Posted: June 27th, 2008 | Author: Joe | Filed under: Economy | Tags: Forvik, Independence, Taxes | 1 Comment »
Are you sick of paying high taxes? I know I am and I’m not alone. Stuart Hill is sick of paying taxes too, but he is alone. Very alone, at least for now.
Mr. Hill is the sole denizen of Forvik island, and he’s just declared his independence. Forvik, a tiny Shetland island located on the edge of the Atlantic, acquired its lone citizen in 2001 when Hill capsized his boat there “during an unsuccessful attempted to circumnavigate Britain.”
Sounds like a real character.
From Reuters:
“He is Forvik’s only resident, and his home is a tent on the storm-battered island. He says on his website that he plans to create Forvik’s own currency — the “gulde” — print his own stamps and raise his own flag.”
Sounds like my kind of guy.
“”There will be no income tax, VAT (value added tax), council tax, corporation tax, or any of the other taxes instituted by the British government,” Hill wrote.”
Right on!
But can he really declare his independence from the UK AND European Union?
” Hill’s claim dates back to a 15th century arrangement between the Norwegian King Christian and King James III of Scotland when the Shetland Islands were effectively pawned to King James in lieu of a marriage dowry.
According to Hill’s studies of the history of the island, in 1669 King Charles II re-confirmed Shetland’s status at the time of the pawning, meaning the islands remained directly answerable to the crown — represented today by the Queen.”
I’m not sure what kind of a legal leg he has to stand on here, but it’s an interesting story nonetheless. I’m guessing that the government is more or less going to ignore him as a rogue nutter since he probably doesn’t have much worth taxing anyway. But who knows, maybe he’s got a huge bank account or investment portfolio in a mainland bank?
It says that Stuart made his declaration on his website… I’m not sure how since it seemed like he had minimal resources when he was shipwrecked on the 2.5 acre island, but more power to him. He’d better be careful though or his 2.5 acres will quickly get over populated:
“”I also invite anyone from any country in the world, who supports these aims, namely to become free of liars, thieves and tyrants in government, to become a citizen of Forvik,” he added.”
You can read the Forvik Declaration of Direct Dependence here. There’s quite an interesting history there.
Technorati Tags: Forvik, Independence, Taxes, Stuart Hill, Shetland Islands
Related Posts:
Posted: June 26th, 2008 | Author: Joe | Filed under: Real Estate | Tags: Home Selling, Sold My house | 4 Comments »
WE SOLD OUR HOME!
Words cannot express the joy and relief my wife and I feel. We were certain we would sell our home in time (by following the points laid out in this post), but we were getting very tired of the disruption to our life from numerous showings.
In the end, our home was on the market only 18 days less than the average when we listed, but as you’ll see that is quite a bit less than our neighborhood competition.
Staging.
People shell out big bucks for professional stagers, and while some will argue that it is money well spent, especially in a buyer’s market, there are a lot of things you can do yourself. This is how we sold our house in a down market, for 97% of our asking price (the average for our area is currently 94%).
Keeping Up Appearances.
OUTSIDE.
This is more than just curb appeal. First impressions count – make sure your lawn, hedges, driveway etc look well kept. Plant some flowers, or hanging baskets out front to add color to the overall appearance. Remove dead branches, cut grass and other debris. Clean the sidewalk and patch the driveway.
If you’ve got lawn equipment lying about the yard or cut wood in a pile, neaten it up. Store what equipment you can in the shed or garage, and stack the wood neatly.
Make sure the front door, and siding look fresh and not faded. Powerwash the siding or paint the front door if you need to.
Make sure the mailbox isn’t leaning like a certain famous Italian landmark.
Fix broken windows and screens. You wouldn’t go to a job interview dressed in rags, why send your house to one like that?
Clean out the shed and garage. If you’re selling your house in the spring, put the snow blower into storage. The perfect garage contains only a car – do your best.
INSIDE.
Eliminate the clutter.
Sell what you don’t need or use at a yard sale or on eBay. Rent a storage unit if you must, but streamline and eliminate what you don’t absolutely need for the next 3 months or more. We put our 6ft entertainment center in storage and put the T. V. on a table just big enough that we borrowed from the in-laws. The result: the living room, which looked like a tight-fit previously, became positively spacious.
Brighten the rooms with a fresh coat of paint, but be careful – stick with neutral colors or risk turning prospective buyers off with too bold a color.
Clean the windows.
Shampoo the carpets.
Polish the hardwood.
Replace the light bulbs with a higher wattage – you want the house to sparkle and gleam with newness, or at least the impression of it.
Clear off the countertops and clear out the cabinets.
Clean the oven and the refrigerator.
Vacuum under things – eliminate dust and debris.
Tighten loose door knobs, and cabinet doors.
Replace or remove peeling wallpaper.
Tips for showing your home.
Do your best to impart a welcoming feel to the home. Light some scented candles, but make sure they are a subtle aroma and only do so about an hour before the showing. You do not want your home to smell like the Yankee Candle Shop when your buyers walk in the door.
Clear out the kids, toys, cat and dog.
Turn on as many lights as you can – you want to make the home appear bright and clean!
Put out a vase of fresh flowers on the table.
Put out your best towels. My wife and I called these our “hotel towels”. Not because they were stolen from a hotel, but because they were new and neatly pressed. We never used them, but we would hang them before a showing.
Make yourself scarce. This is huge. My wife and I looked a dozens of homes, and we were surprised at how many had the owners still inside! Another major DON’T is leaving the television or radio on. You want your buyers to feel like the home is theirs or could be theirs. If the T. V. or radio is on it’s a strong reminder that someone else lives there and the buyer feels like the real owner could return at any moment. Not the vibe you want to create when selling your home.
The Single Biggest Thing You Can Do To Sell Your House Fast.
Set the proper price.
It’s that simple. But that doesn’t mean it’s easy. There is a lot of research and psychology that goes with pricing a home.
When you hire a Realtor, he will show you the “comparables” in your neighborhood. This is what recent homes sold for, what listings are active and what houses were pulled from the market without selling. The recent sales will give you a ball-park idea of what people are currently willing to pay for a house like yours, the houses that were de-listed will tell you what is too much to ask for, and the current listings will show you your competition.
The biggest mistake people make when pricing their home is to start high with the thinking that it provides “bargaining room” to move down when the negotiation phase begins. The problem with this thinking is that if you start too high, you’ve already dropped your price precipitously by the time the negotiation phase begins.
Here’s why.
When your house is priced too high, it attracts lookers, not buyers. It brings the busy bodies and gossiping neighbors out. It brings out the people who wonder, “What have they got that makes that house worth so much?”
When your house is priced too high, it implies you aren’t motivated to sell.
When your house is priced too high, it keeps people away, which reduces showings and eliminates the potential buyers that never make to the negotiation phase.
When your house is priced too high, it makes the competition look better.
When your house is priced too high, may make it difficult or impossible for a buyer to secure a loan if the bank doesn’t appraise the house’s value for the amount you’re asking.
When your house is priced too high, you usually end up dropping significantly and waiting much longer to get a buyer and by that time you have weakened your negotiating position.
The best offers come when the property is newly listed. If the price is right, this creates a “buzz” among realtors and the buyers they represent. Realtors want to find the right home for their buyers as quickly as possible, and when the see a home that fits the needs AND is priced fairly, this makes their job much easier. That translates into more action and offers for you.
I had the opportunity to see all of this first hand. Our neighborhood is approximately 50 houses. They are cookie-cutter, starter-homes, meaning that they all have about the same amenities. Some have gas fireplaces, some don’t, etc.. but they all have the same square footage, number of bedrooms and lot size. There’s very little to distinguish one from another. Given that, you’d expect the price of the homes to be in line with the similarities, but that’s not the case.
Our home was on the market for 72 days. The average time for our area is 3 months (90 days). There are 7 other homes for sale in our development. Only one has sold in that 72 day period. It was ours, and we only had one offer. This means there is serious competition to attract serious buyers out there. In a market with these conditions it’s not about getting top dollar, it’s about getting the buyer.
I am certain that the main reason we got the only buyer to come through the neighborhood in 72 days was that our price was fair market value. Of the 7 other homes in the neighborhood, 3 are priced at $10k more than what we sold our house for (they started at $15k more), 3 of the other 4 homes are $15k more (they have yet to reduce) and the last home is a stunning $20k more (they came down from $25k more!). The average time on the market for those 7 homes is 110 days!
My wife and I loved those homes. With competition like that, it made the process much easier for us.
It will be interesting to see how it plays out, but I would wager that IF those 7 homes sell, they will end up at less than what ours sold for and after much more of a headache.
Technorati Tags: Real Estate, Selling a Home, Home Sales, Buyer’s Market, Home Sales
Related Posts:
Posted: June 25th, 2008 | Author: Joe | Filed under: Investing, Reviews | Tags: Gold, Investing, OIL, Opinion, Review | No Comments »
This is a review of the book: The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel, by Stephen Leeb.
Mr. Leeb, sorry – Doctor Stephen Leeb, PhD – is quite fond of himself. He wastes very few opportunities to tell us just how smart he is, but I think a lot of it is nonsense.
I’ll be up front with you, I have mixed feelings about this book. He’s obviously right on the money about some things, like the high inflationary environment in which we find ourselves today. But he’s also wrong about a lot of stuff, or just plain ignores inconvenient facts or competing theories. He also comes across as an insufferable, pompous ass.
I think the 5 second review of this book would go like this:
20% serious, intelligent and worthwhile content.
80% fear, bunk, fluff and garbage.
The premise is this:
We are in the age of Peak Oil and because of decreased availability and increased demand, western civilization as we know it will be utterly destroyed.
Brief Synopsis.
Don’t bother making any plans in your life for your future, because you haven’t got one. If all out thermal nuclear war doesn’t break out when the oil wells run dry, you’ll be so pitifully poor you’ll be lucky to have a potato and bucket of rain water. Picture Mad Max, only worse.
That’s the basic gist of the first 80% of the book. The second 20% is the only part with any real value, but even that is difficult to get through with the author’s self-righteous bludgeoning of just how bad he thinks the world really is.
The Gory Details.
The reason I say there’s 80% bunk in the book is because he spends about that much of it on straw man arguments and fear mongering.
For instance, he spends a lot of time in the early parts of the book laying the groundwork of fear using the dot com tech bubble of 2000. He uses the tech bubble burst to generate fear and uncertainty in the reader, and draws false parallels to the oil markets.
He uses fear mongering by saying that the tech bubble collapse could have “destroyed the economic fabric of the United States” and compares it to the great depression.
This is an erroneous comparison because while there are similarities to the irrational exuberance of the stock market in 1929 and that of 1999, the great depression was a far reaching collapse brought on by the failing of banks and imposition of Hawley-Smoot Tariff Act among other things – not the stock market collapse alone. There was no FDIC insurance in 1929, and when the market collapsed, more people withdrew money (or wanted to withdraw money) than the banks could provide cash for. Hence, the banks failed, but the market didn’t.
Beyond the factually erroneous implications, he also states that the tech bubble collapse “could have destroyed the civilization of the U.S.” If only this… and if only that…. As my grandmother would say, “If ‘ifs’ and ‘buts’ were candy and nuts, we’d all have a very fine Christmas.” My point is that stating a list of things that might have happened to cause something that didn’t happen is little more than pointing out half a dozen asteroids in the past 200 years that would have exterminated 98% of life on planet Earth, if only their orbit around the sun was a couple degrees in any direction. Or if a mega volcano erupted it would cause mass extinction… These sorts of doomsday scenarios make for interesting and terrifying plots, but they hardly prove the next doomsday scenario is around the bend.
In fact, the first half to three quarters of the book is so heavy handed with doomsday prophecy that it reads like a worn out plot from a sci-fi channel original disaster movie. The threats and warnings are time worn cliche’s about total annihilation, and economic destruction. No joke. He uses words like “destruction”, “annihilation”, “disaster” and “collapse” to the point where such words – and warnings- lose all meaning and impact.
Another facet of this part of the book is great civilizations that have collapsed. This part is mainly to introduce and illustrate physiological phenomenon of thinking “this time its different.” To illustrate the concept, he uses examples of “leaders and experts who were blind to the problems at hand”, but ignores the possibility that he (and others) who believe that costly oil will “destroy the fabric of civilization” (his actual words) are engaged in the same thinking. In other words, the tech bubble could have destroyed civilization, but didn’t. But we are supposed to believe that the oil crisis is different!
In particular, he relies on the work of Jared Diamond’s book Collapse: How Societies Choose to Fail or Survive. Specifically he makes numerous citations regarding the collapse of the civilization on Rapa Nui (Easter Island). Diamond’s theory, as stated in his book, is that the proud Easter Islanders willingly cut down all there trees in the process of building the famous statues. Thus perpetrating eco-suicide. The message is clear: “leaders and experts were blind to the problems at hand” and failed to take proper action (ceasing to deforest their island) all because they thought “this time, it’s different.” The moral of course is “don’t be an Easter Islander – this time it’s not different!”
It’s a poetic and powerful story. The only problem is none of it is true. This theory of purposeful deforestation has been debunked in numerous archeology and scientific circles. One such paper is available for your reading pleasure at Liverpool John Moores University (PDF) and it is also reprinted in web form here.
This leads into a major discussion on the concept of “Group Think.” His premise, of course, is that anyone who thinks oil will not continue a permanent upward climb and “unravel the fabric of civilization as we know it” is simply engaged in group think and can be safely disregarded. Maybe, maybe not. Group think cuts both ways in my mind, and it’s often too easy to say that any commonly held belief is group think. Is evolution group think? Is religion group think?
He says those who don’t believe we’re in the age of peak oil are engaged in group think. Others can say that people who believe we are in the age of peak oil are engaged in group think. Since we can only be sure when the age of peak oil is hit after the wells run dry, time will tell who the group thinkers are.
One of his examples of group think is the belief in the run up to the Iraq war that Iraq possessed a WMD cache and program. The problem with using this as an example is that it was not simply the Bush administration that held this belief – it was a systemic belief of the international intelligence agencies and prior U. S. administrations – and Saddam Hussein himself. It can hardly be said to be group think when every action and word from Saddam himself belied a belief in the program! I don’t want to get into a political argument here. Obviously there were major breakdowns in numerous intelligence programs, but I don’t think it’s as simple as “group think”.
Once he has established this base of what has gone wrong in the past, he relies on drawing parallels to near the miss of calamity from the tech bubble, group think, and peak oil but ignores speculation on wall street . In the case of oil production, he accepts that the Saudis (OPEC) can’t increase production but never questions whether they might not want to increase production (and cut their profits). He also ignores the fact that reductions in U. S. oil production are legislated and self-inflicted, not due to lessening supply. He also completely ignores the effect of middle east unrest on oil prices, and other sources of oil like shale.
Well, that’s the first 80% of the book and where I think Doctor Stephen Leeb, PhD is wrong. Well, maybe he’s just trying to sell his book with the time tested method of fear. Now for the remainder – what he got right.
The Takeaway (the remaining 20%).
This book was written in 2006, at a time when oil was hovering around $65 per barrel. At that time he predicted $100 per barrel, a fact which got him much attention from “those engaged in group think“, he his fond of noting at numerous points in the book. He said when oil reached $100 per barrel, gasoline would be $10 per gallon.
His results on these predictions are clearly mixed. As I write this review, it is 2 years later and oil is about $137 a barrel, but gasoline is only $4.25 per gallon.
Anyway, so he was right about oil, wrong about gas. That’s ok, I’m certainly not going to crucify him for that especially since he also predicted a high inflationary period, something we are also clearly experiencing now. I point this error out (and those mentioned above) because the overwhelming feeling one gets from reading this book is that Stephen Leeb is a lone genius in the wilderness surrounded by ignorance. But I think he doesn’t know it all and he is not infallible, despite what he would like us to believe.
The 20% that’s worthwhile and informative is this essentially the part about how you can thrive when oil costs $200 a Barrel. This is a great example of his use of shock and fear because it’s really little more than a guide to investing in a high inflation environment. I guess that doesn’t sell as well.
He harkens back to the stagflation of the 70′s and provides security analysis on what investments did well, and which did not. Of course, he points out many times how “this time, it’s different”, but I fear the irony is unintended. He then takes the reader through some investments that might be expected to do well over the next decade. Not surprisingly, some of this have already done well over the past 2 years.
Things to avoid include cash (including CDs, money markets and savings accounts), bonds (except TIPS), stocks (except small cap emerging markets).
He recommends commodities, like precious metals (gold, silver and platinum), and oil companies – refiners and drillers. He also recommends alternative energy stocks.
Interestingly, he also believed (in 2005-2006) that predictions of a housing bubble were far-fetched group think! It seems he was under the impression that the Fed would pull the strings and government wouldn’t allow a recession. I guess this time, it was different. 
Here are a few of his recommendations:
GOLD: iShares COMEX Gold Trust (IAU), SPDR Gold Shares (GLD)
MINING: Newmont Mining Corp. (NEM), Barrick Gold Corporation (ABX)
PRECIOUS METAL FUND: Tocqueville Gold (TGLDX)
BIG OIL: BP plc, formerly British Petroleum (BP), Chevron Corp. (CVX), Exxon Mobil Corp. (XOM)
IDEPENDANT ENERGY: Devon Energy Corporation ( DVN)
OIL SERVICE COMPANIES: Schlumberger Limited (SLB)
DRILLERS: Nabors Industries Ltd. (NBR), Noble Corp. (NE), Transocean, Inc. (RIG)
REAL ESTATE (REITs): Regency Centers Corporation (REG)
CHINDIA (China and India): 3M (MMM), Coca-Cola Co. (KO), Intel Corp. (INTC), Procter & Gamble Co. (PG), Texas Instruments (TXN)
ALTERNATIVE ENERGY: FPL Group Inc. (FPL), General Electric Co.(GE), Petro-Canada (PCZ), Suncor Energy Inc (SU).
He provides a detailed sample portfolio, with target allocation percentages in each of the above. I will however leave it to the reader to determine if his model portfolio would have out performed a more typically diversified asset allocation.
Conclusion.
If you are a person who is given to experience even slight bouts of depression, I recommend that you NOT read this book. About one third of the way through, I wanted to slit my wrists. Halfway through, I had to laugh. It just got to the point of being so over the top, I had to either laugh or crawl into my bunker and cry. Seriously, at one point he even predicts the possibility of all out nuclear holocaust when oil becomes scarce.
Call me naive (I prefer to think of myself as optimistic), but I think humanity can rise above the oil crisis and I don’t think it’s all going to come crashing down around us over night like it did for the dinosaurs. But who knows, maybe “this time it’s different.” 
EPILOGUE.
At the end of the day, the take away is this: We are in a high inflationary environment, and no one can be sure how long it may last. There are things you can do to help minimize the effects on your wealth , but I think any wholesale changes predicated on the “new paradigm” are risky. It may be different this time, but much of life is cyclical and the oil crisis of the 70′s gave way to a tremendous drop in oil prices of the 80′s. While I don’t think we’ll see quite the same drop this time (mostly because demand from China and India are far greater than they were in the 80′s), I also don’t think the fabric of the universe is going to unravel because oil is $200 a barrel or gas is $6 a gallon.
That being said, I think it’s best to take that ounce of prevention and add some real estate, oil or commodity funds or stocks as a hedge to your portfolio. But that’s just smart diversification in times of high inflation.
Technorati Tags: Economic Collapse, Reviews, Investing, Oil, Peak Oil, Inflation
Related Posts:
What others are saying