Harvesting Natural Resources
Creating Wealth by building something or selling your skills
Acquiring Wealth by owning or controlling wealth created by others
What do all of these have in common?
In just about all cases, once you stop working, so does your income.
No Productivity = No Wealth Generation
What a sad state of affairs. You mean to tell me that I will have
to continue working all of my life to receive wealth or the income
needed for my survival?
There are certain forms of wealth you can have which can generate
capital and income for you, so you don't have to work.
The fields of investing, cash-flow generation and capital creation can
be highly technical and befuddling.
Hard assets, stocks, bonds, IRAs, 401Ks and everything else under the
sun, compounded by technical charts, advice, opinions, stock symbols
Which direction should you turn?
First of all, let me state that I am no expert in these matters nor in
anything else you are reading in this series of articles. I
feel I have learned a few lessons in life the hard way, have a few
opinionated ideas and am trying to share some of this info with you for
your entertainment and consideration.
For any and all financial advice, legal advice, or any and all other
advice you should always rely on a trusted and licensed professional in
What I would like to do, is share a few of my own personal thoughts
about investing your money in order to receive a pretty much hassle
free income and capital when you need it.
Please take it with all with a grain of salt.
Many of you are lucky, in that you are/have worked for a company and
have a nice little retirement package or have finally reached the
government retirement age and are receiving your Social Security Check,
Free Money! Coming in whether you work or not. I guess
there is a God after all.
Now no offense intended to anyone, but let's examine this so-called
Free Money for just a minute. Where does it come from?
For most of your working life, you have been paying a small percentage
of each of your checks into these various programs. You may
remember that first paycheck stub you received and wondered who the
hail this fica guy was that kept getting a part of it. You give
them your money in the hopes of a return at a later date (and usually
because you have to).
Now without getting too technical, you can add up all of those
stubs for the last 30 years of your life and find out just how much you
paid into that particular fund. Wow! quite a sum-I can draw
on this money I paid in just like it was my personal savings account
for the next 8 years if I live that long. And they also give me
great medical benefits. Well, I sure do deserve it-they owe me
But you just happen to live for longer than those 8 years and still
keep getting these regular checks. What a sweet deal. I
guess when George died after being retired for only 1 year they divided
all of the money he had paid in and put a little bit in everyone elses
savings account. Or I did such a great job for this company or
was such a good citizen, they are making extraordinary profits and
finally giving me my due. Or the financial wizards that were in
control of this giant pile of cash really knew what they were doing.
Enough kidding around-this extra money you keep receiving has to come
from someplace and it usually isn't from the sources listed
above. If you believe the Government has done such a wise job at
managing the money you paid into the Social Security Fund and is
profiting immensely because of your good citizenship, you are only
In our introduction you learned that Wealth is the by-product of Human
Effort or work. This so-called Free Money you are receiving isn't
really free at all. It has to come from someplace. And that
someplace is ultimately the producers of wealth. It is being
stolen from them, in one way or another and given to you. (and this
goes for many other free money traps).
Now am I suggesting you have a conscience and stop accepting it?
Get real :) But what it is ultimately doing in the very long run
is decreasing the standard of living for everyone.
Remember that people work for the reward it will bring them. Less
reward = less incentive to produce. Less production = less
You studied and practiced for years to become a top surgeon.
People pay you for your skills. Due to various factors mostly
outside of your control you have to raise your prices. The
consumer complains to the Government about your high prices.
Government steps in to protect the consumer and passes a law that says
you can only earn $50,000 per year. You lose your incentive to
produce. The standard of living for everyone goes down. And
so on, ad infinitum, ad nauseum.
Getting Wealth that will actually give you some more wealth in return
without working for it can be a tricky business.
I believe we are quickly approaching a time in this generation where
the old ways of buy your stocks and hold onto them forever needs to be
looked at (not that it was ever that good for the common man anyway).
First of all, what can we, as normal everyday middle-class producers
do, which will give us the best return on our investment dollars
(especially in tough times)?
We briefly talked about this earlier, but let's get a little bit more
1. If you aren't earning at least enough to survive on
comfortably, you need to be spending your money on yourself in
improving your abilities in the fields of harvesting, creating or
2. At the same time you need to be spending your cash by
investing in future consumables like food, water, a saferoom and other
aint no better insurance policy around-read the articles on this site).
3. You need to get completely out of any type of consumer debt
you may be in, except for maybe a home and a vehicle.
4. If you have a home and a vehicle, you need to get and keep
insurance on them.
5. You need to either get medical insurance or find a way to
handle major medical expenses.
6. You need to invest in the tools of your trade.
7. You need to invest in you own land and home (and IMHO in a
8. You need to get at least burial insurance, if you have a
These are the basics folks. Personally, I wouldn't even dream of
trying to put my money to any other use (especially any type of paper
investment, unless you really know what you are doing) until the above
This is the Foundation upon which you can build.
Now as you are improving your abilities in harvesting, creating or
acquiring wealth, you can also be looking for certain types of wealth
which will generate either capital or income to speed you along the
goals listed above (this is the tricky part I talked about).
What types of wealth?
There are many ways and once again many levels where Wealth can spin
off more Wealth.
When you can acquire something through your specialized knowledge and
experience that can be sold for more than you paid for it, you
immediately have a built-in equity in that wealth.
When you harvest or create something through your blood, sweat and
tears, you also have a form or equity.
What is this equity thing?
Basically, it how how much you can sell this wealth for minus how much
you paid for it (or still owe on it sometimes).
When I go out and get my load of wood that I can sell for $120 a
truckload, It has cost me a certain amount of money, time and work.
$10 for a permit, $2 for some chainsaw gas and oil, $10 for truck gas
and 6 hours of work.
$120 minus $22 equals $98 worth of equity.
This is what is called sweat equity-you have used your thoughts, work,
experience and tools to create it.
Or in the case where I find a used car I can buy for $1200, fix up for
$300 and re-sell for $2500, I have an equity of $1000.
In this case you have used your cash, knowledge and experience in the
used car market to find a deal.
In whatever way you get some wealth, whether it is through harvesting,
creating or acquiring it, you need to be on the lookout for wealth
which has built-in equity.
(note that the above examples are simplified; your time and equipment,
etc are worth something and it may not be the classic financial
definition of equity, but you get the idea).
(When you work for a living and borrow money you are Giving
your time and work equity to
What can we now do with this equity?
-we can sell it for all cash to generate some capital to pay off a
-we can sell it to someone on payments of $100 per month to help us
increase our cash-flow for everyday living expenses
-we can trade it for some other form of wealth
-we can use it as collateral and borrow money against it (if we also
use this borrowed money to help us reach our goals and not for
Learn how to use your imagination when you have equity in some form of
When times are tough, ask yourself if you have wealth sitting around
your home right now that can be re-sold because you no longer use or
need it? Household articles, jewelry, used vehicles, a portion of
your land? Find ways you can either sell it for capital, write a
personal note on it for cash flow, or trade it for something else.
Used car for sale. $1500. $100 down/$100 month. Owner will
finance at 10%.
You have just created a cash flow of $100 a month for around 13 months.
Do this ten more times and you will have $1,000 a month in cash flow.
Now this sounds easy to do, but it really isn't because I know from
experience. I could always find the deals, but sometimes my cash
was limited. (though your ideas aren't). If you do attempt
it full time I'd recommend to:
Make sure you do credit checks, keep a spare set of keys, make sure
they are insured, get a really good collection agency to handle all of
it, find a repo man to do any dirty work, get a good mechanic and
detailer so you can spend your time locating the deals, have some
people pay every payday so they don't spend it, check your state laws
on how many you can do without becoming classed as a dealer, etc.
Basically do your homework and get some experience (even if it is bad :)
I still do my alloted 6 per year, but I find anything else pretty much
makes it a full-time business (though it can be a pretty good business
if you do it right).
You can create this type of cash flow and capital with just about
anything . . .
-tools, guns and machinery
-antiques and collectibles
-vehicles, boats, planes
-other peoples time, energy and skills (as in employees)
-other peoples resources (like cash)
-tools and knowledge
-paper investments (stocks, bonds, mortgages, etc)
Just take one area of choice which fits you and your situation and
become good at it. After you have established the good foundation
we talked about above, you can use it as actual income to live on and
give up that job which you hate. And remember in many cases it is
easier to deal with things that are more 'idea' related than actual
products which are heavy to move and take up space to store.
A small plan for those with limited
time and cash
1. Maintain the foundation you currently have-don't go out and
quit your job; if you don't have a job, learn how to harvest, create or
acquire some wealth to support yourself
2. Start reading the classifieds every night and going to all
yard sales, auctions and flea markets every weekend to see what is
selling and to give you an idea of 'value'
3. Decide on a few product areas you like, are readily available
in your area and think/know you can re-sell
4. Find out what these products are worth new retail
5. Find out the average selling price on the used market
(classifieds, pawn shops, thrift stores, flea markets)
6. Save up or sell something for $100 cash
7. Use this very small nest egg to start acquiring products for
8. Learn to Re-sell these products for cash and build up a nest
egg of $5,000-absolutely don't spend it and realize that this can take
some time to do
9. Start looking for more expensive products which you can
acquire with a built-in equity and you can re-sell for cash flow
10. Strengthen your foundation and then live off the income
And if you are more interested in the idea end, you need to be asking
yourself where can I find idea related products which might be for sale?
Or what kind of tools or machinery can I use to harvest natural
resources with the sweat of my brow that will have built-in equity?
Or where can I buy or acquire products wholesale from which have a
built-in equity that can be re-sold in my store or even at flea markets?
Or in what ways can I employ the skills, time, money and resources of
The above plan may sound simple, but it takes imagination, work, time,
discipline and experience to actually do and there is risk
involved, no matter what you choose.
In its simplest form it is what business is all about. Buy
And just so you know that I'm not the smartest person in the world, or
even very good at the above yet, we have actually been in this position
twice in our lives. Once we had an income of more than $6,500 per
month coming in from used cars and real estate and had to declare
bankruptcy because I was overextended credit wise and buying things for
resale that I hadn't properly done my homework on.
The second time we were making more than $3,000 per month from products
we acquired and licensed and the market just dried up.
Where are we today? On the long road to recovery, pretty much
following the same plan or forms of it. But it is easier.
The only real disadvantage of some of these ways of generating cash
flow and/or capital, is that they have a limited life span and there
may be more management headaches involved.
Once the equity is used up, you need to create or acquire more equity
to keep going. There is limited growth and always risk
But this doesn't mean you can't develop a diversified income that won't
last for a very long time (if not your entire life) and management
headaches can always be solved in one way or another if you have the
income to do so.
Only after you have strengthened your foundation, payed off your home
and vehicles and have some type of income you have generated to live
on, can you start looking into other areas. Just keep building
your cash flow until it is possible. And it sure does beat Social
Now being the survival type person that I am, the next thing I feel you
need to be looking at is real wealth in the form of trade goods and
materials/supplies needed for any businesses you may own.
In our introduction we talked a little bit about money. We saw
that its primary function was to make it easier for us to trade for
certain forms of wealth.
Here is one of the best explanations I have ever seen on exactly what
money is and what it can do . . .
"Without money, if people want to
exchange goods and services, they barter. "In exchange for filling my
car's gas tank I'll work for you for an hour." In most cases this
simply wouldn't work because party A doesn't want what party B has to
offer in exchange. With the use of money as an intermediary (or
go-between), a wider variety of transactions become possible,
increasing the chances that more people will satisfy their needs.
To facilitate exchanges of goods and
services, it helps if we have a sense of the worth or value of things.
I might value my time at $15 an hour. In that case, if someone offers
to pay me $15 an hour or more, I would consider working for him or her.
If offered less, I would probably decline the offer. Similarly, I might
value a loaf of bread at $1. Money as a unit or measure of value helps
us to make better economic decisions. In the absence of money it would
be much more difficult to make sensible economic and financial
decisions. How things are currently priced by most people provides
indispensable information for guiding economic and financial decisions.
The store-of-value function of money
makes an important dimension to economic and financial life much
easier. It enables us to produce a surplus in the present, to save the
surplus, and to "move" it to different places or into the future. Money
makes it easy to transfer value from place to place or present to
So as you can see, money isn't really wealth, except when it is used
as a store of value and sometimes this value may decrease if you hold
on to it or don't put it to intelligent use. You can't really use
it in the things you need for everyday living. It is mainly used
to trade for real wealth-things.
So what types of trade goods and why? There are many articles
on this site which go into more specifics, but just pretend to yourself
that maybe everyone's money is counterfeit and nobody will take it
anymore. You go down to the grocery store to buy some food and
the clerk says "I'm sorry, but we don't accept cash, credit or
checks." Well then "What will you accept?"
If people won't accept money for what they are selling, they still need
to sell it. The farmer who grows food still needs to have his
other needs met. He spends all day long growing food and still
needs things like clothes, tools, etc and ways to maintain these
items. He may be addicted to nicotine or alcohol. His wife
may need some needles and soap. His kids may cry because they
don't have any candy.
Now why may this happen and could it? As a person on the low end
of the totem pole, we may not have very much influence on the current
political or economic affairs of this world. That's not to say
that we can't make a difference in both small and big ways. It
just means we may wake up tomorrow and find that some of the Asian
Countries will no longer accept US Dollars and will only take Euros or
that the price for a barrel of oil has gone from $50 to more than $150.
And if you do a little bit of reading and research, you may find this
this is entirely as far-fetched as it may sound. We may in truth some
day have have counterfeit money that is unspendable.
And If we do have all of our money invested in paper which is based on
the US Dollar, it may be completely worthless. And you sure can't
eat paper. So after you have a good foundation, paid off all of your
debts and have some cash flow coming in, consider getting some trade
goods, tools/supplies/knowledge/materials to make products as they did
in the old days and materials/inventory that you may not be able to get
for your business if the economy is in shambles.
Now just a small note on metals and how they may come into play in your
investment plan. Even if paper dollars are no longer being
accepted, it doesn't mean that the economy is going to come to a
Even in very Tough Times people are still going to need and desire
products. And straight barter systems are still going to be
clumsy. So eventually some form of money is once again going to
be used. And hard assets like gold and silver have the advantage
of history and use behind them. Just make sure that
inexperienced people you are trading with can recognize it for
what it is. When a silver coin reads 1oz of silver right on it,
there usually is no doubt.
A lot of ideas in this article that you can think about and hopefully
-Build and maintain your foundation
-generate some cash flow
-invest your money in real forms of wealth
Next time we will look into how we are being stolen from, how we are
really still brainwashed slaves in this economic world and what we can
do about it.
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