Loans, Finances, Solar Energy and Inflation

[Revolucionar]

I'm starting this thread as a means to get member's thoughts on some of my own near to mid term plans and also to engage in a wider discussion of the practical side of our research and understanding of how the world works and where it's going, particularly in terms of finance and the prospect of an economic meltdown.

Business has been very good lately and barring a complete meltdown in the next few years, I stand to get myself well taken care of.
Now, money is slowly but surely accumulating, but it's just sitting there.
One of the primary things that I'd like to take care of is my house where I live with my wife, son and dog.
I'm considering getting a loan to remodel and make it a cozy home, but also allow for a substantial vegetable garden and nice landscaping.
On top of that, I've discovered that a fully functional state of the art solar panel electrical plant that is able to produce more than enough to sustain our household can be had for no more than 9000 Euros. This, combined with insulating the house ciuld make us pretty self sufficiet in terms of energy needs and, most importantly, less at the mercy of rising energy costs.And they also give you better terms on the loan if you're using it for improving,...cue magic word... sustainabilty.

In the context of the impending economic ollapse, does taking out a loan with fixed interest rates make sense to you?
If I don't put the house down as collateral and keep making some money, I don't think the bank can do much about it if inflation starts soaring. And if things go really south, my debt will be the least of the bank's worries.

And besides, leaving the money sitting around is the worst idea, while investing in gold doesn't appeal to me when gold isn't really useful in and of itself. Prices for construction and most everything else will be going up and I feel this is the last moment to do something of this nature without getting fleeced.

I'm looking forward to your thoughts, ideas, and differing viewpoints.

Thanks for reading.

 

[Yupo]

Why not use your accumulated cash for the home improvements? That protects your money from the bank having an accident with it. Also using your home as collateral can be a problem if you cannot repay the loan for some reason, like illness or loss of career/earning ability. You don't ever want to be in that position if you can avoid it. Lenders have shown us that they don't care. Solar can be a good thing, but takes a while to recover the investment. Also if there is some kind of an EMP, it is possible that your system could be cooked. If you are remodeling anyway and you have good sun exposure, consider incorporating some passive solar features into your remodel plans.

 

[Pierre]

In the context of the impending economic ollapse, does taking out a loan with fixed interest rates make sense to you?

In times of inflation, interest rates tend to go up, therefore it makes sense to get a loan with fixed interest rate.

 

[Revolucionar]

Why not use your accumulated cash for the home improvements? That protects your money from the bank having an accident with it.

Yeah, that's ideal, but I don't have that kind of cash at the moment. I would need to wait a year or two and by that time who knows what's going to happen with financial system. Certainly, tuings will be more expensive and my money worth less.

Also using your home as collateral can be a problem if you cannot repay the loan for some reason, like illness or loss of career/earning ability. You don't ever want to be in that position if you can avoid it. Lenders have shown us that they don't care.

Oh, I'm definitely not putting the house down as collateral. That would be crazy.

Solar can be a good thing, but takes a while to recover the investment. Also if there is some kind of an EMP, it is possible that your system could be cooked.

That's the thing, if things go sideways in terms of energy availability, I would be in a much better position with some debt but having my own power plant, than being debt free with no power at all.
As energy prices go up, the time to recover the investment goes down and it's already at less than 10 years at the moment.

About EMPs, thanks for the heads up. There appear to be some solutions for that like the one I found here: https://www.sol-ark.com/can-solar-flares-or-emp-damage-solar-power-systems/

In times of inflation, interest rates tend to go up, therefore it makes sense to get a loan with fixed interest rate.

Loans of this sort generally come as fixed interest for the first half of the loan duration. My plan is to take out a 15 year loan and pay it back in 5 years.

I think it's generally a good idea to something like this while the technology is still available and affordable, insulation is still not too expensive and banks give better terms if you're improving sustainability.
In a year or two, this might all become close to impossible to do.
And if I can get a fixed interest loan and inflation goes way up but I manage to retain a good income, I'm basically paying a lot less and the bank is losing money.
At least that's how I see it. Anyone who wants to burst my bubble is appreciated.

 

[Revolucionar]

@Περσεύς , you seem to strongly dislike my opening post. I think everyone would appreciate to hear why that is.
You joined yesterday and have no posts yet. Maybe just disliking members comments with no additional information is not starting off on the good foot. Also, consider making an introductory post in the Newbies section.

 

[Amor]

Yeah, that's ideal, but I don't have that kind of cash at the moment. I would need to wait a year or two and by that time who knows what's going to happen with financial system. Certainly, tuings will be more expensive and my money worth less.


Oh, I'm definitely not putting the house down as collateral. That would be crazy.

That's the thing, if things go sideways in terms of energy availability, I would be in a much better position with some debt but having my own power plant, than being debt free with no power at all.
As energy prices go up, the time to recover the investment goes down and it's already at less than 10 years at the moment.

About EMPs, thanks for the heads up. There appear to be some solutions for that like the one I found here: https://www.sol-ark.com/can-solar-flares-or-emp-damage-solar-power-systems/

Loans of this sort generally come as fixed interest for the first half of the loan duration. My plan is to take out a 15 year loan and pay it back in 5 years.

I think it's generally a good idea to something like this while the technology is still available and affordable, insulation is still not too expensive and banks give better terms if you're improving sustainability.
In a year or two, this might all become close to impossible to do.
And if I can get a fixed interest loan and inflation goes way up but I manage to retain a good income, I'm basically paying a lot less and the bank is losing money.
At least that's how I see it. Anyone who wants to burst my bubble is appreciated.

If I would have a house with a nearby river I would try to find ways to build this instead of solar panel:

 

[Revolucionar]

If I would have a house with a nearby river I would try to find ways to build this instead of solar panel:

That looks great. Unfortunately, this is not possible in my location. I was thinking about supplementing the solar with wind power as usually when there's no sun there's wind where I live.

 

[Gwenllian]

Business has been very good lately and barring a complete meltdown in the next few years, I stand to get myself well taken care of.
Now, money is slowly but surely accumulating, but it's just sitting there.
One of the primary things that I'd like to take care of is my house where I live with my wife, son and dog.
I'm considering getting a loan to remodel and make it a cozy home, but also allow for a substantial vegetable garden and nice landscaping.
On top of that, I've discovered that a fully functional state of the art solar panel electrical plant that is able to produce more than enough to sustain our household can be had for no more than 9000 Euros. This, combined with insulating the house ciuld make us pretty self sufficiet in terms of energy needs and, most importantly, less at the mercy of rising energy costs.And they also give you better terms on the loan if you're using it for improving,...cue magic word... sustainabilty.

That's great, Revolucionar! Well done!

I think insulating your home is a very good idea, I don't know about solar panels or wind turbines. For instance last year in some parts of the world there was very little wind and sunshine. So, I would invest in a wood stove if you can install one, one which would also be suitable for cooking? But that's just me. I would also make sure that my roof and gutters are sturdy.

Also, have you been stocking up on food? That's also a great way of investing your money. The same goes for a good water filter.

Just for fun I have been watching videos about life in a tiny village in Siberia to see how they manage the cold and what kind of outhouses they build.

 

[Matty F]

Thanks for starting this thread revolucionar. I’ve been thinking about solar myself. I have some canned food, rice pasta etc. but a freezer full of meat and need to keep power running for that. I have a generator for short term power lose but for the longer term was thinking solar.

 

[Pat]

I'm starting this thread as a means to get member's thoughts on some of my own near to mid term plans and also to engage in a wider discussion of the practical side of our research and understanding of how the world works and where it's going, particularly in terms of finance and the prospect of an economic meltdown.

Business has been very good lately and barring a complete meltdown in the next few years, I stand to get myself well taken care of.
Now, money is slowly but surely accumulating, but it's just sitting there.
One of the primary things that I'd like to take care of is my house where I live with my wife, son and dog.
I'm considering getting a loan to remodel and make it a cozy home, but also allow for a substantial vegetable garden and nice landscaping.
On top of that, I've discovered that a fully functional state of the art solar panel electrical plant that is able to produce more than enough to sustain our household can be had for no more than 9000 Euros. This, combined with insulating the house ciuld make us pretty self sufficiet in terms of energy needs and, most importantly, less at the mercy of rising energy costs.And they also give you better terms on the loan if you're using it for improving,...cue magic word... sustainabilty.

In the context of the impending economic ollapse, does taking out a loan with fixed interest rates make sense to you?
If I don't put the house down as collateral and keep making some money, I don't think the bank can do much about it if inflation starts soaring. And if things go really south, my debt will be the least of the bank's worries.

And besides, leaving the money sitting around is the worst idea, while investing in gold doesn't appeal to me when gold isn't really useful in and of itself. Prices for construction and most everything else will be going up and I feel this is the last moment to do something of this nature without getting fleeced.

I'm looking forward to your thoughts, ideas, and differing viewpoints.

Thanks for reading.

Thank you for the thread. I have been thinking about those questions you are asking yourself.
Like you, I wouldn't let money in the bank. Money is a tool and should be used as such.
With enough money, I would invest in thermal energy source. I believe that Getting the heat from underground is the best solution possible whatever happens. I don't believe in solar panel, turbine, gas, electricity etc...
Like you, I thought of a garden. I like to start small and do it all myself, so permaculture is a great start.
Also, I invested in a wooden stove. Plenty of wood where I leave if the market collapse.
I really enjoyed the process of asking myself those questions and finding answers, I hope you do

 

[Eboard10]

Hi Revolucionar, it's good to know that you are doing quite well and are keen on doing the necessary work to achieve a certain level of self-sufficiency.

In the context of the impending economic ollapse, does taking out a loan with fixed interest rates make sense to you?
If I don't put the house down as collateral and keep making some money, I don't think the bank can do much about it if inflation starts soaring.

As Pierre mentioned, in periods of inflation interest rates tend to rise so if you ever need to take out a loan and can lock in a low fixed rate with the bank, it may be a better option than going for a variable rate under present conditions. You should ideally also have enough cash on the side for a rainy day that can cover your expenses for a period long enough to secure your income during an economic downturn. At least that's how I would go about it.

When it comes to identifying the optimal energy source, you should make sure to assess all the pros and cons of going for solar panels. See whether the benefits of energy self-sufficiency that come with solar outweigh the initial investment and ongoing costs and compare that to other energy sources. As pointed out by others above, there are alternatives that are also worth considering and may put less financial stress on you.

Wish you good luck!

 

[Revolucionar]

That's great, Revolucionar! Well done!

Thank you! It entails a lot of hard work, sacrifice and strategic enclosure to the max, but I'm enjoying it and feel it's good for my soul.

I think insulating your home is a very good idea, I don't know about solar panels or wind turbines. For instance last year in some parts of the world there was very little wind and sunshine. So, I would invest in a wood stove if you can install one, one which would also be suitable for cooking? But that's just me. I would also make sure that my roof and gutters are sturdy.

Insulation is very important. Could save your hide in the midst of an ice age.
Solar panels actually produce about 20% of their maximum output on an overcast day and my system would be connected to the grid, so I would be selling any surplus to the operator and buying it back when there's a deficit. Plus, it will probably have a battery to store the surplus to be used when there's no power being generated. Wind would be another line of defence.
I'm definitely planning to have a fireplace to be able to have heat in a pinch, but a wood burning stove is something that I might get and place in storage for a rainy day.
Wood is actually rather unhealthy to burn and extremely inefficient, but yeah, if that's all you can get, you better be able to use it.

Also, have you been stocking up on food? That's also a great way of investing your money. The same goes for a good water filter.

I've not done enough on that front but that is also part of the plan. Gotta repurpose one of the rooms in the house for food storage and get more freezers.
Water filter is definitely going in and I'm looking at rainwater or well water options, too.

Just for fun I have been watching videos about life in a tiny village in Siberia to see how they manage the cold and what kind of outhouses they build.

Thanks for that. Some great ideas.

Thanks for starting this thread revolucionar. I’ve been thinking about solar myself. I have some canned food, rice pasta etc. but a freezer full of meat and need to keep power running for that. I have a generator for short term power lose but for the longer term was thinking solar.

As I said, you can get a solar plant for your house that could power everything for under 10000 euros. Something to consider certainly, but don't get rid of your generator either. It's possible to set up a generator to power up when it's needed.

Thank you for the thread. I have been thinking about those questions you are asking yourself.
Like you, I wouldn't let money in the bank. Money is a tool and should be used as such.
With enough money, I would invest in thermal energy source. I believe that Getting the heat from underground is the best solution possible whatever happens. I don't believe in solar panel, turbine, gas, electricity etc...
Like you, I thought of a garden. I like to start small and do it all myself, so permaculture is a great start.
Also, I invested in a wooden stove. Plenty of wood where I leave if the market collapse.
I really enjoyed the process of asking myself those questions and finding answers, I hope you do

Heat pumps need electricity to work. Yes, they are the most efficient, but if you lose power, you freeze all the same. I have been looking into using a heat pump for heating, driven by solar, but this looks like an expensive solution. I'll be talking to a few of my engineer friends over the next week to try to pick their brains about this. Will get back with more data.

I'm also not a fan of these renewable sources, but that's really just because they're being foisted upon the world as the solution to everything when they really are not. The energy needs of the world at large are impossible to meet using solar and wind. The only reason they're seeing increased use at the industrial level is because they're subsidized. I'm guessing that's the real reason why they're 10 times cheaper today compared to 2010, but that part plays into my hand.
I can sort out my own needs and they can continue to mess with the energy market and increase prices while I stay warm, run my computers and freezers while actually making money off it. Sounds like taking advantage of others' suffering, but my not getting solar panels wouldn't make one iota of a difference.
Garden is a key component of my plan, and I've been beating myself over the head for not starting one a couple of years ago. The reason I didn't is time. Time spent on making money to afford all this other stuff. My gamble was that the collapse won't come for at least a few more years. I hope it pays off. My wife and will plant some minor stuff this spring, but next spring I'm going big.

As Pierre mentioned, in periods of inflation interest rates tend to rise so if you ever need to take out a loan and can lock in a low fixed rate with the bank, it may be a better option than going for a variable rate under present conditions. You should ideally also have enough cash on the side for a rainy day that can cover your expenses for a period long enough to secure your income during an economic downturn. At least that's how I would go about it.

Yes, that's my thinking exactly. If in the period of inflation I was able to increase my earnings by the same factor, I would be paying the loan at increasingly smaller actual values. Way to stick it to the banks. And even if I don't manage that, I should be able to keep paying it off. Also, the house value would increase significantly after all the improvements, so there's also selling it as a last resort.

When it comes to identifying the optimal energy source, you should make sure to assess all the pros and cons of going for solar panels. See whether the benefits of energy self-sufficiency that come with solar outweigh the initial investment and ongoing costs and compare that to other energy sources. As pointed out by others above, there are alternatives that are also worth considering and may put less financial stress on you.

From what I've been reading, solar panels have become so cheap that they pay off your investment in less than 10 years. But even more importantly, in a time where energy prices are likely to go way up, the time to recoup your investment can become a lot shorter and provide a great deal of security against blackouts and energy rationing.

For home electrical energy generation, there are unfortunately no solutions other than solar and wind in my case. There are other solutions for heat, but they either rely on electricity or are so highly inefficient to be only useful as a last resort or a supplemental source.
So far, I'm not seeing a lot of downsides to solar, but I'll be sure to educate myself as best as possible before I make a final decision.
Maybe someone here knows this stuff in depth and can provide expert insight.

Wish you good luck!

Thanks so much.

 

[Temperance]

I'm definitely planning to have a fireplace to be able to have heat in a pinch, but a wood burning stove is something that I might get and place in storage for a rainy day.
Wood is actually rather unhealthy to burn and extremely inefficient, but yeah, if that's all you can get, you better be able to use it.

Not sure where you got this info from but as far as I've seen, a fireplace would be the more expensive(masonry labor) and significantly less efficient (less than 25% if I remember correctly), where a wood burning stove installation would be cheaper and if you get a newer model with reburn or catalytic(or even an old one) efficiency is way above 50%. In either case, install carbon monoxide detectors at home if you don't have one yet. I currently have a fireplace and been getting quotes for wood burning stoves, around 6,000 USD. Also getting quotes for solar myself. As for the loans, let the math work out in a responsible way whether we get a collapse or not, so you may be able to afford it reasonably. I.e. don't get too much debt in apocalyptic abandon because it's a slippery slope. Money can be invested in tools and systems for sustainability, and depending on what it is, it can hold resale value.

 

[Gwenllian]

I had a new wood stove in my old house which complied with all these EU regulations and it was quite safe as it was attached to the old chimney stack. The same went for another wood stove, but here they made a metal (?) chimney stack and put it through the roof, so no toxic fumes could get indoors. It burnt a lot of wood, but that's because the wood itself didn't contain many calories so to speak. It was willow and poplar which burn very quickly. I heard that oak is pretty efficient, and you will only need one wood log a day at least that is what I was told. But the wood will probably cost you more?

And another video just for fun: how our ancestors cooked a meal 200 years ago:

 

[Revolucionar]

Not sure where you got this info from but as far as I've seen, a fireplace would be the more expensive(masonry labor) and significantly less efficient (less than 25% if I remember correctly), where a wood burning stove installation would be cheaper and if you get a newer model with reburn or catalytic(or even an old one) efficiency is way above 50%. In either case, install carbon monoxide detectors at home if you don't have one yet. I currently have a fireplace and been getting quotes for wood burning stoves, around 6,000 USD. Also getting quotes for solar myself. As for the loans, let the math work out in a responsible way whether we get a collapse or not, so you may be able to afford it reasonably. I.e. don't get too much debt in apocalyptic abandon because it's a slippery slope. Money can be invested in tools and systems for sustainability, and depending on what it is, it can hold resale value.

Well, the fireplace I already have but it's not built for doing any actual eating so that needs to be redone. The chimney is in place already, though.
It's more of an ambience thing really, but can be used in a pinch.
My remarks about wood were based on stuff I heard and read in the past, but doing a bit of digging now has shown that I was quite wrong. Wood is a good option, especially if you have acces to free wood in sufficient quantities, but all in all, I still consider it a last resort kind of thing that I should have in place nonetheless.
Heat pumps are super efficient on the other hand. I just found one that provides 12 kW of heating power and uses only 2 kW of electricity to do it.
I'll probably go with that paired with a solar system which doesn't need to be to large to provide enough electricity to heat the house even in the winter.
With proper insulation, this investment can be recouped rather quickly.
I've been running the numbers a bit, and pretty confident that I can pull it off and that this is the right thing to do.
Now let's just hope we are given a but more time before the SHTF.

I had a new wood stove in my old house which complied with all these EU regulations and it was quite safe as it was attached to the old chimney stack. The same went for another wood stove, but here they made a metal (?) chimney stack and put it through the roof, so no toxic fumes could get indoors. It burnt a lot of wood, but that's because the wood itself didn't contain many calories so to speak. It was willow and poplar which burn very quickly. I heard that oak is pretty efficient, and you will only need one wood log a day at least that is what I was told. But the wood will probably cost you more?

And another video just for fun: how our ancestors cooked a meal 200 years ago:

Yeah, the main problem with wood is that it greatly depends on the quality and high quality stuff is actually relatively expensive.
One log sounds like not nearly enough to heat anything larger than a small bathroom, and even then I don't see ot lasting a whole day. And oak trees take a looong long time to grow. Burning wood always seemed to me like a waste, but definitely something to have handy for an icy, snowy day.