Posts Tagged ‘money’

Finding My Power: To Farm or Not To Farm

This seems to be the perpetual question. On the one hand, if we don’t have farmers, we don’t have food. This should be pretty straight forward, right? On the other hand, it is difficult, verging on impossible to be a farmer and be able to afford to feed yourself. That should be a ridiculous statement, but it’s not.

In my blog about what it would take to gross $10,000, I only addressed the numbers generated from my interest in farming. This needs to be looked at from another angle, though. What are the numbers my current employment is generating and what are other possible income amounts broken down into the hours, weeks, and months they take to get to $10,000.

I am currently working at a temp job that I rather enjoy making $12 per hour. In Maine, I’m doing ok as a moderately skilled temp. To gross $10,000 I need to work 833.33 (call it 833) hours which is 20.825 (call it 21) weeks or 5 months. That’s a long time. It’s also not taking into account commuting time, gas, clothing requirements, or the fallout from not feeling like I’m contributing in any meaningful way to the world. Gas and commuting time are fairly easy to attach numbers to. I am commuting pretty much exactly an hour each way five days a week plus five 30-minute lunches, making my 40-hour week actually a 52.5-hour week. 40 hours times $12 per hour divided by 52.5 hours means that counting the commute and lunch, I’m being paid $9.14 for each hour the job is consuming. Gas is costing me about $38 per week and the vast bulk of it is for my commute. That means that 21 weeks of commuting costs me $798. At $9.14 per hour before taxes, that means about 87 hours are spent just paying for gas. That’s over 1.5 of my 52.5 hour weeks every 5 months are just paying for gas.

Let’s say I find a job with the same commuting and lunch time and cost, but I’m making $15 per hour for 40 hours. That’s 666.66 (call it 667) hours which is 16.675 (call it 17) weeks or 4 months. My actual time being used is still 52.5 hours per week, which means I’m actually being paid $11.43 per hour before taxes. 17 weeks of commuting at $38 per week is $646 or 56.5 hours. That’s just over a week every 4 months is to pay for gas.

Temping, like an increasing number of permanent jobs, does not offer insurance or any guarantee of hours. Unlike a permanent job, my temporary employer can send me home at lunch time and tell me not to come back for absolutely no reason other than they don’t need me. Poof- no more income. The staffing agency has it in their best interest to get me back to work as quickly as possible, but that might be days or weeks of unemployment. Have you ever tried to save an emergency fund on $12 per hour?

Farming also offers no insurance, no guarantees, and if you’re not careful, the potential to end up with no income and a pile of debt if it all falls apart. On the other hand, I will be using and learning skills that are actually useful in the real world. The world in which being able to feed yourself means knowing whether those berries are yummy or deadly. I have the potential to make my corner of the world healthier, cleaner, and better habitat for both my cultivated plants and animals and the local plants and animals that are using the same space. I can help to perpetuate skills, genes, and equipment that we will need when we realize that Agribusiness might not be working as well as advertised. Farming, particularly small-scale farming, demands a certain level of fitness that will keep me healthy long past the time when an office-bound body would fall apart. It has its own challenges for health, but at least you can often see them coming. I can build the business to embrace my strengths and interests and my income is limited only by my imagination and ability to manifest what I see.

Now comes the hard part. I have been told, am being told, will continue to be told that the responsible thing is to get a “real” job. I need to work on a skill set that employers are looking for. I need to invest time, energy, and possibly money in pursuing what society tells me is an acceptable, respectable, logical use of my time and energy resulting in a “fair” income. I will be paid what I am “worth.”

I was talking about this with a friend and he asked if I’d considered what I would regret not doing in 10 years. 10 years ago I was just settling into a job with a company that I had spent the previous couple of years building a resume to get into. It was a good, solid company. I knew people that loved working there. I was making more money than I had ever made before. I was studying hard to get the licensing to move up in the ranks exactly the way I was supposed to. I may have even had my first exam under my belt at that point. I was doing everything right.

I’m not saying I didn’t learn things from working there, but in the end, you learn things from walking face first into a wall, too. Just because everyone’s doing it and everyone’s saying you need to do it, doesn’t mean it’ll work. Not everyone can get through to Platform 9 ¾, and it turned out I’m one of the ones that can’t.

I can’t quit my job and start farming tomorrow. I do have access to land that I don’t have to pay for, which is more than most people in my situation can say. What I don’t have are a significant number of skills or the money for the infrastructure. 31 hives worth of materials (excluding bees) will cost me about $5,663- that’s 472 hours (12 weeks or 3 months) worth of work at $12 per hour before taxes and expenses. However, I can take the time I would spend looking for a “real” job, and the small amount of disposable income I do have and spend it on a small number of hives so that I can build the necessary skills. If things go well, the hives themselves may gradually generate the income needed to expand my operations. If things go badly, I won’t have spent more than I had and it could be chalked up to an educational expense.

I guess it wasn’t as much of a question as I thought.

$10,000

Money’s funny. One number can seem like so much or so little to the same person, depending on the circumstances around it. If I had to pay $10,000- wow, that’s a lot of money! Where would I come up with it? If I were to receive $10,000, it’s a lot of money up until I start paying bills. Then it goes mighty fast.

I was doing some end-of-year looking at my spending in 2016. I’ve been tracking it for most of the year to help me figure out where it all goes and why there’s never quite enough. The number $10,000 came about because it’s an annual budget of modest spending for one excluding rent, food, utilities, renters insurance, and internet. Just for giggles, I wondered what it would take to gross $10,000 from my farming ventures.

If you know anything about farming, then you are familiar with the fact that gross and net income are not the same and often very, very different.

Honey: 1,250# at $8 per #. That’s 31.25 hives (call it 31) harvesting an average of 40# per hive

Nucs (nucleus hives): 67 nucs at $150, but only 56 if I sell them for $180 each

Eggs: 20,000 or 1,666.66 (call it 1,667) dozen at $6 per dozen

It was just an experiment. Everyone knows farming has no security and little if any prosperity attached to it, but some of those numbers looked almost possible. I don’t have much information on the net income for each, but I could make some educated guesses.

For the eggs, with the numbers I’ve been collecting since I got my chicks in the spring, to gross $10,000 I’d be looking at a net of $-20,000 or thereabouts. Yes, that’s a negative. The housing is killing me. I’ll never make money off of the eggs, but eventually I would like to at least get them to pay for the eggs and old hens the family eats.

For the honey, I found a place where I can get a kit with two deeps and buy one medium super for about $173 per brand new hive (2016 prices). At $8 per pound of honey, that’s around 22 pounds per hive to pay off the woodenware. If I’m buying bees, that’s another $125 to $190 or 16 to 24 pounds. With average harvests in Maine in the 40 to 45# range, that means I should be able to pay off even a purchased hive with the first full harvest- which isn’t until the second summer/fall. If I am splitting my own bees and/or catching swarms, I can make a dent in paying off the bear fence in the first harvest, too. Looking at my 31 hives, they will cost $5,363 for the hives themselves, no bees, and $300 for the bear fence with a potential income of $9,920. (31*40*8) That leaves me with $4,257 to either purchase the bees or pay for my time to split hives and catch swarms.

Splitting hives will mean making at least some nucs for my own use, and I can certainly make more for sale. I’ve heard of available patterns for making nucs out of ½” plywood, about four per sheet. At $20 per sheet that’s about $5 for the box. I also need 5 frames and 5 foundations, a total of about $18. That makes the gear requirement around $23. Nucs are selling around here in the $150 to $190 range for local bees, more if the nuc was overwintered. As a newbie I’d probably start selling at the low end, meaning that after deducting the gear, each hive could net me about $127 less the cost of my time. If I manage to make 67 successful nucs to sell, minus $23 per nuc for the gear, I could have around $8,509 to pay for that time.

If I have 31 healthy, producing hives, making 67 nucs shouldn’t be that hard. If I can do both simultaneously, I could spend around $7,204 but gross about $19,970 to net around $12,766. Hm.

These numbers aren’t taking into account some very important information. It doesn’t include rent/lease/mortgage on the land I’m using. It doesn’t include taxes. It also doesn’t account for the hive bodies and nucs that I have to buy and/or build for the hives that are too weak to produce honey or split into nucs. It doesn’t have room for the farm up the way to spray their fields at just the wrong time of day with the wind blowing in just the wrong direction that wipes out most or all of my hives. It doesn’t take into account the time it will take me, a beginning beekeeper, to learn the skills necessary to take care of 31+ hives and build 67+ nucs.

The numbers are still very interesting.

Finding My Power: Which World?

I was listening to two audio books that randomly ended up perfectly paired. They both dealt with the idea that to live the best, brightest, most awesome life we can, we need other people’s support to make it happen. How each of the authors went about getting that support is all the more important as we gear up for the 45th President of the United States.

The first presents a world in which one goes for the deal. Find out what the market is looking for and give it to them. Test market and don’t start production until you’re sure there’s an audience. Buy your components and advertising cheap and sell your final product for as much as the market will bear. What you can’t get off your plate by streamlining in the process, outsource to the lowest bidder. Then, the payoff. Everybody wants to travel the world, and the global south will let you get a whole lot of bang for the bucks you have coming in.

I think it has some useful ideas. There are ways to work the system to your advantage. I’m particularly fine with doing that to large companies. They can handle it. Our culture runs on money, and making it is a reasonable goal.

The second takes a much more relational look at things. You have your strengths and gifts, they have their strengths and gifts and between you, both sides can come out ahead. If you’re travelling the world, couch surf and in return offer something of yourself. Maybe it’s return surfing, maybe it’s art, maybe it’s an experience, but it’s something that’s yours to give. Make money with your gifts because we all have bills to pay, and always pay your debts. But the payoff is wrapped up in the relationships that you’re building as you share what you have and others share what they have, allowing you all to build richer lives.

This one’s hard. It requires a balance between knowing and believing in yourself and your gifts with the ability to be open to asking for and accepting help. You need to be able to connect with people in a trust that we don’t see very often at this point.

The world as it stands right now supports the first book. If you buy low, sell high, and get a deal, particularly if it makes you rich, then you win. The second is a lot harder, particularly if your interpersonal skills are less than awesome. For the first one, you will be rewarded superficially, but I’m not sure whether it offers true long-term richness. The second one offers the real deal, if you can buck the current culture long enough to develop the relationships.

Right now, it’s all about tweets and “making deals.” Its about making sure that everyone pays up and no one gets a free ride. If you can’t bootstrap yourself into a better position, then its your fault, not the fault of a culture that doesn’t care about you unless you’re rich.

The thing about bootstraps, though? You can’t lift yourself by your own. But you can lift your friends, and they can lift you in return.

 

Tim Ferriss vs Amanda Palmer

That Money Thing

It’s uncouth to talk about money. Yet one of the first things we ask upon meeting someone is “What do you do?” And we aren’t talking about what a person does to make the world a better place or to make themselves happy. We want to know what their job is. And we know that someone who says “teacher” has a smaller income than someone who says “lawyer.” Even “lawyer” has it’s levels. “Public defender?” That’s almost as bad as “teacher.” “Prosecutor” is a bit more monied and has that sheen of absolute respectability. But what you really want to be is “corporate lawyer.” That’s where the money is. And where the money is is where you find the respect.

Right?

I found this calculator from MIT. They call it a “Living Wage Calculator,” but right on the first page they tell you it’s really the amount a family (they offer several sizes) needs to meet minimal standards of living. They break it down by city/county in each state, as New York is not going to have the same expenses as Bozeman is not going to have the same expenses as Hidalgo County, Texas.

So, for the sake of comparison, let’s go with a random place and income level. Say . . . mine. That puts us in Cumberland County, Maine. I am a family of, well, me. So according to this calculator, I can get by on $10.95 per hour if I work a full 40 hours for every single week of the year. The fact that the job I just left was paying me a salary of $920 every two weeks ($11.50 per for 80 hours) meant I was doing pretty well, right? Let’s see what the breakdown is:

Food: $3,497 annually

Divided by 52 weeks, this gives me a weekly food budget of $67.25. That’s about $3.20 per meal. Working off of their assumption that you will never eat out or order in and that you will be more likely to choose the less expensive options in the grocery store, I can see how one could make that work. Assuming you know how to cook. And you already own the necessary tools. And you’re not trying to fix or improve your health with nutritionally useful food. However, having been a single person living alone, I know that sometimes you just can’t handle another meal alone at your kitchen table. You need a meal surrounded by people. Or at least one where you don’t have to do the dishes. So you spend $15 on an omelette at Denny’s. That’s five meals worth of food, according to this budget.

Childcare: $0

It’s a good thing I’m not a single mother, because I’d have to make more than twice as much to support us.

Medical: $2,084

This covers insurance premiums, deductibles, drugs, and any medical devices. I just got new glasses. For the pair that I absolutely had to have for work, I was looking at $300 or so after the small portion my insurance would help with at the eye doctor’s. I ended up going to WalMart and got them there for $118. New insurance plan? Don’t get sick, injured, or need new glasses.

Housing: $8,100

That gives me $675 per month for rent and utilities. According to Craigslist, at this very moment in time, there are 17 possibilities within 20 miles of Bridgton, Maine in the “Apts/Housing” section. As an adult making a “living” wage, I should be able to afford an apartment, right? Right off the bat, two are seasonal. One requires the lease of the downstairs commercial space.One varies up to $681 per month plus electricity. That’s out. Two more vary in a similar manner, just higher. One is $675 without utilities. One is not an apartment, it’s just a room. One posted a weekly rate. That leaves me with a studio, a single-wide, or a one-bedroom for $600 plus utilities. Heat alone will cost more than $75. My options are two apartments for $500 plus utilities or one for $550, utilities included. None of them offer pictures. None of them appear to be professionally managed.

Transportation: $3,575

This gives you $297.92 per month or $68.75 per week. When I was commuting all the way to South Portland, I was budgeting $40 per week for gas- this is a number I can work with! Except that it also has to include car payments, insurance, maintenance, repairs, and snow tires.

Annual Taxes: $3,376

My thoughts on taxes require their own post. Or three.

Other: $2,146

This category includes everything else. Clothing, shampoo, phone, internet, furniture, entertainment. I have a pretty cheap phone plan at $53 per month. That is $636 annually. I just bought a pair of work pants last week that I tried very hard to find for less, but I ended up having to pay retail for because they were required. $40. I’ve been gathering cooking utensils for years, so I don’t need to buy anything, but if I did, it would be in this category. So is savings. Or it would be if there were anything left to save.

I left the job for several reasons, but one was that I had taken it under the impression that the commission piece would make up for the non-commission trial period and the minimal salary. The two commission payments I have gotten made my income $13.65 per hour and $14.15 per hour, assuming 40-hour weeks. But because I’m salary, they were starting to tell me that I needed to do the “rest of my job” by being rabidly pro-employer at after-hours business functions, and take the phone, which would give our customers 24-hour access to us, for one week out of three.

Somehow, being told that my salary-plus-commission is “pretty good”and justifies asking me to do the “rest of my job” just doesn’t make me want to be rabidly pro-employer. Not when the numbers break down to a sketchy apartment, very limited food options, the kind of vehicle that would be held together with inshallah and duct tape, and nothing left over for silly things like debt payments and savings. Assuming of course that I hadn’t already been so beaten up by similar numbers that I had been forced to move back in with my parents.

I don’t want to be rich. My debt, while significant, is not out of control. My tastes do not run to Dom Perignon and diamonds. I want to live comfortably and expect to afford retirement. If I am working 40 hours a week, I want to be able to afford hobbies to help me unwind from work. The fact that these expectations are, evidently, unreasonable is in no way the fault of myself or my generation. Yet we are handed the blame. Everything would be going much better if you handed us reasonable incomes, instead.