Category Archives: Economy

Buy Local, How I Support My Community

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Over at Get Rich Slowly‘s site, J.D. Roth has a great article called “Why I Buy Local“.  And as I started to add a comment, I noticed that all the other comments from other readers were practically as long as J.D’s blog entry.  So I decided to add to his work and put in my two cents over here at www.moneyreasons.com.

So here is my take:

I live in a small middle-class city in the MidWestern region of the United States.  We chose to live in such a community because of the charm of the community and the fact that they have an excellent public school system (okay, I confess the school system was a larger element in our choice)!

While within the last few years, a Walmart, Target, Lowes, Starbucks and other big chains have been built, the downtown area of the city still has much of it’s small social and business charms.

We still have quite a few locally (mom and pop) owned restaurants,  farmers, 1 movie theater, 1 drive-in theater, hardware shops, coffee shops, auto shops, antique shops, and other charming little places.

Now for how we support our local businesses:

  • For movies, we’ll wait a bit longer and go to the Drive-in Theater which is only a few miles away!  It’s a flat rate per car to get into the Drive-In, so not only are we supporting this great local business, but it’s also cheaper than the farther big-city theaters. Just for an additional kick, we also invited my wife’s friend and her two kids to go with us.  We usually pay for the car entirely, but even then, it’s cheaper than the other theaters in the bigger cities.  The sound system isn’t the best but the other great aspects make up for this 🙂
  • In the summer, we go to the local farmer’s market and buy our sweet corn from them!  It’s almost as cheap as the store-bought versions, and taste soo much better!
  • I buy small hardware needs (including sharpening my lawnmower blades) from the local hardware store.  It’s not as big or fancy as Lowes, but it has that Norman Rockwell feel that’s just plain cool!
  • For breakfast, almost every Saturday, we go to this great little mom and pop restaurant!  Everything tastes great (eggs, pancakes, etc), and is cheaper than both Bob Evans and The Cracker Barrel.  Oh sure, it’s not as pretty inside as Bob Evans and The Cracker Barrel, but it’s still has a decent enough decor… and the owner is incredibly friendly!  In fact, it’s my favorite local business, the fool is almost always perfectly prepared (even the cheap coffee)!
  • I confess, I still go to Starbucks when I am at work (which is out of my city)… but if I’m in town, I go to one of the two cafes that are downtown.  The local cafe shops are just as good, and has a personal feeling that’s hard to beat!  Plus, the one shop (the one I go to the most) has small local bands that play on Thursday nights (only for a few hours)!
  • My wife’s minivan is running oddly, so we took it to our local “around the corner” auto shop.  I’ve had great experiences with the owner in the past, and I’m sure he’ll do right by us again!
  • We also frequent many other local shops, instead of big chains.  We’ve bought stuff at clothing stores, thrift stores, ice cream shops, a root beer stand,  antique stores, a tidbit store, a local pizza place (Papa Johns is still our stable though) and other such local shops…

Now I hate to say it, but we also shop at Walmart, Giant Eagle and Target, especially for food products.  Target is just fun… sorry…

So while we are mostly frugal, we do try to keep the local community in business!!!

So my question is…  Do you have any special local businesses that you support and are incredibly proud of?

We love our Drive-In, and would hate to see it go!!!

-MR

Forty Billionaires To Give Half Of Their Fortunes Away

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I read at the abcnews site that Warren Buffett and Bill Gates have been on a crusade to convince some of the billionaire families to give half of their vast fortunes away to charities.  Apparently they were successful.

Some of the money being given away is even old money that has been in families for generations.

You might think that this is great, but I don’t.  It’s not that I think those extremely rich families and individuals should hoard that money.  No, it’s more that I hate do see people become more and more dependent upon others.  Our country is already creeping toward socialism (unless some big changes happen in the next elections), and I’m afraid that the people of the U.S. and the world for that matter are become more and more dependent upon handouts.

I can see us losing a decade or longer, when people become lazy by being too dependent on other.  What if those charity dollars actually prevent some great things that would have happened but won’t now?  How can a small fledgling company compete with the dollars that a big charity with pocket stuffed full of dollars?

You can think of a charity as a business that already has made its money and now is trying to create the product.  There is no sense of urgency and no risk.  But with a small company without the dollars… well, they would be hungry and desperate to make things happen.

The problems with charities is that you never see that effect they have on such small businesses.  I think in small business cases (and farmers), charities are the dream killers.

Now I could be wrong, maybe I’m being too heartless…  I just think that we really don’ t know the true casualties of the various charity organizations.

An example of the potential damage is that continuous charity giving to Haiti (not the earthquake charity work!), has kept the Haiti people dependent on handouts.  Some Haitians claim this has actually hurts the Haiti farmers and other local economic development!

I know this is a controversial viewpoint, and I don’t expect many people to agree with me, or that even I agree 100% with this viewpoint.  My goal with this post is to make you just wonder if it’s a possibility.

Do you have any stories where charities have done more harm than good?  Do you think my theory is way off base?

UPDATE:  After some more focused thinking about what bothers me.  I think it’s the spending the money then it’s gone.  Currently, I’m trying to build up dividend funds to provide a small stream of income, and the giving away of this money sounds like a spending spree.  The frugal side of me thinks that the money should be invested, then a portion of the dividends push towards charity.

Along with most of the commenters below, if the charity does something constructive with the money, I’m okay with the spending.  But of 70 to 90% of the money goes to the running of the charity or wasteful spending, that’s what bothers me.

I really like Sandy L.’s  and BFS’s idea about the money going towards the creation of infrastructure and something constructive… where the charity teach people to fish, instead of giving them a handout.

-MR

Big Crash, Time To Invest?

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Last week’s big gains was washed away by the stock market’s harsh dip this past Friday (DOW was slipped -261 points).

The market seems so choppy, is it time to packup the wagon and head to the hills?

I’d say no… Why?  Because Warren says so!

Warren Buffett exclaimed that he doesn’t believe a double dip scenario is in the work, nor is a great depression.  He then goes on to say that all of the 80+ businesses that his company Bershire Hathaway owns are doing better than in 2008, plus he said that some of the companies are even hiring new people on board (albeit at a slow rate).

So why should I believe what Warren Buffett says?  Afterall, he continuously states that he can’t predict the future movement of the markets!

Well, based on the biography “The Snowball” written about him, he doesn’t make predictions lightly.  Plus, he has empirical evidence (the pretty diversified businesses that his company owns), that gives him first hand information on the state of the economy!

So if Warren said it’ll be okay and we are coming out of the recession, and we are not going into the double dip scenario, I tend to listen with perked up ears!  Time will tell, but if I were a betting man, I’d definitely bet on Mr. Buffett above all others! 

Afterall, his stock Bershire Hathaway cost over $115,000 for just one share!  When Warren took over Bershire Hathaway, it was valued around $19 for one share.  So Warren must know a thing or two!

-MR

Why You Shouldn't Keep Your Money Hidden At Home

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I have a friend and a few older family members that pulled their money out of their banks and hid it in their house during “The Great Recession“.  I asked why, and most said in case the country (United States) falls apart, they want to have that money available

This is damaging on so many levels both personally and for the whole country.

Reasons not to have much money hidden at home:

  • If everybody does this, money tightens and we are in another “Great Recession” scenario, because banks have less to lend to businesses.
  • Money hidden at home losses value due to Inflation.
  • What if you forget where you hid your money?  We always hear of stories of people finding money in old houses where the previous owners hid the money and forgot it.
  • Money hidden at home has a good chance of getting stolen.  Sometimes even by other family members…
  • What if a fire or some other disaster happens?  That money wouldn’t be insured!
  • (Update) My wife mentioned that people that hide money in their house are afraid to leave their house because they are afraid they would get burglarized if they leave.  Sometimes, such people even skip vacations because of this fear!

Another thing to remember is if the government does go down, that money is worthless anyway.

Since the banks are Federally insured up to $250,000 through 12/31/2013, doesn’t it make sense to take advantage of the free insurance (via the FDIC) not to mention the abeit small amount of interest you could get paid!!!

I do think it’s a good idea to hold a little bit of money at home, just for emergencies, perhaps a few thousand at the maxium.

I definitely wouldn’t have hundreds of thousands of dollars squirrelled away at home (if I had hundreds of thousands 😉 ).

What do you think should be thx max amount of cash hidden at home?

-MR