Friday, January 26, 2007

Frozen assets

When we started this little farmlet adventure, we knew that there would be some expenses up front, and some ongoing expenses for a while. But due to some combination of inexperience, ignorance, impatience, poor planning, and bad luck, we exceeded whatever budget we had set aside. We accumulated more credit card debt than we were comfortable with. Call it farm college tuition.

We also killed two pickup trucks in the space of a year. And we found that we didn't have sufficient storage space for the various items (like hay) that we needed to keep things running smoothly.

An uncomfortable position: Too much debt and a couple significant expenses staring us in the face. What to do, what to do?

Well, we've been doing a variety of things to cut expenses: conservation, a big veggie garden, eliminating some discretionary spending, exploring local thrift stores, bartering, etc. But we were still slated to give a good bit of our money to the bank, in the form of interest, for a good while. So we looked for some creative options.

Thanks to some good advice very early in my career, I began contributing a tiny percentage of my income to a 401k retirement account. Through the magic of compound interest, over the years it grew fairly big. [According to Wikipedia, if the Native American tribe that accepted goods worth 60 guilders for the sale of Manhattan in 1626 had invested the money in a Dutch bank at 6.5% interest, compounded annually, then in 2005 their investment would be worth over €700 billion (around US$820 billion), more than the assessed value of the real estate in all five boroughs of New York City.]

Of course, since the money in question is intended for retirement, and since you don't pay income taxes on it, they make it pretty hard to just take that money and do whatever you want with it. If you try to take it out, if you're even allowed, you'll usuall forfeit more than half of it.

While I can't take the money out of the retirement account, I can take a loan against it. What's the difference? Well, there are several good things and a couple bad things.

First, the good:
  • We'd be paying interest to ourselves instead of some financial institution.

  • It provides guaranteed interest to my retirement account. With the stock market at all-time highs despite a variety of what look to me like huge risk factors, I moved my retirement money out of mutual funds into a "cash" account, because I'm not confident that the market will go forever upward from here. Buy low, sell high and all that. A loan would mean that my money was earning a fixed rate - granted it's coming out of our own pockets, but that's a fair trade-off to me.

  • If something goes horribly wrong and I lose my job or can't pay off the loan, it apparently doesn't affect my credit, since it's my own money.
  • Since the payments are taken right off the top of my paycheck, which fits in with the debt reduction maxim of "pay yourself first."
Now the bad:
  • If I do lose my job, or change jobs, the remainder of the loan comes due.

  • If I can't cover the remainder under such a circumstance, there's a big tax penalty.

  • My employer only allows one loan at a time, which means we can't borrow from it again until this one is paid off.
The ideal solution would be not to have debt. But we do. In fact, we're adding a little more with all this, though our monthly expense will stay the same.

We'll also have a simple pole barn, a somewhat more reliable truck, and no credit card debt at all. In fact, as of right now, outside of our mortgage, the only interest we'll be paying on debt will be to ourselves. And hopefully in five years, the mortgage will be the only one left.

But remember, I'm not a financial expert. Far from it. Never take financial advice from random people on the Internet.

So what's with the photo at the top? That's our credit card, sequestered in a block of ice. If an emergency comes along, we can use it. Until then, it'll be in the freezer.


Saturday, January 20, 2007

That's a ton of carbon dioxide

Household energy usagePropaneElectricity
December 2005185 gallons1040 KWH
December 200628 gallons729 KWH
Change:85% reduction30% reduction
CO2 reduction:2011 lbs417 lbs
Approximate C02 cost of corn production & harvest: 440 lbs

If you add the two CO2 reduction numbers together, and subtract what it took to grow and process the corn, our household was responsible for putting 1,988 fewer pounds of carbon dioxide into the atmosphere for December 2006 compared to the same month last year.

That's 66 lbs per day, or about the weight of my two 3 1/2-year-old kids combined.

(I'm assuming the CO2 emitted by burning the corn is equivalent to the CO2 absorbed by the corn plants when they were grown. It's actually probably a net gain, since we're only using a fraction of the corn plant's biomass.)

What did we do to achieve these dramatic results? Honestly, not that much. We replaced light bulbs with compact fluorescents, I put some power strips on the computers and TV equipment to eliminate "phantom loads" when not in use, and we switched our home heating from a propane furnace to a corn/pellet stove. As an added bonus, these changes should pay for themselves in just a few years.

As regular readers may realize, I worry more about peak oil than global warming, probably because my brain can only process one potential global crisis at a time. I'm well aware of climate change concerns, which is why I decided to calculate these numbers. I have to admit though, that I have not read extensively on climate change, because, for the most part, the solutions for both of these problems amount to the same thing: Stop making every aspect of our existence dependent on fossil fuels. As an added bonus, these changes should reduce our need to send lots of money to unstable countries who generally seem to hate us and want us all to die.

But it's pretty near impossible to go cold turkey on fossil fuels. There's a reason we use them for everything. They're abundant, cheap, and packed with energy. At least on the surface. The best we can do to get away from them is just keep trying to conserve, learn, adapt, and change.

The right answers are sometimes hard to find. As I mentioned, since last year, we've switched from burning propane for heat to burning corn. We've recently switched from corn to wood pellets, at least temporarily. There were two reasons for this: 1) Rodents. Until we make some better arrangements, the corn is too much of a rodent magnet. We're working on that... and 2) The cost difference evaporated. Corn has more than doubled in price due to a poor harvest nationally, and corn-to-ethanol plants popping up like weeds throughout the midwest. What we bought for $2.12 a bushel in September now sells for $5.32 a bushel. (Corn-to-ethanol is kind of a silly thing to do, in my opinion, but that's a topic for another day.)

It's hard to figure whether corn or pellets make more sense. The corn is locally produced and harvested, but that generally means lots of chemical fertilizers, pesticides, herbicides, etc. I don't know where the pellets are shipped in from, but I'm sure it's not local (though it is in the US). They are made from a waste product (hardwood sawdust), but I can't really find any information on the energy required to produce them. And bagged 40 lbs. at a time, the packaging definitely adds up. As I understand it, corn burns a little cleaner, a little hotter, and a little more efficiently than pellets, but produces more ash. Corn can be renewed in a growing season, where a woodlot can require decades to establish. Both corn and pellets require more processing than burning whole firewood, but they both burn more efficiently, and something like 85% cleaner in terms of particulate emissions. They also require more technology and moving parts for burning. I don't know if any of these three options could scale up to heat everybody's homes. In our case, we could theoretically grow enough corn to provide all the heat we need, but we're not in a position to do that at this point. And to top it all off, there's some concern about using a food product as fuel.

What's best? You tell me, because I can't figure it out. All I know is that compared to last year, we've come out ahead in several different ways.

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Wednesday, January 17, 2007

To sleep, perchance to dream

Ay, there's the rub!


Friday, January 12, 2007

"Winter" musings

With winter upon us, my mind, like our garden, seems to be dormant.

Though strangely, other than the lack of sunshine, it doesn't feel much like winter here. The Sunday before Thanksgiving, we had about a quarter of an inch of snow, but it's been only rain ever since. Our son doesn't believe that it's really winter, and thinks Christmas hasn't really happened yet, since there isn't any snow in sight. Nary a snowflake in December, nor January so far. It's The Winter that Wasn't.

But then, neither my mind nor the garden are completely dormant. The brussels sprouts, which have been well frosted several times, are still growing, even as we approach mid-January. The rosemary, planted against the south foundation of our house, doesn't seem to realize that it's not hardy here. Even the goats and the donkey continue to graze, or at least pretend to graze (though you wouldn't know it by our hay supply).

Meanwhile, my semi-dormant mind has thinking a lot about our garage. Odd, I know, but since we have no other outbuildings yet, our winter hay and straw are being stored in the garage. We also sift the corn for our heat stove in the garage, to get out the larger bits of cob and stalk, as well as some of the dust and "bee's wings".

If you've watched the "Backyard Habitat" program on Animal Planet, or visited the National Wildlife Federation's Backyard Habitat web site, you'll know that for wildlife habitat, you need four things: food, water, shelter, and a place to raise young. Between the hay, the straw, the corn detritus, the enclosed space, and the nearby spigot used to get water for the goats and donkey, we've created a very attractive habitat for rodents in our garage. It's a rat bed-and-breakfast!

Well, the good thing about the rats is that at least they drove out the mice.

The bad thing about driving out the mice is that the mice have started chewing the bark around the base of my fruit trees (hardware cloth to the rescue!) and trying to nest in the nooks and crannies of our beleaguered vehicles. The other bad thing is that the rats chewed through the side of the worm bin. Luckily it is a layered structure, and only one of the four sections was cleaned out. There were no fresh kitchen scraps, so I can only assume they were after the worms themselves. The worm bin has relocated to the basement for the time being.

[An interesting side note: In researching the rat problem, I learned that because of a large eradication program, Alberta, Canada is one of the few places in the world that is essentially rat-free.]

I'm a live-and-let-live kind of guy, but mice, and especially rats, are carriers for way too many human pathogens to get free room and board in our dwelling place. We've taken some short-term steps, but to really solve the problem and get the rats out of the garage, we need to do two things: Get rid of the habitat, and introduce some population controls.

I'm not a big fan of rodent traps or poisons, since neither may be effective when there's food already to be had. Besides, dealing with trapped rodents is unpleasant, and introducing poisons into the food chain isn't exactly a heartwarming strategy either. Besides, rats are notoriously hard to poison. They tend to take small bites of unfamiliar food sources, and wait a day or two before going back for more.

Too bad we haven't been able to convince any of the various cats passing through that we have a perfect habitat for them as well. I have a hard time actually obtaining a cat solely for rodent control, because feral cats can become a nuisance, and even a spayed or neutered cat living outdoors can have a devastating impact on local songbird populations (not to mention the potential "litter box" problem). Our own cat is too old (18?) and pampered to be put on rodent patrol, though I do occasionally feel like there's something amiss when we're buying both cat food and rodent traps at the same time. We considered getting some kind of terrier (a rat terrier, perhaps?), but fear that between the digging and chasing instincts, it might not be entirely compatible with gardening or poultry.

Clearly we have some sort of predators about though, since we've found one killed rat in the driveway. I don't know if foxes or coyotes prey on rats. Perhaps it was one of the hawks we occasionally see hunting over our pastures. Or maybe we have a feral cat and don't even know it.

We've got quite a few moles and voles around the garden and pastures too. Thank you to them for aerating our soil, as long as they stay away from the veggies.

So eventually I came to the idea of making (or perhaps buying) some barn owl boxes or screech owl boxes to help with rodent control.

But a higher priority at this point is to eliminate the habitat attached to our house. We're looking into a very basic outbuilding for storing hay, straw, grains, tools and equipment, and possibly animals. We are trying to plan for a small pole barn, complete with a wide, south-facing roof, so that someday maybe we can have some solar panels. Short of that, it at least gives me the opportunity for some kind of passive solar heating project, and a perfect spot for an attached greenhouse/chicken playpen.

Gosh, and here I thought my mind was dormant...


Monday, January 01, 2007

Happiness is a warm bed

As requested, here's the link to my big Groovy Green debut, complete with typo. (Just pretend "succeptibility" is a word.)

Meanwhile, I learned something interesting today.

It's a little frustrating to see the goats drop so much hay on the ground, especially since we're buying hay from someone else at this point.

But here's the interesting thing. Much of the hay the goats drop is inside their shelter.

They've already got straw bedding, so you'd think they'd be set.

But guess what happens when you mix straw with hay, plus a little manure and urine, and an occasional splash of rainwater?

You get a nice thick soft heated mattress, that's what. Any gardener with a compost pile knows that greens plus browns plus water plus air makes heat.

When Lori raked out some of the bedding today (it was getting so thick, the goats were losing headroom), the "mattress" was literally steaming.