Many of my friends look at my lifestyle and see travel, leisure, a lot of free time, no day job… so naturally, they wonder why I am living on a tropical beach if I haven’t had a job in over four years, while they are slaving at the office and barely have $5,000 in savings?
It is getting a little too obvious that major companies want you to stay at your job for 45 years or more, and will put everything in place for you not to leave. So does the government. They want you to be good soldiers and keep paying income taxes. You have to be really strong to escape the system.
50 years ago, your grandparents were living the simple life in the country, or in a small town. They would do most things themselves. Your grandma would cook from scratch while your grandpa would fix the car and the house, maybe even build an extension himself, to make room for the kids. She would sow the family’s clothes and cut everyone’s hair while he would chop firewood. Their days would be filled by chores and even at night while listening to the radio she would still polish the silverware while he would grease the entrance door.
As a result, they needed very little money. A one income household was able to pay off a mortgage in 10 years or less, not because they earned more or houses were cheaper, but because they put a bigger chunk of their take home pay into it. They had zero other debt, and would save until they could afford a car or a refrigerator. They would keep their furniture for life, and buy quality items that would last for decades. There were no such things as whims or impulse buying.
A crisis or job loss was tragic, but often not fatal. The family would grow their food, mend their clothes, and get strong social support from their church and family. When you have built your house and chopped your firewood, you can afford to work just for the price of your food.
But what was in it for the manufacturer? If you got a table when you got married and didn’t buy another one until you die, how would they turn you into a repeat customer? By inundating you with a myriad of consumer goods, sofas, clothes, ready meals… that are ever changing and thus forcing you to keep with the trend. With increased offer, companies forced you to work harder, to make more money, to buy more stuff. The second spouse now had to work to pay for the American dream, the two cars, the 5,000 sqft house, and the fridge upgrade every 5 years.
Note: I am all for women joining the workforce, but when I see people like my sister working minimum wage when the household would be better off having her at home, it makes me wonder. She would pay less taxes, have one less car, no childcare,… work related costs are higher than her salary but she doesn’t see it that way. Unless you are two high flyers, the lower earner has often best stay at home than work.
Another related phenomenon was that money now bought many conveniences. Instead of chopping firewood to cook and heat your house, you could work two hours at your desk, and make enough to pay your electric bill. So if you kept living your grandparents’ life, limiting your needs and being quite self sufficient, you would be faced with
1. An incredible rate of savings, way over 50% of your salary, leading to financial independence in 10 years or less, or
2. A LOT of time in your hands, if you stopped working once you had enough money to cover the bills. Which happens to be some people’s definition of financial independence. Say you limit your needs to $1,000 a month, you can now work part time and cover your expenses and then some, while enjoying plenty of free time.
And if you have free time, you have time to do self sufficient tasks, and consume less. Make more, spend less? Sounds like bankruptcy for the big players. So what does a company do to get you to still want more? They give you a TV, amusement parks, laptops, movies, the mall… so you do not have a moment in your spare time to think about freedom. No, you need to work more to pay for all that.
They make it easy. They give you a card. You can pay it back later, in “convenient installments”. At 29.9% APR. Handcuffing yourself to another year or two of company work just to thank them for the cash advance.
And if you want more, they will give you drugs, social media, alcohol and Vicodin. Anything so you just sit there and keep producing and making them richer.
Should you go live in the woods and hunt wolves for your subsistence? Absolutely not. Enjoy the fact that one hour of your labor can buy so much more than before. And use those hard earned dollars to buy things that will give you more value than the energy spent to earn them. Early retirement is not for everyone, but consumer debt should be for no one at all.
This post was featured on the Financial Uproar, thank you!