At the beginning of the year, I promised 17 posts about having a better life in 2017. As July rolls around, I’m short. I’m going to post a final four hints here and wrap up the “17” theme.
As I write this, fireworks are exploding. I am baffled by this since I live in a neighborhood where few people seem to have gotten much out of the whole America and apple pie thing. Most of my neighbors in Gary, Indiana get passed over when pie is passed out in favor of being pulled over for . . . well, anything. I think many Americans could share this sentiment as we all face un- and underemployment, unfair economic policies, and oppressive politics.
People seem to plug into the freedom and fireworks theme, and I think it may be because of a desperate wish to have freedom, to be part of a “free” country. I cannot control who is in the Whitehouse, but I do know some paths to relative individual freedom that are less likely than fireworks to blow off your fingers.
1. Get a divorce. Divorce any idea that you have to exchange your time for money. Punching a clock is antithetical to freedom. Doing work you love, particularly as a self-employed person, is freedom writ large. Many say they cannot afford not to have a boss. The real question is, “How can you possibly afford to have a boss?” When you work for a business, a lot of the revenue you generate goes to paying your boss or creating a profit for a company, paying for an anachronistic infrastructure–including unproductive employees, and waste–whether through bad business decisions, embezzling, or more subtle “agency costs”. Here’s one article on the inability of the average worker to afford so much as rent in most of the United States: https://thinkprogress.org/minimum-wage-workers-cant-afford-rent-anywhere-in-the-country-c313cd648b2b. If you are a higher-paid worker, like a lawyer, there is all the more reason to be self-employed and keep all your filthy lucre–and you are smart enough to see how much your boss siphons off. You don’t have to wait for a judge–sign your own divorce decree and embrace freedom.
2. Plug your ears. Most people’s income goes, for years, into one thing: housing. Sadly, most people are guided to buy a home by unscrupulous realtors and mortgage brokers, all paid on commission. From “crime” statistics to reports of “good” or “bad” schools to intentionally-neglected infrastructures, entire industries are built on convincing you you have to live in a “safe” area. It doesn’t work–paying $500,000.00 to avoid a $50.00 mugging is not only silly, but ineffective. Unbiased crime reports quickly show that crime, especially property crime, reigns in “safe” areas–the difference is in the press coverage, always featuring a very white person blubbering that the neighborhood was supposed to be safe. Over-spending on housing means you do not build equity and remain vulnerable to foreclosure. It also means you do not spend on the things you want and need, creating a vicious cycle of reduced consumer spending and stagnant job creation. See https://www.businessincities.com/wp-content/uploads/2016/04/GCBA-Housing-Economic-Impact-Study.pdf. The next time someone starts talking to you about good and bad neighborhoods, plug your ears. Come join us in Gary, where you can buy a home for what you would spend on rent in a year or for the down payment on a home in a “safe” (and boring) suburb! (I have lived in a “bad” neighborhood for 20 years, and, for a time, also had an apartment on the south side of Chicago. In both places, I have left my keys in the door overnight multiple times, left my car doors unlocked with toll money and my wallet splayed across the seat, left my purse hanging on my door knob overnight, left my computer and bag on the porch overnight–and nothing has been touched. It is a sad reality that many hateful people choose to bash my neighbors without knowing a thing about our lives.)
3. Lose interest! Paying interest is simply counterproductive. While this is closely related to #2, watching the bottom line means paying off all debts and saving–earning interest instead of paying it. While overpriced homes are a huge culprit. Buy the home that fits your needs and pay it off as soon as you can. By simply common-sense steps, like not being afraid of seeing a black kid in the yard next door, you can have a home that can be paid off. You will not being paying interest, and can start saving the money allocated to your house payment. And, unless you are truly wealthy and 100 percent financially independent with enough saving to guarantee nothing will ever upend you financially, please, please, please eschew anything with homeowners’ association fees. Here’s an example from a financial writer: “With a $570/month HOA payment and a $6282.71 property tax obligation, I’m on the hook for nearly $1100 per month! Before utilities! To live in a place I own outright!” http://moneyboss.com/not-so-big-house/. In addition to the financial drain, I have represented several homeowners against unfair condominium associations. I can honestly say, intentions aside, that these are some of the most vile institutions around. Do you really want to move in with pets only to have them banned? Be on the hook for a $20,000 assessment because someone on the roof wants solid gold roof shinges? I cannot fathom why anyone would move into a home where a group of curtain-twitching suburbanites rule their lives. Just don’t.
4. Lose your stuff! I never buy anything. When I “want” something, I quickly realize it will be sitting on curbs or in discount bins within months. Without fail, it is. Take the modest fidget spinner. I still do not know what this is, but it has had an interesting impact on the stock market. A retailer whose sales were fidget-spinner heavy had its stock outlook downgraded as fidget-spinner sales were predicted to slow–and the stock’s price fell by 4 percent! http://www.cnbc.com/2017/06/14/fidget-spinner-bubble-popping-five-below-downgraded-on-slowing-sales-of-the-fad.html I wouldn’t put my investments in fidget spinners, but how many of you have given closet space (or table top) space to them? That $20.00 . . . thing . . . is probably selling for $1.00 now, with a side of free cheese for your trouble carting it off. From tulip bulbs in the 1600s (http://www.investopedia.com/features/crashes/crashes2.asp) to fidget spinners, people have paid dearly for irrational interest in odd consumer goods. Stay away from the mall, and invest your resources in stocks (solid ones, not fidgety ones). A good hint for acquaintances who insist you need something: tell them you will happily accept their gift of that item. You won’t hear about it again.
Hopefully, 2017 will be the year you choose to blow up your stock portfolio instead of blowing off your fingers!