måndag 26 september 2016

How to make Homemade Apple Juice/Cider

We've lived in our house for 2 years now and I've wanted to brew my own cider from day one. Last year our apple tree produced the might number of 3 apples in total, so no cider for me.
This year, a totally different story as you can see in the picture below.

apples in the tree

This is the first time I try to do this so the process might not be optimal and I am sure that things could be done better.
The goal of this post is to have at least one bucket that has started the fermentation process.

Things you need

work table rigged for apple cider production

  • Sturdy buckets, heavy duty. Not the $1 ones.. it has to be able to take a beating
  • Kitchen knife
  • Cutting board
  • Fruit press
  • Ladle
  • Some nails and a wood stud (45x45 mm)
  • Saw
  • Hammer
  • Fermentation bucket with a lid (I used 30 litres)
  • Fermentation lock
  • Yeast
  • Cup (for tasting!)

First we need to create the tool to use for crushing the apples
home made apple crushing tool
The apple crusher
There are many tools that can be bought for crushing the apples but why waste the hard earned money when all you need is some wood stud, a saw, a hammer and some nails to create your own crusher.
home made apple crushing tool in action
Home made apple crushing tool in action

The process

Apple juice flowing into a fermentation bucket
Apple juice flowing into a fermentation bucket
  1. Collect apples
  2. Cut apples in 4-8 pieces depending on size, throw them in a sturdy bucket
  3. When you have a 2 or 3 layers of sliced apples it is time for the crusher. This part is good training.
  4. When you have crushed apples, Pour them into another bucket.
  5. Repeat steps 1-4 until you have a filled bucket
  6. Fill the fruit sack in the press, try pressing a little with the ladle
  7. Use the press
  8. Repeat 6 and 7 until you cannot move the handle
  9. Empty the fruit sack in your compost.
  10. Repeat until you have filled the fermentation bucket.

The Yeast

A fermentation bucket on a wooden floor
Fermentation bucket in action
Yeast eats sugar and produces alcohol and dicarbon oxide. The higher sugar rate of the in going liquid, the more alcohol there will be.
The yeast is added to the fermentation bucket, read on the package how to do it. Some require some pre-activation steps. Also read what temperature your yeast works best in and store the bucket in that temperature.
I decided to use champagne yeast for my batches. There are hundreds of different yeast cultures to chose from, but this felt right for me.
Add the lid and the fermentation lock. Fill the lock with water to the line and wait.

My plan is to do 3 batches. 

picture of 223 grams of hops being weighted
223 grams of hops being weighted
  • Über hopped apple cider (24 liters and 223 grams of fresh hops)
  • Hopped apple cider (24 liters and 70 grams of fresh hops)
  • Apple cider (just 24 liters)
So. The first two batches need hops, luckily enough we planted some last year and it is ready for harvest now as well. We did a little pre-tasting of the hops last weekend and we think it could be cascade but I am not sure. We found it in a private garden and they did not know what kind it was.
So, remember that I've never done any of this before so it is a little bit experimental. Reviews on the outcome will come later. 

OK, so I could read up on how to dry hop cider but where is the fun in that. My best guess is to add the hops into the fermentation bucket after the yeast has been added, before the lid is put on. And then filter them out during after the fermentation is done. That way they should be protected from oxidation by the fermentation lock.

Apples in a wheelbarrow
Apples in a wheelbarrow
So. Now to continue with batch 2 and 3, the wheel barrow is full and waiting :)

lördag 24 september 2016

Step 2: Expectations and mindset when investing

man reading a business newspaper

This is step 2 of my private economy, saving and investing series. Be sure to read the other posts as well:

Step 1: Stabilize your economy
Step 2: Expectations and mindset
Step 3: Index funds

Now we have done some ground work.
An automated savings plan is in place and a buffer is filled for the rainy day. So whats next?
By now you might have noticed that the ordinary savings account has a pretty low interest rate, if at all. It has become more and more common for 0% interest rates on savings accounts.

For us it was a deal with the bank to start an investment account to get a better interest rate on our house loan.
We did not know much about how the capital market worked when we signed the deal, only what we picked up in the news and movies. The popular cultural view includes

  • A lot of trading. Movies love day-traders and Wall Street corruption. Buy! Sell! Follow the markets up and downs.
  • Speculation and the quest of finding the next big winner. In my ears this sounds like a lot of work and a high risk.
  • Small daily variations in trade make big head-lines in financial news. But then again, real journalism seems to be hard to find these days.
  • The market always has the correct pricing due to the volume of trade.
  • Stocks are just numbers that can be statistically analysed.
  • Stock picking is everything there is to it.
The first book on the subject that I read was The Intelligent Investor by Benjamin Graham and the biggest eye-opener for me was the notion that when you buy into stock of a certain company, you actually own a certain part of that company. If your company does well, it will pay you back, if it goes bad it will not.
The strangest thing is that I never thought of that before. The abstraction of a share has taken over.

Definition of the word Invest.

"To commit (money) in order to earn a financial return"

"Put (money) into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit."

"To put money, effort, time, etc. into something to make a profit or get an advantage"

The investing options discussed on this blog follow these definitions. The common idea is to put money or time into something and expect a return on that investment in the form of money.
Many people think of their house or apartment as an investment but in my mind the money you put into your house is in a very grey area, even if you make a profit when you sell it you will still need somewhere to live.. Buying an house and renovating it and then reselling for a profit is a investment. Your home should not be. If you earn some extra cash on moving, see it as a bonus and put it into your investment plan.

Don't expect to get rich fast, it will take time but in the long run if you stick to the plan you will start to get returns that in the end will blow your mind.

Mr Market

Grahams famous allegory of Mr Market goes something like this: once you become a shareholder you will start to get daily visits by Mr. Market with a price quote on your shares. But some times the quote is ridiculous and it is up to you to either trade with him or not. It does not matter if you do or not, because if you are still a shareholder the next day, he will come back. Mr Market listens closely to every piece of information and follows every lead when setting the price tag on a share.
Lets fast forward to present time, today Mr Market comes to visit more frequently. He pretty much comes multiple times per hour if we let him. But it is still you, the shareholder, who must either accept his offer to trade (either buy or sell) or not to.

Day-traders continuously negotiate with Mr Market and trade with him multiple times per day to gain a profit. They do not look at their shares as parts of a real physical business but more like paper with a price-tag on them. In my mind, this is a very high risk game and the only real winner is Mr Broker.

Introducing Mr Broker

Where Mr Market is the provider, I like to see Mr Broker as the pusher. He wants you to do business with Mr Market.
Mr Broker is the guy you call each time you want to trade with Mr Market. He does all the paperwork and takes a small fee for the favor. In the end, if you trade a lot, he is the only real winner. Think of it as the house always wins at the casino. So the key is to involve him as little as possible. Mr Broker loves the news and the manic-depressive Mr Market as they increase the amount of trades per day. Mr Broker is a very very rich guy.

One of the things with Mr Market that Graham left out of his allegory is that he is a pretty bad guy, not only does he have manic-depressive traits, he is also a stalker. Even if you sell every share that you own to him on one day, he will come back the next. And continue to do so. Meaning that you will have a pretty good picture of if the decision you made was a good one or a bad one.

Grahams strategy to battle Mr Market is to diversify your holding. Meaning that you buy into businesses in different fields, that are undervalued by Mr Market and when they rise a little you sell them back to him for a profit. And you continue to do so until you get rich one step at a time.
In my mind this requires a lot of work even though the risks are quire small.
Or you could just buy into an index-fund that is built to automatically mimic a certain markets index. This is what I did when I started out. More on that in a later post.

In conclusion.

If you get into investing with the mindset that shares are owner certificates for a businesses you will probably have a better outset than most. View yourself as an owner and read up on their business instead listening of the wild speculations done by news, media and the market in general. Take your time to read a report or two, perhaps even go to an annual meeting, and only engage in a trade with Mr Market on your own terms and limit the number of trades so that Mr Broker doesn't steal your profit.
If you do not want to do that, then stick with Grahams diversification plan and buy into an index fund with a low fee whenever you have a nice sum of money to put away.

Continue to the next step: Index funds

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

fredag 16 september 2016

Step 1: Stabilize your economy. Buffer and Savings

This is the first step of my private economy, saving and investing series. Be sure to read the other posts as well:

Step 1: Stabilize your economy
Step 2: Expectations and mindset
Step 3: Index funds

As a first step before we even start thinking about investing is to lay out the foundations for a stable living. A buffer and a savings account.

Savings account

My old approach to saving was pretty much ad-hoc:
  1. Get paycheck
  2. Pay bills
  3. Go on with life
  4. Receive next paycheck and move whatever was left to the savings account.
Many times it was nothing, and some months I took instead of put money into the account.
Needless to say, it felt very hard to save for something specific.

The big issue with the ad-hoc approach is that there are a lot of variables in life and even if you cut away something, it is a long way for it to actually get to the savings.
The first change to do is to change the order of things. Namely, to put away money as the first thing instead of the last. This will result in a more deterministic savings.

Deterministic savings mean a lot of things.
  • You will put away the same sum each month. 
  • This allows you to plan your future financial situation. 
  • You can automate it, meaning that it is more likely that you keep your plan if you never actually see the money on the spending account.
It also means that if you plan to save a certain amount each month, you need to stick to the plan. After the money hits the savings account, you should look at it as if it is out of reach and not usable. We usually refer to it as monopoly cash or toy cash. It looks and feels like real money, but you are not able to use it.
If you want to increase your savings per month, try removing from the other sections by for example canceling a subscription. Do you really read that magazine? Directly when you cancel, also change your automatic savings amount. This way you actually save the money and not just use it on something else.

The buffer

From time to time, life happens and your paycheck is not enough and you need to solve the situation by going to the savings. But in the section above we agreed that the savings account was off limits, how do we solve this?
By creating an extra account, preferably an actual account in the bank. How big this has to be is up to you, but the key is to always have it at the level that you have decided.
If you need to take money from it one month, you pay it back the next before all other savings or bills.
If you need to use the buffer continuously, then you need to change some habits. Maybe cancel a subscription, skip a restaurant visit or something similar.

In the end, it is not that much work but quite a lot of determination to keep to the plan. The key idea being to pay yourself first before doing anything else. Start small, and grow it over time.
Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

tisdag 13 september 2016

How we stopped being victims of the system and started to create a life

In 2014 I got fed up hearing people, including myself, voice opinions like: “How can company X pay huge bonuses to their management and dividends to shareholders while at the same time run employee layoff programs?”. The general feeling seems to be that these kinds of businesses are bad, and that they should be avoided. I did not understand how things could be so unfair.
The problem that most businesses that we come in contact with on a daily basis seem to operate in this way leaves us with just a few options:

Option #1: Do nothing.
The first option basically means that you go on with your life and continue complaining and being a victim of the system. Nothing changes, basically you take the blue pill. You can click here stop reading now.

Option #2: Do something against it.
The red pill... Join the resistance. Become an activist or join a movement. Stay pure but in the same or a worse place than you began in. In other words, be an angry victim.
Option #3: Use it to your own advantage.
Just to continue with the popular cultural references: Join the dark side. Learn about the mechanisms that make the world tick, and then use that information to reap benefits that were outside of your reach before. I.e. figure out how to not be a victim anymore.

In the long run, we shape our lives, and we shape ourselves. The process never ends until we die. And the choices we make are ultimately our own responsibility.
-Eleanor Roosevelt

The before situation

We had a savings account, whatever was left at the end of the month ended up in it. Sometimes a lot, sometimes nothing at all and other times it was used to survive the month. In the end it was more like a buffer combined with savings. Whenever we had a goal (a trip, a new car etc.) we managed to put away quite a bit, but it was never anything close to systematic or long term.

What we did

When we bought a house 2 years ago (somehow we had managed to save up to a down payment), our bank had a deal of gold membership (discounts on interest rates for the house loan and insurances) if we signed up for an automated investments account. The deal was setup, and each month it would transfer some money to the new account.
Knowing that this would be the deal I started to read up on capital markets and how they worked. My bank had put the whole sum into one of their own funds. I ended up changing it to a low fee index fund pretty much directly and continue reading books.

Current situation

Today, 2 years later.. All I can say is that we've managed to take the first steps on a long journey, we are by no means rich but we do have a more stable economy than before. I look at this period as a proof of concept. Can we live without the money we are putting away and can we leave it alone? So far that has not been any problems. We still use a ordinary savings account to save money to something specific and hope that the investments we do on the side will yield some returns in the future. So far, we have reinvested everything and plan to continue doing that for quite some time.

The deal for me is to not be afraid of the markets, but then again to not get too involved either, just involved enough to get a nice return of investment that we potentially could live on in the future. On this blog I plan to post articles about that journey and things that I've learned in hopes that it will be a trigger for other people to start building their own money machines.

Today when my friends complain about the unfairness of bonus systems and owners, I can argue both sides and that makes a huge difference in my own life and hopefully triggers positive change in theirs as well.

The Plan

  • The plan is to continue building the money machine. 
  • Automatically transfer money each month into and investing that amount. 
  • Do more research myself and keep the plan simple.
  • Whenever extra cash comes our way, birthdays, bonuses etc. it should be invested, at least partly.
And allow ourselves to have fun.

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

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