a little deeper we would find that the number one reason for divorce is that the couple fails to develop and stick to a plan of spending priorities that makes sense.

Robert Kiyosaki revealed in Increase Your Financial I.Q. that it wasn’t until he and his wife hired a book keeper to whom they gave a set of non-negotiable spending priorities that included saving, that they realized how broke they were.

For far too many people, the pay check arrives and sensible priorities are drowned out by poor planning and apparent needs of the moment, the relatives, the car, the candlestick maker.

Oddly enough, spending priorities are a constant.  A quick Google search of the term “how to prioritize bills” reveals lists of spending priorities and they all look remarkably the same.

Bankrate and Smart Money offer priority lists.

Here is mine today:

1) Saving

2) Mortgage, taxes and insurance

3) Food and Gas

4) Utilities

5) Disability and Life Insurance

But this wasn’t always the case.  Years ago when my housing costs were  50% of my take-home pay, my spending priorities looked something like this:

1) Mortgage, taxes, insurance

2) Car payment

3) Food and Gas

4) Utilities

5) Disability insurance

6) Tithing

Everything else went on a credit card.  That included meals out, trips home and vacations.  Knowing what I know now, I would put saving at the top of the list and divide those funds into charitable giving and other discretionary spending as I do today and forget the credit cards. Yes, some money that I mark to be saved today is saved for immediate use, other money that I save is set aside for charitable giving and other money is set aside for capital investment.  Why bother to call it “saving” then?  Simple.  When ever I save something, I understand that I will use it later.

Saving is, by definition, deferred consumption.  Because I save with purpose, and don’t leave money sitting in my checking account where the ants can get at it, I will only release designated amounts for spending if the reason for spending is in alignment with the reason for saving.  When I come across something to buy, I ask one initial question of myself: “Is this an impulse buy?” If the answer is yes, the second question is “How are you going to pay for it?” (credit card is not a suitable answer).  If the answer is that I will use my savings account tagged for discretionary spending, I then ask “is there anything else on your purchase list of higher priority?” If the answer is yes then I ask if I can buy both.  If the answer is no, I don’t buy the impulse item.  If the answer is yes I will buy both.  As I write this I am chuckling to myself because I realize that this seems like a cumbersome system, but the reality is that this exercise only takes about 10 minutes for me to perform and I perform it faithfully.  Truth is that I am not cloistered in my home, I venture out regularly and, because I do, I am aware of the opportunities to spend money.  Just to be clear, I classify an impulse item as an item that I may have been looking for for a while, but which suddenly becomes available at a desired price.  As an example, I needed a couch.  I looked for one for 4 years, but couldn’t find the right price and quality.  I walked into a local furniture store about a year ago that was having a closeout sale.  The sofa that I wanted was 50% off.  I performed the internal calculations and bought the sofa.  A similar thing happened this year with a chair.  I had been looking for a specific chair for over 5 years.  Found a floor model for 30% off and got an additional 5% off just for asking.  In this case I had been planning to buy the iPad, but the initial Wi-Fi issues with the iPad knocked it down on my list of spending priorities.  I bought the chair and not the iPad.  One other method to my madness is that I don’t shop.  I hate shopping and I can always find something to buy so my spending is ultimately based on things that I need or things that I want and have thought a long time about buying.  Ultimately, though, I don’t care when I get the things that I need or want.

What are your methods for setting spending priorities?

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