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stockpiling food as an investment?

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Get Rich Slowly commentator shevy made the following comment on J.D.’s post about the best piece of financial advice:

Johnny asked: “What’s the best investment for someone who has only $1,000?” Mr. Tobias said, “Nonperishable consumer staples.”

That reminds me of a story Howard Ruff tells about attending a conference years ago with a number of noted hard money advisers.

He got up to speak in front of 800 people and asked,”Do you honestly believe that in a period of monetary collapse that you will be able to safely drive down to your supermarket in your gas-guzzling car, make a selection from a dazzling variety of goods on the shelf, pay them with your personal check, walk safely out the door to your car, drive home and put them in your dependable, electric-operated refrigerator?”

He said that was the first time he ever got an ovation for a question! (Then he was able to give his advice about storing a year’s worth of food.)

But if I had to choose the overall best piece of financial advice I’d probably go with “Pay yourself first.”

I think that survival preparedness is a very American thing. It feels like only Americans would suggest that you need to stockpile food in your house in case there’s, well I don’t know what because some people recommend storing a years worth of food. A year! The longest anyone’s been unable to access food in the United States is probably a week or so in the aftermath of Hurricane Katrina, and then I reckon that most of the food in people’s houses would have been waterlogged.

but what about emergencies?

I understand the natural emergencies are real. In the UK the most likely emergency is flooding as happened in the Gloucestershire and Herefordshire last year, or Carlisle a couple of years ago and, floods like these are likely to recur. But think about what actually happens in such an emergency. Flood water comes in to the ground floor of the house pretty quickly. People are evacuated within a day or so usually in rubber dinghies and taken somewhere else. The flooding subsides within a fortnight. You might not get back home for months and months, but you aren’t in any danger of starving to death.

There’s insurance, and then there’s unnecessary insurance. In an emergency, people need food, shelter, heat and water. It’s the last of these that there are probably the fewest supplies of. There’s little point in having enough food to survive a nuclear winter if you have no available water. Or you’ll be suffering from hypothermia within a few hours. I’m not a stockpiler because I tend to just eat the food when I can’t be bothered to go to the shops, but if you’re going to do it it’s worth being consistent. Personally, I think that more than a few days worth (maybe a week?) of stored food is overkill. We just don’t live in that kind of country.

or monetary collapse?

The countries that I know have suffered severe monetary collapse have been post-Soviet Russia (early 1990s), post-WWI Germany (early 1920s), Zimbabwe (current). In each case the moment of crisis was caused by a political event or revolution - the collapse of communism, the loss of the war and the abdication of the Kaiser, land reform leading to the loss of production of the major cash crop. These are places that did not have robust or developed economies to start off with.

On the other hand, a comparison that is more plausible is the Argentinian collapse of the early 21st century. This led to riots, savings accounts and local investments were wiped out. People didn’t starve though. Argentina is recovering. The best hedge would have been to have diversified investments outside your own country, not a year’s worth of food in the basement.

in reality…

In the end, I guess that if you’re living on the edge, stockpiling non-perishables is not an awful idea because there’s a possibility that you won’t have enough money to buy them in the near future. If you’re worried about a natural emergency, then maybe a few days to at most a weeks worth of food would be enough, and don’t forget about the other necessities. Alternatively, do what I do and decide that the probality of needing to use the stuff in an emergency is lower than the probability of:

  1. eating the stuff earlier because you’ve run out of food, or
  2.  forgetting about it, and letting it go mouldy

And pay yourself first is great financial advice.

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24 comments for “stockpiling food as an investment?”

  1. Plonkee, what about wartime rationing? You say you just don’t live in that kind of country, but most Americans learned their stockpiling habits from their Depression-era parents and grandparents and you can argue that in America’s 24/7 society, there’s no reason to stockpile whatsoever. The Bible it says to save grain in 7 years of good harvest for 7 years of bad harvest. It just seems prudent on some level to have a well-stocked pantry.

    At the very least so that when you’re feeling lazy, you don’t have to leave the house. LOL

    I mentioned stockpiling to a friend as a hedge against inflation, but we pretty much agreed that there is stockpiling and there is irrational hoarding. Trying to stock up on a good deal without going overboard is really the key I suppose.

    Posted by mapgirl | August 12, 2008, 3:10 pm
  2. I like mapgirl’s distinction between hoarding and stockpiling.

    The Mormons I believe advocate 2 years worth of stockpile.

    In my preparedness training, we learned 4-5 days water, 2-3 days food. Don’t forget the canopener. :)

    Posted by deepali | August 12, 2008, 3:28 pm
  3. @mapgirl:
    That’s a good point. In WWII I don’t think people had enough to stockpile - they did grow a lot of their own fruit and veg on allotments, and reused a lot, but I don’t get the same scarcity mentality from people who grew up in the war as I hear from Americans. One of the things about rationing was that it was designed to ensure that everyone had enough, or at least a reasonably fair share. Luxury goods were traded on the black market of course, and people stockpiled nylons and makeup and anything they could get from GIs of course.

    If something is on sale and you buy a few extra, that’s a good idea. Having enough food to last you for a couple of months when your most likely emergency situations will see you being evacuated, not so much.

    Seems like preparedness training sort of agrees with me, and honestly I think those are reasonable quantities even though I don’t bother myself. By the way, it’s a perennial joke that Americans need to be reminded to keep a non-electric can opener (almost everyone in the UK uses a manual one all the time).

    Posted by plonkee | August 12, 2008, 4:14 pm
  4. I think if things were to get really bad (and I mean really bad) a gun might be a good investment. That way I could hunt the ubiquitous rabbit and have a little something to eat. After that I would get training in farming and then in local botany.

    If I still had money left I would fly my wife out to her people’s native land (she is native American, at least half of her is) and get her to get membership in her tribe. This would unlock her inner native American powers, making her a proverbial Sacajawea - saving me and our offspring from all the natural perils.

    Posted by Steward | August 12, 2008, 4:17 pm
  5. I think that the most I would ever be able to save is a few days worth of food. And I know that I would eat it when I ran out of everything else. And I think that it’s more important to have water in the house than a tin of beans.

    I have a friend in Louisiana that keeps a gallon jug of water in her car in case she has to evacuate for another hurricane.

    Posted by Maggie | August 12, 2008, 6:07 pm
  6. Not this American - my cans are opened the old fashioned way. Well, not that old-fashioned. But not plugged in! Actually, I don’t know anyone who uses an electric can opener….

    But that being said, I meant - the can opener needs to be in the stockpile. If you’re sheltering in place, you can’t assume you’ll have access to your kitchen.

    America is a large country. There are many parts of the middle of the country where people have to drive many miles to reach a grocery store. It makes sense to stockpile for longer than a week in the event of a disaster for them. Probably not in cities, though.

    Posted by deepali | August 12, 2008, 6:14 pm
  7. Only Americans would have room in their houses!!
    Yes, I know a Mormon family who told me they are all supposed to stockpile 2 yrs!

    Honestly, in floods very little survives. Also, the amount you need to “survive” vs what you’re normally used to is very different. It’s not something I currently do apart from thinking it’s probably a good idea to have some water bottles in the house (I don’t currently drink anything but my tap water) and maybe a few non parishable items. I’ll get round to it one of these days!

    Posted by Frugal Trenches | August 12, 2008, 6:28 pm
  8. My emergency preparedness consists of keeping some cash in the house. I think we should probably keep some water on hand, we don’t drink bottled water so we wouldn’t have any unless it was specifically purchased.
    I think most emergencies would result in evacuation as quickly as possible, with little opportunity to carry much. I generally have enough food for a week in my cupboards anyway.

    Posted by Looby | August 12, 2008, 7:24 pm
  9. @Steward:
    A gun would be no help in the UK - firstly they are as a rule of thumb illegal and secondly, most of us live in cities so it’s not like there’s anything we should be shooting to try and get food. Although, in true John Wyndham style, I do know where my nearest gun factory is. The native American thing sounds like a splendid idea, but I’m a bit concerned as to how you’re going to fly.

    I guess it’s an urban legend about the tin opener then. And of course you should be considering your own circumstances, if you’re a long way from civilisation then you’ll need to do more. In England, nowhere is really that far from anywhere else.

    @Frugal Trenches:
    I know what you mean about having room. I’m ok for space in general but my kitchen is tiny (6ft by 6ft) and there’s no cupboard space in general. Good job we’re not too far from anything.

    It looks like water is the thing to keep around. Even I could do that since I don’t drink bottled water it wouldn’t occur to me to use that instead of the tap normally.

    Posted by plonkee | August 12, 2008, 8:21 pm
  10. @ Plonkee - In the absence of a good firearm you could always go with a wicked sling shot or bow. These might even be better as you can reuse the ammunition or more easily create your own.

    And what about pigeons? I hear those are so plentiful in parts of England that my friends would walk around seeing how many of them they could kick. Kind of like a contest, but better. Surely, in a pinch, you could eat them (unless the great pandemic is the avian flu)?

    Posted by Steward | August 12, 2008, 8:54 pm
  11. Two years ago - when avian flu fears were rampant - we stockpiled months of non-perishable food along with a portable water purifier, etc. (Also stashed some cash and bought a combat shotgun for home defense!) Stuff is still there if needed. Never know when the avian flu will mutate into humans.

    Posted by ToughMoneyLove | August 12, 2008, 9:08 pm
  12. @Steward:
    Ugh pigeons. Yes they are plentiful. They are also nicknamed *rats with wings*. I’d have to be very hungry.

    Hmm. A flu epidemic could be quite serious. I guess there’s a concern that I’d be holed up sick and unable to get to the shops which might have reduced opening hours. Thinking about the last big pandemic in 1918, most people recovered within a week and half the population didn’t contract it at all. Things would be difficult, but given the infrastructure where I live, not impossible.

    Posted by plonkee | August 12, 2008, 10:00 pm
  13. Yeesh. Americans like their guns. Personally I can’t imagine anything more dangerous to have in your home.

    I do like the idea of stock-piling, but I tend to agree with Plonkee. Most of us do it anyway when we get our weekly shopping - cans of soup, instant noodles, frozen meat etc of about 3-4 days worth - it’s just another way of stretching your money, as good food can go bad very quickly (incidentally, I’ve noticed that any Warburton’s bread I have ever bought has lasted for ages without going off!). I also put most fruit and veg in the fridge (and I started before the Prime Minister suggested it!)as it’s just common sense, and can extend their shelf life. More than that is probably excessive, we’re not expecting famine any time soon.

    Posted by Shaz | August 13, 2008, 6:37 am
  14. Yes, I put fruit and veg in the fridge, mostly because I have more fridge space than I do cupboard or worksurface space. And I also find that Warburton’s lasts for ages.

    On the guns thing, I think that (with the possible exception of Singapore) we have some of the strictest gun control laws in the world. And they’re popular. Suits me fine as guns scare the bejeezus out of me.

    Posted by plonkee | August 13, 2008, 12:12 pm
  15. Plonkee, do you think that the Cold War merely propigated the notion of stockpiling in the US vs in the UK? I mean were Britons building bomb shelters in the 50’s? I think that kind of idea contributes to stockpiling. After all, I live close to a major political target and going 72 hours without emergency services is quite possible.

    Posted by mapgirl | August 13, 2008, 8:05 pm
  16. The British weren’t building bomb shelters in the 50s but only because we already had them. In fact, I remember when I was little my great grandmother still had a bomb shelter in the back of her garden. People were concerned about the cold war in the 1950s but we didn’t have the red scare in quite the same way as far as I can tell. Maybe that is why we have a different attitude to these things.

    Posted by plonkee | August 13, 2008, 8:36 pm
  17. In our current economic set-up, supermarkets do not have much stock on hand. There is really just a few days’ worth of food on hand. If something goes wrong the supply chain, what happens? We had an ice storm here where we lost electricity for over a week. You should have seen the supermarkets. They did manage to get some trucks in with bread and such, but really there was hardly anything you could buy and eat cold. (And this was January.)

    What I am worried about is a collapse on a bigger scale. The combination of peak oil and climate change will change our lives, and maybe it isn’t a bad idea to have extra rice and dried beans on hand. There is a blog I read called Casaubon’s Book ( http://www.sharonastyk.com/ ) which scares me but I do take it somewhat seriously. Books on this topic include the Long Emergency by Kunstler and Powerdown by Heinberg. Documentaries include The End of Suburbia and Crude Awakening.

    I always feel like some kind of weird nutcase when I mention this kind of thing, but I am not planning on holing up in my bunker, I am just taking in account that society, the economy, and my lifestyle may not be able to continue as before.

    Posted by Canadian | August 14, 2008, 9:52 pm
  18. Also consider investing in things such as solar panels and generally making one’s house energy-efficient, rain barrels depending on where you live, a good garden with good soil and maybe fruit trees and berry bushes, a sturdy bicycle suitable for transportation purposes, etc.

    Posted by Canadian | August 14, 2008, 9:58 pm
  19. Yes, we do have long supply chains here in the U.S./Canada.

    Stores could be out of stock for some time.

    But I see the real reason to stockpile is pandemic - some states here recommend 3 months worth of food for that possibility.

    In a pandemic with a disease of such high mortality rate as avian influenza it is unlikely you’d even be allowed out of your home.

    I’d rather have food in my home than having to hope for a delivery to my front gate (likely by the military)

    Currently, a year’s month supply of freeze dried prepared meals (just add water) would cost about US $3000.

    Those are the same premium meals backpackers carry, but in #10 (1 U.S. gallon) cans.

    Nitrogen-packed and freeze-dried, they last for at least 10 years in storage.

    Amortized over a decade or more, that’s pretty cheap insurance against the possibility of being stuck at home for weeks or months.

    Posted by Bill in NC | August 15, 2008, 3:05 pm

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