Coping: Renting Your Life, II / New Minimalism/ Microfication

Our “renting your life” discussion sure touched a lot of people’s nerves.

Reader Victoria found a ‘lil gem over on YouTube:  I didn’t know there was a musical titled :”Rent” but then I live in the outback…

When they act tough you call their bluff
We’re not gonna pay
We’re not gonna pay
We’re not gonna pay last year’s rent!
This year’s rent! Next year’s rent! Rent rent rent rent rent!
We’re not gonna pay rent! ‘Cause everything is rent!

A sample of the music here… 

I can’t hope but notice that the talk about rent cuts for NYC homeless has managed to fall apart.

And as housing prices recover, so are hefty rent increases in the East Bay area (Oakland).

And as if we need to be reminded, a reader in Hawaii sent us this backgrounder…

George,

Honolulu is the most expensive city in the country to live… and the hardest to make a ‘living wage’ (according to Yahoo).  I’ve done fair, with a decent career.  In past years I’ve been renting from long-term owners of paid-off apartments who knew me personally and were not terribly aggressive with their rents.  I’ve been a good tenant who takes care of the places and does my own maintenance and painting.  Most recently renting one of a 4-plex cinder block building from an old Chinese man where I refurbished the apartment myself before moving in.  He was most grateful to be saved the work.

Well, the old man sold out.  Put the 50-year old building on the market and sold it for $1.2mil.  I have a lease until Dec. for $925mo, but now a reality sandwich is about to hit.  The new owner is a Taiwanese-American woman fashion-designer who grosses $3mil/year and has her own real-estate and construction contracting company (more chinese workers) and wants to completely refurbish the building internally… including some structural deficiencies.  The real-estate turnover in Honolulu in recent years means that these new owners with ever larger mortgages need to collect ever larger rent payments, and it is forcing out increasing numbers of wage-earners who can no longer afford a place to live.  I’ve been skating under the market value of rents for years, but no longer.

Even the old condo across the street where I used to live has had a 50% ownership turnover, and the new rents are $1500-$1600/month.  My new Taiwanese owner of my building is rebuilding the two empty units, and will offer them to us two remaining tenants, but she thinks the costs will be “Around $1700/month”.

Ye Gods!  I’m facing a 70% rent increase in December… and I would STILL have to move apartments.  I’m desperately looking for something in the neighborhood that is as cheap as I can find.  At least I have a few months to accomplish that.    Looks like my rent is going to reach 50% (or MORE!) of my take-home pay.   This is just obscene.   And city officials wonder why we have ever-increasing numbers of homeless people on the streets.   Many have minimal jobs, but just cannot afford a place to live!

It’s such a damn hassle to move… and all the paperwork for address changes.  Driver’s license/ID (nothing else works without that ID), bank accounts, utilities  Nine more years before I retire to Hilo… where it’s cheaper!

But only for now.  The bad news is that if you take your new $1,600 per month rent (if you can get by that cheaply) and crank in average inflation (3.2%) for nine years, you get rent in the vicinity of  $2,125 per month…

And (again historically) you will need to have enough independent money to continue living outside of government benefits (like Social Security) because if you retire in 9-years, let’s say 2020 for round numbers, there’s a good chance that you will see benefits reined-in.

While an article in Forbes a while back “Why Social Security Can’t go Bankrupt: Rerun” is a bit comforting, without owning your own (ass)et to live in, you’re always going to be at someone else’s mercy.

Which is why the philosophy evolved around here:  The main thing in retirement is to get all your major assets paid-off so that your cash demands of minimal.  Once you do that, living becomes incredibly cheap.

Out here in the outback, we’ve gotten our “nut” down incredibly low – so that should I actually “retire” then we will have a minimized “nut” to meet. 

Some examples:

  • Car payment:  Gone – paid off on a car that typically goes 200,000 miles and is still under 100,000 miles.
  • House and land:  Ditto.  Being in Texas and large enough to qualify, it’s a tree farm and ag property is taxed at a preferential rate.  Taxes about 900/year.
  • Utilities:  Our power bill for the latest month (one of the hottest of the year) was $234.  And that’s for the house, my office, and bro-in-law’s apartment.  Reason?  Remember that big 20-panel solar system we put in with grid-tie?  If we need to, we could fall-back to the “house only” and that would reduce the monthly to about $100/month.
  • Garden and hydroponics gear is on-hand and ready, so we could cut food bill in half.  Even less if I want to buy a half a beef and take up hunting.  And, of course, by coincidence, we saw ammo price hikes coming so we have a lifetime supply of…er…..

If you’re in your 20’s and 30’s this may seem like the rantings of a “loonie-tune reprobate out in the sticks”  (it is….but that’s beside the point), but the main thing in life is to continue to live below your means and never stop scheming on how to reduce your expense line.

There’s two parts to the income/outgo equation.  And if you’re not planning to trump-Trump, then the only thing you can work on is the outgoing…and that means serious minimalism.

So yes, micro-housing makes sense, and remember that the biggest increase in my personal net worth occurred when I was living on a 40-foot sailboat for almost 11-years.  There was literally nothing to spend money on and consequently, financial assets piled up.

You ever hear that old saying in management school “Work expands to fill the available time”?

The same thing is true in housing.  The more square-footage you have, the more income you need to fill it up.  And if you don’t actually own the home, then you may be thinking “Gee, this will improve the home…” but until the last payment is made, you could be improving the home for the bank.

That’s why my absolute Zen-like focus on keeping expenses down, and when they can’t be managed down, I find other averages for my interest.

And speaking of making a buck…  Madison Avenue Mike spied a good trend store in the Wall St. Journal:  “U.S. could face high unemployment through 2030, consultancy says.”

I haven’t had time to read the whole thing, but unless robots are going to go out of style, I wouldn’t bank on a return of jobs, even then, sorry to say.

The automation that “saves us” from the drudgery of factory work and repetitive tasks is tax-advantaged and coming to steal your future.  So the only outcome will be what?

Microfication of life.

Plane Speaking

Even though our old airplane is still on the market, here’s an interesting note about insurance.

Our car insurance (perfect records, paid for older vehicles) is still $1,100 per year.

But yesterday I got a pleasant surprise from the AOPA insurance people:  Airplane insurance this year is $553 for the year.

Who would have thought?  Safe pilot, well-maintained airplane, no claims, agreed hull value and it’s actually down $100 bucks from what the bill was last year.

One of the joys of being a nut-job and living in an old mobile home in the woods is that we get to watch deer bed-down in the front yard, and we can afford the occasional eccentricity, now and then…

Most folks don’t realize the latitude in decision-making they have when comes to lifestyles.

Although some of the common sense did get passed on to the kids.  My son triumphantly told me the other day his Nissan Versa gets 39-MPG.  Instead of getting a “pimped out” ride, he’s got a simple stock car that will run well for the next 15-years. 

No big sound system and no navi. who needs it?  Unless your office is moving around or you can’t find your way home, of course.

It’s all the hypenosis that snares money from your wallet and keeps you bound to that “upwardly mobile” track which then sucks you into an $80-thousand college bill that still doesn’t assure you of a job.

Ree-dicking-fuggulous.

Panama’s Vacation

Before we take off on our semi-vacation (August-Sept in a super-deal found on www.airbnb.com that cost less for a whole month than our hotel did for a week, last time) Panama’s thinking about an expedition to the diamond park over in Arkansas.

He’s gone so far as to pick up a set of sifting rings off eBay…you can find details about Crate of Diamonds State Park over here.

I just really like the idea of going on a vacation where there’s a pay-off.

Reader Gatherings?

Speaking of which, depending on how we travel:  I’d be interested in having a cup of coffee (or a brew) when we go on our trip/vacation this year.

Any interest in that, if we publish our route a few days ahead of time? 

If we take the old plane, we’d trade drinks and appetizers for a ride to the airport and back in places like Rapid City, SD, Dodge City, KS, and however we route the other way…

The car would likely be up I-35 to Salina, KS, then over to Denver, then on up via I-80 then cutting off to go up through Salt-Lick City, Boise, and Ellensburg (over down the Columbia Gorge)…

The folks we have met in our travels around the country so far and just marvelous people.  And they’d make a fine country, too, were it not for all the riff-raf.

Comments and suggestions welcome.

OK, off to work on Peoplenomics for tomorrow.  I’m becoming more and more intrigued with the future of public housing, so off to research trends there…

CJ’s Correction

I don’t publish many of these (don’t get your hopes up) but this one was pretty good:

In Friday’s column you suggested having silver around would be useful against vampires.

That would be werewolves.

Wouldn’t want you wasting silver bullets on the wrong supernatural opponent.

Oh, and speaking of bullets, remember, head shots for zombies.

CJ

Got it…head shots for vampires.   Where’s the Adderall when I ne…Gonna be one of those days…

Peoplenomics tomorrow, Thursday David’s account of “the hum” and more…Write when you break-even…

George   george@ure.net

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