In Part 1, we looked the history of American personal real estate investing. We discovered we had made a mistake thinking that investing in home ownership was the best thing we could ever put our money into. It turns out that houses are just as subject to economic and market pressures as stocks and mutual funds are. So let’s spend just a few minutes discovering a new way to think about home ownership and money.
The Simple, Sustainable crowd want to limit risk and maximize life. We learned that big, oversized suburban homes, don’t actually improve our lifestyles, they only make them APPEAR to be improved. In reality, those houses have to be filled with stuff. Stuff costs money and generally depreciates in value rather quickly. Financing the typical suburban lifestyle frequently requires multiple incomes, which increases the number of vehicles a household needs. Those vehicles must be purchased, fueled, insured and maintained. The stress of the big circle of the big suburban lifestyle is killing us.
Living Simple, Sustainable lives, means instead of buying as much as we can afford, we look for the minimally viable living space. It means prioritizing the land over the structures. It means smaller mortgages, spread over shorter periods of time. We think in terms of 15 year mortgages, maximum, and getting them paid off early.
A smaller house is less expensive to buy, to heat and cool, to maintain and to furnish, which reduces our expense requirements even more. Fewer operating costs allows for faster wealth building or faster mortgage reduction. I bet you can feel your blood pressure dropping just thinking about it.
Besides the financial savings, reduced energy costs benefit the environment by reducing nonrenewable portions of our footprint.
Most Simple, Sustainable lifestyles include growing some, or all of our own food. I’m not just describing the back to the country, homesteaders, like my wife and me. More urban and suburban dwellers are gardening (much of it organic) than at any time since the end of WWII. Whether the motivation is environmental, financial or nutritional, it’s a win for everyone except big corporations.
Let’s summarize: The Simple, Sustainable, Lifestyle, has less debt, on shorter terms, smaller operating costs, better nutrition, and less stress. We have taken back ownership of our time, our lives and our finances. We are investing in our families and in ourselves, rather than handing our hard earned cash to big banks, insurance, utility and oil companies. We are keeping it and using it for things we value rather than handing over to someone else.
I remember once, a friend parking his big, new, heavily financed truck next to my little runabout commuter car. As we got out and started walking to the office, he said, “Geez, Sam, what is that thing you’re driving?”
“Paid for”, I grinned. Years later, I’m still grinning.
There is a revolution happening all over America. Some haven’t caught on yet, but the movement is growing. Americans are beginning to think differently about real estate and home ownership. Rather than throwing money after the appearance of wealth, we are looking at ways to build REAL, tangible, cash in hand wealth. We have minimized risk, have more liquid assets and own our houses outright. We have less stress and sleep great at night. We’re not afraid of the next economic bubble. We have created a kind of immunity. We love our simple, sustainable lives. And we’d love to have you join us.
I sure would like hear from y’all. Drop in a comment, or send an email with your thoughts on how you’ve simplified your life, or how you’d like to. After all, we’re in this thing together.