What Aunt Toby is here to tell you is that there are other ‘investments’ that sometimes do a whole lot better than fancy financial instruments, ‘regular’ and ‘preferred’ and Class A, B or C.

I’m talking about…potatoes (and yes, I realize that there has been a whole lot of coverage about this ‘early blight’ stuff that is basically turning tomatoes into the vegetable equivalent of cavier this summer – and is the same thing that killed a million Irish through starvation between 1845 and 1852 – and brought another million to our shores in the same time). And we have had a summer the likes of which I do not care to discuss (needless to say that if there are any leather shoes underneath Aunt Toby’s bed – they have already sprouted some rather exotic molds because it’s been one rainy summer Chez Siberia.

But remember these?

I’ve been watching that bed for a while because once potatoes flower, it’s time to keep a watch for the plants dying back. That means (drum roll, please) that it is time to dig them up.

I love digging up potatoes. It’s like Treasure Island and we are the pirate crew. The other part is that no matter how clever we think we are about getting every last one, we always miss a few. These turn into volunteers and usually, since they have had a head start from the fall before, we get even bigger ‘taters’ the next year. A nice surprise.

So, let’s review: In early March, I went to the Philadelphia Flower Show and I bought a little bag of seed potatoes – there were three little potatoes in that bag that weighed 8 ounces. A half a pound of potatoes that I cut into basically thirds (so that each one had a couple of eyes). The amount of ground that I used to plant them was a piece of a bed that was about 3 feet wide and 5 feet long. Frankly, those potatoes were not the only occupants – I had some basil plants hidden in there as well. Recently, the plants just seemed to give up the ghost.

And yesterday I dug them up. Frankly, I was expecting, between the rain and the whole ‘OMG – it’s the blight..the blight” thing, a slimy unedible mess that I’d have to dig the entire bed up and throw everything – potatoes, slime, dirt, rocks everything, away. Blight is a bacterial infection so I’d have to do that. But no – the bed (which the DH has worked assiduously for years, digging it out by hand, with a pick and shovel, de-rocking it, putting in manure and leaves and compost every year, was great – the dirt had drained well and the potatoes were just…lovely.

So, I dug them all out and I washed all the dirt off them and weighed them, just to see how much we’d gotten out of those three little potatoes..that 8 ounces had turned through the magic of being buried in the ground, given room, warmth, and rain, into…14 pounds.

FOURTEEN POUNDS.

You do the math:
14 pounds x 16 ounces to the pound = 224 ounces
224 ounces / 8 ounces is 28 — 28 times the investment

Let’s see now – if we invested a $1.00 today and 5 months later, we received $28.00 back, that would be SOME investment, huh? The difference between investing money and seed potatoes is that with a money investment, you can lose your whole investment. The chances of losing all of your potatoes are pretty small (small potatoes? Nah…).

So, now we have 14 pounds of potatoes. Actually, we have a good bit less because they are soooo good that we have already eaten some. And some are really too small to eat. So, I’m going to invest them again – I’ll put those back in the ground for next year.

Worth the risk.

Here it is: Investments are things that you spend money on that bring in income.

Income. Real cash flow. Revenue streams (sort of like the Mississippi only with greenbacks). Dividends. Interest. Rents. Payments to YOU.

Why am I saying this? Because Aunt Toby reads, on a regular basis in the media, on the internet, etc. pieces where the writer associates the word ‘investment’ with something that does NOT bring in revenue streams. If nothing else, this debases the entire meaning of the word investment.

It also puts false ideas into people’s heads. Ideas such as “Owning your own home is a good investment.”

I beg your pardon? Even under the best of circumstances, unless the total cost of owning your home (mortgage, insurance, maintenance, taxes and fees) is less than what it would cost you to rent the same amount of space, under the same conditions, owning your own home is….expense, pure and simple. If you were to buy a house and rent it out and the amount you got in the rental was greater than the amount of money it cost you in all the other costs associated with that piece of property, then THAT is an investment. And Aunt Toby would like to remind her gentle readers that the value of homes in many parts of the United States today is LESS than it was even a couple of years ago, and of course, if you are trying to sell your home in a depressed market, you may find, for all practical purposes, it has no value whatsoever.

No value? How can I say that? Because, my friends, if you have something that no one else will pony up the shekels to buy, that means it has no value. Value is in the eye of the beholder.

But, let us return to the issue of investment. One of the reasons that people have been led to believe (and have deluded themselves into believing) that owning a home is an ‘investment’ is that in a world where real estate seemingly never stops increasing in value, then the money that one had put into the house (in terms of purchase price, maintenance, any additions or rehabilitations, etc. ) would be recouped in a sale…and then some. Ah…when that happens, indeed, one has truly made an investment because one received the ‘revenue stream’ at the after end, in the sale. If one does NOT recoup all that money, then it’s all been expense – and people are made to feel somehow cheated and stupid when that happens.

And they should not feel that way. The government set up everything to benefit the home builders – they set up tax laws which encouraged borrowing to purchase homes, borrowing to improve those homes. We won’t go into all the shenanigans that banks have gone through in terms of loans, mortgages, home equity loans, reverse mortgages, etc. Something to remember is this: In some parts of the country, the past 20 years have not been a boom time in terms of the prices of homes. Homes have kept their values for sure; homes have not seen the precipitous drops in sales prices. But they never went through the roof either. No one was making the big money in those areas in terms of selling their real estate.

Another piece of mythology about ‘investment’ comes in the form of encouraging people to buy certain types or pieces of clothing or accessories in terms of their being ‘investments’. Aunt Toby read a headline just today that made her smile: “Getting more out of your closet investment.” Now, they were not discussing the building of a closet and renting out the space therein – THAT would be an investment. What they were discussing was the various items of clothing that were in the closet.

Clothing and accessories (except for fine jewelry, which carries its own value, which Aunt Toby has found much to her disappointment is not as much as one would think) are NOT investments, unless you have been bequeathed vintage things that are of the quality and provenance as those in the picture at the top – those are one of a kind, couture created pieces of art. And in an auction situation (and even to the gimlet eye of an insurance company), these would have value and the longer you have them and keep them under museum quality environmental conditions, when you sell them, you will achieve a revenue stream from them and therefore…they are an investment.

But the clothing in your closet, no matter how fine or nice; no matter how well you maintain them, is just another expense of daily living. We don’t consider food to be an investment – and although we should not waste money buying clothing that will fall apart and need repairs or further expense, we should not try to delude ourselves that the clothing items themselves are some sort of investment. Buying well made clothing that with maintenance will last a long time and through many wearings is a good in itself. Ultimately, it will reduce one’s expenses, which will, in a roundabout way, increase one’s savings which if placed in a bank or into an investment grade item such as stock or a bank account, will throw off a revenue stream. But by itself, it is not an investment.

So, be extremely careful about using that word ‘investment’, and thinking about what you are actually doing when you spend money.

(photo courtesy of Maia C)

While I sat there watching the story reel out, the thought occurred to me that we really don’t know what we can do if we try. There is one character in the film who when asked what he did in his old life, announces himself as ‘an intellectual’ – yet, not to much farther in the story, we see this man perched on the top of a shelter hammering away to help put a log roof on which will be covered with branches so that the Germans cannot see it from the air.

I think before we see genuine improvement in the economy, a lot of us are going to be faced with this same situation: We may not be able to earn a living with the skills we have; we will have to learn new ones or add more depth to the skills we have. I’m not saying that we should all run out and attach ourselves as apprentices to shoe makers (if you could find one who would take you on). What I am saying is that it might be a very good idea for us to look ahead and think, “What skills can I learn or add which will make me more valuable at work – that will help me not get fired or laid off?” Or, what if my company just decides to go into Chapter 7 – straight for bankruptcy – not into Chapter 11 (reorganization). Looking in my local area, will my skills still be valued or should I start thinking about adding some skills that more companies in my area are hiring for?”

At the moment, I’m working on learning Access 2007; my current company uses this program a lot and other companies use it also. If I were a younger person, I’d think seriously about taking some technical courses because we have a large percentage of our manufacturing base locally which uses those skills. But the important thing, I think, is to think ahead – how can I turn my skills to a new situation if, like those people in the woods, I’m asked “what do you know how to do?”

We’re back in the kitchen (because that is where the food, the heat and the good seats are). We’ve talked about (to review, in case anyone is taking notes here and no – there are no essay questions on the final) saving money, starting a garden, “doing one thing” to improve your situation, and finding out who your network is.

Today, we’re going to grasp the wriggly monster with both hands: The country is in the toilet. Really. The news gets worse every day. It looks as if we are “staring down the barrel of a gun” and “hitting the wall” – simultaneously. (Being able to do both at the same times is going to take the skills and physique of a contortionist, but I digress.)

And now Elliot Spitzer gets out there and basically says that all the money that has been used to bail out the banks and AIG was wasted – like we didn’t know that already.

But he did talk about something that we WILL talk about which is:
“government investment in the long-range competitiveness of our nation, not in a failed business model…”

What I want you to do, right now (and you know I am all about the “right now”) is to take that phrase “government investment in the long-range competitiveness of our nation” and replace a couple of words so that it reads like this:

“personal investment in the long-range competitiveness of ME” or “family investment in the long-range competitiveness of family members.”

Recently, I also wrote a diary about the cost of higher education and what it is doing to American competitiveness (you know the shorter version and frankly, our competitiveness is in the shitter too). How are you going to improve your and your family’s competitiveness with THAT?

I’d also like to remind folks about a couple of things from the Great Depression and from bad times more recent: Companies that invested, whether it was for advertising (during the Great Depression) or in developing new products (even when Corning, Inc.’s stock went straight into the toilet, landing finally at $1.80, they still invested in developing new products, which is what keeps them competitive), invariably come out the other end of an economic mess in better shape, more profitable, and more competitive than those who hunker down, cut spending, lay off staff and hope to still be there when the sun shines again.

So, what does this have to do with you, bucky? And your fam? You need to look at yourself and your family as your own little economic unit, your own little company, if you will. And we are in the bottom of all toilets right now. Time to cut costs to the bone? Hunker down? Hope things will get better later?

Mmmmmm, no.

Yes, you can cut your operating costs at home – plastic on the windows, more effective nutrition, not eating out. But you need to, like those successful companies from the Great Depression, invest and position yourselves for the future.

Advertising and Marketing:

Get out there. Let people know you guys are still around and about. Attend school functions; go to your local Chamber of Commerce “get togethers;” talk to the folks at church. Let people know who you are, what you do, how you can help THEM, too. Do good stuff. This goes triple if things at your work start to look shaky. Do not hide. Don’t let anyone hide.

New Product Development:

Companies look ahead and if they are smart, do the stuff that needs doing to position themselves for the next wave up. Corning pays the scientists and engineers to cast their minds into the river of the future and you and your family members can do that too. Talk to your kids – find out their dreams. I know people find it funny when I write: “Be a patriot: take a degree in accountancy,” but it’s true – have everyone think about what is good for the country AND for themselves and talk about ‘how do we get there?” If you have college or education benefits at work – USE them. If they will allow you to use them for other family members, then do so. Explore programs that might be available at your children’s schools – perhaps there is a tech high school and one of your kids is technically inclined. Don’t allow all the chitchat about college to get in your child’s way – go talk to the people and find out what they’ve got and how your kids can take advantage.

Be a creative thinker. CAD-based machinists in my area START at $40,000 a year and our local Vo-Tech high school trains for that. In some areas, they are so hungry for them, the companies will hire them and then pay for college for them to move on in the technical field.

Use the internet, books and tapes from the library and learn new stuff – invest in yourself and in members of your family. Perhaps you will make a mistake – perhaps learning some particular computer program will not help you when we come out of this, but the more you do it, the better your chances of having the products that will sell when we come out the other end of this tunnel. Every product development that Corning does is not a hit “out of the park” – think about this that way.

Another thing is – if you have a small business and need money, you need to look for money. I realize that the meme out there is “there is no money.” Here’s a story:

The DH and I were working on the house once when the kids were little. We’d just gotten started and had paid the first payment to the contractor when I lost my job. I remember coming home that day and realizing that the contractor had picked that day to rip the back of the house off and dig a 15 foot hole in the back for a new basement, which was now filled with water. I put my head on the steering wheel of the car and wept. At dinner that night, the DH and I were in a panic: How could we possibly get a loan from a bank now that I had no job? All that stood between us and the great outdoors was a big blue tarp.

A small voice from a chair next to us piped up, “Ask Grandma and Grandpa – they have money.” Our 5-year old had cut through the muck and mire to the nub of the issue – we just had to find someone with money. There are all sorts of people out there who have money and who have been getting shittier returns from the market for a long time.

Your job, if you need money for a new business, to expand your business, etc. is to find those people. Go back and see: Advertising and Marketing. You need to meet and find people who a) have money to invest, b) are willing to invest locally and c) are willing to invest in YOU and your family to do whatever it is you want to do. Don’t be shy and don’t think they aren’t out there because believe it or not, they are. Just go to the internet and do a search on “angels” – they are out there and they are looking for a better return and better control than they can find in the market. In your case, you need to find your local versions of angels – believe me, they are out there.

Above all – FDR and Frank Herbert (Dune)were right: FEAR IS the mind-killer. Now is not a time for fear: It is a time for thinking and planning and doing.

(originally published at Oxdown Gazette)